Ceapro Inc. Reports Fourth Quarter and Full Year 2021 Financial Results and Operational Highlights
April 13 2022 - 8:00AM
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
operational highlights and financial results for the fourth quarter
and full year ended December 31, 2021.
“We are thrilled with achievements made in 2021
on all fronts from production operations to research and
development, allowing us to expand our pipeline to build a high
value life sciences Company focused on immune and
inflammation-based diseases. A 14% year over year increase in sales
for our base business is absolutely remarkable especially during
such a year marked by a continued COVID-19 pandemic, inflationary
pressure, issues related to availability of inputs, persistently
high logistical transportation costs and labour scarcity. Despite
these challenges, our team worked tirelessly to meet strong demand
for our products and deliver one of the best ever performances in
the Company’s history. I thank everyone wholeheartedly for their
resilience and dedication,” stated Gilles Gagnon, M.Sc., MBA,
President and CEO, of Ceapro. “In addition to excellent financial
and operational results, we had many key highlights over the course
of the year and are committed to building on these
achievements.”
2021 Corporate and Operational
Highlights
Pipeline Development
Avenanthramides:
- Announced expanded collaboration
with Montreal Heart Institute (MHI) with new clinical study
evaluating flagship product, avenanthramides, as a new potential
pharmaceutical product. This Phase 1 safety and tolerability study
will be led by renowned Dr. Jean-Claude Tardif. Published positive
results from Ceapro’s previously conducted study evaluating
anti-inflammatory properties of low doses of avenanthramides in
exercise-induced inflammation paved the way for this clinical
trial.
- Agreement signed with Corealis to formulate 30mg and 240mg
dosage pills to be used in Phase 1 study with MHI.
- Completed physical characterization of avenanthramides and
continued to monitor stability studies with new powder
formulations.
- Completed the Phase 1 study protocol which expects to enroll
approximately 72 patients.
Oat Beta Glucan:
- Completed pilot clinical trial
evaluating oat beta glucan in patients with high cholesterol
levels. While 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), the study did not achieve in a
statistically significant manner the expected primary endpoint
related to a decrease of low-density lipoproteins cholesterol when
using Ceapro’s pill dosage form.
- Announced research agreement with
Boston-based Angiogenesis Foundation to assess in
vivo bioefficacy of oat beta glucan and avenanthramides in
angiogenesis, blood vessel repairs, and wounds to
assess healing and tissue regeneration in various
inflammation-based diseases and conditions like COVID-19 presenting
damages of the lung blood vessels.
Yeast Beta Glucan (YBG)
- Analyzed and screened YBG feedstock
from numerous global suppliers to select ideal sources for best
possible product.
- Identified process conditions for
YBG improving morphology of YBG processed using PGX Technology
(PGX-YBG) to boost immunomodulating activity.
- Further developed custom-shape
formulations of PGX-YBG for oral administration.
- Obtained further evidence
confirming that PGX-YBG is suitable for lung inhalation.
- Demonstrated,
in vitro, that PGX processed YBG can prevent the activation of
macrophages toward a pro-fibrotic phenotype which, according to
experts in the field, is seen as a viable therapeutic strategy
toward fibrotic disease.
- PGX-YBG binds
to specific receptors (Dectin 1) located on macrophages responsible
for the cascade of immunomodulating events when activated.
- McMaster’s research team discovered
a new mechanism of action as per PGX-YBG’s ability to reprogram
macrophages on its own.
- Continuing PGX-YBG project with
McMaster University to assess preclinical animal models to
determine posology.
- Initiated studies with a medical
device manufacturer to assess aerosol/nebulizer device for
inhalation of YBG.
- Proved, using an in vitro study,
that the Company’s PGX Technology maintains the integrity of the
YBG molecular structure and enhances its microscopic morphology
which leads to a boost in its immunomodulatory activity without
generating proinflammatory reaction. Based on these attributes
PGX-YBG is poised to become a key strategic asset for the
Company.
New Chemical Complexes / Delivery Systems:
- Announced the successful completion
of a long-term research program conducted with University of
Alberta. This screening program allowed Ceapro to retain the most
promising products, such as PGX-alginate, and expand the
PGX-processed products pipeline. Combination of alginate and YBG,
leading to tunable PGX composites, are now viewed as the most
promising products developed from this research program.
- Pursued bioavailability studies
with University of Alberta for new chemical complexes YBG-CoQ10,
alginate-CoQ10 and the newly formed alginate-YBG-CoQ10. Results are
expected in Q3 2022.
Technology:
- Continued significant technical
improvements of the existing PGX plant in Edmonton to develop
equipment for the production of PGX-YBG for the purpose of
generating material suitable for nutraceutical and lung
delivery.
- Ongoing engineering design in
collaboration with experts in the field for designing and building
a PGX processing commercial unit. Alginate and yeast beta glucan
would be the first products to be processed at large scale level.
Given regulatory requirements and to accelerate market entry, yeast
beta glucan as a standalone and/or in combination with alginate
will be developed at first as a nutraceutical/immune booster.
- Pursued installment in Edmonton of
a commercial scale unit for loading of bioactives onto
PGX-processed biopolymers. This system allows loading of active
pharmaceutical ingredients, like ibuprofen, onto thin soluble PGX
alginate strips for wound healing or oral applications.
- Continued projects with University of Alberta and McMaster
University for the development of potential delivery systems for
multiple applications in healthcare.
Bioprocessing Operations
- Ceapro’s dedicated production team
successfully responded to the growing market demand for the
cosmeceutical base business by producing over 290 metric tons of
active ingredients in 2021, a 20% increase over the previous
year.
- Received renewal of the Site
License from the Health Canada Natural Product Directorate. This
License enables the Company to manufacture, package, label, release
and distribute final products.
Corporate
- Fully repaid loan with Canadian
Agricultural Adaptation Program (CAAP).
- Effective December
31, 2021, the Company wound up Ceapro Technology Inc., Ceapro
Active Ingredients Inc. and Ceapro BioEnergy Inc. into the Company
and dissolved Ceapro USA Inc. JuventeDC Inc. remains the only
active fully owned subsidiary of Ceapro Inc.
- Announced expansion of a grant from
National Research Council of Canada Industrial Research Assistance
Program (NRC-IRAP) to further develop the patented PGX Technology
to increase its innovation capacity by designing the first
pharmaceutical PGX processing unit along with bioactive
impregnation and loading units.
- Pursued out-licensing discussions
for PGX-processed new chemical complexes.
Subsequent to Year End
- Signed a Supply and Distribution
Agreement with Symrise securing the long-term sustainability of
Ceapro’s base business.
- Appointed Mr. Ronnie Miller, former
President & CEO of Roche Canada for the last 22 years, to the
Company’s Board of Directors.
Financial Highlights for the Fourth
Quarter and the Full Year 2021 Ended December 31, 2021
- Total sales of $3,562,000 for the
fourth quarter of 2021 and $17,200,000 for the full year of 2021
compared to $2,706,000 and $15,100,000 for the comparative periods
in 2020. These respective increases of 32% for Q4, 2021 and 14% for
the full year 2021 were driven by volume sales increases in all of
the Company’s primary products. The increase in revenue occurred
despite being offset by a lower U.S. dollar relative to the
Canadian dollar compared to the prior year, which negatively
impacted revenue by approximately $1,358,000 for the full year
2021.
- Net profit of $776,000 for the
fourth quarter of 2021 and a net profit of $2,842,000 for the full
year of 2021 compared to a net loss of $539,000 and a net profit of
1,856,000 for the comparative periods in 2020, a year over year
increase of 53.1% for the full year 2021. These results reflect a
full year of operations in one production site only as compared to
year 2020 that was marked by the completion of the decommissioning
of Leduc manufacturing site and the final integration of production
operations in the Edmonton facility. Margins improved on an annual
basis from 50% in 2020 to 56% in 2021.
- Cash generated from operations of
$3,510,000, for the full year 2021.
- Positive working capital balance of
$10,755,000 as of December 31, 2021.
“While the Company’s business has not been
significantly impacted by the COVID-19 pandemic, management remains
very vigilant in ensuring the highest level of safety for Ceapro’s
employees. Depending on the evolution of this pandemic situation
and assuming minimal supply chain disruptions, I strongly believe
the prospects for the Company remain very strong for the upcoming
year. We expect Ceapro’s cosmeceuticals base business to continue
growing and provide positive cash flows to support the expansion to
a new business model to a high value life science/biopharmaceutical
company involved in nutraceuticals and pharmaceuticals. We then
expect to further invest into R&D to initiate an early clinical
trial with our newly developed pill of avenanthramide, to continue
the development of new chemical complexes as potential delivery
systems for bioactives and to emphasize our current efforts for the
development and assessment of yeast beta glucan as immune booster
and as potential inhalable therapeutics for lung fibrotic diseases
including COVID 19 conditions,” added Mr. Gagnon.
“Additionally, results from bioavailability
studies with new chemical complexes and results with yeast beta
glucan as an immune booster will drive decisions for the magnitude
of capital expenditures to be incurred for the building of a
commercial scale unit for PGX Technology. 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 to
access key large markets, we have all the key components for
success,” concluded Mr. Gagnon.
CEAPRO INC. |
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Consolidated
Balance Sheets |
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December
31, |
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December
31, |
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2021 |
|
2020 |
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$ |
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$ |
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ASSETS |
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Current
Assets |
|
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Cash and cash equivalents |
7,780,989 |
|
5,369,029 |
|
Trade receivables |
2,092,842 |
|
2,019,723 |
|
Other receivables |
45,850 |
|
102,224 |
|
Inventories (note 3) |
1,644,893 |
|
1,210,079 |
|
Prepaid expenses and deposits |
162,919 |
|
348,845 |
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Total Current Assets |
11,727,493 |
|
9,049,900 |
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Non-Current
Assets |
|
|
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Investment
tax credits receivable |
766,629 |
|
607,700 |
|
Deposits |
79,539 |
|
82,124 |
|
Licences (note 4) |
15,551 |
|
18,514 |
|
Property and equipment (note 5) |
17,499,774 |
|
18,591,189 |
|
Deferred tax assets (note 13 (b)) |
439,063 |
|
874,304 |
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Total Non-Current Assets |
18,800,556 |
|
20,173,831 |
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TOTAL ASSETS |
30,528,049 |
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29,223,731 |
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LIABILITIES
AND EQUITY |
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Current
Liabilities |
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Accounts payable and accrued liabilities |
682,057 |
|
1,067,622 |
|
Current portion of lease liabilities (note 6) |
290,055 |
|
250,658 |
|
Current portion of CAAP loan (note 8) |
- |
|
72,263 |
|
|
|
|
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Total Current Liabilities |
972,112 |
|
1,390,543 |
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Non-Current
Liabilities |
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Long-term lease liabilities (note 6) |
2,358,862 |
|
2,648,917 |
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Deferred tax liabilities (note 13 (b)) |
- |
|
874,304 |
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Total Non-Current Liabilities |
2,358,862 |
|
3,523,221 |
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TOTAL LIABILITIES |
3,330,974 |
|
4,913,764 |
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Equity |
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Share capital (note 7 (b)) |
16,557,401 |
|
16,511,067 |
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Contributed surplus (note 7 (e)) |
4,680,690 |
|
4,682,393 |
|
Retained earnings |
5,958,984 |
|
3,116,507 |
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Total Equity |
27,197,075 |
|
24,309,967 |
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TOTAL LIABILITIES AND EQUITY |
30,528,049 |
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29,223,731 |
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CEAPRO
INC. |
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Consolidated Statements of Net Income and Comprehensive Income |
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2021 |
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2020 |
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Years Ended December 31, |
$ |
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$ |
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Revenue (note 15) |
17,195,329 |
|
15,121,282 |
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Cost of goods sold |
7,506,036 |
|
7,498,996 |
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Gross
margin |
9,689,293 |
|
7,622,286 |
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Research and
product development |
3,779,102 |
|
1,881,883 |
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General and
administration |
3,239,672 |
|
3,282,754 |
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Sales and
marketing |
47,119 |
|
111,044 |
|
Finance costs (note 11) |
206,891 |
|
231,271 |
|
|
|
|
Income from
operations |
2,416,509 |
|
2,115,334 |
|
|
|
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Other income (expense) (note 10) |
202,281 |
|
(259,234 |
) |
|
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Income
before tax |
2,618,790 |
|
1,856,100 |
|
|
|
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Income
taxes |
|
|
Current tax expense (note 13 (a)) |
215,376 |
|
- |
|
Deferred tax benefit (note 13 (a)) |
(439,063 |
) |
- |
|
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Income tax
benefit |
(223,687 |
) |
- |
|
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|
Total net income and comprehensive income for the year |
2,842,477 |
|
1,856,100 |
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Net income
per common share (note 20): |
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Basic |
0.04 |
|
0.02 |
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Diluted |
0.04 |
|
0.02 |
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Weighted average number of common shares outstanding (note
20): |
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Basic |
77,673,804 |
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77,594,629 |
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Diluted |
78,590,706 |
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78,143,033 |
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CEAPRO
INC. |
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Consolidated
Statements of Cash Flows |
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2021 |
|
2020 |
|
Years Ended December 31, |
$ |
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$ |
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OPERATING
ACTIVITIES |
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|
Net income for the year |
2,842,477 |
|
1,856,100 |
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Adjustments for items not involving cash |
|
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Finance costs |
140,270 |
|
153,538 |
|
Transaction costs |
- |
|
1,108 |
|
Depreciation and amortization |
1,880,748 |
|
1,841,033 |
|
Gain on disposal of equipment |
(5,000 |
) |
- |
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Accretion |
11,621 |
|
21,625 |
|
Income tax benefit |
(439,063 |
) |
- |
|
Share-based payments |
17,906 |
|
136,796 |
|
|
4,448,959 |
|
4,010,200 |
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CHANGES IN
NON-CASH WORKING CAPITAL ITEMS |
|
|
Trade receivables |
(73,119 |
) |
1,639,818 |
|
Other receivables |
56,374 |
|
(55,412 |
) |
Investment tax credits receivable |
(158,929 |
) |
- |
|
Inventories |
(434,814 |
) |
(541,074 |
) |
Prepaid expenses and deposits |
111,044 |
|
(88,839 |
) |
Accounts payable and accrued liabilities relating to operating
activities |
(298,765 |
) |
(358,136 |
) |
|
(798,209 |
) |
596,357 |
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Net income for the year adjusted for non-cash and working capital
items |
3,650,750 |
|
4,606,557 |
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Interest paid |
(140,270 |
) |
(153,538 |
) |
CASH GENERATED FROM OPERATIONS |
3,510,480 |
|
4,453,019 |
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INVESTING
ACTIVITIES |
|
|
Purchase of property and equipment |
(689,431 |
) |
(528,707 |
) |
Purchase of leasehold improvements |
(19,472 |
) |
(12,870 |
) |
Proceeds from sale of equipment |
5,000 |
|
353 |
|
Deposits relating to the purchase of equipment |
- |
|
(77,467 |
) |
Accounts payable and accrued liabilities relating to investing
activities |
(86,800 |
) |
134,554 |
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CASH USED IN INVESTING ACTIVITIES |
(790,703 |
) |
(484,137 |
) |
FINANCING
ACTIVITIES |
|
|
Stock options exercised |
26,725 |
|
4,897 |
|
Repayment of long-term debt |
- |
|
(112,973 |
) |
Repayment of CAAP loan |
(83,884 |
) |
(83,884 |
) |
Repayment of lease liabilities |
(250,658 |
) |
(265,088 |
) |
CASH USED IN FINANCING ACTIVITIES |
(307,817 |
) |
(457,048 |
) |
Increase in
cash and cash equivalents |
2,411,960 |
|
3,511,834 |
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|
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Cash and cash equivalents at beginning of the year |
5,369,029 |
|
1,857,195 |
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|
|
|
Cash and cash equivalents at end of the year |
7,780,989 |
|
5,369,029 |
|
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 ThomasJTC Team, LLCInvestor Relations and Corporate
Communications AdvisorT (US): +1 (833) 475-8247E: czo@jtcir.com
Issuer:Gilles R. Gagnon, M.Sc., MBAPresident & CEOT:
780-421-4555
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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