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Ceapro Inc. Reports 2018 Third Quarter and Nine-Month Financial Results and Operational Highlights

EDMONTON, Alberta, Nov. 21, 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 September 30, 2018.

Recent Operational Highlights

  • Announced the settlement of royalty provisions with AVAC Ltd. This eliminates a financial burden at a lower cost as compared to previously reported financial provisions;
  • Received approval from Health Canada to commence human clinical study assessing beta glucan as a cholesterol-lowering agent. Patient enrollment is expected to commence in Montreal before year end. This is the first clinical trial with a proprietary pharmaceutical grade product in Ceapro’s history;
  • Advanced research project with University of Alberta for the impregnation of various bio actives using PGX processed dry beta glucan as a potential delivery system for multiple applications in healthcare;
  • Filed a dossier with Health Canada to obtain a Drug Establishment Licence to allow handling of biopharmaceutical products at the Edmonton-based facility;
  • Continued presentations of PGX technology to selected companies as part of business development discussions; and
  • Hired a Director of Quality for both Ceapro’s active ingredients and Juvente line of high value finished products representing a key addition to the Company’s team.

Subsequent to Quarter

  • Received the 2018 Award for Most Innovative Raw Material at Cosmetics 360 Salon in Paris, recognizing the potential of Ceapro’s new chemical entity beta glucan/co-enzyme Q10 for various applications in personal care and healthcare industries;
  • Scientific article titled “Adsorptive precipitation of Co-enzyme Q10 on PGX-processed Beta glucan powder” published in Journal of Supercritical Fluids (November 2018, 141, pp 157-165); and
  • Announced the completion of successful audits from major customers for the Edmonton-based new facility which fully complies with recognized international quality systems. First orders shipped from Edmonton.

“Over the course of 2018 we have made significant progress in transitioning our business model towards the nutraceutical and pharmaceutical sectors, while simultaneously continuing to rely on our cosmeceuticals base business. With the successful development and recognition of new chemical entities and the recently announced approval from Health Canada to initiate Ceapro’s first clinical trial with beta glucan as a cholesterol reducer, we expect to further increase our investments in research and development. We remain focused on the successful execution of this beta glucan trial targeting a $12 billion market, which we believe could be an absolute game changer for the Company while presenting a new approach for patients,” stated Gilles Gagnon, M.Sc., MBA, President and CEO of Ceapro.

“On the financial front, our fundamentals remain solid despite lower sales than the comparative periods in the previous year. In order to grow in 2019, we are deploying strategic efforts to expand and optimize our sales through our distribution network and especially through direct marketing and sales activities. Additionally, the recently announced qualification of Ceapro’s production sites should definitively help to get new customers,” added Mr. Gagnon. “Moving forward, I strongly believe Ceapro has all the key components for success based on a very solid foundation, a highly competent team, a healthy balance sheet and a very strong technology and product portfolio with the potential of getting into very large markets.”

Financial Highlights for the Third Quarter and the Nine-Month Period Ended September 30, 2018

  • Total sales of $2,124,000 for the third quarter of 2018 and $7,125,000 for the first nine-months of 2018 compared to $3,600,000 and $9,957,000 for the comparative periods in 2017. The nine-month decrease of sales is strictly due to a decrease in sales of avenanthramides compared to the same period in 2017.
  • Loss from operations of $363,000 for the third quarter of 2018 and $923,000 for the first nine-months of 2018 compared to income of $604,000 and $1,373,000 for the comparative periods in 2017.
  • Net loss after tax of $299,000 and $760,000 for the third quarter and first nine-month period of 2018 compared to net income after tax of $296,000 and $684,000 for the same periods in 2017.
  • Cash flows used in operations of $332,000 in 2018 vs cash flows generated from operations of $1,067,000 in 2017.
  • Positive working capital balance of $3,985,000 as of September 30, 2018.
  • Retained earnings position of $1,949,000 as of September 30, 2018.
  • Cash on hand as of September 30, 2018 of $4,160,000.

“From a corporate perspective and especially for matters related to a potential uplisting of Ceapro, the Company qualifies on all criteria with most stock exchanges except for share price. Given that a reverse split transaction would be necessary to comply with uplisting requirements especially in USA, this project is a lower priority on a short-term basis. We are focusing on entering into a new avenue within an existing business through a change in business model and we strongly believe we are well positioned for success at all levels,” concluded Mr. Gagnon.

CEAPRO INC.   
Consolidated Balance Sheets   
Unaudited   
 September 30,December 31, 
 20182017 
  $  $  
    
ASSETS   
Current Assets   
Cash and cash equivalents  4,160,046  6,173,895 
Trade receivables  671,479  1,246,413 
Other receivables  69,220  213,512 
Inventories (note 5)  819,325  1,085,388 
Prepaid expenses and deposits  401,536  277,600 
    
   6,121,606  8,996,808 
Non-Current Assets   
  Investment tax credits receivable  607,700  607,700 
Deposits  90,925  87,816 
Licences (note 6)  25,181  27,403 
Property and equipment (note 7)  18,118,192  17,379,839 
Intangible assets (note 8)  445,333  489,733 
Goodwill (note 9)  218,606  218,606 
    
   19,505,937  18,811,097 
    
TOTAL ASSETS  25,627,543  27,807,905 
    
LIABILITIES AND EQUITY   
Current Liabilities   
Accounts payable and accrued liabilities  1,290,491  979,626 
Current portion of long-term debt (note 10)  500,509  860,871 
Royalty provision - Ceapro Inc. (note 11 (a) (c))  -   778,636 
Royalty provision - Ceapro Technology Inc. (note 11 (b) (c))  -   1,375,000 
Contract liabilities  265,248  -  
Current portion of CAAP loan (note 13)  80,814  72,942 
    
   2,137,062  4,067,075 
Non-Current Liabilities   
Long-term debt (note 10)  154,461  430,622 
CAAP loan (note 13)  181,276  161,424 
Deferred tax liabilities  441,635  604,835 
    
   777,372  1,196,881 
    
TOTAL LIABILITIES  2,914,434  5,263,956 
    
Equity   
Share capital (note 12 (b))  16,320,522  15,565,522 
Contributed surplus (note 12 (f))  4,443,584  4,269,855 
Retained earnings  1,949,003  2,708,572 
    
    

 

CEAPRO INC.     
Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) 
Unaudited     
    
  QuartersNine Months 
 Ended September 30,Ended September 30, 
 2018 2017 2018 2017  
  $  $  $  $  
      
Revenue (note 17)  2,124,462   3,600,242   7,125,417   9,956,977  
Cost of goods sold  1,057,634   1,727,223   3,403,564   4,354,778  
      
Gross margin  1,066,828   1,873,019   3,721,853   5,602,199  
      
Research and product development  997,143   435,039   1,995,182   1,332,201  
General and administration  744,663   586,566   2,258,383   2,112,592  
Sales and marketing  61,462   730   109,083   9,747  
Finance costs (note 16)  15,046   21,018   101,430   121,194  
      
Income (loss) from operations  (751,486)  829,666   (742,225)  2,026,465  
      
Other expenses (note 15)  (334,278)  (225,686)  (903,439)  (653,526) 
Gain on settlement of royalty provisions  722,895   -    722,895   -   
      
Income (loss) before tax  (362,869)  603,980   (922,769)  1,372,939  
      
Income taxes     
  Current tax recovery  -    -    -    9,345  
  Deferred tax benefit (expense)  64,200   (308,410)  163,200   (698,523) 
      
Income tax benefit (expense)  64,200   (308,410)  163,200   (689,178) 
      
Total comprehensive income (loss) for the period  (298,669)  295,570   (759,569)  683,761  
      
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  76,288,921   75,365,319   75,916,828   75,293,096  
Diluted  76,288,921   76,371,934   75,916,828   76,739,362  
      

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

Wednesday, November 21, 2018 - 09:00