Ceapro Inc. Reports 2021 Second Quarter and Six-Month Financial Results and Operational Highlights

Ceapro Inc. Reports 2021 Second Quarter and Six-Month Financial Results and Operational Highlights




Ceapro Inc. Reports 2021 Second Quarter and Six-Month Financial Results and Operational Highlights

Company continues to increase R&D activities to advance clinical and preclinical programs

– Second quarter sales of $4,409,000 compared to $4,666,000 for second quarter 2020 –

– Cash generated from operations of $2,128,000 in Q2 2021 compared to $2,195,000 in Q2 2020 –

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

EDMONTON, Alberta, Aug. 26, 2021 (GLOBE NEWSWIRE) — Ceapro Inc. (TSX-V: CZO; OTCQX: CRPOF) (“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 second quarter and six months ended June 30, 2021.

“Progress continues on all fronts from production operations to research and development, allowing us to advance our pipeline while expanding our business model. With our newly formed network of highly renowned experts from University of Alberta, McMaster University, the Montreal Heart Institute, and the Angiogenesis Foundation, we have implemented a comprehensive strategic research plan that we believe enables us to address immune/inflammation-based and lifestyle diseases at various stages and from all angles. Additionally, with upcoming results expected in the fourth quarter of this year for Ceapro’s very first clinical trial, I believe we are well positioned for the next steps in becoming a premier life sciences company. The Company has exciting things on the horizon and we are committed to building on momentum,” stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

  • Announced successful completion of collaborative research and development program with University of Alberta. The program developed several new chemical complexes as potential delivery systems and demonstrated the possibility of drying peptides using Pressurized Gas eXpanded (PGX) Technology.
  • Initiated bioavailability studies with University of Alberta for new chemical complexes yeast beta glucan-CoQ10 and alginate-CoQ10.
  • Resumed research activities with McMaster University to develop an inhalable therapeutic for COVID-19 using yeast beta glucan.
  • Completed patient enrollment in clinical study evaluating beta glucan as a cholesterol-lowering agent. Last patient last visit is expected by end of September 2021, followed by locking of data base, unblinding of the study and topline results expected in Q4 2021.

Technology:

  • Pursued technical upgrades of PGX demo plant in Edmonton including initiation of commercial scale up of impregnation unit to produce chemical complexes.
  • Initiated engineering design for PGX commercial scale unit. Final decision on the type and location of future commercial scale PGX unit to be announced during Q4 2021.

Production Operations:

  • Successfully passed thorough audits conducted by two major customers for the Edmonton facility, which is now housing all production operations for the Company.

Corporate:

  • Pursued out-licensing discussions for PGX-processed new chemical complexes.

Subsequent to Quarter:

  • Announced research agreement with Montreal Heart Institute for a Phase 1 clinical trial assessing safety and tolerability of pharmaceutical grade avenanthramides.
  • Announced research agreement with Boston-based Angiogenesis Foundation to assess in vivo bioefficacy of oat beta glucan and avenanthramides in angiogenesis, blood vessel repairs, wound healing and tissue regeneration in various inflammation-based diseases and conditions like COVID-19 presenting damages of the lung blood vessels.

Financial Highlights for the Second Quarter and the Six-Month Period Ended June 30, 2021

  • Total sales of $4,409,000 for the second quarter of 2021 and $9,110,000 for the first six months of 2021 compared to $4,666,000 and $8,939,000 for the comparative periods in 2020.

    Sales being made in USA dollars and then reported in CDN dollars, it is noteworthy to look at the impact of the exchange rate (USD/CDN) from year to year. In fact, the Company has recorded respective sales in USD of $3.6M and USD $7.3M for the second quarter and the first six months of 2021 as compared to USD $3.4M and USD $6.5M for the comparative periods of 2020, representing a year-to-date effective increase of 12% in 2021.

  • Net profit of $676,000 for the second quarter of 2021 and $1,191,000 for the first six months of 2021 compared to a net profit of $1,077,000 and $2,203,000 for the comparative periods in 2020.
  • Cash flows generated from operations of $2,433,000 for the first six months of 2021 vs $2,727,000 in 2020.
  • Positive working capital balance of $9,303,000 as of June 30, 2021.

“The ability of our business to successfully navigate through the challenging second quarter business environment is a testament to the commitment and hard work of our dedicated employees, and a measurable indication of the operational improvements generated by our strategic investments of the past few years,” continued Mr. Gagnon. “Looking ahead, while considering the ongoing potential economic impact related to the new surge of COVID-19, we believe Ceapro is well-positioned to once again deliver solid growth in 2021. With a strong and very clean balance sheet, a group of dedicated people, and a solid base business coupled with the innovative technologies and products that we have developed to enable us to expand, Ceapro is poised to emerge as a successful life science company.”

CEAPRO INC.    
Consolidated Balance Sheets    
Unaudited    
     
  June 30, December 31,
  2021 2020
  $ $
     
ASSETS    
Current Assets    
Cash and cash equivalents 7,269,428 5,369,029
Trade receivables 1,801,568 2,019,723
Other receivables 45,913 102,224
Inventories (note 3) 1,168,163 1,210,079
Prepaid expenses and deposits 236,932 348,845
     
  10,522,004 9,049,900
Non-Current Assets    
Investment tax credits receivable 607,700 607,700
Deposits 82,124 82,124
Licences (note 4) 17,032 18,514
Property and equipment (note 5) 18,029,316 18,591,189
Deferred tax assets 874,304 874,304
     
  19,610,476 20,173,831
     
TOTAL ASSETS 30,132,480 29,223,731
     
LIABILITIES AND EQUITY    
Current Liabilities    
Accounts payable and accrued liabilities 857,731 1,067,622
Current portion of lease liabilities (note 6) 283,204 250,658
Current portion of CAAP loan (note 8) 77,855 72,263
     
  1,218,790 1,390,543
Non-Current Liabilities    
Long-term lease liabilities (note 6) 2,505,623 2,648,917
Deferred tax liabilities 874,304 874,304
     
  3,379,927 3,523,221
     
TOTAL LIABILITIES 4,598,717 4,913,764
     
Equity    
Share capital (note 7 (b)) 16,555,619 16,511,067
Contributed surplus (note 7 (e)) 4,670,289 4,682,393
Retained earnings 4,307,855 3,116,507
     
  25,533,763 24,309,967
     
TOTAL LIABILITIES AND EQUITY 30,132,480 29,223,731
     

CEAPRO INC.        
Consolidated Statements of Net Income and Comprehensive Income
Unaudited        
     
     
  Quarters Ended June 30,   Six Months Ended June 30,
  2021   2020   2021   2020
  $   $   $   $
         
Revenue (note 14) 4,408,631   4,665,971   9,110,374   8,939,345
Cost of goods sold 1,770,153   2,079,270   4,213,953   3,980,493
         
Gross margin 2,638,478   2,586,701   4,896,421   4,958,852
         
Research and product development 830,511   399,797   1,647,358   902,339
General and administration 952,847   838,263   1,665,054   1,703,297
Sales and marketing 16,362   29,207   29,600   77,435
Finance costs (note 11) 38,344   44,583   132,254   146,192
         
Income from operations 800,414   1,274,851   1,422,155   2,129,589
         
Other (expenses) income (note 10) (123,942 ) (197,812 ) (230,807 ) 73,505
         
Income before tax 676,472   1,077,039   1,191,348   2,203,094
         
Income taxes      
         
Total comprehensive income for the period 676,472   1,077,039   1,191,348   2,203,094
         
Net income per common share (note 17):        
Basic 0.01   0.01   0.02   0.03
Diluted 0.01   0.01   0.02   0.03
         
Weighted average number of common shares outstanding (note 17):        
Basic 77,673,832   77,608,341   77,662,495   77,573,327
Diluted 78,684,303   77,980,876   78,684,344   77,930,529
         

CEAPRO INC.    
Consolidated Statements of Cash Flows    
Unaudited    
     
     
  2021   2020  
Six Months Ended June 30, $   $  
OPERATING ACTIVITIES    
Net income for the period 1,191,348   2,203,094  
Adjustments for items not involving cash    
Finance costs 71,662   79,674  
Transaction costs   1,108  
Depreciation and amortization 937,356   920,521  
Accretion 5,592   10,410  
Share-based payments 6,828   108,147  
Net income for the period adjusted for non-cash items 2,212,786   3,322,954  
CHANGES IN NON-CASH WORKING CAPITAL ITEMS    
Trade receivables 218,155   600,990  
Other receivables 56,311   (43,599 )
Inventories 41,916   (592,489 )
Prepaid expenses and deposits 51,179   (33,088 )
Accounts payable and accrued liabilities relating to operating activities (75,337 ) (448,200 )
Total changes in non-cash working capital items 292,224   (516,386 )
         
Net income for the period adjusted for non-cash and working capital items 2,505,010   2,806,568  
Interest paid (71,662 ) (79,674 )
CASH GENERATED FROM OPERATIONS 2,433,348   2,726,894  
INVESTING ACTIVITIES    
Purchase of property and equipment (277,062 ) (38,230 )
Purchase of leasehold improvements (19,472 )  
Deposits relating to investment in equipment (16,733 ) (50,203 )
Accounts payable and accrued liabilities relating to investing activities (134,554 )  
CASH USED IN INVESTING ACTIVITIES (447,821 ) (88,433 )
FINANCING ACTIVITIES    
Stock options exercised 25,620    
Repayment of long-term debt   (97,507 )
Repayment of lease liabilities (110,748 ) (130,829 )
CASH USED IN FINANCING ACTIVITIES (85,128 ) (228,336 )
Increase in cash and cash equivalents 1,900,399   2,410,125  
     
Cash and cash equivalents at beginning of the period 5,369,029   1,857,195  
     
Cash and cash equivalents at end of the period 7,269,428   4,267,320  
     

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

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