Ceapro Inc. Reports Record 2022 Second Quarter and Six-Month Financial Results and Provides Corporate Update
August 24 2022 - 08:00AM
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 second quarter and six months ended June 30,
2022.
“I could not be more excited for the future of
Ceapro. With our very strong performance year to date, we are on
track to achieve another solid year with double-digit growth.
Progress continues on all fronts from production operations to
research and development, allowing us to advance our pipeline while
expanding our business model. We have learned a lot from our
encouraging development work and studies and will continue to
invest in research and development and remain focused on our
pipeline. We are well positioned for the next steps in becoming a
high-value life sciences company,” stated Gilles Gagnon, M.Sc.,
MBA, President and CEO.
Corporate and Operational
Highlights
Pipeline Development:
The Company’s focus is on avenanthramides,
alginate, yeast beta glucan and new chemical complexes/delivery
systems.
Avenanthramides
Formulation:
Production and preparation of the selected 30mg
and 240mg pill formulation of the drug product was scaled-up in
preparation of the clinical batches for a Phase 1 safety and
tolerability study. Stability studies are ongoing.
Clinical batches were manufactured, packaged and
labeled in June 2022 by Corealis Inc. GMP Manufacturing
Services.
Phase 1 Clinical Trial:The
clinical trial protocol completed with Montreal Heart Institute was
further discussed with Health Canada for expansion into a Phase 1/
2a to include a cohort of patients suffering from mild
inflammation. A response from Health Canada for clearance to
proceed with this study is expected in Q4 2022.
Alginate
- Pursued and
fine-tuned the development of new PGX-dried chemical complexes with
sodium alginate (SA) as a carrier. Emphasis put on thin strips of
alginate/yeast beta glucan as a potential nutraceutical product
with immune boosting properties.
- Announced
publication of results for PGX-Processed Alginates in the Journal
of CO2 Utilization. PGX Technology demonstrated that it could
effectively dry, purify and increase the surface area of SA while
producing a unique fibrous morphology that cannot be obtained by
any other conventional drying method.
- Subsequent to
quarter, announced publication of positive results for
PGX-processed alginates impregnated with CoQ10 in The Journal of
Supercritical Fluids. This publication confirms alginate as a
carrier for other bioactives.
- Alginate-Co-Q10
is currently part of bioavailability studies at University of
Alberta. Results are expected at the end of Q3 2022.
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. Several
commercially available formulations of spray-dried YBG were further
PGX processed and tested following the installation of a new piece
of equipment. Promising results obtained showing that this new unit
should enable the production of uniform particle sizes nearly
independent of suppliers. The next step is to develop a processing
sequence to ensure that the final PGX processed YBG meets not only
particle size requirements and morphology, but also the targeted
microbial load, composition, and immunological functions.
- In collaboration with research
partners at McMaster University, the team prepared and shipped
additional samples to advance the development of PGX processed YBG
for drug delivery and potential treatment of lung fibrotic disease.
Results from animal studies are being analyzed as part of a PhD
thesis.
- Of interest, the size of PGX
processed YBG particles (around 5 microns) would allow them to be
“swallowable” by macrophages that would carry them to remote sites
in the body. Thus, the loading of drugs onto PGX YBG is currently
under further investigation, since numerous research studies
suggest that YBG cells being swallowed by macrophages could be
utilized as “Trojan Horses” to carry bioactives (potentially CoQ10,
antioxidants, pain killers or potent pharmaceutical drugs) into the
body to the target tissue.
Technology:
- Pursued technical upgrades of PGX
demo plant in Edmonton especially for the commercial scale up of an
impregnation unit to produce chemical complexes mostly with
alginate as a carrier for other bioactives like yeast beta
glucan.
- Pursued engineering design for PGX processing commercial scale
unit. Decision made to use a stepwise approach to ensure
standardization of product specifications at each scale level from
current 10 Liters to 50-100 Liters vessels. These scale-ups will be
first conducted for food/nutraceuticals grade applications which
should pave the way to advance key aspects of a pharma processing
unit. More specifically, the strategic path is for the production
of alginate and the development of YBG as an immune booster
(nutraceutical) at first and secondly, as an inhalable therapeutic
(pharmaceutical).
- Keynote presentation made by Dr.
Bernhard Seifried at the 13th International Symposium on
Supercritical Fluids in Montreal featuring the ability of the PGX
Technology to generate novel bioaerogels, composites and bioactive
delivery systems for nutraceuticals, drug delivery and wound
healing.
Corporate:
- Appointed Mrs. Genevieve Foster, an
accomplished lawyer, Corporate Director of Governance and
businesswoman to the Company’s Board of Directors.
- Pursued
out-licensing discussions for PGX-processed new chemical
complexes.
Subsequent to Quarter:
- Announced appointment of Ms. Sigrun Watson as Chief Revenue
Officer. Ms. Watson is a recognized commercial leader with over 20
years of experience across diverse healthcare industries.
- Expanded collaborative research program with McMaster
University to develop an inhalable immuno-therapeutic/prophylactic
for COVID-19-induced lung fibrosis.
- Successfully completed audits conducted by two major customers
at the Edmonton facility.
Financial Highlights for the Second
Quarter and the Six-Month Period Ended June 30, 2022
- Total sales of $5,500,000 for the
second quarter of 2022 and $11,672,000 for the first six months of
2022 compared to $4,409,000 and $9,110,000 for the comparative
periods in 2021, respectively, representing increases of 25% and
28%. The increase in sales revenue for the six-month period ended
June 30, 2022 was primarily driven by a 23% increase in the sale of
avenanthramides and a 75% increase in the sale of beta glucan.
- Income before tax of $2,177,000 for
the second quarter of 2022 and $4,790,000 for the first six months
of 2022 compared to $676,000 and $1,191,000 for the comparative
periods in 2021.
- Net profit after tax of $1,662,000
for the second quarter of 2022 and $3,659,000 for the six-month of
2022 compared to $676,000 and $1,191,000 for the comparative
periods in 2021.
- Cash flows generated from
operations of $3,958,000 for the first six months of 2022 vs
$2,433,000 in 2021.
- Positive working capital balance of
$16,189,000 as of June 30, 2022.
- Cash on hand of $11,367,997 as of
June 30, 2022.
“While we are very pleased with the strong
financial results so far, proper planning and management of supply
chain challenges will be key in securing success during this
transformative year for Ceapro. With a strengthened management
team, a renewed agreement with our long-time and committed partner,
Symrise and with a solid and clean balance sheet and positive cash
flows, we are in a position to financially support the projects
that will enable the expansion to a new business model from a
contract manufacturer/commodity company to a high-value, life
science/biopharmaceutical company. More specifically, we are very
enthusiastic for the many opportunities which we expect have the
potential to drive significant value, including the Phase 1
clinical trial with our newly developed avenanthramides pill
formulation, the development of new chemical complexes as potential
delivery systems for bioactives with alginate as a carrier, 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 and the implementation of
the intermediary scale level of the PGX processing unit in
Edmonton,” concluded Mr. Gagnon.
CEAPRO INC. |
|
|
Condensed Interim Consolidated Balance Sheets |
|
|
Unaudited |
|
|
|
|
|
|
June 30, |
December 31, |
|
2022 |
2021 |
|
$ |
$ |
|
|
|
ASSETS |
|
|
Current Assets |
|
|
Cash and cash equivalents |
11,367,997 |
7,780,989 |
Trade receivables |
3,360,751 |
2,092,842 |
Other receivables |
90,723 |
45,850 |
Inventories (note 3) |
2,116,159 |
1,644,893 |
Prepaid expenses and deposits |
169,978 |
162,919 |
Total Current Assets |
17,105,608 |
11,727,493 |
Non-Current Assets |
|
|
Investment tax credits receivable |
766,629 |
766,629 |
Deposits |
79,539 |
79,539 |
Licences (note 4) |
14,069 |
15,551 |
Property and equipment (note 5) |
16,802,060 |
17,499,774 |
Deferred tax assets |
- |
439,063 |
Total Non-Current Assets |
17,662,297 |
18,800,556 |
|
|
|
TOTAL ASSETS |
34,767,905 |
30,528,049 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Current Liabilities |
|
|
Accounts payable and accrued liabilities |
613,721 |
682,057 |
Current portion of lease liabilities (note 6) |
303,354 |
290,055 |
|
|
|
Total Current Liabilities |
917,075 |
972,112 |
Non-Current Liabilities |
|
|
Long-term lease liabilities (note 6) |
2,202,269 |
2,358,862 |
Deferred tax liabilities |
692,843 |
- |
Total Non-Current Liabilities |
2,895,112 |
2,358,862 |
|
|
|
TOTAL LIABILITIES |
3,812,187 |
3,330,974 |
|
|
|
Equity |
|
|
Share capital (note 7 (b)) |
16,657,044 |
16,557,401 |
Contributed surplus (note 7 (e)) |
4,681,131 |
4,680,690 |
Retained earnings |
9,617,543 |
5,958,984 |
Total Equity |
30,955,718 |
27,197,075 |
|
|
|
TOTAL LIABILITIES AND EQUITY |
34,767,905 |
30,528,049 |
CEAPRO INC. |
|
|
|
|
Condensed Interim Consolidated Statements of Net Income and
Comprehensive Income |
Unaudited |
|
|
|
|
|
|
|
|
Quarters Ended June 30, |
Six Months Ended June 30, |
|
2022 |
|
2021 |
2022 |
|
2021 |
|
$ |
|
$ |
$ |
|
$ |
|
|
|
|
|
Revenue (note 13) |
5,500,399 |
|
4,408,631 |
11,672,023 |
|
9,110,374 |
Cost of goods sold |
1,861,064 |
|
1,770,153 |
4,078,079 |
|
4,213,953 |
|
|
|
|
|
Gross margin |
3,639,335 |
|
2,638,478 |
7,593,944 |
|
4,896,421 |
|
|
|
|
|
Research and product development |
543,924 |
|
830,511 |
899,205 |
|
1,647,358 |
General and administration |
1,069,275 |
|
952,847 |
1,838,320 |
|
1,665,054 |
Sales and marketing |
9,248 |
|
16,362 |
14,547 |
|
29,600 |
Finance costs (note 10) |
32,175 |
|
38,344 |
120,210 |
|
132,254 |
|
|
|
|
|
Income from operations |
1,984,713 |
|
800,414 |
4,721,662 |
|
1,422,155 |
|
|
|
|
|
Other (income) expense (note 9) |
(191,841 |
) |
123,942 |
(68,803 |
) |
230,807 |
|
|
|
|
|
Income before tax |
2,176,554 |
|
676,472 |
4,790,465 |
|
1,191,348 |
|
|
|
|
|
Deferred income tax expense |
514,283 |
|
- |
1,131,906 |
|
- |
|
|
|
|
|
Total net income and comprehensive income for the period |
1,662,271 |
|
676,472 |
3,658,559 |
|
1,191,348 |
|
|
|
|
|
Net income per common share (note 16): |
|
|
|
|
Basic |
0.02 |
|
0.01 |
0.05 |
|
0.02 |
Diluted |
0.02 |
|
0.01 |
0.05 |
|
0.02 |
|
|
|
|
|
Weighted average number of common shares outstanding (note
16): |
|
|
|
|
Basic |
77,734,865 |
|
77,673,832 |
77,710,854 |
|
77,662,495 |
Diluted |
78,474,139 |
|
78,684,303 |
78,405,883 |
|
78,684,344 |
CEAPRO INC. |
|
|
Condensed Interim Consolidated Statements of Cash Flows |
|
|
Unaudited |
|
|
|
|
|
|
2022 |
|
2021 |
|
Six Months Ended June 30, |
$ |
|
$ |
|
OPERATING ACTIVITIES |
|
|
Net income for the period |
3,658,559 |
|
1,191,348 |
|
Adjustments for items not involving cash |
|
|
Finance costs |
65,210 |
|
71,662 |
|
Depreciation and amortization |
939,191 |
|
937,356 |
|
Accretion |
- |
|
5,592 |
|
Deferred income tax expense |
1,131,906 |
|
- |
|
Share-based payments |
39,924 |
|
6,828 |
|
|
5,834,790 |
|
2,212,786 |
|
CHANGES IN NON-CASH WORKING CAPITAL ITEMS |
|
|
Trade receivables |
(1,267,909 |
) |
218,155 |
|
Other receivables |
(44,873 |
) |
56,311 |
|
Inventories |
(471,266 |
) |
41,916 |
|
Prepaid expenses and deposits |
(7,059 |
) |
51,179 |
|
Accounts payable and accrued liabilities relating to operating
activities |
(20,582 |
) |
(75,337 |
) |
|
(1,811,689 |
) |
292,224 |
|
Net income for the year adjusted for non-cash and working capital
items |
4,023,101 |
|
2,505,010 |
|
Interest paid |
(65,210 |
) |
(71,662 |
) |
CASH GENERATED FROM OPERATIONS |
3,957,891 |
|
2,433,348 |
|
INVESTING ACTIVITIES |
|
|
Purchase of property and equipment |
(239,995 |
) |
(296,534 |
) |
Deposits relating to the purchase of equipment |
- |
|
(16,733 |
) |
Accounts payable and accrued liabilities relating to investing
activities |
(47,754 |
) |
(134,554 |
) |
CASH USED IN INVESTING ACTIVITIES |
(287,749 |
) |
(447,821 |
) |
FINANCING ACTIVITIES |
|
|
Stock options exercised |
60,160 |
|
25,620 |
|
Repayment of lease liabilities |
(143,294 |
) |
(110,748 |
) |
CASH USED IN FINANCING ACTIVITIES |
(83,134 |
) |
(85,128 |
) |
Increase in cash and cash equivalents |
3,587,008 |
|
1,900,399 |
|
|
|
|
Cash and cash equivalents at beginning of the period |
7,780,989 |
|
5,369,029 |
|
|
|
|
Cash and cash equivalents at end of the period |
11,367,997 |
|
7,269,428 |
|
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
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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