(See accompanying notes to condensed consolidated financial statements)

SunOpta Inc.
Condensed Consolidated Balance Sheets
As at March 31, 2007 and December 31, 2006
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

(See accompanying notes to condensed consolidated financial statements)

SunOpta Inc.
Condensed Consolidated Statements of Shareholders' Equity
As at March 31, 2007 and 2006
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

(See accompanying notes to condensed consolidated financial statements)

SunOpta Inc.
Condensed Consolidated Statements of Cash Flow
For the three months ended March 31, 2007 and 2006
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

(See accompanying notes to condensed consolidated financial statements)

SunOpta Inc.
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2007 and 2006
Unaudited (Expressed in thousands of U.S. dollars, except per share amounts)

1.     Basis of presentation

The interim condensed consolidated financial statements of SunOpta Inc. (the Company) have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and in accordance with accounting principles generally accepted in the United States. Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature. Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2007. For further information, see the Company's consolidated financial statements, and notes thereto, included in the Annual Report on Form 10K for the year ended December 31, 2006.

The interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the financial statements for the year ending December 31, 2006. All significant intercompany accounts and transactions have been eliminated on consolidation.

2.     Inventory

3.     Capital stock and contributed surplus

SunOpta Inc.
Notes to Condensed Consolidated Financial Statements
For the three months ended March 31, 2007 and 2006
Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

3.     Capital stock and contributed surplus continued

(a)    On February 13, 2007, the Company issued 5,175,000 common shares at a price of $10.40 per common share, in respect of a public offering for gross proceeds of $53,820. The Company incurred share issuance costs of $2,089, net of a $992 tax benefit, for net proceeds of $51,731.

(b)   In the three months ended March 31, 2007, employees and directors exercised 127,645 (March 31, 2006 – 214,218) common share options and an equal number of common shares were issued for net proceeds of $776 (March 31, 2006 - $673).

(c)   In the three months ended March 31, 2007, 20,436 (March 31, 2006 – 21,080) common shares were issued for net proceeds of $214 (March 31, 2006 - $128) as part of the Company's employee stock purchase plan.

(d)   In the three months ended March 31, 2007, 100,000 (March 31, 2006 – 12,000) options were granted to employees at a price of $10.86 (March 31, 2006 - $5.36 to 7.04). The fair value of the options granted was $549 (March 31, 2006 – $32) estimated using the Black-Scholes option-pricing model with the assumptions of a dividend yield of 0% (2006 - 0%), an expected volatility of 54% (2006 – 55%), a risk-free interest rate of 4% (2006 – 4%), forfeiture rate of 15% (2006 – 10%) and an expected life of five to six years.

(e)    In conjunction with his promotion to Chief Executive Officer, Steve Bromley received an award of 10,000 shares of the Company's stock. The stock was granted 25% on February 8, 2007,plus an additional 25% will be issued on the anniversary for the next three years. Accordingly, 2,500 shares were issued from treasury and the Company recognized stock based compensation costs of $29 in the quarter.

(f)    In the three months ended March 31, 2007, the Company recognized stock based compensation of $195 (March 31, 2006 - $75) related to the Company's stock option plans.

(g)   In the three months ended March 31, 2007, no warrants were exercised, however, in the quarter ending March 31, 2006, there were 35,000 warrants exercised and 35,000 shares were issued for proceeds of $60.

4.     Earnings per share

The calculation of basic earnings per share is based on the weighted average number of shares outstanding. Diluted earnings per share reflect the dilutive effect of the exercise of warrants and options. The number of shares for the diluted earnings per share was calculated as follows:

Options to purchase 100,000 (March 31, 2006 - 660,980) common shares have been excluded from the calculations of diluted earnings per share due to their anti-dilutive effect.

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

5.      Long-term debt and banking facilities

On February 28, 2007 the company repaid $1,890 in term debt and repaid and terminated its $20,000 asset based line of credit arrangement, both of which were secured by the assets of Cleugh's Frozen Foods, Inc. The assets of Cleugh's Frozen Foods, Inc. have now been pledged as collateral under the syndicated lending agreement noted below.

(a) Syndicated Lending Agreement

i)      Term loan facility:

The term loan facility remained unchanged at $45,000 (2006 - $45,000). The entire loan principal is due on maturity. The term loan matures on December 20, 2010 and is renewable at the option of the lender and the Company.

ii)     Revolving acquisition facility:

The acquisition facility of $9,000 (December 31, 2006 - $10,000) is payable quarterly equal to the greater amount of (a) 1/20 of the initial drawdown amount of the facility, or (b) 1/20 of the outstanding principal amount as of the date of the last draw. Any remaining outstanding principal under this facility is due on October 31, 2009.

iii)     Canadian line of credit facility:

The Company has a line of credit facility in Canada with a maximum draw of Cdn $25,000 ($21,652). At March 31, 2007, $16,600 (December 31, 2006 - $nil) of this facility was utilized (included in bank indebtedness) plus an additional $172 (December 31, 2006 - $172) was committed through letters of credit.

iv)   US line of credit facility:

The US line of credit facility has a maximum borrowing of $30,000. At March 31, 2007, $3,000 (December 31, 2006 - $13,000) of this facility was utilized (included in bank indebtedness). Interest on borrowings under this facility accrues at the borrower's option based on various reference rates including U.S. bank prime, or U.S. LIBOR, plus a margin based on certain financial ratios.

All of the above facilities are collateralized by a first priority security against substantially all of the Company's assets in both Canada and the United States with the exception of the assets of Opta Minerals.

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

5.     Long-term debt and banking facilities continued

(b) Other long-term debt consists of the following:

(c)   Additional Credit Facilities

Included in bank indebtedness on the balance sheet are lines of credit of the Company as described in 5(a) above and lines of credit of the Company's subsidiaries as follows

i) Opta Minerals Inc.:

In addition to the term loan facility described above in 5(b), Opta Minerals, Inc. has a line of credit of $10,826 (Cdn $12,500) and a $4,330 (Cdn $5,000) facility to finance future acquisitions and capital expenditures. As of March 31, 2007 Opta Minerals, Inc. has utilized $8,919 (December 31, 2006 - $7,645) of the line of credit, including letters of credit outstanding and $2,417 (December 31, 2006 - $950) of the acquisition facility.

These facilities have been collaterized by a priority security interest against substantially all of the Opta Minerals Inc.'s assets.

Cash on deposit with lending institutions has been netted against borrowings under the lines of credit with the same institutions.

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

6.      Supplemental cash flow information

7. Commitments and contingencies

(a)   One of the Company's subsidiaries, SunRich LLC (formerly SunRich Inc.) filed a claim against a supplier for failure to adhere to the terms of a contract. In 2004 Sunrich was awarded the trial judgement and in the fall of 2006, the decision of the Appellate Court confirmed this judgement. In 2006, the Company collected $2,014 in satisfaction of the judgement. The Company also has filed an application for the recovery of legal fees which is currently outstanding with the Court for approval.

In 2005, the Company was sued by a landlord of one of its leased facilities for non-payment of rent and early lease cancellation. The company has countersued for non-performance by the landlord and damages. The Company believes the resolution of the matter will not have a material impact on the financial statements.

In addition, various claims and potential claims arising in the normal course of business are pending against the Company. It is the opinion of management that these claims or potential claims are without merit and the amount of potential liability, if any, to the Company is not determinable. Management believes the final determination of these claims or potential claims will not materially affect the financial position or results of the Company.

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

8.     Proforma data (unaudited)

Condensed proforma income statement, as if the acquisition of Magnesium Technologies Corporation, Purity Life Health Products, Bimac Corporation, Quest Vitamins, Hess Food Group and Aux Mille et une Saisons Inc had occurred at the beginning of 2006, is as follows:

9.     Segmented information Industry segments

The Company operates in six segments within the following three industry groups:

(1) The SunOpta Food Group ("Food Group"), produces, packages, markets and distributes a wide range of natural, organic, kosher and specialty food products and ingredients with a focus on soy, corn, sunflower, a wide range of fruit based products, oat and soy fiber and other natural and organic food products. There are four segments in the SunOpta Food Group comprising:

a) SunOpta Grains and Foods Group ("Grains Group")
b) SunOpta Ingredients Group ("Ingredients Group")
c) SunOpta Fruit Group ("Fruit Group")
d) SunOpta Canadian Food Distribution Group ("Distribution Group")

(2) Opta Minerals processes, sells and distributes silica free loose abrasives, roofing granules, industrial minerals, specialty sands, and recycles inorganic materials for the foundry, steel, roofing shingles and bridge and ship cleaning industries; and

(3) The SunOpta BioProcess Group owns numerous patents on its proprietary biomass pretreatment steam explosion technology and providesa wide range of research and development services, engineering services and equipment solutions to a range of customers for processing non-woody fibers for use in the paper, food and cellulosic ethanol industries.

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

9.     Segmented information continued

The SunOpta Food Group has the following segmented reporting:

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

9.      Segmented information continued

The SunOpta Food Group has the following segmented reporting:

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

10. Recent Accounting Pronouncements

In June 2006, the FASB issued FIN No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109'' ("FIN 48''). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, "Accounting for Income Taxes'' ("SFAS 109''). The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides accounting guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. SunOpta has adopted the provisions of FIN 48 on January 1, 2007. The Company has assessed the impact of FIN 48 which includes uncertain tax positions and tax returns not audited by tax authorities. The Company's adoption did not have a significant impact on the results of operations or financial position.

11. Subsequent Events

On May 4, 2007, SunOpta Inc. acquired certain assets of Baja California Congelados, S.A. de C.V. ("BCC"), of Rosarito, Baja California, Mexico. The purchase price of $2,875 consisted of cash paid on closing.

BCC is the leading frozen strawberry processor in Baja California, Mexico. Under the terms of the agreement, SunOpta purchased all of the physical assets in the production facility located in Rosarito and also assumed a long-term lease for the facility, located 20 miles south of San Diego, California. In addition, SunOpta entered into long-term supply agreements with Andrew Williamson Fresh Produce, ("Andrew Williamson") the San Diego-based parent of BCC. The agreements provide for the supply of strawberries from both the Baja California and Oxnard, California growing regions to the Rosarito facility in addition to SunOpta's existing California facilities. As a result, SunOpta expects to add in excess of 20 million pounds of strawberries to the Company's supply chain by 2008.

SunOpta Inc.
Condensed Notes to Consolidated
Financial Statements
For the three months ended March 31, 2007 Unaudited
(Expressed in thousands of U.S. dollars, except per share amounts)

PART I - FINANCIAL INFORMATION

Item 21 - – Management's Discussion

Condensed Consolidated Financial Statements

SunOpta Inc.

For the Three and AnalysisSix Months Ended June 30, 2007

(Unaudited)

(See accompanying notes to condensed consolidated financial statements)

(See accompanying notes to condensed consolidated financial statements)

(See accompanying notes to condensed consolidated financial statements)

(See accompanying notes to condensed consolidated financial statements)

(See accompanying notes to condensed consolidated financial statements)

SunOpta Inc.

Condensed Consolidated Statements of Cash Flow

For the six months ended June 30, 2007 and 2006

Unaudited

(Expressed in thousands of U.S. dollars, except per share amounts)

(See accompanying notes to condensed consolidated financial statements)

SunOpta Inc.

Notes to Condensed Consolidated Financial ConditionStatements

For the three and Resultssix months ended June 30, 2007 and 2006

Unaudited

(Expressed in thousands of OperationsU.S. dollars, except per share amounts)

Significant Developments

Public Offering

1.        Basis of presentation

The interim condensed consolidated financial statements of SunOpta Inc. (the Company) have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and in accordance with accounting principles generally accepted in the United States.  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for annual financial statements.  In the opinion of management, all adjustments considered necessary for fair presentation have been included and all such adjustments are of a normal, recurring nature.  Operating results for the six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2007.  For further information, see the Company's consolidated financial statements, and notes thereto, included in the Annual Report on Form 10K for the year ended December 31, 2006.

The interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and have been prepared on a basis consistent with the financial statements for the year ended December 31, 2006.  All significant intercompany accounts and transactions have been eliminated on consolidation.

2.

Business acquisitions

The Company completed two acquisitions in the quarter.  All of these acquisitions have been accounted for using the purchase method of accounting and the condensed consolidated financial statements include the results of operations for these businesses from the date of acquisition.  The following are the preliminary purchase allocations for these acquisitions:

a)

Congeladora del Rio S.A. de C.V. and Global Trading Inc.

On May 14, 2007, SunOpta Inc. announced that it has completed the acquisitions of the net operating assets of Congeladora del Rio, S.A. de C.V. ("Del Rio"), and all of the outstanding shares of Global Trading Inc., ("Global") for total consideration of $10,353.  Consideration included a combination of cash and notes payable and acquisition costs.  No additional consideration is payable under the agreement.   The promissory notes payable to former shareholders bear an interest rate of 6% and are payable in quarterly installments over the next three years.

Del Rio operates a fruit processing facility in Irapuato, Mexico. The high quality facility processes strawberries, peaches, mangos, bananas, pineapples, honeydew melons and other fruits, into individually-quick frozen, block frozen and purees for the food service, industrial and retail markets. Under the terms of the agreement, SunOpta purchased all of the net operating assets, including working capital, equipment, land and buildings.

SunOpta Inc.

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2007 and 2006

Unaudited

2.

Business acquisitions, continued

Global, the U.S.-based marketing agent for Del Rio located in Greenville, South Carolina, markets the fruits processed at Del Rio. Global's offices include executive management, sales, customer service and accounting support.

The acquisitions of Del Rio and Global provide additional capacity plus other synergistic opportunities to the SunOpta Fruit Group. In addition, the acquisition completes the Group's vertically integrated model for other fruit varieties, noted above, and expands its core production capabilities.

b)

 Baja California Congelados, S.A. de C.V.

On May 4, 2007, SunOpta completed the acquisition of certain assets, including inventory, machinery and equipment, from Baja California Congelados, S.A. de C.V. ("BCC"), of Rosarito, Baja California, Mexico for total consideration of $6,473.  Consideration consisted entirely of cash and no additional consideration is payable under the agreement.

BCC is the leading frozen strawberry processor in Baja California, Mexico. Under the terms of the agreement, SunOpta purchased all of the physical assets of the production facility located in Rosarito and also assumed a long-term lease for the facility, located 20 miles south of San Diego, California. In addition, SunOpta entered into five year supply agreements with Andrew & Williamson Sales Co., ("Andrew Williamson") the San Diego-based former parent of BCC. The agreements provide for the supply of strawberries from both the Baja California and Oxnard, California growing regions to the Rosarito facility in addition to SunOpta's existing California facilities.

c)

       Contingent consideration on companies acquired prior to 2007

Additional consideration of $54 was realized related to the acquisition of Cleugh's Frozen Foods Inc. ("Cleugh's").The amount was recorded in relation to Cleugh's achieving predetermined earnings targets.

3.     

Preferred Shares Issued by Subsidiary

On June 8, 2007, the Company completed a private placement for the sale of 1,500,000 non-dividend bearing, convertible preferred shares of SunOpta BioProcess Inc. (“SBI”, formerly the SunOpta BioProcess Group) for gross proceeds of $30,000.  The company incurred issuance costs of approximately $3,142 including the fair value (non-cash) assigned to warrants of SunOpta Inc. for $1,022, issued as part of the financing. These costs have been netted against the carrying value of the preferred shares.  The preferred shares do not bear any dividend rate and have a conversion feature which allows the holders to convert the preferred shares to common shares at any time on a one for one basis.  At any time following the seventh anniversary of the closing date or upon the occurrence of a change in control, holders of the majority of preferred shares will have the right to require the corporation to redeem all of the preferred shares for a cash payment equal to the o riginal issue price ($20 per share). Should SBI complete a qualified initial public offering (greater than $50,000), the preferred shares would automatically be converted into common shares upon closing of the transaction.

Included in issuance costs is the fair value attributed to warrants to purchase 648,300 common shares of SunOpta at a price of $11.57 (exercisable anytime over six months from the date of closing) that were granted to the SBI investors.  The fair value of these warrants was determined using the Black-Scholes method (note 4) and the fair value attributed to them was $1,022.

The preferred shares are shown net of issuance costs and the value of the preferred shares will be accreted to the $30,000 redemption value using the interest method over seven years (the redemption date).  Annual accretion expense will be approximately $446.

SunOpta Inc.

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2007 and 2006

Unaudited

3.     

Preferred Shares Issued by Subsidiary continued

In conjunction with the private placement, SBI granted 800,000 Restricted Stock Units (RSU) and 800,000 stock options (with an exercise price of $20 per share) in SBI common shares to certain employees of SBI.  The RSU's allow for a cash payment or grant of shares to the employees equal to the issuance price of a future initial public offering (to a maximum of $20 per share).  The RSU's and the stock options granted only vest if a change or control of SBI occurs or SBI completes an initial public offering and as such these units are considered performance based awards under FAS 123 and no expense is recorded in the financial statements until the contingent element has been resolved.

At the date of the grant, the Company estimates that the fair value associated with the stock grant is $10,180 and RSU's is $16,000.  The fair value of the options was calculated using the Black-Scholes option-pricing model with the assumptions of a dividend yield of 0%, an expected volatility based on industry peers of 77.7%, a risk-free interest rate of 4.0%, a forfeiture rate of 10.0% and a maximum life of up to 7 years.  The fair value of the RSU's is calculated using the maximum $20 per share that could be paid.  Given that no market exists for the SBI common shares, there exists significant measurement uncertainty in assessing the values of these units.

4.       Inventory

5.     

Capital stock and contributed surplus

(a)

On June 8, 2007, the Company issued 1,500,000 non-dividend bearing, convertible preferred shares of SunOpta BioProcess Inc. (see Note 3).  The investors in the private placement were also issued warrants to purchase 648,300 common shares of the Company at a price of $11.57 any time until December 8, 2007.  The fair value of the warrants is $1,022, determined using the Black-Scholes method using a volatility of 53.5%, risk-free interest rate of 4.5% and a six month life.

SunOpta Inc.

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2007 and 2006

Unaudited

5.     

Capital stock and contributed surplus continued

(b)

On February 13, 2007, the Company announced that it had completed its previously announcedissued 5,175,000 common shares at a price of $10.40 per common share, in respect of a public offering for gross proceeds of $53,820.  The Company incurred share issuance costs of $1,938, net of a $920 tax benefit, for net proceeds of $51,882.

(c)

In the six months ended June 30, 2007, employees and directors exercised 213,175 (June 30, 2006 – 622,715) common shares. As the underwritersshare options and an equal number of the offering exercised their over-allotment option in full upon closing, a total of 5,175,000 common shares were issued for net proceeds of $1,237 (June 30, 2006 - $2,639).

(d)

In the six months ended June 30, 2007, 40,655 (June 30, 2006 – 41,111) common shares were issued for net proceeds of $417 (June 30, 2006 - $278) as part of the Company's employee stock purchase plan.

(e)

In the six months ended June 30, 2007, 250,000 (June 30, 2006 – 38,500) options were granted to the publicemployees at a price of US$10.40$10.86 - $11.60 (June 30, 2006 - $5.36 - $10.00).  The fair value of the options granted were $1,209 (June 30, 2006 - $ 76) estimated using the Black-Scholes option-pricing model with the assumptions of a dividend yield of 0% (2006 – 0%), an expected volatility of 53.5% (2006 – 55%), a risk-free interest rate of 4.0% (2006 – 4.0%), forfeiture rate of 15% (2006 – 10%) and an expected life of five to six years.

(f)

In conjunction with his promotion to Chief Executive Officer, Steve Bromley received an award of 10,000 shares of the Company's stock.  The stock was granted 25% on February 8, 2007, plus an additional 25% will be issued on the anniversary for the next three years.  Accordingly, 2,500 shares were issued from treasury and the Company recognized stock based compensation costs of $29.

(g)

In the six months ended June 30, 2007, the Company recognized stock based compensation of $446 (June 30, 2006 - $166) related to the Company's stock options plans including the plan within Opta Minerals Inc.

(h)

In the six months ended June 30, 2007, no warrants were exercised, however, in the six months ending June 30, 2006, there were 35,000 warrants exercised and 35,000 shares were issued for proceeds of $60.

6.     

Earnings per share for aggregate gross proceeds of $53,820,000 or $51,731,000 net of costs.

The net proceedscalculation of basic earnings per share is based on the weighted average number of shares outstanding. Diluted earnings per share reflect the dilutive effect of the offeringexercise of warrants and options.  The number of shares for the diluted earnings per share was calculated as follows:

SunOpta Inc.

Notes to Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2007 and 2006

Unaudited

6.     

Earnings per share continued

Options to purchase nil and 117,000 common shares in the three and six months ended June 30, 2007 (June 30, 2006 – 174,800 and 264,800), respectively, have been excluded from the calculation of diluted earnings per share due to their anti-dilutive nature.  Warrants to purchase 648,300 common shares in the six months ended June 30, 2007 (June 30, 2006 – Nil) have been excluded from the calculation of diluted earnings per share due to their anti-dilutive nature.

7.

Long-term debt and banking facilities

Subsequent to the quarter end, on July 4, 2007, the Company completed the expansion of our existing credit facilities adding additional lenders Rabobank and HSBC Bank to its lending syndicate.  As part of this facility expansion, our operating line of credit in the United States has been increased by $30,000 with an additional $20,000 acquisition facility available for future strategic acquisitions.  The numbers presented below do not reflect these increased limits.  The additional operating line replaces other credit facilities that were usedeliminated earlier in 2007.

On February 28, 2007 the company repaid $1,890 in term debt and repaid and terminated its $20,000 asset based line of credit arrangement, both of which were secured by the assets of Cleugh's Frozen Foods, Inc.   The assets of Cleugh's Frozen Foods, Inc. have now been pledged as collateral under the syndicated lending agreement.

As of June 30, 2007 the syndicated lending agreement was as follows:

(a) Syndicated Lending Agreement

i)  Term loan facility:

The term loan facility is at $45,000 (December 31, 2006 - $45,000). The entire loan principal is due on maturity.  The term loan matures on December 20, 2010 and is renewable at the option of the lender and the Company.

ii)  Revolving acquisition facility:

The acquisition facility of $8,500 (December 31, 2006 - $10,000) is payable in equal quarterly installments of the greater amount of (a) 1/20 of the initial drawdown amount of the facility, or (b) 1/20 of the outstanding principal amount as of the date of the last draw.  Any remaining outstanding principal under this facility is due on October 31, 2009.

iii) Canadian line of credit facility:

The Company has a line of credit facility in Canada with a maximum draw of Cdn $25,000 ($23,465).  At June 30, 2007, $22,224 (December 31, 2006 - $nil) of the facility was utilized including outstanding cheques plus an additional $94 (December 31, 2006 - $172) was committed through letters of credit.

SunOpta Inc.

Notes to repayCondensed Consolidated Financial Statements

For the three and six months ended June 30, 2007 and 2006

Unaudited

(Expressed in thousands of U.S. dollars, except per share amounts)

7.

Long-term debt and banking facilities, continued

iv)  US line of credit facility:

The US line of credit facility has a maximum borrowing of $30,000.  As at June 30, 2007 $32,178 (December 31, 2006 - $13,000) of this facility was utilized including outstanding cheques.  Interest on borrowings under this facility accrues at the borrower's option based on various reference rates including U.S. bank prime rate, or U.S. LIBOR, plus a margin based on certain financial ratios.

All of the above facilities are collateralized by a first priority security against substantially all of the Company's assets in both Canada and the United States with the exception of the assets of Opta Minerals.

(b) Other long-term debt consists of the following:

(c) Additional Credit Facilities

Included in bank indebtedness are the lines of credit of the Company as described in 7(a) above and certainlines of credit of the Company's subsidiaries as follows:

i)  Opta Minerals Inc.:

In addition to the term debts and fund internal expansion projects and working capital requirements.

New Contracts

On March 9,loan facility described above in 7(b), Opta Minerals, Inc. has a line of credit of $11,733 (Cdn $12,500).  As of June 30, 2007 Opta Minerals, Inc., the Company's 70.4% owned subsidiary, announced two new contracts for approximately $12,000,000 in annual revenues for the supply of magnesium desulfurization products to two major integrated steel mills in Canada and the US. These contracts are renewable on a yearly basis.

Opta Minerals also announced that it will commence commercial production of these products in the 2nd quarter at the Waterdown, Ontario facility. This expansion will give Opta three facilities focused on the production of magnesium based reagents and slag conditioners located in Indiana, Ontario and Michigan.

Strategic Agreements

On March 27, 2007, the Company announced, through the SunOpta Fruit Group, that it had entered into a strategic agreement with reputable local fruit industry leaders in Argentina and Chile to develop supply opportunities in the organic and natural frozen fruit industry. The agreements increase SunOpta's supply of natural and organic strawberries, raspberries and blueberries, apple and pear purees and fruit and vegetable concentrates from an important counter cyclical supply region.

In this regard, the Company entered into a five year exclusive supply agreement with Baby's Best Infant Food Ingredients S.A.("Baby's Best), a producer of organic and natural purees and concentrates in Mendoza, Argentina. Under the terms has utilized $9,411 (December 31, 2006 - $7,645) of the agreement, the Company provided a line of credit, to enable Baby's Best to expand production and in turn received an option to purchase Baby's Best atincluding letters of credit outstanding of $964.  

These facilities have been collateralized by a predetermined price in March 2009.

The Company also entered into a three year exclusive organic supply agreement with a leading processor of organic and natural frozen fruits in Chile. Under the termspriority security interest against substantially all of the agreement SunOpta financed a capital expansion to further develop growth in critical organic fruit supply.Opta Minerals Inc.'s assets.  

Working CapitalCash on deposit with lending institutions has also been netted against borrowings under the lines of credit with the same institutions.  

The Company's working capital increased to $129,420,000 during the quarter versus $80,430,000 at December 31, 2006. A number of business factors drove this increase including an increase in accounts receivable in line with revenue growth, the rapid growth in the Company's global sourcing program which often requires payment for raw materials in advance of shipping to North America, the rapid increase in the costs of certain grains and fruits due to market pricing conditions, changes in the ship and release policy within the Fruit Group which increased inventory levels and aggressive use of all supplier payment discounts made available. In addition, traditional farmer payments which normally straddle the year-end were significant higher in 2007 due to increased volumes and higher commodity prices for corn and soybeans. A number of actions have been taken to reduce these factors and we expect significant improvement in this regard over the balance of the year.

Operations

SunOpta Inc.

Condensed Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2007

Unaudited

8.

 Supplemental cash flow information

One of the Company's subsidiaries, SunRich LLC filed a claim against a supplier for failure to adhere to the terms of a contract.  In 2004 Sunrich was awarded the trial judgement and in the fall of 2006, the decision of the Appellate Court confirmed this judgement.  In 2006, the Company collected $2,014 in satisfaction of the judgement.  The Company also has filed an application for the Three Months ended March 31, 2007 Compared Withrecovery of legal fees, included in other assets, which is currently outstanding with the Three Months Ended March 31, 2006Court.

1 (Operating Income is defined as earnings before other income (expense), interest expense (net), income taxes

(b)

In addition, various claims and minority interest)

Revenuespotential claims arising in the first three monthsnormal course of 2007 increased by 37.6% to $183,440,000 based on internal growthbusiness are pending against the Company.  It is the opinion of 16.1%management that these claims or potential claims are without merit and acquisition revenuesthe amount of $24,683,000. Internal growth includes growth on base business plus growth on acquisitions from the date of acquisition over the previous year.

Operating income increased to $7,976,000, representing an increase of 32.3% versus the first three months of 2006. Growth in operating income was attributed to improved operating earnings from the SunOpta Food Group of $1,106,000 due primarilypotential liability, if any, to the strong revenues and margins inCompany is not determinable.  Management believes the SunOpta Canadian Food Distribution Group operations and improved revenue and operating margins infinal determination of these claims or potential claims will not materially affect the SunOpta Grains and Food Group. In addition, operating improvements of $449,000 were realized in Opta Minerals while the SunOpta BioProcess and Corporate segment realized reduced costs of $390,000. Please note that segmented operating income reflects an increase in allocated costs from Corporate to the SunOpta Food Group of $1,169,000 for increased information technology services as well as back office functions provided to divisions using the Oracle ERP system. Further details on revenue and operating income, including the impactfinancial position or results of the corporate cost allocations, are provided by operating group below.Company.

Interest expense increased by 36.6% to $1,911,000 for

10.

Proforma data (unaudited)

Condensed proforma income statement, as if the three months ended March 31, 2007 due to increased average long-term debt and operating lines of approximately $21,000,000. The increase in debt is primarily related to acquisitions completed duringin 2006 and 2007 had occurred at the previous year and additional working capital utilized to fund internal growth. The average interest rate for the quarter was approximately 6.4%, slightly higher that the prior years first quarter at 6.2%. The Company's long term debt to equity ratiobeginning of 2005, is 0.31:1:00, below the Company's long term target. Bank indebtedness is approximately 14% of accounts receivable and inventory, which is used to finance operating lines.as follows:

Other expense for the three months ending March 31, 2006 of $189,000 includes certain restructuring costs incurred during the quarter mainly relating to the consolidation of warehouses within the SunOpta Canadian Food Distribution Group. Other expenses of $85,000 in the previous year were related to costs incurred with the acquisition of Magnesium Technologies Corporation.

The income tax rate for the first three months of 2007 is approximately 31.0%. The provision for income taxes in the first three months of 2007 is comparable to the prior year. The Company expects that the full year income tax rate for 2007 will be between 30% and 34%.

SunOpta Inc.

Segmented Operations InformationCondensed Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2007

Unaudited

(Note: Certain prior year figures have been adjusted to conform with current year presentation and segmented reporting.)Expressed in thousands of U.S. dollars, except per share amounts)

SunOpta Food Group:

11.

1 (Operating Income is defined as earnings before other income (expense), interest expense (net), income taxes and minority interest)Segmented information

Industry segments

The SunOpta Food Group contributed $166,262,000 or 90.6%% of total Company consolidated revenuesoperates in the first three months of 2007 versus 89.5% in the same period in 2006. The increase of 39.4% inindustries divided into six operating segments:

(a) the SunOpta Food Group reflects very strong sales volume from(Food Group), processes, packages and distributes a wide range of natural, organic and specialty food products via its vertically integrated operations and is further divided into the following segments:

i)

SunOpta Grains & Foodand Foods Group dueis focused on vertically integrated sourcing, processing, packaging and marketing of grains and grain based ingredients and packaged products.

ii)

SunOpta Ingredients Group works closely with its customers to strong sales of soybean, corn, sunfloweridentity product formulation, cost and refrigeratedproductivity issues and aseptic soymilk, very strong increases infocuses on transforming raw materials into value-added food ingredient solutions with a focus on fiber based ingredient systems.

iii)

SunOpta Fruit Group focuses on providing natural and organic fruits, vegetables and related products to the private label retail, food service and industrial markets.

iv)

SunOpta Distribution Group (formally the SunOpta Canadian Food Distribution group due to improving grocery sales and acquisitions and strong internal growth fromGroup) represents the SunOpta Fruit Group driven by increased demand forfinal layer of the Company's vertically integrated natural and organic fruits and related ingredients. These increases were offset by lower sales in the SunOpta Ingredients Group due to the previously announced loss offoods business model, a contract manufacturing customer which contributed $2,542,000 in revenue in 2006.

Operating income in the SunOpta Food Group increased by 16.2% to $7,935,000 including the impact of $1,169,000 in higher corporate costs allocations. Excluding those allocations, the SunOpta Food Group recorded an increase in operating income of 33.3% on a comparable basis. The increase in operating income reflects improved operating results of $923,000 within the SunOpta Canadian Food Distribution Group, due to strongnational natural, organic, kosher and grocery revenues, cost rationalizationspecialty foods distribution system.

(b) Opta Minerals Inc., processes, distributes, and acquisitions completed in the prior yearrecycles silica free loose abrasives, industrial minerals, specialty sands and a $915,000 increase fromrelated products; and

(c) the SunOpta GrainsBioProcess Inc., markets proprietary biomass pre-treatment processing technology including pre-engineering, design and Foods Group, due to strong soymilk revenueslaboratory services with significant licensing and a turn aroundapplications potential in cellulosic ethanol, food processing and pulp industries.  

The Company's assets, operations and employees are located in Canada, the sunflower business. The increases noted were offset by reduced operating income of $687,000 in the SunOpta Ingredients Group primarily due to the loss of a contract for manufacturing of a soluble fiber which contributed operating margin of $545 in the first quarter of 2006, plus their share of higher corporate allocations.

1 (Operating Income is defined as earnings before other income (expense), interest expense (net), income taxesUnited States and minority interest)Mexico.

SunOpta Inc.

Condensed Notes to Consolidated Financial Statements

For the three and six months ended June 30, 2007

Unaudited

(Expressed in thousands of U.S. dollars, except per share amounts)

11.

Segmented information, continued

The SunOpta Grains and FoodsFood Group contributed $52,591,000 in revenues duringhas the first quarter, a $13,437,000 or 34.3% increase over the same quarter in the previous year. This increase was attributed entirelyfollowing segmented reporting: