Naturally Advanced Technologies Reports on Environmentally Sustainable CRAILAR(R) Fiber Process and Files Third Quarter Financials

Naturally Advanced Technologies Inc. ("NAT" or the "Company") (OTCBB: NADVF), a developer of proprietary technologies for the processing and production of environmentally sustainable bast fibers, today reported operating and financial results for the third quarter and nine months ended September 30, 2007.
   
For the third quarter ended September 30, 2007, the Company, through its wholly owned subsidiary CRAILAR(R) Fiber Technologies Inc., confirmed Phase I proof of concept for two proprietary bast fiber processing technologies currently being developed in collaboration with Canada's National Research Council ("NRC") and the Alberta Research Council ("ARC"). CRAILAR(R) X-Series Fiber demonstrated Phase I proof of concept at the NRC's Industrial Materials Institute in Montreal, including hemp fiber decortication and extrusion of dissolving pulp processes co-developed with the ARC. CRAILAR(R) X-Series Fiber is an environmentally sustainable hemp fiber which is dissolved and then extruded to create high performance fabric, apparel and composites.
   
Phase I proof of concept for CRAILAR(R) F-Series Fiber included final engineering, installation and testing of processing equipment at the Company's co-development facility located at the NRC's Institute for Biological Science in Ottawa. CRAILAR(R) F-Series Fiber is a traditionally spun environmentally sustainable hemp yarn targeted for use in apparel and
upholstery industries. The Company has begun build-out of its CRAILAR(R)F-Series pilot plant in Montreal, which is expected to be operational for initial scale-up of Phase II proof of concept during the second quarter of 2008. Proprietary CRAILAR(R) fiber technologies including all patent applications filed by the NRC and ARC, are held by the Company under
exclusive international licensing agreements. Development continues to establish efficacy of the CRAILAR(R) platform with test fibers meeting initial production requirements of textile and composite industries.
   
"We are exceptionally pleased with the progress of our CRAILAR(R) technology platform and ongoing collaboration with world class scientists at Canada's National Research Council and Alberta Research Council. Our F-Series intellectual property was developed by Dr. Wing Sung, a Principal Research Officer at the NRC and international expert in industrial enzymes. Dr. Sung is the scientist behind four generations of high performance engineered enzymes for the production of bleached pulp in partnership with Iogen Corporation of Ottawa, a leading manufacturer of industrial enzymes used internationally in the pulp and paper industry. We are excited to see Canada's biomass expertise applied to the development and early validation
of CRAILAR(R) technology for the production and processing of bast fibers including hemp and flax." said Ken Barker, the Company's Portland, Oregon-based Chief Executive Officer.
   
Sales results for the Company's apparel division HTnaturals, a provider of environmentally sustainable hemp, bamboo, organic cotton and soy blended apparel since 1998, continued to show strong growth in both the seasonal retail line and the high volume corporate wear line. For the third quarter ended September 30, 2007, HTnaturals posted sales of US$721,000 an increase of 78% over the same period last year, with year to date sales of US$1.8 million, an increase of 129% over the same period 2006. Year to date margin is approximately 35% of sales or US$629,000 as compared to 32% or US$255,000 for the same period 2006. The net loss for the nine-month period ending September 30, 2007, was ($944,236) compared to a loss of ($896,233) for the same period in 2006, which is an increase in net loss of ($48,003). The increase in loss was primarily due to the increase in operating expenses which are attributable to the commercialization of CRAILAR(R), but not to direct development costs. The basic loss per share was $0.04 for the nine-month period ended September 30, 2007, compared to a basic loss of $0.05 per share for the same period in 2006. For the nine-month period ended September 30, 2007, the weighted average number of shares outstanding was 24,726,397 compared to 17,895,425 at September 30, 2006.
   
The foregoing information should be read together with the unaudited consolidated financial statements of the Company for the period ended September 30, 2007, including the notes thereto, and management's discussion and analysis for the same period, all of which have been filed and are available for viewing under the Company's profile at http://www.sec.gov/.
   
ABOUT Naturally Advanced Technologies, Inc.
   
Naturally Advanced Technologies Inc. ("NAT" or the "Company") is committed to unlocking the potential of renewable and environmentally sustainable biomass resources from hemp and other bast fibers. NAT, through its wholly owned subsidiary CRAILAR(R) Fiber Technologies Inc., is developing proprietary technology for production of bast fibers, cellulose
pulp, and their resulting byproducts, in collaboration with Canada's National Research Council and the Alberta Research Council. CRAILAR(R) technology offers cost-effective and environmentally sustainable processing and production of bast fibers such as hemp and flax, resulting in advanced performance characteristics for use in textile, industrial, energy, medical and composite material applications. The Company is also a provider of sustainable, environmentally friendly fibers and fabrics through its apparel division HTnaturals. Founded in 1998 in response to the growing demand for environmentally friendly, socially responsible clothing, NAT adheres to a "triple bottom line" philosophy, respecting the human rights of employees, the environmental impact of the Company's operations and fiscal responsibility to its shareholders.

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