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Ceapro Inc. Reports 2021 Third Quarter and Nine-Month Financial Results and Operational Highlights

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Ceapro reported a strong Q3 2021, achieving record sales of $4.52 million, a 30% increase from Q3 2020. Net profit surged by 356% to $875,000. The company is advancing R&D projects, including trials for oat beta glucan as a cholesterol reducer and yeast beta glucan for COVID-19 therapy. Production reached a record 70 MT, despite pandemic challenges. However, a beta glucan clinical trial did not meet primary endpoints, highlighting potential hurdles. Overall, Ceapro is poised for growth, focusing on innovation and expansion in the nutraceutical sector.

Positive
  • Q3 2021 sales increased by 30% to $4.52 million.
  • Net profit rose by 356% to $875,000 in Q3 2021.
  • Achieved record production of over 70 MT of finished products.
  • Improved gross margin of 65.2% compared to 47.8% in 2020.
Negative
  • Beta glucan clinical trial did not meet primary endpoints for LDL cholesterol reduction.

– Increased R&D activities focused on the completion of a clinical trial for oat beta glucan as a potential cholesterol reducer and on the development of yeast beta glucan as a potential inhalable therapeutic for COVID-19 –

Q3 2021 record sales of $4,523,000 compared to $3,476,000 for Q3 2020, representing a 30% increase –

– Net profit of $875,000 for Q3 2021 vs. net profit of $192,000 for Q3 2020, a 356% increase –

Achieved record production levels despite COVID-19 pandemic situation –

EDMONTON, Alberta, Nov. 17, 2021 (GLOBE NEWSWIRE) -- Ceapro Inc. (TSX-V: CZO; OTCQX: CRPOF) (“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 third quarter and the first nine months ended September 30, 2021.

“Progress continues on all fronts from production operations to research and development, allowing us to advance our pipeline while expanding our business model. We are extremely proud of our employees who worked tirelessly since the beginning of the year to maintain operations and deliver these very solid results despite the COVID-19 pandemic. As we continue to move forward, our focus remains on the health and safety of our associates, followed by business continuity,” stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

  • Pursued the development of new PGX-dried chemical complexes for potential applications under various forms like pills, capsules, fast dissolving strips and face masks. Alginate and yeast beta glucan to become key products of Ceapro’s portfolio.
  • Resumed bioavailability studies with University of Alberta for new chemical complexes yeast beta glucan-CoQ10, alginate-CoQ10 and newly formed alginate yeast beta glucan-CoQ10.
  • Announced research agreement with Boston-based Angiogenesis Foundation to assess in vivo bioefficacy of oat beta glucan and avenanthramides in angiogenesis, blood vessel repairs, wound healing and tissue regeneration in various inflammation-based diseases and conditions like COVID-19 presenting damages of the lung blood vessels.
  • Expanded collaboration with Montreal Heart Institute to initiate a Phase 1 clinical trial to assess safety and tolerability of pharmaceutical grade avenanthramides powder formulation.
  • Conducting in vivo studies with McMaster University with yeast beta glucan as a potential inhalable therapeutic.

Technology:

  • Pursued installment in Edmonton of a commercial scale unit for impregnation of bioactives with PGX-processed biopolymers.
  • Ongoing engineering design for PGX processing commercial unit.

Production Operations:

  • Achieved record levels with production of over 70 MT of finished products during the last quarter reliably providing our customers essential high quality products.

Subsequent to Quarter:

  • Announced discovery of a new mechanism of action for PGX processed yeast beta glucan (PGX-YBG) as a potential inhalable therapeutic for lung fibrotic diseases including COVID-19 patients.
    • PGX-YBG binds to specific receptors (Dectin 1) located on macrophages responsible for the cascade of immunomodulating events when activated.
    • McMaster’s research team demonstrates ability of PGX-YBG to reprogram macrophages on its own.
  • Reported preliminary results from clinical trial evaluating oat beta glucan in patients with high cholesterol levels. The study did not achieve the expected primary endpoint related to a decrease of low-density lipoproteins cholesterol when using Ceapro’s pill dosage form. While there was no statistically significant difference between the placebo group and the different dosages of beta glucan, there were positive signals that beta glucan nutraceutical formulation may offer appreciable health benefits as indicated with approved Health Canada’s beta glucan monograph (Natural Product Division)

Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2021

  • Total sales of $4,523,000 for the third quarter of 2021 and $13,633,000 for the first nine months of 2021 compared to $3,476,000 and $12,415,000 for the comparative periods in 2020. The 10% increase in sales for the first nine months is mainly due to a significant increase in sales of avenanthramides in the USA compared to the same period in 2020.
  • Net profit of $875,000 for the third quarter of 2021 and $2,067,000 for the first nine months of 2021 compared to a net profit of $192,000 and $2,395,000 for the comparative periods in 2020. Increased net profit for the third quarter of 2021 comes from improved margin of 65.2% as compared to 47.8% in 2020. Improved margins in 2021 result from the buying of excellent source material and from the diligent work of highly skilled personnel operating in only one site as compared to two sites in 2020.
  • R&D investments were $1,400,000 for Q3 2021 compared to $479,000 for the same period in 2020. The significant increase being due to payments made to Montreal Heart Institute for a clinical trial for the assessment of oat beta glucan as a potential cholesterol reducer by almost $1.0 million during Q3 2021.
  • Cash flows generated from operations of $2,837,000for the first nine months in 2021 vs $4,777,000 in 2020.
  • Positive working capital balance of $10,367,000 as of September 30, 2021.

“Looking ahead, while considering the ongoing potential economic impact related to COVID-19, evolving consumption trends and escalating inflationary levels we believe Ceapro is well-positioned to once again deliver a strong growth in sales well in line with the positive trend achieved over the last years. While we have experienced a “bump in the road” with the beta glucan trial, our solid base business and expanded pipeline will enable us to pursue the expansion of our business model to the nutraceutical sector with avenanthramides and yeast beta glucan for which we are going to conduct more preclinical assays before investing at large scale levels. With a strong balance sheet, a group of dedicated people, and a solid base business, coupled with the innovative technologies and products that we have developed to enable us to expand, Ceapro is poised to emerge as a successful life science company,” concluded Mr. Gagnon.

     
CEAPRO INC.    
Condensed Interim Consolidated Balance Sheets    
Unaudited    
     
 September 30, December 31, 
 2021 2020 
 $ $ 
     
ASSETS    
Current Assets    
Cash and cash equivalents7,410,214 5,369,029 
Trade receivables2,716,058 2,019,723 
Other receivables39,522 102,224 
Inventories (note 3)1,532,271 1,210,079 
Prepaid expenses and deposits133,760 348,845 
     
Total Current Assets11,831,825 9,049,900 
     
Non-Current Assets    
Investment tax credits receivable607,700 607,700 
Deposits82,124 82,124 
Licences (note 4)16,292 18,514 
Property and equipment (note 5)17,776,791 18,591,189 
Deferred tax assets874,304 874,304 
     
Total Non-Current Assets19,357,211 20,173,831 
     
TOTAL ASSETS31,189,036 29,223,731 
     
LIABILITIES AND EQUITY    
Current Liabilities    
Accounts payable and accrued liabilities1,097,645 1,067,622 
Current portion of lease liabilities (note 6)286,608 250,658 
Current portion of CAAP loan (note 8)80,811 72,263 
     
Total Current Liabilities1,465,064 1,390,543 
     
Non-Current Liabilities    
Long-term lease liabilities (note 6)2,432,682 2,648,917 
Deferred tax liabilities874,304 874,304 
     
Total Non-Current Liabilities3,306,986 3,523,221 
     
TOTAL LIABILITIES4,772,050 4,913,764 
     
Equity    
Share capital (note 7 (b))16,557,401 16,511,067 
Contributed surplus (note 7 (e))4,676,456 4,682,393 
Retained earnings5,183,129 3,116,507 
     
Total Equity26,416,986 24,309,967 
     
TOTAL LIABILITIES AND EQUITY31,189,036 29,223,731 


CEAPRO INC.
Condensed Interim Consolidated Statements of Net Income and Comprehensive Income
Unaudited
   
 Quarters Nine Months 
 Ended September 30, Ended September 30, 
 2021 2020 2021 2020 
 $ $ $ $ 
      
Revenue (note 14)4,522,980 3,475,625 13,633,354 12,414,970 
Cost of goods sold1,573,655 1,814,080 5,787,608 5,794,573 
      
Gross margin2,949,325 1,661,545 7,845,746 6,620,397 
      
Research and product development1,403,186 478,993 3,050,544 1,381,332 
General and administration766,605 791,217 2,431,659 2,494,514 
Sales and marketing4,957 12,395 34,557 89,830 
Finance costs (note 11)37,684 43,066 169,938 189,258 
      
Income from operations736,893 335,874 2,159,048 2,465,463 
      
Other (expenses) income (note 10)138,381 (144,251)(92,426)(70,746)
      
Income before tax875,274 191,623 2,066,622 2,394,717 
      
Income taxes- - - - 
      
Total comprehensive income for the period875,274 191,623 2,066,622 2,394,717 
      
Net income per common share (note 17):     
Basic0.01 0.00 0.03 0.03 
Diluted0.01 0.00 0.03 0.03 
      
Weighted average number of common shares outstanding (note 17):     
Basic77,684,017 77,610,113 77,669,747 77,585,679 
Diluted78,740,532 78,700,415 78,694,469 78,039,105 


CEAPRO INC.
Condensed Interim Consolidated Statements of Cash Flows
Unaudited
   
 2021 2020 
Nine Months Ended September 30,$ $ 
OPERATING ACTIVITIES  
Net income for the period2,066,622 2,394,717 
Adjustments for items not involving cash  
Finance costs106,390 117,237 
Transaction costs- 1,108 
Depreciation and amortization1,408,392 1,382,838 
Gain on disposal of equipment(5,000)- 
Accretion8,548 15,913 
Share-based payments13,672 122,902 
Net income for the period adjusted for non-cash items3,598,624 4,034,715 
CHANGES IN NON-CASH WORKING CAPITAL ITEMS  
Trade receivables(696,335)1,821,449 
Other receivables62,702 (96,375)
Inventories(322,192)(522,670)
Prepaid expenses and deposits137,618 12,471 
Accounts payable and accrued liabilities relating to operating activities163,017 (355,552)
Total changes in non-cash working capital items(655,190)859,323 
Net income for the period adjusted for non-cash and working capital items2,943,434 4,894,038 
Interest paid(106,390)(117,237)
CASH GENERATED FROM OPERATIONS2,837,044 4,776,801 
INVESTING ACTIVITIES  
Purchase of property and equipment(494,833)(222,610)
Purchase of leasehold improvements(19,472)- 
Proceeds from sale of equipment5,000 353 
Accounts payable and accrued liabilities relating to investing activities(132,994)14,161 
CASH USED IN INVESTING ACTIVITIES(642,299)(208,096)
FINANCING ACTIVITIES  
Stock options exercised26,725 3,013 
Repayment of long-term debt- (112,973)
Repayment of lease liabilities(180,285)(197,537)
CASH USED IN FINANCING ACTIVITIES(153,560)(307,497)
Increase in cash and cash equivalents2,041,185 4,261,208 
   
Cash and cash equivalents at beginning of the period5,369,029 1,857,195 
   
Cash and cash equivalents at end of the period7,410,214 6,118,403 
   

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
JTC Team, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: czo@jtcir.com

This press release does not express or imply that the Company claims its product has the ability to eliminate, cure or contain the SARS-2-CoV-2 (COVID-19) at this time.

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.


FAQ

What were Ceapro's Q3 2021 revenue and net profit figures?

Ceapro reported Q3 2021 revenue of $4.52 million and net profit of $875,000.

How did Ceapro's sales compare year-over-year for Q3 2021?

Sales for Q3 2021 increased by 30% compared to Q3 2020.

What key developments are happening in Ceapro's clinical trials?

Ceapro is advancing trials for oat beta glucan for cholesterol reduction and yeast beta glucan for COVID-19 therapy.

What is the current status of Ceapro's clinical trial for beta glucan?

The beta glucan clinical trial did not achieve the primary endpoint related to reducing LDL cholesterol.

What is Ceapro's outlook for future sales growth?

Ceapro believes it is well-positioned to deliver strong growth in sales, despite challenges from COVID-19 and inflation.

CEAPRO INC

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13.31M
76.19M
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Biotechnology
Healthcare
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United States of America
Edmonton