MANAGEMENT’S DISCUSSION & ANALYSIS GLYPH<127> A variety of novel manufacturing technologies including ‘‘Supercritical Fluid’’ drying technology, which is currently being tested on oat beta glucan but may have application for multiple classes of compounds. GLYPH<127> Identifying unique plant sources and technologies capable of generating novel active natural products; GLYPH<127> Increasing sales and expanding markets for our current active ingredients; GLYPH<127> Developing and marketing additional high-value proprietary therapeutic natural products; GLYPH<127> Developing and improving manufacturing technologies to ensure efficiencies; and GLYPH<127> Advancing new partnerships and strategic alliances to develop new commercial active ingredients and manufacturing technologies. GLYPH<127> Adding value to all aspects of our business; GLYPH<127> Enhancing the health of humans and animals; GLYPH<127> Discovering, extracting, and commercializing new, therapeutic natural ingredients; GLYPH<127> Producing the highest quality work possible in products, science, and business; and GLYPH<127> Developing personnel through guidance, opportunities, and encouragement. The Company makes sales to customers that are well-established and well-financed within their respective industries. Based on previous experience, the counterparties have had very low default rates and management views The Company has exposure to credit, liquidity, and market risk as follows: Biotechnology companies are subject to a number of risks and uncertainties inherent in the development of any new technology. General business risks include: uncertainty in product development and related clinical trials and validation studies, the regulatory environment, for example, delays or denial of approvals to market our products, the impact of technological change and competing technologies, the ability to protect and enforce our patent portfolio and intellectual property assets, the availability of capital to finance continued and new product development, and the ability to secure strategic partners for late stage development, marketing, and distribution of our products. To the extent possible, we pursue and implement strategies to reduce or mitigate the risks associated with our business. To support these objectives, we believe we have strong intellectual and human capital resources and we are developing a strong base of partnerships and strategic alliances to exploit our technology. The current economic environment provides challenges in obtaining financial resources to fully exploit opportunities. To fund our operations, Ceapro relies upon revenues primarily generated from the sale of active ingredients, and the proceeds of public and private offerings of equity securities, debentures, government grants and loans, and other investment offerings. Our business growth depends on our ability to access global markets through distribution partnerships and direct sales. Our marketing strategy emphasizes providing technical support to our distributors and their customers and generating direct sales to maximize the value of our technology and product utilization. Our vision and business strategy are supported by our commitment to the following core values: As a knowledge-based enterprise, we will also expand and strengthen our patent portfolio and build the necessary manufacturing infrastructure to become a global technology company. Our vision is to be a global leader in developing and commercializing products for the human and animal health markets through the use of proprietary technology and renewable resources. We act as innovator, advanced processor, and formulator in the development of new products. We deliver our technology to the market through distribution partnerships and direct sales efforts. Our strategic focus is in: 8 CEAPRO Annual Report 2012 Accounts receivable A) CREDIT RISK RISKS AND UNCERTAINTIES