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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,
 20182017
  $  $ 
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,
 2018201720182017
  $  $  $  $ 
     
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 

Tuesday, August 28, 2018 - 09:00