Ceapro Inc. Reports Record Financial Results for First Quarter 2022 and Provides Corporate Update
May 18 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 financial results and operational
highlights for the first quarter ended March 31, 2022.
“Our strong financial results this quarter
reflect our employees’ dedication to respond to increased demand in
a timely manner. It also results from operational efficiencies, as
well as a diligent material requirement planning that has allowed
us to properly navigate through this inflationary period.
Significant capital improvements that were put into the production
process during the fourth quarter of 2020 and scaled up over the
course of 2021 are now paying off. Additionally, throughout 2021
and continuing into 2022, a key focus for Ceapro was to negotiate
distribution and supply agreements with key partners for the
Company's portfolio, with an emphasis on improving visibility and
long-term sustainability. This quarter, we announced a strengthened
distribution and supply agreement with long time distributor and
partner, Symrise, which will take us through the end of 2024.
This agreement will provide Ceapro with an additional three years
of visibility, stable revenue and cashflows,” commented Gilles
Gagnon, M.Sc., MBA, President and CEO.
Corporate and Operational
Highlights
Pipeline Development:
Company’s focus is on avenanthramides, alginate,
yeast beta glucan and new chemical complexes/delivery systems.
Avenanthramides
Formulation:
In 2021, formulation
and process development activities were performed at small scale
for 30 mg and 240 mg avenanthramides drug product and placebo to
design and optimize the best formulation for a Phase 1 clinical
study. The pill formulation was retained.
In the first quarter
of 2022, a lab-scale production of the drug product for an informal
non-GMP prototype formulation of pills was developed and stability
study was launched. The formulation and manufacturing processes of
the selected formulation of the drug product was scaled-up in
preparation of the clinical batches which will be manufactured,
packaged and labeled in June 2022 by Corealis Inc. GMP
Manufacturing Services.
Phase 1
Clinical Trial:
The clinical trial
protocol has been completed with Montreal Heart Institute and
discussions are ongoing with Health Canada.
Alginate
- Developed and fine-tuned new
PGX-dried chemical complexes mostly using sodium alginate as a
carrier. As an example, drug delivery systems composed of PGX
processed cross-linked alginate impregnated with different
antibiotics were recently developed and tested both in vitro and in
vivo for wound healing applications. Clear zones of inhibition were
seen for all in vitro tests, while a disc of cross-linked alginate
impregnated with fusidic acid successfully inhibited
Methicillin-Resistant Staphylococcus aureus (MRSA)
infection in wounds in mice.
- Alginate-Co-Q10 is currently part
of bioavailability studies at University of Alberta. Results are
expected in Q3 2022.
- Subsequent to quarter, results from
development of sodium alginate using PGX Technology were published
in the peer review Journal of CO2 Utilization. An additional
scientific article for alginate impregnated with another bioactive
has been submitted for publication in a different scientific
journal.
- Thin strips composed of alginate
and yeast beta glucan are also being developed and could lead to a
viable nutraceutical product.
Yeast Beta Glucan (YBG)
- Progress achieved for the
pre-processing of YBG to ensure homogeneous dispersion and
deagglomeration of polymers and batch to batch consistency. The
team successfully performed several runs on the PGX demo plant to
verify the final PGX processed YBG complies with desired product
specifications.
- In collaboration with research
partners at McMaster University, the team prepared and shipped
samples, discussed the findings, and analyzed the data to advance
the development of PGX processed YBG for drug delivery, treatment
of lung fibrotic disease, and alginate strips loaded with drugs for
wound healing.
- Several commercially available
formulations of YBG were ordered, processed and analyzed for the
development of YBG as an immune booster.
“In summary, given encouraging results obtained
so far, alginate and yeast beta glucan are poised to be key
strategic assets at the basis of decisions regarding the magnitude
of capital expenditures to be incurred for the building of a
commercial scale unit for PGX Technology either as a Ceapro
stand-alone project or in partnership with another company,” added
Mr. Gagnon.
Corporate
- Appointed Mr. Ronnie Miller, former
long-serving President & CEO of Roche Canada and subsequent to
quarter, Mrs. Genevieve Foster, an accomplished lawyer, corporate
director, governance and business woman to the Company’s Board of
Directors.
Financial Highlights for the First
Quarter Ended March 31, 2022
- Total sales of $6,172,000 for the
first quarter of 2022 compared to $4,702,000 for the comparative
period in 2021, an increase of 31% over last year primarily driven
by a 32% increase in product sales volume over the comparative
quarter due to higher sales of the Company’s flagship product,
avenanthramides (+35%) and value driver product, beta glucan
(+27%).
- Achieved a favorable gross margin
of 64% in Q1 2022 compared to 48% in Q1 2021 and improved net
earnings and cash flows.
- Operating profit of $2,614,000 in
Q1 2022 vs $515,000 for the comparative period in 2021.
- Net profit after tax of $1,996,000
in Q1 2022 compared to $515,000 in Q1 2021.
- Cash generated from operations of
$1,300,000 in Q1 2022 vs. $305,000 in Q1 2021.
- Positive working capital balance of
$13,591,417 as of March 31, 2022.
“Despite the fact that inflation is prevailing
on all fronts, management believes the prospects for the Company
remain very strong for the remainder of the year given the
Company’s diligent material planning program in place through
advanced purchase of the best available raw material, the
operational efficiencies from our extraction facility in Edmonton
along with a strengthened partnership with the Symrise Group.
Ceapro’s cosmeceuticals base business should continue to grow and
provide positive cash flows to support the expansion to a new
business model from a contract manufacturer/commodity company to a
high value life science/biopharmaceutical company involved in
nutraceuticals and pharmaceuticals. We then expect to further
invest in R&D to initiate an early clinical trial with our
newly developed avenanthramides pill formulation, to continue the
development of new chemical complexes as potential delivery systems
for bioactives and emphasize our current efforts for the
development and assessment of yeast beta glucan as an immune
booster and as a potential inhalable therapeutic for lung fibrotic
diseases including COVID-19 conditions,” concluded Mr. Gagnon.
|
|
|
|
|
|
CEAPRO INC. |
|
|
|
|
|
Condensed Interim Consolidated Balance Sheets |
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2022 |
|
2021 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current Assets |
|
|
|
|
|
Cash and cash equivalents |
|
8,781,572 |
|
7,780,989 |
|
Trade receivables |
|
3,540,557 |
|
2,092,842 |
|
Other receivables |
|
75,958 |
|
45,850 |
|
Inventories (note 3) |
|
1,745,351 |
|
1,644,893 |
|
Prepaid expenses and deposits |
|
298,218 |
|
162,919 |
|
|
|
|
|
|
|
Total Current Assets |
|
14,441,656 |
|
11,727,493 |
|
|
|
|
|
|
|
Non-Current Assets |
|
|
|
|
|
Investment tax credits receivable |
|
766,629 |
|
766,629 |
|
Deposits |
|
79,539 |
|
79,539 |
|
Licences (note 4) |
|
14,810 |
|
15,551 |
|
Property and equipment (note 5) |
|
17,218,956 |
|
17,499,774 |
|
Deferred tax assets |
|
- |
|
439,063 |
|
|
|
|
|
|
|
Total Non-Current Assets |
|
18,079,934 |
|
18,800,556 |
|
|
|
|
|
|
|
TOTAL ASSETS |
|
32,521,590 |
|
30,528,049 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
556,695 |
|
682,057 |
|
Current portion of lease liabilities (note 6) |
|
293,544 |
|
290,055 |
|
|
|
|
|
|
|
Total Current Liabilities |
|
850,239 |
|
972,112 |
|
|
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
|
Long-term lease liabilities (note 6) |
|
2,284,154 |
|
2,358,862 |
|
Deferred tax liabilities |
|
178,560 |
|
- |
|
|
|
|
|
|
|
Total Non-Current Liabilities |
|
2,462,714 |
|
2,358,862 |
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
3,312,953 |
|
3,330,974 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital (note 7 (b)) |
|
16,557,975 |
|
16,557,401 |
|
Contributed surplus (note 7 (e)) |
|
4,695,390 |
|
4,680,690 |
|
Retained earnings |
|
7,955,272 |
|
5,958,984 |
|
|
|
|
|
|
|
Total Equity |
|
29,208,637 |
|
27,197,075 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
32,521,590 |
|
30,528,049 |
|
CEAPRO INC. |
|
|
|
|
|
Condensed Interim Consolidated Statements of Net Income and
Comprehensive Income |
Unaudited |
|
|
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
Three Months Ended March 31, |
|
$ |
|
$ |
|
|
|
|
|
|
|
Revenue (note 13) |
|
6,171,624 |
|
4,701,743 |
|
Cost of goods sold |
|
2,217,015 |
|
2,443,800 |
|
|
|
|
|
|
|
Gross margin |
|
3,954,609 |
|
2,257,943 |
|
|
|
|
|
|
|
Research and product development |
|
355,281 |
|
816,847 |
|
General and administration |
|
769,045 |
|
712,207 |
|
Sales and marketing |
|
5,299 |
|
13,238 |
|
Finance costs (note 10) |
|
88,035 |
|
93,910 |
|
|
|
|
|
|
|
Income from operations |
|
2,736,949 |
|
621,741 |
|
|
|
|
|
|
|
Other expense (note 9) |
|
123,038 |
|
106,865 |
|
|
|
|
|
|
|
Income before tax |
|
2,613,911 |
|
514,876 |
|
|
|
|
|
|
|
Deferred income tax expense |
|
617,623 |
|
- |
|
|
|
|
|
|
|
Total net income and comprehensive income for the period |
|
1,996,288 |
|
514,876 |
|
|
|
|
|
|
|
Net income per common share (note 16): |
|
|
|
|
|
Basic |
|
0.03 |
|
0.01 |
|
Diluted |
|
0.03 |
|
0.01 |
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (note
16): |
|
|
|
|
|
Basic |
|
77,686,576 |
|
77,651,031 |
|
Diluted |
|
78,333,335 |
|
78,709,975 |
|
CEAPRO INC. |
|
|
|
Condensed Interim Consolidated Statements of Cash Flows |
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
Three Months Ended March 31, |
|
$ |
|
$ |
|
OPERATING ACTIVITIES |
|
|
|
Net income for the period |
|
1,996,288 |
|
514,876 |
|
Adjustments for items not involving cash |
|
|
|
Finance costs |
|
33,035 |
|
36,166 |
|
Depreciation and amortization |
|
462,456 |
|
468,153 |
|
Accretion |
|
- |
|
2,744 |
|
Deferred income tax expense |
|
617,623 |
|
- |
|
Share-based payments |
|
14,914 |
|
3,742 |
|
|
|
3,124,316 |
|
1,025,681 |
|
CHANGES IN NON-CASH WORKING CAPITAL ITEMS |
|
|
|
Trade receivables |
|
(1,447,715 |
) |
(887,290 |
) |
Other receivables |
|
(30,108 |
) |
72,648 |
|
Inventories |
|
(100,458 |
) |
211,168 |
|
Prepaid expenses and deposits |
|
(135,299 |
) |
72,574 |
|
Accounts payable and accrued liabilities relating to operating
activities |
|
(77,608 |
) |
(153,619 |
) |
|
|
(1,791,188 |
) |
(684,519 |
) |
Net income for the year adjusted for non-cash and working capital
items |
|
1,333,128 |
|
341,162 |
|
Interest paid |
|
(33,035 |
) |
(36,166 |
) |
CASH GENERATED FROM OPERATIONS |
|
1,300,093 |
|
304,996 |
|
INVESTING ACTIVITIES |
|
|
|
Purchase of property and equipment |
|
(180,897 |
) |
(272,490 |
) |
Accounts payable and accrued liabilities relating to investing
activities |
|
(47,754 |
) |
(122,914 |
) |
CASH USED IN INVESTING ACTIVITIES |
|
(228,651 |
) |
(395,404 |
) |
FINANCING ACTIVITIES |
|
|
|
Stock options exercised |
|
360 |
|
22,020 |
|
Repayment of lease liabilities |
|
(71,219 |
) |
(61,570 |
) |
CASH USED IN FINANCING ACTIVITIES |
|
(70,859 |
) |
(39,550 |
) |
Increase in cash and cash equivalents |
|
1,000,583 |
|
(129,958 |
) |
|
|
|
|
Cash and cash equivalents at beginning of the period |
|
7,780,989 |
|
5,369,029 |
|
|
|
|
|
Cash and cash equivalents at end of the period |
|
8,781,572 |
|
5,239,071 |
|
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.
Ceapro (TSXV:CZO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ceapro (TSXV:CZO)
Historical Stock Chart
From Apr 2023 to Apr 2024