Chai-Na-Ta Corp. Reports 2002 First Quarter Results.

Business Editors

LANGLEY, British Columbia--(BUSINESS WIRE)--May 7, 2002

Chai-Na-Ta Corp. (TSE:CC) (OTCBB:CCCFF) today reported its financial results for the first quarter ended March 31, 2002.

Revenue more than doubled to $5.7 million in the 2002 first quarter from $2.5 million in the quarter ended March 31, 2001. Net earnings were $92,000 in the first quarter of 2002 ($0.01 per basic share) compared to net earnings of $166,000 ($0.01 per basic share) in the prior year period.

"There are a number of positive signs for our Company going forward," said William Zen, Chai-Na-Ta's Chairman and Chief Executive Officer. "Highlights include a significant improvement in our net cash position, which rose to $1.9 million at March 31, 2002 from $437,000 at December 31, 2001. This was mainly due to repayment of our line of credit from revenue generated in the first quarter of the year. Sales, general and administrative expenses fell 4.5% from the year earlier period as a result of ongoing efforts to minimize overhead costs.

"In the wake of the industry-wide rust problem that affected ginseng crops across British Columbia last year, we sold nearly half of our 2001 harvest by March 31, 2002. We have commitments from purchasers for the rest of the crop and market demand remains firm. We expect that most of the 2001 harvest will be sold by the end of the second quarter," said Mr. Zen.

"Although rusty root is primarily an aesthetic problem, it affects prices. As a result, our gross profit margin was 8.7% in the 2002 first quarter - down from 28.1% in the prior year period. While the next couple of quarters will remain challenging, we anticipate that sales resulting from a spring harvest that is currently in progress, combined with our regular fall harvest, will enable us to achieve close to breakeven operating results for 2002 as a whole. Furthermore, we expect to return to profitability in 2003," Mr. Zen concluded.

Chai-Na-Ta Corp., based in Langley, British Columbia, is the world's largest supplier of North American ginseng. The Company farms, processes and distributes North American ginseng as bulk root, and supplies processed extract powder for the manufacture of value-added ginseng-based products.

This news release contains forward-looking statements that reflect the Company's expectations regarding future events. These forward-looking statements involve risks and uncertainties, and actual events could differ materially from those projected. Such risks and uncertainties include, but are not limited to, the success of the Company's ongoing research programs, general business conditions, and other risks as outlined in the Company's periodic filings, Annual Report, and Form 20-F.