Ceapro Provides Update to Shareholders
EDMONTON, ALBERTA -- (MARKET WIRE) -- 02/09/11 -- Ceapro Inc. (TSX VENTURE: CZO)
The following is a letter to shareholders from Ceapro.
At Ceapro Inc., 2010 will be recognized as a landmark year where we completed a turn around and implemented a new growth strategy. We are pleased to provide an update to our September 29, 2010 letter and share with you 2010 accomplishments and some corporate objectives for 2011.
I am very pleased to state that based on preliminary selected unaudited financial results, Ceapro expects to achieve record revenues in excess of $5.5 million for fiscal 2010, and to management's knowledge, will be amongst a very few biotechnology companies in Canada to announce a net profit. The financial information contained in this news release is based on management's estimates and has not yet been approved by Ceapro's Board of Directors, or reviewed by the Ceapro's auditors, and are subject to adjustment. We anticipate full audited financial statements will be released in April 2011.
To achieve our main goal of growing revenues and being profitable in a challenging environment, we needed to implement an action plan to:
1. Increase sales of existing products 2. Improve existing products 3. Develop new products 4. Keep manufacturing at a state-of-the-art level, lean and effective 5. Evaluate and adapt new and innovative process technologies
The foregoing was accomplished through:
1.0 Increased sales of existing products.
-- Ceapro impressively delivered a 30% increase of finished goods tonnage with the same workforce in 2010 compared to 2009. -- Enhanced presence at trade shows and through invitations to relevant meetings and follow up with a newly created network (American Academy of Dermatologists, In-Cosmetics in Paris, Society of Cosmetics Chemists in London, Canadian Government trade delegation to Europe, North American and European Oat conferences). -- Engaged new customers directly. -- Reinforced relationships with existing customers through demonstrated pricing and delivery stability. -- Adopted a regional distribution strategy to approach new potential customers that were not readily accessible by Ceapro.
2.0 Improved existing products.
-- Developed a new natural line to get ECOCERT certification and leverage on this continued trend. Customers have told us this is what they want. Certification was obtained on November 9, 2010. -- Investigated innovative technologies as in-licensing opportunities from other parties. Two agreements were signed in 2010 to evaluate their commercial potential and these projects are ongoing into 2011.
3.0 Developed new products.
-- Continued in-house projects such as propagating our unique spearmint variety licensed from the University of Guelph. These plants have grown exceptionally well in their first year in several different sites across Canada and appear to be small bio-factories producing high concentrations of active ingredients. -- Producing at commercial level Ceapro's newest products CP Sweet Blue Lupin Peptides and CP Oat Peptide. In late 2010 Ceapro completed hair care and skin studies to support new marketing initiatives planned in 2011. -- External in licensing projects ranging from unique plant sources to traditional medicine are now being brought to Ceapro throughout the year by developers and inventors who want to get their technology into the personal care market. We do a thorough due diligence on these opportunities and anticipate some of our current ongoing discussions will lead to in-licensing agreements in 2011.
4.0 Manufacturing/process improvements
-- Developing a novel, more efficient process for the purification of avenanthramides. Scale-up work is currently ongoing as part of our projects with Growing Forward and Canadian Agriculture Adaptation Program. -- Developing a novel oat oil manufacturing technology. This ongoing project has yielded impressive pre-commercial scale results.
-- Improved QA/QC program through the implementation of customized Good Manufacturing Practices. -- Activities to expand manufacturing capacity commenced in 2010 and are ongoing. -- Improved shelf-life and stability of our existing product line.
Recognizing R&D as a key success factor to support the implementation of our new Marketing and Sales strategy, Ceapro significantly increased its investment in this sector. We are confident that achievements in generating new products and new data will position Ceapro as a leader in the personal care and cosmeceutical market. Due to patentability assessments ongoing, we are not releasing any results at this time.
Also, since a significant part of R&D tasks were to improve existing manufacturing processes, findings from these researches should serve to establish new performance standards for an upcoming new and/or expanded production facility.
During the year Ceapro opened a new R&D lab in Prince Edward Island at the state of the art National Research Council Institute of Nutrisciences and Health (NRC-INH) and hired additional scientists in both Charlottetown and Edmonton
Six federal and provincially funded programs partnered with Ceapro during the year to make these achievements possible:
a. Atlantic Canada Opportunities Agencies b. Growing Forward c. Alberta Ingenuity Industry Associate Program d. Canadian Agricultural Adaptation Program e. Innovation PEI f. PEI Novel Crops Initiative
These programs represent amounts in excess of $1.5 million in available funding.
New collaboration agreements were also entered into with the following organizations:
a. University of Alberta b. Agriculture and Agri-Food Canada (AAFC) c. National Research Council-Institute of Nutrisciences and Health(NRC-INH) d. Agri-Food Discovery Place (AFDP) e. Food Technology Centre (FTC)
We are grateful to these organizations as well as to our long term supporters at Agriculture Financial Services Corporation and the Food Processing Development Centre that have recognized Ceapro's innovation and are contributing to assist Ceapro on an ongoing basis.
Looking forward in 2011, we expect to achieve the following corporate goals:
-- To continue and grow profitability -- To announce plans for the expansion of manufacturing capacity -- To launch one new product in the personal care market -- To sign two new regional distribution agreements for the personal care market -- To initiate a research project for the potential development of avenanthramides as pharmaceuticals -- To intensify Corporate Relations activities and strive to become a Company of Choice in the Canadian Biotechnology sector
Ceapro began the year with two main assets: a solid core base of strong product and manufacturing technologies and a loyal group of talented employees who accepted the challenge to grow Ceapro.
I now proudly say that Ceapro has become a fully integrated biotechnology company with several projects covering research and commercialization activities that will be the basis for future growth.
Ceapro has established a reputation as a trusted supplier of quality ingredients to the personal care industry, and, its oat technologies in particular are recognized as among the best in the world. Ceapro's sales are 100% export.
We are very pleased with results from 2010 and excited by the prospects for the Company in 2011. Not only do we look forward to being a leader in the development of active ingredients for the personal care and cosmetic market, but also we expect to start transitioning to other healthcare markets where Ceapro is now attracting attention from interested parties.
Thank you all for your continued support.
Gilles R. Gagnon
About Ceapro Inc.
Ceapro Inc. is a Canadian growth-stage biotechnology company. Primary business activities relate to the development and commercialization of natural products for personal care and cosmetic industries using proprietary technology and natural, renewable resources. The commercial line of natural active ingredients include beta glucan, avenanthamides (colloidal oat extract), oat powder, oat oil, oat peptides, and lupin peptides.
The TSX Venture Exchange nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts: Ceapro Inc. Branko Jankovic Chief Financial Officer 780-917-8376 email@example.com www.ceapro.com
Source: Ceapro Inc.
Released February 9, 2011