Ceapro Inc. Reports 2016 First Quarter Financial Results and Provides Corporate Update

EDMONTON, ALBERTA--(Marketwired - May 18, 2016) - Ceapro Inc. (TSX VENTURE: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 its financial results for the three-months ended March 31, 2016 and provided a business update.

Financial Highlights for the First Quarter 2016

• Best first quarter performance with revenues reaching historical highs;

• Total sales of $4,064,000 for the quarter ended March 31, 2016 compared to $1,714,000 in 2015, an increase of 137% quarter-over-quarter revenue performance;

• Record income from operations of $1,910,000 for the quarter ended March 31, 2016 compared to a loss from operations of $226,000 in 2015;

• Net profit after taxes of $1,213,000 for the quarter ended March 31, 2016 compared to a net loss of $194,000 for 2015; and

• Cash flows generated from operations for the quarter ended March 31, 2016 of $2,273,000 compared to a cash burn of $173,000 for the same period in 2015.

Gilles Gagnon, M.Sc., MBA, President and CEO of Ceapro, stated, "We are very pleased with ending the first quarter of 2016 with these exceptional results and aim to continue to drive value in our high-value de-risked base business in cosmeceuticals, which has shown to be a proven result of the effectiveness of our business strategy."

"With these results combined with the recent announcement of the renewal of a long-term agreement with our major distributor, Symrise AG, Ceapro has established a solid base for year-over-year growth. Beyond these excellent financial results, we will continue to develop our pipeline and execute our projects rigorously toward market expansion into the profitable nutraceutical and pharmaceutical sectors as we anticipate top-line data from our beta glucan study and our avenanthramides bioavailability study, and our expected launch of Ceapro's first two clinical studies this year with these two important value drivers."

Recent Corporate Highlights

• Presented its PGX Technology at the prestigious 15^th European Meeting on Supercritical Fluids;

• Received issuance of a U.S. patent for Ceapro's unique and disruptive enabling Pressurized Gas Expanded (PGX) technology covering proprietary methods and use of micro- and nano-sized particles generated by applying PGX supercritical fluid technology;

• Signed a Research Agreement with McMaster University for testing of materials using PGX Technology; and

• Renewed a major distribution agreement with long-time partner, Symrise AG.

"We fully believe our unique and disruptive enabling PGX technology will expand our reach into additional high-value programs and facilitate beneficial strategic collaborations in a broad range of industrial applications. The broad utility of this technology is an important part of Ceapro's growth strategy," concluded Mr. Gagnon.

Avenanthramides Update

Due to an enabling technology in-licensed from Agriculture Canada, Ceapro successfully produced three batches at the commercial level in its current facility for a next generation of avenanthramides extracted from malted oat. As part of the International Application of the Patent Cooperation Treaty (PCT), the Company has already been issued patents in both Canada and China for avenanthramides resulting from this enabling malting technology.

Ceapro is currently assessing avenanthramides in a bioavailability study with a U.S.-based university to compare low-dose and high-dose avenanthramides. The Company fully expects the bioavailability study to further demonstrate the efficacy of avenanthramides in alleviating exercise-induced inflammation as evidenced by a lack of inflammation biomarkers shown previously in published data from a study in elderly people. If additional positive trends are observed, Ceapro expects to commence its clinical program with avenanthramides as an anti-inflammatory compound before year end.

Beta Glucan Update

Following the successful impregnation study conducted at MIT, Ceapro has initiated a study with the University of Alberta for the development of a prototype formulation for a functional drink whereby the Company has impregnated beta glucan with the well-known co-enzyme Q10 as an energy booster. Ceapro anticipates that the development of the impregnated prototype for functional drink will be completed by the end of 2016.

The Company plans to initiate a pilot clinical study to develop beta glucan as a cholesterol reducer in the third quarter of 2016. Previously existing safety and toxicology studies demonstrate a positive safety profile for beta glucan in more than 200,000 individuals from an industry partner currently commercializing beta glucan as a carrier in a urinary incontinence device. Ceapro will also conduct its own safety studies to assess high purity oral beta glucan during the second quarter of 2016.

PGX Research Programs Update

Ceapro is developing its in-licensed PGX enabling technology at the commercial scale level for all industries and all applications. The Company has been issued a U.S. patent covering proprietary methods and use of micro- and nano-sized particles generated by applying PGX supercritical fluid technology.

The Company has conducted encouraging lab scale research with PGX and analyzed biopolymer samples from commercially available starch, pectin, gums, alginate, and other polymers from various multi-national companies in a broad range of industries. Ceapro is evaluating potential collaborations and alliance opportunities with these companies.

Financial Results for Three Month Period Ended March 31, 2016

• Total revenue of $4,064,000 for the three months ended March 31, 2016 compared to $1,714,000 for the three-month period ended March 31, 2015, an increase of 137% primarily as a result of higher sales volumes of beta glucan in Europe and Asia and strong sales of the Company's flagship product, avenanthramides. Total revenues were also positively impacted by a stronger U.S. dollar relative to the Canadian dollar.

• Net income before tax was $1,734,000 for the three months ended March 31, 2016 compared to a loss of $230,000 for the same period in 2015.

• Net profit after taxes of $1,213,000 for the quarter ended March 31, 2016 compared to a net loss of $194,000 for 2015;

• Research and Development investments of $328,000 for the three month period ended March 31, 2016 compared to $106,000 in the 2015 period.

• General and Administration expenses of $496,000 for the three months ended March 31, 2016 compared to $802,000 for the same period in 2015. The decrease in G&A in 2016 compared to 2015 is mostly due to lower salaries and benefits expense as the Company did not have a significant option granting so the share-based payment charges were considerably lower. The other significant decrease is related to lower legal fees as the AVAC trial was completed in the first quarter of 2015 and there were no corresponding legal fees in the first quarter of 2016.

• Sales and Marketing expenses for the three-months ending March 31, 2016 of only $2,000 compared to $3,000 in 2015, due to the Company's sales strategy to sell mostly through a distribution network.

• As of March 31, 2016, the Company had cash and cash equivalents of $1,999,194 as compared to $1,681,125 as of December 31, 2015.

CEAPRO INC.
Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
Unaudited
			2016			2015
Three Months Ended March 31,			$			$
Revenue (note 15)			4,063,576			1,714,485
Cost of goods sold			1,229,763			922,386
Gross margin			2,833,813			792,099
Research and product development			327,832			105,907
General and administration			495,646			801,933
Sales and marketing			2,186			3,167
Finance costs (note 14)			98,481			106,750
Income (loss) from operations			1,909,668			(225,658	)
Other operating loss (note 13)			(175,692	)		(4,430	)
Income (loss) before tax			1,733,976			(230,088	)
Income taxes
	Current tax expense		(458,006	)		-
	Deferred tax (expense) recovery		(62,578	)		36,250
Income tax (expense) recovery			(520,584	)		36,250
Total comprehensive income (loss) for the period			1,213,392			(193,838	)
Net income (loss) per common share (note 20):
	Basic		0.02			(0.00	)
	Diluted		0.02			(0.00	)
Weighted average number of common shares outstanding (note 20):
	Basic		62,583,239			61,543,874
	Diluted		65,676,833			61,543,874

CEAPRO INC.
Consolidated Balance Sheets
Unaudited
			March 31,		December 31,
			2016		2015
			$		$
ASSETS
Current Assets
	Cash and cash equivalents		1,999,194		1,681,125
	Trade receivables		144,898		538,995
	Other receivables		58,547		124,132
	Inventories (note 4)		1,140,316		1,242,417
	Prepaid expenses and deposits		141,148		259,560
			3,484,103		3,846,229
Non-Current Assets
	Investment tax credits receivable		348,854		603,302
	Deposits		93,264		93,264
	Licenses (note 5)		32,589		33,329
	Property and equipment (note 6)		11,378,419		9,868,676
	Deferred tax assets		1,258,674		1,258,674
			13,111,800		11,857,245
TOTAL ASSETS			16,595,903		15,703,474
LIABILITIES AND EQUITY
Current Liabilities
	Accounts payable and accrued liabilities		1,900,633		2,005,611
	Deferred revenue (note 9)		844,640		1,172,198
	Current portion of long-term debt (note 7)		987,989		984,318
	Convertible debentures (note 8)		893,056		872,355
	Current portion of CAAP loan (note 11)		75,677		72,942
	Income tax payable		298,738		95,180
			5,000,733		5,202,604
Non-Current Liabilities
	Long-term debt (note 7)		2,020,375		2,277,186
	CAAP loan (note 11)		244,507		235,529
	Deferred tax liabilities		174,199		111,621
			2,439,081		2,624,336
TOTAL LIABILITIES			7,439,814		7,826,940
Equity
	Share capital (note 10)		6,824,626		6,800,018
	Equity component of convertible debentures (note 8)		106,200		106,200
	Contributed surplus		1,071,119		1,029,564
	Retained earnings (deficit)		1,154,144		(59,248	)
			9,156,089		7,876,534
TOTAL LIABILITIES AND EQUITY			16,595,903		15,703,474

The complete financial statements are available for review on SEDAR at http://sedar.com/Ceapro and on the Company's website at www.ceapro.com.

About Pressurized Gas eXpanded Liquid Technology (PGX)

PGX is a unique and disruptive technology with several key advantages over conventional drying and purification technologies that can be used to process biopolymers into high-value, nano-sized polymer structures and novel bio-nanocomposites. PGX is ideally suited for processing challenging high-molecular-weight, water-soluble biopolymers. It has the ability to make ultra-light, highly porous polymer structures on a continuous basis, which is not possible using today's conventional technologies. PGX was co-invented by Ceapro researcher Dr. Bernhard Seifried and University of Alberta professor, Dr. Feral Temelli.

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.

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