GlobeNewswire Inc | Aug 26, 2021 09:00AM EDT

August 26, 2021

Company continues to increase R&D activities to advanceclinical and preclinical programs

Second quarter sales of $4,409,000 compared to $4,666,000 for second quarter 2020

Cash generated from operations of $2,128,000 in Q2 2021 compared to $2,195,000 in Q2 2020

Maintained production operations during COVID-19 pandemic, providing customers with essential products while ensuring the health and safety of our employees

EDMONTON, Alberta, Aug. 26, 2021 (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 second quarter and six months ended June 30, 2021.

Progress continues on all fronts from production operations to research and development, allowing us to advance our pipeline while expanding our business model. With our newly formed network of highly renowned experts from University of Alberta, McMaster University, the Montreal Heart Institute, and the Angiogenesis Foundation, we have implemented a comprehensive strategic research plan that we believe enables us to address immune/inflammation-based and lifestyle diseases at various stages and from all angles. Additionally, with upcoming results expected in the fourth quarter of this year for Ceapros very first clinical trial, I believe we are well positioned for the next steps in becoming a premier life sciences company. The Company has exciting things on the horizon and we are committed to building on momentum, stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

-- Announced successful completion of collaborative research and development program with University of Alberta. The program developed several new chemical complexes as potential delivery systems and demonstrated the possibility of drying peptides using Pressurized Gas eXpanded (PGX) Technology. -- Initiated bioavailability studies with University of Alberta for new chemical complexes yeast beta glucan-CoQ10 and alginate-CoQ10. -- Resumed research activities with McMaster University to develop an inhalable therapeutic for COVID-19 using yeast beta glucan. -- Completed patient enrollment in clinical study evaluating beta glucan as a cholesterol-lowering agent. Last patient last visit is expected by end of September 2021, followed by locking of data base, unblinding of the study and topline results expected in Q4 2021.

Technology:

-- Pursued technical upgrades of PGX demo plant in Edmonton including initiation of commercial scale up of impregnation unit to produce chemical complexes. -- Initiated engineering design for PGX commercial scale unit. Final decision on the type and location of future commercial scale PGX unit to be announced during Q4 2021.

Production Operations:

-- Successfully passed thorough audits conducted by two major customers for the Edmonton facility, which is now housing all production operations for the Company.

Corporate:

-- Pursued out-licensing discussions for PGX-processed new chemical complexes.

Subsequent to Quarter:

-- Announced research agreement with Montreal Heart Institute for a Phase 1 clinical trial assessing safety and tolerability of pharmaceutical grade avenanthramides. -- Announced research agreement with Boston-based Angiogenesis Foundation to assess in vivo bioefficacy of oat beta glucan and avenanthramides in angiogenesis, blood vessel repairs, wound healing and tissue regeneration in various inflammation-based diseases and conditions like COVID-19 presenting damages of the lung blood vessels.

Financial Highlights for the Second Quarter and the Six-Month Period Ended June 30, 2021

-- Total sales of $4,409,000 for the second quarter of 2021 and $9,110,000 for the first six months of 2021 compared to $4,666,000 and $8,939,000 for the comparative periods in 2020.Sales being made in USA dollars and then reported in CDN dollars, it is noteworthy to look at the impact of the exchange rate (USD/CDN) from year to year. In fact, the Company has recorded respective sales in USD of $3.6M and USD $7.3M for the second quarter and the first six months of 2021 as compared to USD $3.4M and USD $6.5M for the comparative periods of 2020, representing a year-to-date effective increase of 12% in 2021.

-- Net profit of $676,000 for the second quarter of 2021 and $1,191,000 for the first six months of 2021 compared to a net profit of $1,077,000 and $2,203,000 for the comparative periods in 2020. -- Cash flows generated from operations of $2,433,000 for the first six months of 2021 vs $2,727,000 in 2020. -- Positive working capital balance of $9,303,000 as of June 30, 2021.

The ability of our business to successfully navigate through the challenging second quarter business environment is a testament to the commitment and hard work of our dedicated employees, and a measurable indication of the operational improvements generated by our strategic investments of the past few years, continued Mr. Gagnon. Looking ahead, while considering the ongoing potential economic impact related to the new surge of COVID-19, we believe Ceapro is well-positioned to once again deliver solid growth in 2021. With a strong and very clean balance sheet, a group of dedicated people, and a solid base business coupled with the innovative technologies and products that we have developed to enable us to expand, Ceapro is poised to emerge as a successful life science company.

CEAPRO INC. Consolidated Balance Sheets Unaudited June 30, December 31, 2021 2020 $ $ ASSETS Current Assets Cash and cash equivalents 7,269,428 5,369,029Trade receivables 1,801,568 2,019,723Other receivables 45,913 102,224Inventories (note 3) 1,168,163 1,210,079Prepaid expenses and deposits 236,932 348,845 10,522,004 9,049,900Non-Current Assets Investment tax credits receivable 607,700 607,700Deposits 82,124 82,124Licences (note 4) 17,032 18,514Property and equipment (note 5) 18,029,316 18,591,189Deferred tax assets 874,304 874,304 19,610,476 20,173,831 TOTAL ASSETS 30,132,480 29,223,731 LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued liabilities 857,731 1,067,622Current portion of lease liabilities (note 6) 283,204 250,658Current portion of CAAP loan (note 8) 77,855 72,263 1,218,790 1,390,543Non-Current Liabilities Long-term lease liabilities (note 6) 2,505,623 2,648,917Deferred tax liabilities 874,304 874,304 3,379,927 3,523,221 TOTAL LIABILITIES 4,598,717 4,913,764 Equity Share capital (note 7 (b)) 16,555,619 16,511,067Contributed surplus (note 7 (e)) 4,670,289 4,682,393Retained earnings 4,307,855 3,116,507 25,533,763 24,309,967 TOTAL LIABILITIES AND EQUITY 30,132,480 29,223,731

CEAPRO INC. Consolidated Statements of Net Income and Comprehensive IncomeUnaudited Quarters Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 $ $ $ $ Revenue (note 14) 4,408,631 4,665,971 9,110,374 8,939,345Cost of goods sold 1,770,153 2,079,270 4,213,953 3,980,493 Gross margin 2,638,478 2,586,701 4,896,421 4,958,852 Research and product 830,511 399,797 1,647,358 902,339developmentGeneral and administration 952,847 838,263 1,665,054 1,703,297Sales and marketing 16,362 29,207 29,600 77,435Finance costs (note 11) 38,344 44,583 132,254 146,192 Income from operations 800,414 1,274,851 1,422,155 2,129,589 Other (expenses) income (123,942 ) (197,812 ) (230,807 ) 73,505(note 10) Income before tax 676,472 1,077,039 1,191,348 2,203,094 Income taxes - - - - Total comprehensive income 676,472 1,077,039 1,191,348 2,203,094for the period Net income per common share (note 17):Basic 0.01 0.01 0.02 0.03Diluted 0.01 0.01 0.02 0.03 Weighted average number ofcommon shares outstanding (note 17):Basic 77,673,832 77,608,341 77,662,495 77,573,327Diluted 78,684,303 77,980,876 78,684,344 77,930,529

CEAPRO INC. Consolidated Statements of Cash Flows Unaudited 2021 2020 Six Months Ended June 30, $ $ OPERATING ACTIVITIES Net income for the period 1,191,348 2,203,094 Adjustments for items not involving cash Finance costs 71,662 79,674 Transaction costs - 1,108 Depreciation and amortization 937,356 920,521 Accretion 5,592 10,410 Share-based payments 6,828 108,147 Net income for the period adjusted for non-cash items 2,212,786 3,322,954 CHANGES IN NON-CASH WORKING CAPITAL ITEMS Trade receivables 218,155 600,990 Other receivables 56,311 (43,599 )Inventories 41,916 (592,489 )Prepaid expenses and deposits 51,179 (33,088 )Accounts payable and accrued liabilities relating to (75,337 ) (448,200 )operating activitiesTotal changes in non-cash working capital items 292,224 (516,386 ) Net income for the period adjusted for non-cash and 2,505,010 2,806,568 working capital itemsInterest paid (71,662 ) (79,674 )CASH GENERATED FROM OPERATIONS 2,433,348 2,726,894 INVESTING ACTIVITIES Purchase of property and equipment (277,062 ) (38,230 )Purchase of leasehold improvements (19,472 ) - Deposits relating to investment in equipment (16,733 ) (50,203 )Accounts payable and accrued liabilities relating to (134,554 ) - investing activitiesCASH USED IN INVESTING ACTIVITIES (447,821 ) (88,433 )FINANCING ACTIVITIES Stock options exercised 25,620 - Repayment of long-term debt - (97,507 )Repayment of lease liabilities (110,748 ) (130,829 )CASH USED IN FINANCING ACTIVITIES (85,128 ) (228,336 )Increase in cash and cash equivalents 1,900,399 2,410,125 Cash and cash equivalents at beginning of the period 5,369,029 1,857,195 Cash and cash equivalents at end of the period 7,269,428 4,267,320

The complete financial statements are available for review on SEDAR at https://sedar.com/Ceapro and on the Companys 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 Companys 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

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