:: M ANAGEMENT’S DISCUSSION & ANALYSIS FORWARD-LOOKING STATEMENTS VISION, CORE BUSINESS, AND STRATEGY CEAPRO Annual Report 2012 7 The MD&A provides commentary on the results of operations for the years ended December 31, 2012 and 2011, the financial position as at December 31, 2012, and the outlook of Ceapro Inc. (‘‘Ceapro’’) based on information available as at April 4, 2013. The following information should be read in conjunction with the audited consolidated financial statements as at December 31, 2012, and related notes thereto, as well as the audited consolidated financial statements for the year ended December 31, 2011 and the Management’s Discussion and Analysis (MD&A) for the year ended December 31, 2011 which are prepared in accordance with International Financial Reporting Standards (IFRS). All comparative percentages are between the periods ended December 31, 2012 and 2011 and all dollar amounts are expressed in Canadian currency, unless otherwise noted. Additional information about Ceapro can be found on SEDAR at www.sedar.com. This MD&A offers our assessment of Ceapro’s future plans and operations as at April 4, 2013, and contains forward- looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, including those discussed below. Readers are cautioned that the assumptions used in the preparation of forward- looking information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Actual results, performance, or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. No assurance can be given that any of the events anticipated will transpire or occur, or if any of them do so, what benefits Ceapro will derive from them. The Company disclaims any intention or obligation to update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise unless required by law. Ceapro is incorporated under the Canada Business Corporations Act; and its wholly-owned subsidiaries, Ceapro Technology Inc., Ceapro Veterinary Products Inc., Ceapro Active Ingredients Inc., and Ceapro BioEnergy Inc. are incorporated under the Alberta Business Corporations Act. Ceapro (P.E.I.) Inc. is a wholly-owned subsidiary incorporated in Prince Edward Island. Ceapro USA Inc. is a wholly-owned subsidiary incorporated in the state of Nevada. Ceapro is a growth stage biotechnology company. Our primary business activities relate to the development and commercialization of natural products for personal care, cosmetic, human, and animal health industries using proprietary technology and natural, renewable resources. MANAGEMENT’S DISCUSSION & ANALYSIS Our products include: Other products and technologies are currently in the research and development or pre-commercial stage. These technologies include: GLYPH<127> A commercial line of natural active ingredients, including  beta glucan, avenanthramides (colloidal oat extract ),  oat powder, oat oil ,  oat peptides,  and  lupin peptides,  which are marketed to the personal care, cosmetic, medical, and animal health industries through our distribution partners and direct sales; and GLYPH<127> Veterinary therapeutic products, including an  oat shampoo , an  ear cleanser,  and a  dermal complex/conditioner , which are manufactured and marketed to veterinarians in Japan and Asia, through agreements with Daisen Sangyo Co. Ltd. GLYPH<127> CeaProve GLYPH<H23006> , a diabetes test meal to screen pre-diabetes and to confirm diabetes diagnosis; GLYPH<127> A drug delivery  platform using our  beta glucan  technology to deliver compounds for uses ranging from wound care and therapy, to skin care treatments that reduce the signs of aging; GLYPH<127> An extension t o the active ingredients  product range offering, through new plant extract products including products from a unique variety of spearmint; and