Ceapro Inc. Reports 2010 Second Quarter Financial and Operating Results

EDMONTON, ALBERTA--(Marketwire - August 05, 2010) - Ceapro Inc. (TSX VENTURE: CZO) today reported financial results and operating results as at and for the three-month and six-month periods ended June 30, 2010.

Second Quarter highlights

 -- Completion of a license and distribution agreement with Oat Cosmetics for the sale of Ceapro’s “All Natural” active ingredients in the United Kingdom. -- Announcement of a Research Collaboration with the National Research Council of Canada (NRC). Research studies to be conducted at the NRC Institute for Nutrisciences and Health (INH) located in Charlottetown, Prince Edward Island. Press conference held with Federal Ministers of Science and Technology and Fisheries and Oceans, Honourable Gary Goodyear and Gail Shea respectively. Also in attendance was the Provincial (PEI) Minister of Environment, Energy and Forestry, the Honourable George Webster. -- Initiation of development of new formulations and testing for Ceapro’s second generation products with all natural preservative. 

Subsequent to Quarter-End

 -- Ceapro reduces debt $270,500 as royalty holders elect to exchange royalty debt for equity. -- Ceapro receives approval from TSX-V to issue 271,752 common shares to pay interest on convertible debentures due at June 30, 2010 -- Government of Alberta provides Ceapro with a grant of $124,000 to conduct a two year research project using University of Alberta technology to optimize extraction of Ceapro’s active ingredients. 

Financial results as at and for the three-month periods ended June 30, 2010

 -- Sales were $1,018,000 for the three-month period ended June 2010 compared to $1,212,000 for the same period in 2009.This 16% decrease is primarily due to the absence of sales to the animal health sector and a lower US dollar exchange rate versus the Canadian dollar. Sales of active ingredients to the personal care industry increased in volume by 6% following increased shipments of newly launched lupin peptides to be used in a new hair care line. -- Research and Development investments amounted to $143,000 for the three- month period ended June 30, 2010. This is similar to the R&D Investments for the same period in 2009. It is expected that R&D investments will increase during the second half of 2010 due to the initiation of three new projects that will allow Ceapro to get new data to further support health benefits claims for its products. -- General and Administration expenses amounted to $323,000 for the three- month period ended June 30, 2010 compared to $417,000 for the same period in 2009. This 23% decrease reflects the Company’s effort to reduce expenditures and focus on core areas of the business. -- Income from Operations was $52,000 for the three-month period ended June 30, 2010 compared to $216,000 for the same period in 2009.The absence of sales to the animal health sector is primarily responsible for this decrease. -- Net Income amounted to $237,000 for the three-month period ending June 30, 2010 compared to $466,000 for the same period in 2009. Net income includes the recovery of $315,000 for legal fees as at June 30, 2010. Legal fee recoveries of $426,000 were also recorded as a recovery in the second quarter of 2009. 

“Results obtained so far in 2010 are in line with our expectations during this period of economic recovery in the personal care industry. While we are pleased with these results, we are excited that Ceapro is now in a position to invest in Research and Development in partnership with both Federal and Provincial Governments and other research institutions. This recognition will allow Ceapro to develop new products and rejuvenate some existing ones with new data to support Ceapro’s marketing and sales strategy.” stated Gilles Gagnon, Acting President and CEO.

The complete audited annual report and financial statements are available for review on SEDAR at http://sedar.com/Ceapro and on the Company’s website at www.ceapro.com .

About Ceapro Inc.

Ceapro Inc. is a Canadian growth-stage biotechnology company. Primary business activities relate to the development and commercialization of active ingredients for personal care and cosmetic industries using proprietary technology and natural, renewable resources.

 CEAPRO INC. Consolidated Statements of Net Income, Comprehensive Income and Deficit Unaudited Six Months Quarters Ended June Ended June 30 30 2010 2009 2010 2009 -------------------------------------------------------------------------- Revenue Sales $ 2,173,343 $ 2,713,927 $ 1,018,481 $ 1,212,018 Cost of goods sold 1,250,046 1,097,814 557,928 446,775 -------------------------------------------------------------------------- Gross margin 923,297 1,616,113 460,553 765,243 -------------------------------------------------------------------------- Expenses General and administration 613,602 807,516 322,929 417,194 Royalties 25,956 214,458 12,762 76,431 Sales and marketing 39,116 85,063 17,947 24,761 Amortization 16,891 20,809 8,363 11,511 Write off of property plant and equipment 10,490 - 10,490 - Interest on convertible debentures 21,096 - 11,071 - Accretion on convertible debentures 15,000 - 7,500 - Interest on long- term debt 35,831 38,794 17,687 18,880 -------------------------------------------------------------------------- 777,982 1,166,640 408,749 548,777 -------------------------------------------------------------------------- Income from operations 145,315 449,473 51,804 216,466 -------------------------------------------------------------------------- Other income (expenses) Research and product development (282,098) (281,195) (143,970) (145,624) Other income (expenses) 10,376 (25,870) 14,591 (31,210) -------------------------------------------------------------------------- (271,722) (307,065) (129,379) (176,834) -------------------------------------------------------------------------- Comprehensive income (loss) before SGGF legal fees recovery (expense) and income taxes (126,407) 142,408 (77,575) 39,632 SGGF legal fees recovery 314,983 426,300 314,983 426,300 Income taxes Current 59,000 241,000 37,000 184,000 Reduction as a result of applying non-capital losses carried forward against the current period’s taxable income (59,000) (241,000) (37,000) (184,000) -------------------------------------------------------------------------- NET INCOME AND COMPREHENSIVE INCOME FOR THE PERIOD 188,576 568,708 237,408 465,932 Deficit, beginning of period (7,390,890) (7,321,541) (7,439,722) (7,218,765) -------------------------------------------------------------------------- Deficit, end of period$ (7,202,314)$ (6,752,833)$ (7,202,314)$ (6,752,833) -------------------------------------------------------------------------- -------------------------------------------------------------------------- Net income per share: Basic $ 0.00 $ 0.01 $ 0.00 $ 0.01 -------------------------------------------------------------------------- -------------------------------------------------------------------------- Diluted $ 0.00 $ 0.01 $ 0.00 $ 0.01 -------------------------------------------------------------------------- -------------------------------------------------------------------------- See accompanying notes