Ceapro Inc. Reports 2018 Second Quarter and Six-Month Financial Results and Operational Highlights
EDMONTON, Alberta, Aug. 28, 2018 (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 quarter ended June 30, 2018.
“Ceapro remains in a period of exciting ongoing multiple transitions. While we continue to rely on our existing base business model in cosmeceuticals through a distribution network, we are accelerating the diversification of this model by investing in marketing and sales to get closer to the customer through the direct offering of both of Ceapro’s active ingredients and the Juvente line of top class cosmeceutical products. We will also further invest in clinical trials for new product applications for our value drivers, avenanthramides and beta glucan, to allow the expansion of Ceapro to its next phase of growth into the profitable nutraceutical sector. Positive results recently announced with avenanthramides as an anti-inflammation product and with beta glucan as part of a new water-soluble and bioavailable chemical entity (Beta Gucan/CoQ10) represent important steps in facilitating this transition,” stated Gilles Gagnon, M.Sc., MBA, President and CEO of Ceapro.
Recent Operational Highlights
- Presented positive results for bioefficacy study with avenanthramides in exercise-induced inflammation at the Nutrition 2018 conference held in Boston. Results of the study showed that oat avenanthramides supplementation reduces circulatory inflammation and inhibits expressions of chemokines and adhesion molecules. Subject to Health Authorities approval, Ceapro believes that the data gathered could support an anti-inflammatory claim for food or liquids when enriched with avenanthramides to become a functional food or functional drink. Furthermore, with this data, Ceapro is well positioned to conduct additional studies of avenanthramides as a potential pharmaceutical product with the goal of achieving proof of concept and supporting its proprietary product’s ability to have a significant impact on inflammation-based diseases;
- Announced positive results for the bioavailability study conducted with Ceapro’s new chemical complex, coenzyme Q10-impregnated beta glucan confirming in a dose response manner excellent bioavailability of Ceapro’s unique CoQ10-BG formulation at concentrations of 3% to 8% CoQ10. From a physicochemical perspective, Ceapro’s unique water soluble CoQ10-BG formulation remained stable in aqueous dispersion for more than four months compared to the commercially available 20% CoQ10 formulation, which precipitated in less than 18 hours. This is now a candidate for out-licensing in certain territories;
- Signed a long-term Master Service Agreement with the prestigious Montreal Heart Institute for Ceapro’s clinical program; the assessment of beta glucan as a cholesterol reducer being the first clinical trial to be initiated upon receipt of green light from Health Canada;
- Produced large scale powder formulation of beta glucan using the Pressurized Gas eXpanded (PGX) pilot unit located within the new Edmonton facility;
- Signed pharmaceutical development and manufacturing agreements with two Montreal-based specialized companies for the final formulation and production of tablets from PGX processed dry beta glucan to be assessed as a cholesterol reducer in an upcoming clinical trial;
- Presented PGX Enabling Technology Case Study at the Inventures Conference held in Calgary on June 5, 2018;
- Presented PGX technology to large European based companies as part of business development discussions; and
- Hired a Director of Marketing and Sales for both Ceapro’s active ingredients and Juvente line of top class finished products representing a key addition to the Company’s team.
Subsequent to quarter
- Announced the settlement of royalty provisions with AVAC Ltd. This will eliminate a financial burden at a lower cost as compared to previously reported financial provisions.
“On the financial front, our fundamentals remain solid despite lower sales than the comparative periods in 2017. We look forward to expand and optimize our sales through direct marketing and sales efforts,” added Mr. Gagnon.
Financial Highlights for the Second Quarter and the Six-Month Period Ended June 30, 2018
- Total sales of $2,731,000 for the second quarter of 2018 and $5,001,000 for the first six-months of 2018 compared to $3,173,000 and $6,357,000 for the comparative periods in 2017. The six-month decrease of sales is due to a decrease in sales of avenanthramides compared to the same period in 2017.
- Loss from operations of $201,000 for the second quarter of 2018 and $560,000 for the first six-months of 2018 compared to income of $757,000 and $769,000 for the comparative periods in 2017.
- Net loss after tax of $166,000 and $461,000 for the second quarter and first six-month period of 2018 compared to net income of $370,400 and $388,000 for the same periods in 2017.
- Cash flows generated from operations of $381,000 in 2018 vs cash flows used in operations of $44,000 in 2017.
- Positive working capital balance of $3,891,000 as of June 30, 2018.
- Retained earnings position of $2,248,000 as of June 30, 2018.
- Cash on hand as of June 30, 2018 of $5,409,000.
“We have continued to make progress over the course of the first half of the year in this important transitional period for the Company. By building a start-up within an existing business, coupled with a change in business model, we believe we are well positioned for success at all levels, and we look forward to building shareholder value in the near and long term,” concluded Mr. Gagnon.
| CEAPRO INC. | ||
| Consolidated Balance Sheets | ||
| Unaudited | ||
| June 30, | December 31, | |
| 2018 | 2017 | |
| $ | $ | |
| ASSETS | ||
| Current Assets | ||
| Cash and cash equivalents | 5,408,581 | 6,173,895 |
| Trade receivables | 1,306,368 | 1,246,413 |
| Other receivables | 197,543 | 213,512 |
| Inventories (note 5) | 881,286 | 1,085,388 |
| Prepaid expenses and deposits | 289,652 | 277,600 |
| 8,083,430 | 8,996,808 | |
| Non-Current Assets | ||
| Investment tax credits receivable | 607,700 | 607,700 |
| Deposits | 90,925 | 87,816 |
| Licences (note 6) | 25,921 | 27,403 |
| Property and equipment (note 7) | 17,899,395 | 17,379,839 |
| Intangible assets (note 8) | 460,133 | 489,733 |
| Goodwill (note 9) | 218,606 | 218,606 |
| 19,302,680 | 18,811,097 | |
| TOTAL ASSETS | 27,386,110 | 27,807,905 |
| LIABILITIES AND EQUITY | ||
| Current Liabilities | ||
| Accounts payable and accrued liabilities | 829,570 | 979,626 |
| Current portion of long-term debt (note 10) | 667,952 | 860,871 |
| Royalty provision - Ceapro Inc. (note 11 (a)) | 778,636 | 778,636 |
| Royalty provision - Ceapro Technology Inc. (note 11 (b)) | 1,375,000 | 1,375,000 |
| Contract liabilities | 463,763 | - |
| Current portion of CAAP loan (note 13) | 77,858 | 72,942 |
| 4,192,779 | 4,067,075 | |
| Non-Current Liabilities | ||
| Long-term debt (note 10) | 198,115 | 430,622 |
| CAAP loan (note 13) | 174,644 | 161,424 |
| Deferred tax liabilities | 505,835 | 604,835 |
| 878,594 | 1,196,881 | |
| TOTAL LIABILITIES | 5,071,373 | 5,263,956 |
| Equity | ||
| Share capital (note 12 (b)) | 15,670,522 | 15,565,522 |
| Contributed surplus (note 12 (f)) | 4,396,543 | 4,269,855 |
| Retained earnings | 2,247,672 | 2,708,572 |
| 22,314,737 | 22,543,949 | |
| TOTAL LIABILITIES AND EQUITY | 27,386,110 | 27,807,905 |
| CEAPRO INC. | ||||
| Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) | ||||
| Unaudited | ||||
| Quarters Ended June 30, | Six Months Ended June 30, | |||
| 2018 | 2017 | 2018 | 2017 | |
| $ | $ | $ | $ | |
| Revenue (note 17) | 2,731,375 | 3,173,225 | 5,000,955 | 6,356,735 |
| Cost of goods sold | 1,177,636 | 1,155,231 | 2,345,930 | 2,627,555 |
| Gross margin | 1,553,739 | 2,017,994 | 2,655,025 | 3,729,180 |
| Research and product development | 659,226 | 301,138 | 998,039 | 897,162 |
| General and administration | 765,984 | 686,686 | 1,513,720 | 1,526,026 |
| Sales and marketing | 31,598 | 4,727 | 47,621 | 9,017 |
| Finance costs (note 16) | 15,481 | 21,711 | 86,384 | 100,176 |
| Income from operations | 81,450 | 1,003,732 | 9,261 | 1,196,799 |
| Other expenses (note 15) | (282,743) | (246,797) | (569,161) | (427,840) |
| Income (loss) before tax | (201,293) | 756,935 | (559,900) | 768,959 |
| Income taxes | ||||
| Current tax recovery | - | - | - | 9,344 |
| Deferred tax benefit (expense) | 35,600 | (386,513) | 99,000 | (390,113) |
| Income tax benefit (expense) | 35,600 | (386,513) | 99,000 | (380,769) |
| Total comprehensive income (loss) for the period | (165,693) | 370,422 | (460,900) | 388,190 |
| Net income (loss) per common share (note 22): | ||||
| Basic | (0.00) | 0.00 | (0.01) | 0.01 |
| Diluted | (0.00) | 0.00 | (0.01) | 0.01 |
| Weighted average number of common shares outstanding (note 22): | ||||
| Basic | 75,756,859 | 75,344,730 | 75,734,815 | 75,256,385 |
| Diluted | 75,756,859 | 76,760,043 | 75,734,815 | 76,821,870 |
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
Jenene Thomas Communications, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: czo@jtcir.com
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Released August 28, 2018