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Ceapro Inc. Reports 2021 First Quarter Financial Results and Highlights

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,
  2021 2020
  $ $
     
ASSETS    
Current Assets    
Cash and cash equivalents 5,239,071 5,369,029
Trade receivables 2,907,013 2,019,723
Other receivables 29,576 102,224
Inventories (note 3) 998,911 1,210,079
Prepaid expenses and deposits 198,804 348,845
     
  9,373,375 9,049,900
Non-Current Assets    
  Investment tax credits receivable 607,700 607,700
Deposits 82,124 82,124
Licences (note 4) 17,773 18,514
Property and equipment (note 5) 18,473,734 18,591,189
Deferred tax assets 874,304 874,304
     
  20,055,635 20,173,831
     
TOTAL ASSETS 29,429,010 29,223,731
     
LIABILITIES AND EQUITY    
Current Liabilities    
Accounts payable and accrued liabilities 791,089 1,067,622
Current portion of lease liabilities (note 6) 260,307 250,658
Current portion of CAAP loan (note 8) 75,007 72,263
     
  1,126,403 1,390,543
Non-Current Liabilities    
Long-term lease liabilities (note 6) 2,577,698 2,648,917
Deferred tax liabilities 874,304 874,304
     
  3,452,002 3,523,221
     
TOTAL LIABILITIES 4,578,405 4,913,764
     
Equity    
Share capital (note 7 (b)) 16,549,875 16,511,067
Contributed surplus (note 7 (e)) 4,669,347 4,682,393
Retained earnings 3,631,383 3,116,507
     
  24,850,605 24,309,967
     
TOTAL LIABILITIES AND EQUITY 29,429,010 29,223,731


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 sold 2,443,800   1,901,223  
       
Gross margin 2,257,943   2,372,151  
       
Research and product development 816,847   502,542  
General and administration 712,207   865,034  
Sales and marketing 13,238   48,228  
Finance costs (note 11) 93,910   101,609  
       
Income from operations 621,741   854,738  
       
Other (expenses) income (note 10) (106,865 ) 271,317  
       
Income before tax 514,876   1,126,055  
       
Income taxes -   -  
       
Total comprehensive income for the period 514,876   1,126,055  
       
Net income per common share (note 17):      
Basic 0.01   0.01  
Diluted 0.01   0.01  
       
Weighted average number of common shares outstanding (note 17):      
Basic 77,651,031   77,538,314  
Diluted 78,709,975   77,880,861  
       


CEAPRO INC.    
Consolidated Statements of Cash Flows    
Unaudited    
     
     
  2021   2020  
Three Months Ended March 31, $   $  
OPERATING ACTIVITIES    
Net income for the period 514,876   1,126,055  
Adjustments for items not involving cash    
Finance costs 36,166   40,947  
Transaction costs -   554  
Depreciation and amortization 468,153   460,088  
Accretion 2,744   5,108  
Share-based payments 3,742   93,548  
Net income for the period adjusted for non-cash items 1,025,681   1,726,300  
CHANGES IN NON-CASH WORKING CAPITAL ITEMS    
Trade receivables (887,290 ) (264,398 )
Other receivables 72,648   (24,076 )
Inventories 211,168   (347,853 )
Prepaid expenses and deposits 72,574   (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 items 341,162   572,344  
Interest paid (36,166 ) (40,947 )
CASH GENERATED FROM OPERATIONS 304,996   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 exercised 22,020   -  
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 period 5,369,029   1,857,195  
     
Cash and cash equivalents at end of the period 5,239,071   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


Source: Ceapro Inc.




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