Ceapro Inc. Reports 2020 Third Quarter and Nine-Month Financial Results and Operational Highlights

– R&D activities focused on advancing the development of innovative delivery systems and yeast beta glucan as a potential inhalable therapeutic for COVID-19 –

– Q3 2020 sales of $3,476,000 compared to $2,908,000 for Q3 2019, representing a 20% increase –

– Net profit of $192,000 for Q3 2020 vs. net loss of $104,000 for Q3 2019 –

– Cash generated from operations of $4,777,000 in 2020 vs. $1,321,000 in 2019 –

– Maintained production operations during COVID-19 pandemic and completed integration of manufacturing sites –

EDMONTON, Alberta, Nov. 27, 2020 (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, 2020.

“Over the course of the third quarter, our operations executed and adapted well, delivering significantly improved year over year results even during the final phase of integration of the production operations and despite the COVID-19 pandemic situation. We successfully completed the full integration of manufacturing operations under one roof in Edmonton, resumed the clinical trial for beta glucan as a cholesterol reducer, as well as the development and optimization of new products developed through the use of our PGX disruptive technology. Additionally, we are extremely proud of our employees who worked tirelessly since the beginning of the year to maintain operations and deliver these 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:

• Announced publication of positive results from study evaluating avenanthramides in exercise-induced inflammation in the international, peer-reviewed Journal of the International Society of Sports Nutrition.
• Achieved the first milestones in successful development of PGX-processed yeast beta glucan product as a potential inhalable therapeutic for COVID-19 and other fibrotic endpoint diseases of the lung.
• Confirmed capability of PGX Technology to optimize and standardize the size and morphology of yeast beta-glucan (PGX-YBG) suitable for lung inhalation.
• Conducted in-vitro study with human cell lines demonstrating that PGX-YBG obtained from different sources exhibited significant stimulatory effect on human immune response through activation of beta glucan specific Dectin 1 receptors.
• Ongoing PGX-YBG project with McMaster University conducted in parallel for naïve and preclinical animal models. To-date, no safety issues have been encountered. The preclinical phase has been extended to identify the maximum tolerated dose. Progress update on this exciting project to be issued in the near future.
• Conducting additional in vitro PGX-YBG dose response study to correlate with upcoming McMaster animal study results.
• Resumed enrollment of patients for the clinical trial with beta glucan as a cholesterol reducing natural pharmaceutical product. 191 patients have been screened and 65 randomized during the last three months.
• Pursued the development of new PGX-dried chemical complexes for potential applications under various forms like pills, capsules, fast dissolving strips and face masks. Yeast beta glucan to become a key product of Ceapro’s portfolio.

Technology:

• Made significant technical upgrades of PGX demo plant to allow production of yeast beta glucan for a potential human clinical trial with COVID-19.
• Acquired pieces of equipment suitable for the assembling of a commercial scale PGX unit. Timelines to initiate building of the customized large scale unit to be defined due to COVID-19 travel restrictions and resulting availability of expert personnel.
• Initiated installment of a commercial scale unit for impregnation of bioactives with PGX-processed biopolymers.
• Pursued research collaboration projects with University of Alberta and McMaster University for the impregnation of various bioactives using PGX-processed biopolymers as potential delivery systems for multiple applications in healthcare.

Production Operations:

• Completed the decommissioning of Leduc manufacturing site and the moving of all production operations to the Edmonton based facility.

Corporate:

• Fully repaid loan with Alberta Financial Service Corporation.
• Advanced conversations with interested potential partners to utilize Ceapro’s innovative technologies.
• Pursued out-licensing discussions for PGX-processed new chemical complexes.

Subsequent to Quarter:

• Announced expansion of a grant from National Research Council of Canada for the optimization and mass production of yeast beta glucan as a potential inhalable therapeutic for COVID-19 and other fibrotic end-point disease of the lung.

Financial Highlights for the Third Quarter and Nine–Month Period Ended September 30, 2020

• Total sales of $3,476,000 for the third quarter of 2020 and $12,415,000 for the first nine months of 2020 compared to $2,908,000 and $9,159,000 for the comparative periods in 2019. The 36% 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 2019.
• Net profit of $192,000 for the third quarter of 2020 and $2,395,000 for the first nine months of 2020 compared to a net loss of $104,000 and $1,299,000 for the comparative periods in 2019. An improvement of $3,694,000 for the nine-month period.
• Excluding non-cash items, mainly amortization, adjusted net profit for the first nine months in 2020 is $ 4,035,000 versus adjusted net profit of $414,000 for the first nine months of 2019.
• Cash flows generated from operations of $4,777,000 in 2020 vs $1,321,000 in 2019.
• Positive working capital balance of $8,151,000 as of September 30, 2020.

“Looking ahead, while taking into account the ongoing potential economic impact related to COVID-19 and evolving consumption trends, we believe Ceapro is well-positioned to once again deliver a double-digit growth in sales well in line with the positive trend achieved over the last years. 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.

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
JTC Team, LLC
Investor Relations and Corporate Communications Advisor
T (US): +1 (833) 475-8247
E: 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