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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Ceapro Inc. Reports 2019 First Quarter Financial Results and Highlights

May 23, 2019 GMT

- Continued execution on transition to a new business model from contract manufacturer to biopharmaceutical company -

- Increased R&D investment focused on the development of delivery systems -

- First quarter 2019 sales increased 41% vs first quarter 2018 -

EDMONTON, Alberta, May 23, 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 financial results and operational highlights for the first quarter ended March 31, 2019.


Corporate and Operational Highlights

Pipeline Development:

-- Screened first group of patients for the pilot clinical trial evaluating beta glucan as a potential cholesterol reducer. Patient enrollment to commence following completion of randomization. This is the first clinical trial with a proprietary pharmaceutical grade product in Ceapro’s history; -- Announced that the results from the Company’s bio-efficacy study assessing anti-inflammatory properties and immunoregulatory mechanism of action of avenanthramides in exercise induced inflammation was accepted for presentation on May 31, 2019 at the American College of Sports Medicine Annual Meeting to be held in Orlando, FL; and -- Developed new PGX-dried chemical complexes like sodium alginate and gum arabic impregnated with coenzyme Q10 demonstrating the versatility of the PGX technology and the potential to develop significant bioactives delivery systems. Dissoluble thin films including these new chemical complexes developed at lab scale.


-- Advanced conversations with interested potential partners to utilize Ceapro’s innovative technology; -- Continued to build solid IP portfolio for its unique and disruptive enabling PGX technology with issuance of patent in India, which represents a very large potential market. Ceapro’s proprietary PGX technology now has IP protection in the U.S., Canada, Europe and India; and -- Executed on research collaboration projects with Universities of Alberta and McMaster for the impregnation of various bio actives using PGX-processed dry beta glucan as a potential delivery system for multiple applications in healthcare.


-- Recruited and appointed top talent for key management positions; and -- Increased Company exposure at conferences and activities on social media.


Subsequent to Quarter

-- Presented positive data from three PGX research projects at the International Symposium on Supercritical Fluids held in Spain from April 12-14, 2019; -- Received Site License from Health Canada Natural and Non-Prescription Products Directorate; and -- Participated in a trade mission showcasing Ceapro’s products and technologies in Germany and Spain.

“Our strategy remains focused on strengthening and leveraging our base cosmeceuticals business, enabling the Company to successfully execute on our transition to a new business model from a contract manufacturer to a biopharmaceutical company. Our recently issued Site License obtained for both bioprocessing sites from the Health Canada Natural Product Directorate is a major step forward for Ceapro as it will enable the formulation and release of finished products,” stated Gilles Gagnon, M.Sc., MBA, President and CEO of Ceapro. “Over the course of 2019, we will continue to work towards the expansion of our product portfolio and are currently working to develop formulations that would potentially allow the delivery of bioactives through different modes of administration such as oral, topical, sub-lingual, nasal spray. Additionally, our line of Juvente products will be used primarily for the development of topical/transdermal delivery systems utilizing Ceapro’s proprietary new chemical complexes developed with our PGX technology.”

Financial Highlights for the First Quarter Ended March 31, 2019

-- Total sales of $3,197,000 for the first quarter of 2019 compared to $2,270,000 for the comparative period in 2018; an increase of 41% over last year. Avenanthramides sales volumes increased by 31% for Q1 2019 vs Q1 2018. -- Net loss after taxes of $637,000 for the first quarter of 2019 compared to a net loss after taxes of $295,000 for the comparative period in 2018. Net loss includes non-cash items like depreciation of $456,000, mostly due to the completion of the Edmonton manufacturing site and the inclusion of $85,000 of depreciation on right-of-use assets as a result of adopting the new lease standard under IFRS effective as of January 1, 2019. These non-cash charges 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. -- Research and Development of $801,000 in Q1 2019 vs $339,000 in 2018. This increased investment for the development of new products and technologies is in line with the transition to a new business model from a contract manufacturer to a biopharmaceutical company. -- Cash generated from operations of $367,000 in Q1 2019 vs. cash flows generated from operations of $370,000 in Q1 2018. -- Positive working capital balance of $4,306,727 as of March 31, 2019.

“In an effort to build significant momentum to ensure growth in 2019, we will deploy tremendous efforts towards direct marketing and sales activities while we pursue activities through our distribution network. We also remain very active in business development activities for out-licensing of Ceapro’s products candidates and applications arising from the use of our PGX game-changing technology.”

“As stated previously, 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 with minimal debt to equity ratio, and a very strong technology and product portfolio with the potential of getting into very large markets,” concluded Mr. Gagnon.

CEAPRO INC. Consolidated Balance Sheets Unaudited March 31, December 31, 2019 2018 $ $ --------------------------------------------- ---------- ------------ ASSETS Current Assets Cash and cash equivalents 1,900,119 1,844,134 Trade receivables 2,524,978 3,015,344 Other receivables 35,384 46,899 Inventories (note 4) 968,554 710,708 Prepaid expenses and deposits 525,450 518,219 --------------------------------------------- ---------- ------------ 5,954,485 6,135,304 --------------------------------------------- ---------- ------------ Non-Current Assets Investment tax credits receivable 607,700 607,700 Deposits 88,340 88,340 Licences (note 5) 23,699 24,440 Property and equipment (note 6) 20,813,996 17,947,967 Deferred tax assets 520,872 520,872 --------------------------------------------- ---------- ------------ 22,054,607 19,189,319 --------------------------------------------- ---------- ------------ TOTAL ASSETS 28,009,092 25,324,623 --------------------------------------------- ---------- ------------ LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued liabilities 1,096,973 949,878 Current portion of long-term debt (note 7) 220,181 336,956 Current portion of lease liabilities (note 8) 254,927 - Current portion of CAAP loan (note 10) 75,677 72,942 --------------------------------------------- ---------- ------------ 1,647,758 1,359,776 --------------------------------------------- ---------- ------------ Non-Current Liabilities Long-term debt (note 7) 64,381 110,350 Long-term lease liabilities (note 8) 2,975,763 - CAAP loan (note 10) 119,626 115,216 Deferred tax liabilities 524,280 524,280 --------------------------------------------- ---------- ------------ 3,684,050 749,846 --------------------------------------------- ---------- ------------ TOTAL LIABILITIES 5,331,808 2,109,622 --------------------------------------------- ---------- ------------ Equity Share capital (note 9 (b)) 16,322,633 16,320,522 Contributed surplus (note 9 (e)) 4,598,244 4,501,444 Retained earnings 1,756,407 2,393,035 --------------------------------------------- ---------- ------------ 22,677,284 23,215,001 --------------------------------------------- ---------- ------------ TOTAL LIABILITIES AND EQUITY 28,009,092 25,324,623 --------------------------------------------- ---------- ------------

CEAPRO INC. Consolidated Statements of Net Loss and Comprehensive Loss Unaudited 2019 2018 Three Months Ended March 31, $ $ --------------------------------------------------------------- ---------- - ---------- - Revenue (note 16) 3,196,930 2,269,580 Cost of goods sold 1,840,298 1,168,294 --------------------------------------------------------------- ---------- - ---------- - Gross margin 1,356,632 1,101,286 Research and product development 800,504 338,813 General and administration 733,019 747,736 Sales and marketing 107,678 16,023 Finance costs (note 13) 108,374 70,903 --------------------------------------------------------------- ---------- - ---------- - Loss from operations (392,943 ) (72,189 ) Other expenses (note 12) (243,685 ) (286,418 ) --------------------------------------------------------------- ---------- - ---------- - Loss before tax (636,628 ) (358,607 ) Income taxes Current tax recovery - - Deferred tax benefit - 63,400 --------------------------------------------------------------- ---------- - ---------- - Income tax benefit - 63,400 Total comprehensive loss for the period (636,628 ) (295,207 ) --------------------------------------------------------------- ---------- - ---------- - Net loss per common share (note 19): Basic (0.01 ) (0.00 ) --------------------------------------------------------------- ---------- - ---------- - Diluted (0.01 ) (0.00 ) --------------------------------------------------------------- ---------- - ---------- - Weighted average number of common shares outstanding (note 19): --------------------------------------------------------------- ------------ ------------ Basic 77,046,786 75,712,526 --------------------------------------------------------------- ---------- - ---------- - Diluted 77,046,786 75,712,526 --------------------------------------------------------------- ---------- - ---------- -

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 ThomasJenene Thomas Communications, LLCInvestor Relations and Corporate Communications AdvisorT (US): +1 (833) 475-8247E: czo@jtcir.com

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.