Ceapro Inc. Reports 2021 First Quarter Financial Results and Highlights

– Maintained production operations during COVID-19 pandemic, providing customers essential products while ensuring the health and safety of Company’s employees –

– Increased R&D investments for the development of innovative delivery systems and for accelerating recruitment of patients in a clinical trial for oat beta glucan as a cholesterol reducer –

First quarter 2021 sales increased 10% vs. first quarter 2020 –

EDMONTON, Alberta, May 20, 2021 (GLOBE NEWSWIRE) -- Ceapro Inc. (TSX-V: CZO) (“Ceapro” or the “Company”), a growth-stage biotechnology company focused on the development and commercialization of active ingredients for healthcare and cosmetic industries, today announced financial results and operational highlights for the first quarter ended March 31, 2021.

“While ensuring safety of our employees remained a top priority, we obtained solid results once again during the first quarter of this year and were successful at both growing our base business and also advancing some key research and development projects despite mandated stay-at-home orders in some Canadian provinces due to the ongoing COVID-19 pandemic. These results are a clear testament to the dedication and hard work of each of our employees during these challenging times and we are very proud of their commitment to support our customers heightened demand by delivering high quality products,” stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

  • Deployed additional efforts and resources in accelerating enrollment and randomization of patients for the clinical trial with beta glucan as a cholesterol reducer. To date, with outreach initiatives put in place by the team at the Montreal Heart Institute, more than 200 patients are part of the study. A total of 264 randomized patients are required for statistical significance.
  • Continued to monitor stability studies for liquid beta glucan and avenanthramides produced at Ceapro’s new manufacturing site as well as for the pharmaceutical-grade dry powder formulation of avenanthramides to be used in a human Phase 1 bioavailability and safety study.
  • Initiated the design of a protocol for a Phase 1 clinical trial with pharmaceutical grade avenanthramides. Subsequent to quarter end, signed a service agreement for the development and manufacturing of an oral solid dosage formulation of avenanthramide to be administrated during the Phase 1 study.
  • Conducted additional in vitro dose response study with PGX processed yeast beta glucan to correlate with upcoming McMaster animal study results. Animal studies should resume at the beginning of June 2021 upon lifting of stay-at-home orders in Ontario.
  • Developed and fine-tuned new PGX-dried chemical complexes mostly using sodium alginate as a carrier. Subsequent to quarter end, the Company announced the successful completion of its long-term research collaboration with University of Alberta. This project allowed for the expansion of a PGX pipeline which now includes proteins/enzymes in addition to polysaccharides like beta glucan. One of these enzymes, lysozyme was presented at the European Meeting on Supercritical Fluids by Dr. Ricardo Couto, a member of Ceapro’s PGX team who demonstrated that enzymatic activity is preserved following PGX processing. Lysozyme might have several applications since it is recognized as a remarkable natural antimicrobial and antiviral enzyme that boosts the immune defense while increasing shelf life in foods, cosmetics and pharmaceuticals. Lysozyme can also be integrated in skin care products to treat acne or promote wound repair.

Technology:

  • Upgraded and commissioned PGX pilot scale processing unit in Edmonton. This will allow the generation of larger and more consistent batches of PGX polymer carriers for impregnation scale-up.

  • Advanced the installation and further scaled up the PGX impregnation unit in Edmonton. Many trials were successfully conducted with the new impregnation vessel system mostly using sodium alginate.

  • Retained and conducted several virtual meetings with a seasoned high-pressure engineering and manufacturing company capable to design and build a new PGX industrial plant with equipment recently purchased in Germany. Timelines and cost estimates are being assessed.

Financial Highlights for the First Quarter Ended March 31, 2021

  • Total sales of $4,702,000 for the first quarter of 2021 compared to $4,273,000 for the comparative period in 2020; an increase of 10% over last year. Beta glucan sales volumes increased by 318% for Q1 2021 vs Q1 2020. With sales being made in US dollars, the decreased exchange rate $US/CDN as compared to the prior period negatively impacted 2021 sales by approximately $364,000.

  • Net profit of $515,000 for the first quarter of 2021 compared to a net profit of 1,126,000 for the comparative period in 2020.

  • Research and Development of $817,000 in Q1 2021 vs. $502,000 in 2020. This increased investment was partly due to an accelerated pace for the recruitment of patients for the beta glucan trial as a cholesterol reducer.

  • Cash generated from operations of $305,000 in Q1 2021 vs. $531,000 in Q1 2020.

  • Positive working capital balance of $8,246,972 as of March 31, 2021.

“As we respond to the potential impacts and uncertainties of COVID-19 by taking the necessary steps to preserve our financial position, we continue to execute on our expansion to a new business model from a contract manufacturer/commodity company to a high-value life science/biopharmaceutical company. We remain dedicated to executing on our milestones ahead and should the Company be able to service its customers without disruption, we strongly believe the prospects for the Company remain very strong for the upcoming year,” concluded Mr. Gagnon.

CEAPRO INC.  
Consolidated Balance Sheets  
Unaudited  
   
 March 31,December 31,
 20212020
 $$
   
ASSETS  
Current Assets  
Cash and cash equivalents5,239,0715,369,029
Trade receivables2,907,0132,019,723
Other receivables29,576102,224
Inventories (note 3)998,9111,210,079
Prepaid expenses and deposits198,804348,845
   
 9,373,3759,049,900
Non-Current Assets  
  Investment tax credits receivable607,700607,700
Deposits82,12482,124
Licences (note 4)17,77318,514
Property and equipment (note 5)18,473,73418,591,189
Deferred tax assets874,304874,304
   
 20,055,63520,173,831
   
Total Fina Elf ASSETS29,429,01029,223,731
   
LIABILITIES AND EQUITY  
Current Liabilities  
Accounts payable and accrued liabilities791,0891,067,622
Current portion of lease liabilities (note 6)260,307250,658
Current portion of CAAP loan (note 8)75,00772,263
   
 1,126,4031,390,543
Non-Current Liabilities  
Long-term lease liabilities (note 6)2,577,6982,648,917
Deferred tax liabilities874,304874,304
   
 3,452,0023,523,221
   
Total Fina Elf LIABILITIES4,578,4054,913,764
   
Equity  
Share capital (note 7 (b))16,549,87516,511,067
Contributed surplus (note 7 (e))4,669,3474,682,393
Retained earnings3,631,3833,116,507
   
 24,850,60524,309,967
   
Total Fina Elf LIABILITIES AND EQUITY29,429,01029,223,731


CEAPRO INC.   
Consolidated Statements of Net Income and Comprehensive Income 
Unaudited   
   
   
 2021 2020 
Three Months Ended March 31,$ $ 
    
Revenue (note 14)4,701,743 4,273,374 
Cost of goods sold2,443,800 1,901,223 
    
Gross margin2,257,943 2,372,151 
    
Research and product development816,847 502,542 
General and administration712,207 865,034 
Sales and marketing13,238 48,228 
Finance costs (note 11)93,910 101,609 
    
Income from operations621,741 854,738 
    
Other (expenses) income (note 10)(106,865)271,317 
    
Income before tax514,876 1,126,055 
    
Income taxes- - 
    
Total comprehensive income for the period514,876 1,126,055 
    
Net income per common share (note 17):   
Basic0.01 0.01 
Diluted0.01 0.01 
    
Weighted average number of common shares outstanding (note 17):   
Basic77,651,031 77,538,314 
Diluted78,709,975 77,880,861 
    


CEAPRO INC.  
Consolidated Statements of Cash Flows  
Unaudited  
   
   
 2021 2020 
Three Months Ended March 31,$ $ 
OPERATING ACTIVITIES  
Net income for the period514,876 1,126,055 
Adjustments for items not involving cash  
Finance costs36,166 40,947 
Transaction costs- 554 
Depreciation and amortization468,153 460,088 
Accretion2,744 5,108 
Share-based payments3,742 93,548 
Net income for the period adjusted for non-cash items1,025,681 1,726,300 
CHANGES IN NON-CASH WORKING CAPITAL ITEMS  
Trade receivables(887,290)(264,398)
Other receivables72,648 (24,076)
Inventories211,168 (347,853)
Prepaid expenses and deposits72,574 (54,186)
Accounts payable and accrued liabilities relating to operating activities(153,619)(463,443)
Total changes in non-cash working capital items(684,519)(1,153,956)
Net income for the period adjusted for non-cash and working capital items341,162 572,344 
Interest paid(36,166)(40,947)
CASH GENERATED FROM OPERATIONS304,996 531,397 
INVESTING ACTIVITIES  
Purchase of property and equipment(253,018)(20,099)
Purchase of leasehold improvements(19,472)- 
Accounts payable and accrued liabilities relating to investing activities(122,914)- 
CASH USED IN INVESTING ACTIVITIES(395,404)(20,099)
FINANCING ACTIVITIES  
Stock options exercised22,020 - 
Repayment of long-term debt- (48,520)
Repayment of lease liabilities(61,570)(64,987)
CASH USED IN FINANCING ACTIVITIES(39,550)(113,507)
(Decrease) increase in cash and cash equivalents(129,958)397,791 
   
Cash and cash equivalents at beginning of the period5,369,029 1,857,195 
   
Cash and cash equivalents at end of the period5,239,071 2,254,986 

The complete financial statements are available for review on SEDAR at https://sedar.com/Ceapro and on the Company’s website at www.ceapro.com.

About Ceapro Inc.

Ceapro Inc. is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and “active ingredients” from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical, and therapeutics products for humans and animals. The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. For more information on Ceapro, please visit the Company’s website at www.ceapro.com.

For more information contact:

Jenene Thomas
JTC Team , LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: czo@jtcir.com

Issuer:
Gilles R. Gagnon, M.Sc., MBA
President & CEO
T: 780-421-4555

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release