Ceramic Protection Corporation Announces Acquisition of ForceOne Assets and Issue of Subordinated Convertible Debenture



    Acquisition of ForceOne Assets and Issuance of Subordinated Convertible
    Debentures

    Symbol: CEP
    Exchange: TSX

    SUNRISE, FL, Jan. 2 /CNW/ - Ceramic Protection Corporation ("CEP" or the
"Corporation"), a leading manufacturer and distributor of advanced ballistic
protective products, is pleased to announce the Corporation has entered into
an agreement for the acquisition of the production facility and certain assets
of ForceOne, LLC. Closing is expected to occur in the next few days. The
Corporation also announces a private placement of up to US $6 million in
subordinated convertible debentures to close on or before January 8, 2008.
    Mr. Steve Giordanella, Chief Executive Officer, stated that the
Corporation is taking steps to enhance and strengthen its manufacturing base
and capital structure. To these ends the Corporation is pleased to announce
that it has acquired the ForceOne production facility and certain other
manufacturing assets in North Carolina, USA for approximately US $1.9 million
plus closing costs. These new assets, in addition to the continuing use of
certain existing sub-contractors, will enable the Corporation to reduce
manufacturing costs, enhance profitability and better control its production
and delivery schedules of MTV soft armour vests for the US military.
    The Corporation also announced that, subject to normal TSX approvals, it
is proceeding with a non-brokered private placement of up to US $6 million of
subordinated convertible debentures. The debentures carry an interest rate of
10% with a 3 year term and a conversion price at the Canadian dollar
equivalent of US $6.57. The Corporation will have the option to force
conversion if after the first year its Common Shares trade at or above the
Canadian dollar equivalent of US $9.10 for 30 or more consecutive trading
days. Funds from the private placement will be used for general corporate and
ongoing working capital purposes. Up to US $3 million of the debenture will be
placed with certain directors and insiders of the Corporation.
    Mr. Giordanella also commented that the Corporation is maintaining
deliveries from a strong backlog of orders from both the Florida and Delaware
plants while maintaining ongoing negotiations with customers for certain other
new opportunities.

    Business of the Corporation

    Ceramic Protection Corporation, headquartered in Sunrise, Florida, USA,
with offices in Newark, Delaware, USA, is a certified manufacturer and
distributor of advanced materials for use in the ballistic protection
marketplace. The Corporation manufactures a wide range of products used to
provide protection for personnel and vehicles, including a wide range of
ceramic armour products and multiple composite-based products. In conjunction
with its wholly owned subsidiary Ceramic Protection Corporation of America of
Newark, Delaware, the Corporation also manufactures a wide range of boron
carbide, silicon carbide and polyethylene products for use in personnel armour
systems. PPI of Sunrise, Florida, manufactures a growing range of soft armour
products for the law enforcement and military markets.

    Forward Looking Statements

    This release may contain forward looking statements including
expectations of future sales, cash flow, and earnings. These statements are
based on current expectations that involve a number of risks and uncertainties
that could cause actual results to differ from those anticipated. These risks
include, but are not limited to, uncertainties associated with the defense
industry, commodity prices, exchange rate fluctuations, and risks resulting
from potential delays, appeals or changes related to government orders in the
defense sector.
    The Corporation depends on reliable supplies of high quality source
materials used in the manufacture of armour products, including aramid fabrics
and polyethylene materials, and works actively with key suppliers to ensure
that requirements and demands for these materials are anticipated and properly
met. The foregoing is not exhaustive and other risks are detailed from time to
time in other disclosure filings of the Corporation. Should one or more of
these risks or uncertainties materialize, or should stated assumptions
underlying the forward looking statements prove incorrect, actual results may
vary materially from those described herein as anticipated, believed,
estimated or expected. The reader is also referred to other uncertainties and
risks discussed in detail in the MD&A section of the Corporation's
December 31, 2006 Annual Report dated March 20, 2007 and also the
Corporation's Annual Information Form.
    In light of certain sensitive aspects in regard to customers and
products, the Corporation may choose not to disclose all information related
to the purchasers of its products, such as government agencies, countries or
other end-users. Armour products manufactured for export in the United States
must first be approved for export by the appropriate U.S. government agencies.
Other armour sales may be made to recognized domestic agencies such as the
military and those involved in local or national law enforcement and homeland
security matters.

    Investor Relations

    Analyst and investor relations calls should be addressed to Ms. Grimie
Villarreal, Corporate Investor Relations, at (954) 846-8222. Interested
parties are also referred to the Corporation's website www.cerpro.com for
further information about the Corporation, its products and other recent
announcements.

    
    Mr. Steve Giordanella                            Mr. Larry Moeller
    Chief Executive                                  Officer Chairman
    

    %SEDAR: 00001737E




For further information:

For further information: Ms. Grimie Villarreal, Corporate Investor
Relations, at (954) 846-8222

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CERAMIC PROTECTION CORPORATION

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