News
Ceapro Inc. Reports Financial Results for First Quarter 2024 and Provides Corporate Update
Ceapro Inc.
– Q1 2024 marked by significant advancement of R&D projects focused on avenanthramide Phase 1-2a clinical study and the processing of yeast beta glucan along with the building of pilot scale units for PGX Technology
– Q1 2024 sales of $2,800,000 vs $3,500,000 in Q1 2023
– Announced approval by shareholders of merger of equals with Aeterna Zentaris to create a diversified biopharmaceutical company; expected to close in the second quarter of 2024, subject to the closing conditions
EDMONTON, Alberta, May 29, 2024 (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 first quarter ended March 31, 2024.
“We are excited by the advancement of several key milestones related to new product and technology development. We are making progress on multiple fronts including the team at Montreal Heart Institute completing the first arm of the Phase 1 clinical study with avenanthramides and the team at Ceapro working to complete the scale-up of the PGX Technology at the Edmonton facility using fully defined yeast beta glucan. With the return of the re-ordering pattern from one major customer and the expected shared benefits that should result from the upcoming merger of equals with Aeterna Zentaris, we believe we are poised to significantly propel the Company into its next phase of growth and unlock value as a diversified biopharmaceutical company,” stated Gilles Gagnon, M.Sc., MBA, President and CEO of Ceapro.
Corporate and Operational Highlights
Pipeline Development
Focus maintained on the development of avenanthramides and the scale-up of the PGX Technology
Avenanthramides:
Clinical
Story continues
Formulation, Stability Studies and Analytics
Yeast Beta Glucan (YBG)
Specifications have been standardized and the product is being used for the PGX scale-up projects in Edmonton and Austria.
Technology:
Pressurized Gas eXpanded Technology (PGX):
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Edmonton Main Facility – PGX Scale-Up 50 Liters Vessel: Construction and installation were completed during Q1 2024. Several trial runs of yeast beta glucan have been performed as part of the last commissioning “fine tuning” phase. Given that the Edmonton site license is for natural products, yeast beta glucan produced from this facility will be offered as a nutraceutical. Subject to approval by Health Canada, this product could be launched by end of 2024.
Corporate:
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Received on March 28, 2024 the final court approval for merger with AeternaZentaris to create a diversified biopharmaceutical company; expected to close in the second quarter of 2024; subject to the closing conditions.
Financial Highlights for the First Quarter Ended March 31, 2024
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Total sales of $2,800,000 for the first quarter of 2024 compared to $3,500,000 for the comparative quarter in 2023. The decrease compared to last year was primarily due to a significant decrease in product sales of oat oil. One major customer is gradually resuming ordering pattern with flagship product, avenanthramides.
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Net loss of $1,900,000 in Q1 2024 compared to a net loss of $385,000 in Q1 2023. Loss was incurred due to lower sales, increased R&D investments as well as non-recurrent increased G&A expenses mostly due to professional fees incurred for the expected merger with Aeterna Zentaris.
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Positive working capital balance of $10,219,022 as of March 31, 2024.
“As we expect renewed growth with our active ingredients revenue generating base business and subject to the closing and successful integration of the merger with Aeterna Zentaris, the Company expects to complete prioritized projects using cash on hand while continuing to assess different market initiatives to bring new business and unlock value,” concluded Mr. Gagnon.
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CEAPRO INC. |
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Condensed Interim Consolidated Balance Sheets |
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Unaudited |
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March 31, |
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December 31, |
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2024 |
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2023 |
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$ |
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$ |
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ASSETS |
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Current Assets |
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Cash |
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4,746,901 |
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8,843,742 |
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Trade receivables |
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1,677,934 |
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167,295 |
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Other receivables |
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204,911 |
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216,763 |
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Inventories (note 3) |
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4,778,701 |
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5,308,987 |
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Prepaid expenses and deposits |
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485,826 |
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310,191 |
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Total Current Assets |
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11,894,273 |
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14,846,978 |
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Non-Current Assets |
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Restricted cash |
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10,000 |
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10,000 |
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Investment tax credits receivable |
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984,200 |
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984,200 |
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Deposits |
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74,369 |
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74,369 |
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Licences (note 4) |
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8,884 |
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9,625 |
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Property and equipment (note 5) |
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15,783,093 |
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15,421,884 |
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Deferred tax assets |
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654,850 |
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98,778 |
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Total Non-Current Assets |
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17,515,396 |
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16,598,856 |
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TOTAL ASSETS |
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29,409,669 |
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31,445,834 |
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LIABILITIES AND EQUITY |
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Current Liabilities |
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Accounts payable and accrued liabilities |
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1,273,963 |
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1,342,156 |
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Current portion of lease liabilities (note 6) |
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401,288 |
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396,232 |
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Total Current Liabilities |
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1,675,251 |
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1,738,388 |
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Non-Current Liabilities |
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Long-term lease liabilities (note 6) |
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1,750,106 |
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1,852,345 |
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Total Non-Current Liabilities |
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1,750,106 |
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1,852,345 |
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TOTAL LIABILITIES |
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3,425,357 |
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3,590,733 |
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Equity |
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Share capital (note 7 (b)) |
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16,721,867 |
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16,721,867 |
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Contributed surplus |
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4,982,466 |
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4,963,067 |
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Retained earnings |
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4,279,979 |
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6,170,167 |
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Total Equity |
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25,984,312 |
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27,855,101 |
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TOTAL LIABILITIES AND EQUITY |
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29,409,669 |
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31,445,834 |
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CEAPRO INC. |
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Condensed Interim Consolidated Statements of Net Loss and Comprehensive Loss |
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Unaudited |
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2024 |
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2023 |
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Three Months Ended March 31, |
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$ |
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$ |
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Revenue (note 13) |
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2,773,788 |
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3,494,811 |
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Cost of goods sold |
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1,555,382 |
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1,888,973 |
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Gross margin |
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1,218,406 |
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1,605,838 |
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Research and product development |
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1,432,824 |
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573,687 |
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General and administration |
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2,229,528 |
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1,521,445 |
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Sales and marketing |
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4,559 |
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8,179 |
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Finance costs (note 9) |
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84,419 |
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88,800 |
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Loss from operations |
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(2,532,924 |
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(586,273 |
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Other income (note 10) |
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(86,664 |
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(95,875 |
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Loss before income taxes |
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(2,446,260 |
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(490,398 |
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Deferred tax benefit |
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(556,072 |
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(105,348 |
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Net loss and comprehensive loss for the period |
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(1,890,188 |
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(385,050 |
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Net loss per common share (note 16): |
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Basic |
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(0.02 |
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(0.00 |
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Diluted |
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(0.02 |
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(0.00 |
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Weighted average number of common shares outstanding (note 16): |
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Basic |
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78,293,177 |
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78,251,844 |
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Diluted |
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78,293,177 |
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78,251,844 |
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CEAPRO INC. |
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Condensed Interim Consolidated Statements of Cash Flows |
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Unaudited |
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2024 |
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2023 |
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Three Months Ended March 31, |
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$ |
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$ |
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OPERATING ACTIVITIES |
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Net loss for the period |
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(1,890,188 |
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(385,050 |
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Adjustments for items not involving cash |
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Finance costs |
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29,419 |
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33,800 |
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Depreciation and amortization |
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484,351 |
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485,253 |
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Deferred income tax benefit |
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(556,072 |
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(105,348 |
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Share-based payments |
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19,399 |
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134,083 |
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(1,913,091 |
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162,738 |
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CHANGES IN NON-CASH WORKING CAPITAL ITEMS |
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Trade receivables |
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(1,510,639 |
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(90,938 |
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Other receivables |
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11,852 |
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10,389 |
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Inventories |
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530,286 |
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(488,465 |
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Prepaid expenses and deposits |
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(161,825 |
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(34,397 |
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Accounts payable and accrued liabilities relating to operating activities |
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(165,513 |
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(646,806 |
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(1,295,839 |
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(1,250,217 |
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Net loss for the period adjusted for non-cash and working capital items |
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(3,208,930 |
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(1,087,479 |
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Interest paid |
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(29,419 |
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(33,800 |
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CASH USED IN OPERATIONS |
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(3,238,349 |
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(1,121,279 |
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INVESTING ACTIVITIES |
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Purchase of property and equipment |
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(747,499 |
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(24,643 |
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Deposits relating to the purchase of equipment |
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(13,810 |
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(17,419 |
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CASH USED IN INVESTING ACTIVITIES |
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(761,309 |
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(42,062 |
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FINANCING ACTIVITIES |
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Stock options exercised |
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– |
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2,000 |
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Repayment of lease liabilities |
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(97,183 |
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(86,188 |
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CASH USED IN FINANCING ACTIVITIES |
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(97,183 |
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(84,188 |
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Decrease in cash |
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(4,096,841 |
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(1,247,529 |
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Cash at beginning of the period |
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8,843,742 |
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13,810,998 |
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Cash at end of the period |
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4,746,901 |
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12,563,469 |
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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.
Forward-looking information
The information in this news release has been prepared as at May 29, 2024. Certain statements made herein, including statements relating to matters that are not historical facts and statements of the Company’s beliefs, intentions and expectations about developments, results and events which will or may occur in the future, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information relates to future events or future performance, reflect current expectations or beliefs regarding future events and is typically identified by words such as “aim”, “anticipate”, “assume”, “believe”, “continue”, “could”, “expect”, “forecast”, “future”, “intend”, “maintain”, “may”, “outlook”, “plan”, “potential”, “project”, “synergies”, “will”, and similar expressions suggesting future outcomes or statements regarding an outlook.
Forward-looking information is based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performance or achievements of the Company or the combined company to be materially different from future results, performance or achievements expressed or implied by such information. There can be no assurance that such information will prove to be accurate. Such information being based on numerous assumptions.
Readers are cautioned not to place undue reliance on forward-looking information, which speak only as of the date made. For a more detailed discussion of such risks and other factors that may affect Ceapro’s ability to achieve the expectations set forth in the forward-looking information contained in this news release, see Ceapro’s management information circular dated February 9, 2024, MD&A filed under Ceapro’s profile on SEDAR+ at www.sedarplus.ca, as well as Ceapro’s other filings with the Canadian securities regulators. Other than as required by law, the Company does not intend, and does not assume any obligation to, update the forward-looking information in this news release.
For more information contact:
Issuer:
Gilles R. Gagnon, M.Sc., MBA
President & CEO
T: 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.
