GlobeNewswire Inc | Nov 17, 2021 09:00AM EST

November 17, 2021

Increased R&D activities focused on the completion of a clinical trial for oat beta glucan as a potential cholesterol reducer and on the development of yeast beta glucan as a potential inhalable therapeutic for COVID-19

Q3 2021 record sales of $4,523,000 compared to $3,476,000 for Q3 2020, representing a 30% increase

Net profit of $875,000 for Q3 2021 vs. net profit of $192,000 for Q3 2020, a 356% increase

Achieved record production levels despite COVID-19 pandemic situation

EDMONTON, Alberta, Nov. 17, 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 third quarter and the first nine months ended September 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. We are extremely proud of our employees who worked tirelessly since the beginning of the year to maintain operations and deliver these very solid results despite the COVID-19 pandemic. As we continue to move forward, our focus remains on the health and safety of our associates, followed by business continuity, stated Gilles Gagnon, M.Sc., MBA, President and CEO.

Corporate and Operational Highlights

Pipeline Development:

-- Pursued the development of new PGX-dried chemical complexes for potential applications under various forms like pills, capsules, fast dissolving strips and face masks. Alginate and yeast beta glucan to become key products of Ceapros portfolio. -- Resumed bioavailability studies with University of Alberta for new chemical complexes yeast beta glucan-CoQ10, alginate-CoQ10 and newly formed alginate yeast beta glucan-CoQ10. -- Announced research agreement with Boston-based Angiogenesis Foundation to assessin vivobioefficacy 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. -- Expanded collaboration with Montreal Heart Institute to initiate a Phase 1 clinical trial to assess safety and tolerability of pharmaceutical grade avenanthramides powder formulation. -- Conducting in vivo studies with McMaster University with yeast beta glucan as a potential inhalable therapeutic.

Technology:

-- Pursued installment in Edmonton of a commercial scale unit for impregnation of bioactives with PGX-processed biopolymers. -- Ongoing engineering design for PGX processing commercial unit.

Production Operations:

-- Achieved record levels with production of over 70 MT of finished products during the last quarter reliably providing our customers essential high quality products.

Subsequent to Quarter:

-- Announced discovery of a new mechanism of action for PGX processed yeast beta glucan (PGX-YBG) as a potential inhalable therapeutic for lung fibrotic diseases including COVID-19 patients. PGX-YBG binds to specific receptors (Dectin 1) located on macrophages responsible for the cascade of immunomodulating events when activated.McMasters research team demonstrates ability of PGX-YBG to reprogram macrophages on its own. -- Reported preliminary results from clinical trial evaluating oat beta glucan in patients with high cholesterol levels. The study did not achieve the expected primary endpoint related to a decrease of low-density lipoproteins cholesterol when using Ceapros pill dosage form. While there was no statistically significant difference between the placebo group and the different dosages of beta glucan, there were positive signals that beta glucan nutraceutical formulation may offer appreciable health benefits as indicated with approved Health Canadas beta glucan monograph (Natural Product Division)

Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2021

-- Total sales of $4,523,000 for the third quarter of 2021 and $13,633,000 for the first nine months of 2021 compared to $3,476,000 and $12,415,000 for the comparative periods in 2020. The 10% increase in sales for the first nine months is mainly due to a significant increase in sales of avenanthramides in the USA compared to the same period in 2020. -- Net profit of $875,000 for the third quarter of 2021 and $2,067,000 for the first nine months of 2021 compared to a net profit of $192,000 and $2,395,000 for the comparative periods in 2020. Increased net profit for the third quarter of 2021 comes from improved margin of 65.2% as compared to 47.8% in 2020. Improved margins in 2021 result from the buying of excellent source material and from the diligent work of highly skilled personnel operating in only one site as compared to two sites in 2020. -- R&D investments were $1,400,000 for Q3 2021 compared to $479,000 for the same period in 2020. The significant increase being due to payments made to Montreal Heart Institute for a clinical trial for the assessment of oat beta glucan as a potential cholesterol reducer by almost $1.0 million during Q3 2021. -- Cash flows generated from operations of $2,837,000for the first nine months in 2021 vs $4,777,000 in 2020. -- Positive working capital balance of $10,367,000 as of September 30, 2021.

Looking ahead, while considering the ongoing potential economic impact related to COVID-19, evolving consumption trends and escalating inflationary levels we believe Ceapro is well-positioned to once again deliver a strong growth in sales well in line with the positive trend achieved over the last years. While we have experienced a bump in the road with the beta glucan trial, our solid base business and expanded pipeline will enable us to pursue the expansion of our business model to the nutraceutical sector with avenanthramides and yeast beta glucan for which we are going to conduct more preclinical assays before investing at large scale levels. With a strong 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, concluded Mr. Gagnon.

CEAPRO INC. Condensed Interim Consolidated Balance Sheets Unaudited September 30, December 31, 2021 2020 $ $ ASSETS Current Assets Cash and cash equivalents 7,410,214 5,369,029 Trade receivables 2,716,058 2,019,723 Other receivables 39,522 102,224 Inventories (note 3) 1,532,271 1,210,079 Prepaid expenses and deposits 133,760 348,845 Total Current Assets 11,831,825 9,049,900 Non-Current Assets Investment tax credits receivable 607,700 607,700 Deposits 82,124 82,124 Licences (note 4) 16,292 18,514 Property and equipment (note 5) 17,776,791 18,591,189 Deferred tax assets 874,304 874,304 Total Non-Current Assets 19,357,211 20,173,831 TOTAL ASSETS 31,189,036 29,223,731 LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued liabilities 1,097,645 1,067,622 Current portion of lease liabilities (note 6) 286,608 250,658 Current portion of CAAP loan (note 8) 80,811 72,263 Total Current Liabilities 1,465,064 1,390,543 Non-Current Liabilities Long-term lease liabilities (note 6) 2,432,682 2,648,917 Deferred tax liabilities 874,304 874,304 Total Non-Current Liabilities 3,306,986 3,523,221 TOTAL LIABILITIES 4,772,050 4,913,764 Equity Share capital (note 7 (b)) 16,557,401 16,511,067 Contributed surplus (note 7 (e)) 4,676,456 4,682,393 Retained earnings 5,183,129 3,116,507 Total Equity 26,416,986 24,309,967 TOTAL LIABILITIES AND EQUITY 31,189,036 29,223,731

CEAPRO INC.Condensed Interim Consolidated Statements of Net Income and ComprehensiveIncomeUnaudited Quarters Nine Months Ended September 30, Ended September 30, 2021 2020 2021 2020 $ $ $ $ Revenue (note 14) 4,522,980 3,475,625 13,633,354 12,414,970 Cost of goods sold 1,573,655 1,814,080 5,787,608 5,794,573 Gross margin 2,949,325 1,661,545 7,845,746 6,620,397 Research and product 1,403,186 478,993 3,050,544 1,381,332 developmentGeneral and 766,605 791,217 2,431,659 2,494,514 administrationSales and marketing 4,957 12,395 34,557 89,830 Finance costs (note 11) 37,684 43,066 169,938 189,258 Income from operations 736,893 335,874 2,159,048 2,465,463 Other (expenses) income 138,381 (144,251 ) (92,426 ) (70,746 )(note 10) Income before tax 875,274 191,623 2,066,622 2,394,717 Income taxes - - - - Total comprehensive 875,274 191,623 2,066,622 2,394,717 income for the period Net income per common share (note 17):Basic 0.01 0.00 0.03 0.03 Diluted 0.01 0.00 0.03 0.03 Weighted average numberof common shares outstanding (note 17):Basic 77,684,017 77,610,113 77,669,747 77,585,679 Diluted 78,740,532 78,700,415 78,694,469 78,039,105

CEAPRO INC.Condensed Interim Consolidated Statements of Cash FlowsUnaudited 2021 2020 Nine Months Ended September 30, $ $ OPERATING ACTIVITIES Net income for the period 2,066,622 2,394,717 Adjustments for items not involving cash Finance costs 106,390 117,237 Transaction costs - 1,108 Depreciation and amortization 1,408,392 1,382,838 Gain on disposal of equipment (5,000 ) - Accretion 8,548 15,913 Share-based payments 13,672 122,902 Net income for the period adjusted for non-cash items 3,598,624 4,034,715 CHANGES IN NON-CASH WORKING CAPITAL ITEMS Trade receivables (696,335 ) 1,821,449 Other receivables 62,702 (96,375 )Inventories (322,192 ) (522,670 )Prepaid expenses and deposits 137,618 12,471 Accounts payable and accrued liabilities relating to 163,017 (355,552 )operating activitiesTotal changes in non-cash working capital items (655,190 ) 859,323 Net income for the period adjusted for non-cash and 2,943,434 4,894,038 working capital itemsInterest paid (106,390 ) (117,237 )CASH GENERATED FROM OPERATIONS 2,837,044 4,776,801 INVESTING ACTIVITIES Purchase of property and equipment (494,833 ) (222,610 )Purchase of leasehold improvements (19,472 ) - Proceeds from sale of equipment 5,000 353 Accounts payable and accrued liabilities relating to (132,994 ) 14,161 investing activitiesCASH USED IN INVESTING ACTIVITIES (642,299 ) (208,096 )FINANCING ACTIVITIES Stock options exercised 26,725 3,013 Repayment of long-term debt - (112,973 )Repayment of lease liabilities (180,285 ) (197,537 )CASH USED IN FINANCING ACTIVITIES (153,560 ) (307,497 )Increase in cash and cash equivalents 2,041,185 4,261,208 Cash and cash equivalents at beginning of the period 5,369,029 1,857,195 Cash and cash equivalents at end of the period 7,410,214 6,118,403

The complete financial statements are available for review on SEDAR at https://sedar.com/Ceaproand 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

This press release does not express or imply that the Company claims its product has the ability to eliminate, cure or contain the SARS-2-CoV-2 (COVID-19) at this time.

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.