Burcon Reports Fiscal 2024 First Quarter Results

Rhea-AI Summary

Burcon NutraScience Corporation reported results for the fiscal first quarter ended June 30, 2023. Operational highlights include closing a $3.4 million private placement, launching a pilot plant processing service, expanding partnership opportunities, and advancing the commercialization of hempseed protein technology. Subsequently, Burcon partnered with HPS Food and Ingredients to launch the world's first soluble hempseed protein isolate and successfully launched it at IFT FIRST 2023.

Positive

• Burcon closed a fully subscribed $3.4 million private placement, strengthening its balance sheet. The partnership with HPS Food and Ingredients to launch the soluble hempseed protein isolate received overwhelming positive feedback. The successful launch at IFT FIRST 2023 indicates a potential path to revenues and validates the Burcon 2.0 strategy.

Negative

• None.

Vancouver, British Columbia--(Newsfile Corp. - August 14, 2023) - Burcon NutraScience Corporation (TSX: BU) ("Burcon" or the "Company"), a global technology leader in the development of plant-based proteins for foods and beverages, reported results for the fiscal first quarter ended June 30, 2023.

Operational highlights for the first quarter ended June 30, 2023:

During the quarter, Burcon:

• closed a fully subscribed $3.4 million non-brokered private placement;
• announced that its sunflower protein process is commercially ready;
• launched its Winnipeg Technical Centre as a pilot plant processing and scale-up validation service provider;
• expanded its scope of strategic partnership opportunities for each of its innovative plant-based protein technologies; and
• advanced the due diligence process to commercialize its hempseed protein technology

Subsequent to the quarter-end, Burcon:

• partnered with HPS Food and Ingredients Inc. to launch the world's first soluble hempseed protein isolate; and
• successfully launched its soluble hempseed protein isolate at IFT FIRST 2023 in Chicago, IL

Management Commentary

Burcon began fiscal 2024 by strengthening its balance sheet with a $3.4 million non-brokered private placement, which, together with its recent cost-cutting measures and pursuit of potential government funding, is expected to provide us with sufficient runway to execute our Burcon 2.0 strategy. Continued support from our long-term shareholders allowed us to raise funds well above our initial target in the May 2023 private placement. Our focus going forward is to create value for the Company and in particular, for our shareholders who believe in our vision and strategy.

Our revised Burcon 2.0 strategy, which includes identifying additional revenue sources, getting closer to customers and gaining more influence over the production of our proteins, is a path for us to create value for the Company. Our partnership with HPS Food and Ingredients Inc. ("HPS") is the first of many proof points for Burcon 2.0. The partnership is an excellent marriage of expertise, creating positive synergistic results. Burcon has production and process engineering expertise, while HPS has access to hempseed farmers and a global network of hemp ingredient customers. In addition, we continue to evaluate different routes to market for each of our protein technologies, including the potential use of assets from Merit Functional Foods. We are thrilled about our partnership with HPS and are equally excited about additional opportunities we are pursuing to monetize our IP.

Subsequent to quarter-end, HPS and Burcon successfully launched our hempseed protein isolate at the world's largest food ingredient tradeshow - Institute of Food Technologists 2023 Annual Meeting and Exposition ("IFT FIRST") - in Chicago, IL. Our hempseed protein isolate with 95% protein content received overwhelming positive feedback from customers and industry peers. Based on the positive feedback received, we anticipate moving forward on our commercial plans to quickly bring this best-in-class hempseed protein ingredient to market and further validate our Burcon 2.0 strategy.

During the quarter, we successfully completed end-to-end validation trials of our novel sunflower protein process, a major milestone in the commercialization roadmap. We see tremendous potential in our unique sunflower protein to disrupt the plant-based ingredient market. We believe that reaching this milestone brings us one step closer to commercialization. Our discussions with potential partners continue to progress as we complete further due diligence while exploring additional paths to market.

In addition to commercializing Burcon's proteins, we continue to execute initiatives that focus on our three key strategic themes. Burcon announced that it is offering its pilot plant processing and validation capabilities as a service. By leveraging Burcon's expertise and infrastructure, we can better connect with our customers and industry peers. Burcon's capabilities at its Winnipeg Technical Centre are unique in North America and can provide exceptional value to the growing food ecosystem.

Going forward, we see a potential path to revenues with our hempseed protein isolate and is a priority for Burcon to work closely with our partners and customers to ensure we bring forth a commercial-scale, high-quality hempseed protein product that meets the evolving preferences of customers worldwide.

Financial Results (in Canadian dollars)

Net loss totaled $1.9 million or $0.02 per basic and diluted share for the current quarter, as compared to $4.0 million or $0.04 per basic and diluted share in same period last year. The lower loss this quarter, as compared to the same year-ago quarter, is due almost entirely to the share of loss in Merit recorded during the first quarter of fiscal 2023. The Company's cash conservation efforts have also contributed to lower expenditures.

Research and development expenses totalled $936,000, as compared to $1,248,000 in the same year-ago quarter. The decrease of $312,000 is due mainly to lower intellectual property expenses, driven by optimization of the patent portfolio that resulted in lower maintenance fees.

General and administrative expenses totalled $837,000, as compared to $911,000 in the same year-ago quarter. The decrease of $74,000 is due mainly to the Nasdaq annual fee and U.S. investor relations consulting expenses incurred during the first quarter of last year.

During the quarter, Burcon completed a private placement for net proceeds of $3.4 million. At June 30, 2023, cash balances totaled $3.6 million compared to $1.5 million at March 31, 2023. Subsequent to the quarter-end, Burcon's largest shareholder, Large Scale Investments, agreed to extend the maturity date of the first tranche of the secured loan from July 1, 2024 to July 1, 2025. Burcon expects its current cash resources to fund its operations to February 2024, and further to February 2025, if conditions for advance under the second tranche are satisfied. These dates may potentially be extended if the Company receives funding or generates revenues from other sources including, not limited to, government assistance, pilot plant processing and scale-up validation services.

Conference Call Details

Burcon will hold an investor conference call and webcast on Monday, August 14, 2023 at 5:00pm ET.

A link to the webcast of the conference call is available on Burcon's website under "Presentations" or directly here. The webcast will also be archived for future playback.

Investors interested in participating in the live call can dial in using the details below:

Date: Monday August 14, 2023

Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)

Toll-free dial-in (North America): 1-855-327-6837

Dial-in (toll/international): 1-631-891-4304

Conference ID: 10022225

About Burcon NutraScience Corporation

Burcon is a global technology leader in the development of plant-based proteins for foods and beverages. Our proteins exhibit superior functionality, taste and nutrition, making them ideal ingredients for food formulators. With over two decades of experience, Burcon has amassed an extensive patent portfolio covering its specialty plant-based proteins derived from pea, canola, soy, hemp and sunflower seeds, among other plant sources. Burcon is striving to become a vertically integrated provider of specialty plant-based protein solutions that deliver on health, nutrition and sustainability. Supporting the growing trend towards a plant-based diet, Burcon is developing premium protein ingredients that we believe are better for you and better for the planet. For more information, visit burcon.ca.

Forward-Looking Information Cautionary Statement

The TSX has not reviewed and does not accept responsibility for the adequacy of the content of the information contained herein. This press release contains forward-looking statements or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, including our ability to successfully commercialize our hemp protein isolate and to validate and execute our Burcon 2.0 strategy. Forward-looking statements or forward-looking information involve risks, uncertainties and other factors that could cause actual results, performances, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements or forward-looking information can be identified by words such as "anticipate," "aim", "intend," "plan," "goal," "project," "estimate," "expect," "believe," "future," "likely," "may," "should," "could," "will" and similar references to future periods. All statements included in this release, other than statements of historical fact, are forward-looking statements. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements or information. Important factors that could cause actual results to differ materially from Burcon's plans and expectations include the implementation of our business model and growth strategies; trends and competition in our industry our future business development, financial condition and results of operations and our ability to obtain financing cost-effectively; potential changes of government regulations; and other risks and factors detailed herein and from time to time in the filings made by Burcon with securities regulators and stock exchanges, including in the section entitled "Risk Factors" in Burcon's annual information form for the year ended March 31, 2023 and its other public filings with Canadian securities regulators on SEDAR at www.sedar.com. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Any forward-looking statement or information speaks only as of the date on which it was made, and, except as may be required by applicable securities laws, Burcon disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Although Burcon believes the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance, and, accordingly, investors should not rely on such statements.

Industry and Investor Contact

Paul Lam
Director, Investor Relations
Burcon NutraScience Corporation
Tel (604) 733-0896, Toll-free (888) 408-7960
plam@burcon.ca www.burcon.ca

Media Contact:
Steve Campbell, APR
President
Campbell & Company Public Relations
Tel (604) 888-5267
TECH@CCOM-PR.COM

Burcon NutraScience Corporation
Condensed Consolidated Interim Statements of Financial Position
(Unaudited)
As at June 30, 2023 and March 31, 2023
(In Canadian dollars)
	June 30,	March 31,
	2023	2023
Assets
Current assets
Cash	3,571,886	1,456,845
Amounts receivable	169,280	332,118
Prepaid expenses	126,266	75,902
	3,867,432	1,864,865
Property and equipment	945,312	983,924
Deferred development costs	5,690,275	5,795,650
Goodwill	1,254,930	1,254,930
	11,757,949	9,899,369
Liabilities
Current liabilities
Accounts payable and accrued liabilities	675,720	590,936
Lease liabilities	48,049	34,431
	723,769	625,367
Secured loan	5,224,613	5,112,381
Lease liabilities	7,059	24,310
	5,955,441	5,762,058
Shareholders' Equity
Capital stock	117,718,241	114,566,577
Contributed surplus	16,830,753	16,763,830
Options	7,381,835	7,279,559
Warrants	228,572	-
Restricted share units	155,496	127,651
Deficit	(136,512,389)	(134,600,306)
	5,802,508	4,137,311
	11,757,949	9,899,369

 

Burcon NutraScience Corporation
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss
(Unaudited)
For the three months ended June 30, 2023 and 2022
(In Canadian dollars)
		2023	2022
Revenue
Royalty income		-	90,538
Expenses
Research and development		936,370	1,248,277
General and administrative		836,560	911,391
		1,772,930	2,159,668
Loss from operations		(1,772,930)	(2,069,130)
Interest and other income		27,379	116,018
Share of loss in Merit Functional Foods Corporation		-	(2,003,740)
Interest and other expense		(130,974)	(40,762)
Foreign exchange (loss) gain		(35,558)	1,446
Loss and comprehensive loss for the period		(1,912,083)	(3,996,168)
Basic and diluted loss per share		(0.02)	(0.04)

 

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/177150

FAQ

What were the operational highlights for Burcon in the fiscal first quarter of 2023?

Burcon closed a $3.4 million private placement, launched a pilot plant processing service, expanded partnership opportunities, and advanced the commercialization of hempseed protein technology.

What partnership did Burcon form for the launch of a soluble hempseed protein isolate?

Burcon partnered with HPS Food and Ingredients Inc. for the launch of the world's first soluble hempseed protein isolate.

What was the feedback for the hempseed protein isolate launch at IFT FIRST 2023?

The hempseed protein isolate received overwhelming positive feedback from customers and industry peers.