– 2018 marked by Company’s catalytic pivot from contract manufacturer to
biopharmaceutical company
and validation of Ceapro’s dedication to innovation –

EDMONTON, Alberta, April 11, 2019 (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 operational highlights and financial results for the fourth quarter and full year ended December 31, 2018.

2018 Corporate and Operational Highlights:

Innovation

Pipeline Development:

  • Signed a Master Service Agreement with prestigious Montreal Heart Institute for Ceapro’s clinical program;
  • Filed a Clinical Trial Agreement and received approval from Health Canada to commence human clinical study assessing beta glucan as a cholesterol-lowering agent. Eleven (11) research centers will be involved in this pan Canadian study. All approvals from their respective Ethics boards have been received and the study is ready for enrollment. This is Ceapro’s first clinical trial with a proprietary, pharmaceutical-grade product;
  • Positive results obtained from bioavailability study with new water-soluble chemical complex of oat beta glucan impregnated with Co-enzyme Q10 (CoQ10-iBG);
  • Published data from the functional drink formulation (CoQ10-iBG) in Journal of Nutrition; and
  • Completed bio-efficacy study assessing anti-inflammatory properties of avenanthramides in exercise induced inflammation. Data presented at the Nutrition 2018 Conference held in Boston. Additional data on the immunoregulatory mechanism of action of avenanthramides to be presented at the 2019 American College of Sports Medicine Annual Meeting on May 31, 2019 in Orlando, FL.

Technology:

  • Advanced the Technical Readiness Level (TRL) of Ceapro’s game-changing Pressurized Gas eXpanded (PGX) Technology reaching demo scale and performed the groundwork necessary to integrate the system in large commercial scale;
  • Presented PGX enabling technology case study at various international scientific conferences;
  • Granted patent for PGX technology in Europe. Several companies have already shown some keen interest in working with Ceapro for the PGX processing of their material;
  • Developed and presented several new PGX-dried chemical complexes like CoQ10-iBG, sodium alginate and Gum Arabic impregnated with CoQ10 (CoQ10-iGA) confirming the versatility of the PGX technology and the potential to develop significant bioactives delivery systems;
  • Received the 2018 Award for “Most Innovative Raw Material” at Cosmetics 360 Salon in Paris, recognizing the potential of Ceapro’s new chemical entity CoQ10-iBG for various applications in cosmeceuticals and personal care;
  • Advanced research projects with the University of Alberta and McMaster University for the impregnation of various bio actives using PGX-processed dry beta glucan and numerous other biopolymers as potential delivery systems for multiple applications in healthcare and personal care;
  • Presented three abstracts at the International Symposium on Supercritical Fluids held in Spain from April 8-11, 2019;
  • Published six scientific articles in peer reviewed journals along with researchers from University of Alberta and McMaster University; and
  • Successfully completed a research project in collaboration with two German Fraunhofer Institutes, a German SME focusing on membrane systems (A. Junghans) and the University of Alberta developing cutting edge novel separation membranes for dehydration of ethanol and potential applications for bioactive separations for the PGX Technology.

Bioprocessing Operations:

  • Announced the completion of successful audits from key major customers for the new Edmonton-based facility which fully complies with recognized international quality systems. First orders shipped from Edmonton Plant in December 2018.

Legal:

  • Announced the settlement of royalty provisions with AVAC Ltd.

Marketing & Sales:       

  • Launched a new website and increased visibility of Ceapro on social media; and
  • Achieved the highest quarterly sales in the history of Ceapro while shipping from two sites in the fourth quarter of 2018.

Subsequent to Year End:

  • Granted patent for PGX technology in India, which represents a very large potential market with numerous contract manufacturers in the pharmaceutical industry that Ceapro believes could benefit from our PGX technology;
  • Recruited and appointed top talent for key management positions; and
  • Completed the dossier for uplisting Ceapro to a U.S. Exchange.

“2018 was marked by tremendous advancements on many fronts and I believe we have a solid foundation established for growth. We will continue to leverage our cosmeceuticals base business allowing the Company to pursue the transition to a new business model from a contract manufacturer to a biopharmaceutical company involved in nutraceuticals and pharmaceuticals. As part of new product development, Ceapro will develop formulations potentially allowing delivery of bioactives through different modes of administration, including oral, topical, sub-lingual, and intranasally. The Juvente line of products will mostly be used for the development of topical/transdermal delivery systems using Ceapro’s proprietary new chemical complexes developed leveraging our PGX technology,” stated Gilles Gagnon, M.Sc., MBA, President and CEO, of Ceapro.

Financial Highlights for the Fourth Quarter and the Full Year 2018 Ended December 31, 2018

  • Total sales of $4,467,000 for the fourth quarter of 2018 and $11,593,000 for the full year of 2018 compared to $2,969,000 and $12,926,000 for the comparative periods in 2017. While sales of avenanthramides increased by 52% in Q4 2018 vs Q4, 2017, they remained lower than the previous year by 16% for the full year of 2018 compared to the previous year. Beta glucan sales improved by 23% in 2018 vs 2017. In summary, the twelve-month decrease of sales in 2018 is primarily due to a decrease in sales of avenanthramides compared to 2017.
     
  • Net profit of $444,000 for the fourth quarter of 2018 and a loss of $316,000 for the full year of 2018 compared to a loss of $1,642,000 and $958,000 for the comparative periods in 2017. The net profit of $444,000 in Q4 2018 includes non-recurring impairment charges on goodwill and intangible assets of $649,000. These one-time impairment charges are non-cash items that do not have an adverse effect on the Company’s liquidity or cash flows from operating activities and will not have an impact on future operations.
     
  • Positive working capital balance of $4,776,000 as of December 31, 2018.

“Moving forward, we are deploying strategic efforts to expand and optimize our sales through our distribution network and mostly through direct marketing and sales activities. We are also very active in business development activities for out-licensing of selective Ceapro products. From a manufacturing perspective, the recently announced qualification of Ceapro’s bioprocessing sites have triggered considerable discussions with potential partners. Ceapro has the capability to work from two sites based in Alberta: the Leduc site, a government-owned bio incubator and the Edmonton site, Ceapro’s new facility which is now commissioned and validated,” added Mr. Gagnon. “Given that both sites were successfully audited by major customers, and given new opportunities that are arising especially for applications of proprietary new chemical complexes, Ceapro will continue to operate the two sites for an extended period depending on the results from an expected one-year feasibility study with a project dedicated to functional food. Should the results be positive, Leduc, in addition to be a back-up for Edmonton, would be dedicated for production of actives with application in the nutraceuticals and functional food industry while Edmonton will be for cosmeceuticals and potentially pharmaceuticals.”

“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 to access key large markets,” concluded Mr. Gagnon.


CEAPRO INC.    
Consolidated Balance Sheets    
     
 December 31, December 31, 
 2018 2017 
  $   $  
     
ASSETS    
Current Assets    
Cash and cash equivalents1,844,134 6,173,895 
Trade receivables3,015,344 1,246,413 
Other receivables46,899 213,512 
Inventories (note 6)710,708 1,085,388 
Prepaid expenses and deposits518,219 277,600 
 6,135,304 8,996,808 
Non-Current Assets    
Investment tax credits receivable607,700 607,700 
Deposits88,340 87,816 
Licences (note 7)24,440 27,403 
Property and equipment (note 8)17,947,967 17,379,839 
Intangible assets (note 9)- 489,733 
Goodwill (note 10)- 218,606 
Deferred tax assets (note 19 (b))520,872 - 
 19,189,319 18,811,097 
TOTAL ASSETS25,324,623 27,807,905 
LIABILITIES AND EQUITY    
Current Liabilities    
Accounts payable and accrued liabilities949,878 979,626 
Current portion of long-term debt (note 11)336,956 860,871 
Royalty provision - Ceapro Inc. (note 12 (a) (c))- 778,636 
Royalty provision - Ceapro Technology Inc. (note 12 (b) (c))- 1,375,000 
Current portion of CAAP loan (note 14)72,942 72,942 
 1,359,776 4,067,075 
Non-Current Liabilities    
Long-term debt (note 11)110,350 430,622 
CAAP loan (note 14)115,216 161,424 
Deferred tax liabilities (note 19 (b))524,280 604,835 
 749,846 1,196,881 
TOTAL LIABILITIES2,109,622 5,263,956 
     
Equity    
Share capital (note 13 (b))16,320,522 15,565,522 
Contributed surplus (note 13 (f))4,501,444 4,269,855 
Retained earnings2,393,035 2,708,572 
     
 23,215,001 22,543,949 
TOTAL LIABILITIES AND EQUITY25,324,623 27,807,905 
     


   
CEAPRO INC.  
Consolidated Statements of Net Loss and Comprehensive Loss
   
  
 2018 2017 
Year Ended December 31, $ $ 
   
Revenue (note 21)11,592,666 12,925,825 
Cost of goods sold5,454,468 5,653,707 
   
Gross margin6,138,198 7,272,118 
   
Research and product development2,665,838 1,606,332 
General and administration3,000,005 2,840,605 
Sales and marketing225,549 32,106 
Finance costs (note 17)118,728 136,560 
   
Income from operations128,078 2,656,515 
   
Other expenses (note 16)(1,123,061)(929,696)
Royalty provision - Ceapro Inc. (note 12 (a))- (778,636)
Royalty provision - Ceapro Technology Inc. (note 12 (b))- (1,375,000)
Impairment of intangible assets (note 9)(430,533)- 
Impairment of goodwill (note 10)(218,606)- 
Gain on settlement of royalty provisions (note 12 (c))722,895 - 
   
Loss before tax(921,227)(426,817)
   
Income taxes  
Current tax recovery4,263 9,345 
Deferred tax benefit (expense)601,427 (540,803)
   
Income tax benefit (expense) (note 19 (a))605,690 (531,458)
   
Total comprehensive loss for the year(315,537)(958,275)
   
Net loss per common share (note 27):  
Basic(0.00)(0.01)
Diluted(0.00)(0.01)
   
Weighted average number of common shares outstanding (note 27):  
Basic76,201,191 75,343,907 
Diluted76,201,191 75,343,907 
   

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

Issuer:
Gilles R. Gagnon, M.Sc., MBA
President & CEO
T: 780-421-4555

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