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.

Consolidated Balance Sheets    
  June 30, December 31,
  2018 2017
   $   $ 
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
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
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)
  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

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 

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Source: Ceapro Inc.