Mr. Gilles Gagnon reports

CEAPRO INC. REPORTS SECOND QUARTER 2015 FINANCIAL AND OPERATIONSRESULTS

Ceapro Inc. has released its financial results for the three-month and six-month periods ended June 30, 2015, and provided an overview of recent operational highlights.

Financial highlights for the second quarter of 2015

• Total sales of $2,439,000 in second quarter 2015 versus $2,432,000 in second quarter 2014;
• Income from operations of $843,000 in second quarter 2015 versus $727,000 in second quarter 2014;
• Gross margin of $1,749,000 in second quarter 2015 versus $1,444,000 in second quarter 2014;
• Net profit of $658,000 in second quarter 2015 versus $630,000 in second quarter 2014.

Gilles Gagnon, MSc, MBA, president and chief executive officer, of Ceapro, stated: "While we are very pleased with our financial performance, it is important to emphasize that we are positioning Ceapro for the long term. Leveraging on our derisked base business in cosmetics, we remain focused on our vision to develop our value drivers, beta glucan and avenanthramides, into different formulations enabling us to transition to other sectors like nutraceuticals and pharmaceuticals."

Second quarter 2015 and recent operational highlights

• Received a notice of allowance from the U.S. Patent and Trademark Office for the company's proprietary PGX technology;
• Initiated a second impregnation study at Massachusetts Institute of Technology to test dry formulations of beta glucan as a potential delivery system for selected bioactive natural ingredients;
• Announced the decision to develop the company's enabling pressurized gas expanded technology (PGX) at commercial and demonstration-scale levels;
• Contributed avenanthramides produced by Ceapro's innovative technology for the highest dose level component of a United States-based human bioavailability study currently analyzing data on three escalating doses of avenanthramides;
• Produced high concentrations of avenanthramides at commercial-scale levels utilizing Ceapro's innovative malting technology;
• Presented a highly successful overview on the unique advantages of Ceapro's PGX drying technology platform at the International Conference on Engineering and Food and the Bio World Congress on Industrial Biotechnology;
• Appointed accomplished finance and accounting executive, Stacy Prefontaine, CA, as chief financial officer;
• Appointed seasoned pharmaceutical executive Dr. Ulrich Kosciessa to the board of directors.

Mr. Gagnon continued: "As previously announced, the successful production of pharmaceutical-grade powder formulation of beta glucan obtained through the use of our unique and promising PGX technology confirmed our decision to develop this enabling technology at the commercial-scale level. This decision is further reinforced by promising results recently obtained from analysis of samples from different industrial sources. Attaining worldwide rights for PGX in all industrial applications was a major milestone and has triggered significant changes in terms of the scope and magnitude of our contemplated scale-up for this innovative technology platform to be exploited in our upcoming world-class manufacturing facility. In the meantime, we are currently producing at record levels in the existing facility and have even significantly improved our efficiencies. We would like to thank our dedicated employees who once again delivered superior results."

Financial results for the three-month and six-month periods ended June 30, 2015

• Total sales of $2,439,000 and $4,154,000 in second quarter and first half 2015, respectively, compared with $2,432,000 and $4,386,000 in 2014.
• Net profit of $658,000 and $464,000 in second quarter and first half 2015, respectively, compared with a net profit of $630,000 and net profit of $807,000 in 2014. Taking into account the non-cash item related to share-based compensation costs of $396,000 for first half 2015 versus $68,000 for first half 2014, net profit amounts to $860,000 for the first six months of 2015 versus $875,000 for the same period in 2014.
• Research and development investments of $237,000 and $343,000 in second quarter and first half 2015, respectively, compared with $189,000 and $414,000 in 2014.
• General and administration expenses of $629,000 and $1,431,000 in second quarter and first half 2015, respectively, compared with $462,000 and $884,000 in 2014. The increase in G&A in 2015 compared with 2014 is mostly due to share-based compensation costs due to the granting of options at a time when the company share price was higher. Share-based expense is an accounting charge that does not impact cash flows as no actual payment is made. Although it decreases net profit, it also increases the company's equity component.
• Sales and marketing expenses of only $3,500 and $6,700 in second quarter and first half 2015, respectively, compared with $5,500 and $6,700 in 2014, due to a sales strategy through a distribution network.
• The company had cash and cash equivalents of $550,000 as of June 30, 2015, as compared with $273,000 as of Dec. 31, 2014.

                                                              
          CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME              
                                                                 
                                           Quarters ended          Six months ended 
                                                 June 30,                  June 30, 
                                        2015         2014       2015           2014

Revenue                           $2,439,366   $2,431,736 $4,153,851     $4,386,083
Cost of goods sold                   690,229      987,603  1,612,615      1,881,906
Gross margin                       1,749,137    1,444,133  2,541,236      2,504,177
Research and product development     236,835      189,461    342,742        413,967
General and administration           629,225      461,808  1,431,158        884,067
Sales and marketing                    3,506        5,500      6,673          6,667
Finance costs                         37,024       60,496    143,774        152,360
Income from operations               842,547      726,868    616,889      1,047,116
Other operating loss (loss)        (184,823)     (96,902)  (189,253)      (239,721)
Income before tax                    657,724      629,966    427,636        807,395
Income taxes
Deferred tax recovery                      -            -     36,250              -
Total comprehensive income for
the period                           657,724      629,966    463,886        807,395
Net income per common share
Basic                                   0.01         0.01       0.01           0.01
Diluted                                 0.01         0.01       0.01           0.01