Vancouver, British Columbia--(Newsfile Corp. - June 26, 2024) - Burcon NutraScience Corporation (TSX: BU) (OTCQB: BRCNF) ("Burcon" or the "Company"), a global technology leader in the development of plant-based proteins for foods and beverages, reported results for the fiscal year ended March 31, 2024.
"Fiscal 2024 was an incredible turnaround year for Burcon. We cleared a number of key milestones in our revised business plan. The Company is in an excellent position to produce and sell its best-in-class protein ingredients, generate revenues, and capture value for our shareholders," said Kip Underwood, Burcon's chief executive officer. "We believe our market-disrupting, high purity plant proteins can enable the creation of great-tasting, healthy and sustainable products that consumers demand. We are thrilled to ramp up production and sales to meet the growing customer demand as we tap into a $40 billion addressable market for Burcon's high purity protein ingredients."
Fiscal 2024 Operational Highlights
Burcon's focus for fiscal 2024 was to reposition the Company for success, which included revising its strategy, developing and funding a solid business plan, and executing against those business plan goals.
During fiscal 2024, Burcon:
- scaled commercial production of the world's first 95% hempseed protein isolate;
- validated customer demand for its protein products, which exceeded all initial expectations;
- established commercial production capabilities via integration of proprietary processing equipment at its partner manufacturer's facility;
- entered into production agreement with its partner manufacturer;
- partnered with HPS Food and Ingredients and launched the world's first high purity, hempseed protein isolate;
- showcased its high purity, 95% hempseed protein isolate at major food ingredient tradeshows;
- successfully raised total proceeds of $7.8 million via two separate non-brokered private placements;
- entered into an agreement to access second $5 million tranche of the $10 million loan from its largest shareholder; and
- received co-investment from Protein Industries Canada for $6.9 million project to scale up hempseed and sunflower seed proteins.
Subsequent to the year-end, Burcon:
- achieved first commercial sales of world's first high purity hempseed protein isolate;
- launched high purity, nutritionally complete canola protein to tap into additional markets;
- expanded US investor outreach with trading of shares on OTCQB Venture Market; and
- tapped into a new revenue stream through contract research services.
Management Commentary
In Fiscal 2024, Burcon achieved several foundational milestones that are paving the way for our next growth phase-commercial production and sales. Our key accomplishments include establishing capital-light manufacturing capabilities, commencing commercial production and sales of the world's first high-purity hempseed protein isolate, and identifying and validating customer demand for our protein products, surpassing business plan expectations. Through a combination of equity financings, non-dilutive debt, government assistance, and anticipated recurring protein sales, we believe we have a fully funded business plan to achieve positive cash flow. Burcon is well-positioned to seize upcoming opportunities and become a market-leading plant protein innovation company.
We executed our first proof point and successfully launched the world's first hempseed protein isolate, from concept to commercial sales, within nine months. Additionally, we brought online commercial production capabilities within three months of integrating Burcon's proprietary process equipment at our partner manufacturer's facility. With our production supply chain established, we are ready to market Burcon's portfolio of differentiated, high-purity plant-based protein ingredients. We look forward to ramping up hemp protein production to meet the strong customer demand.
We are encouraged by the market's reception to our protein products, which have received exceptional feedback. Our 95% hempseed protein isolate, with its neutral flavour and off-white colour, works well in applications such as ready-to-mix powdered beverages, ready-to-drink beverages, dairy alternatives, and protein nutrition bars. We expect that our hemp protein will be incorporated into some of these food and beverage applications and be available on store shelves later this year. Our recently launched high-purity, nutritionally complete canola protein is already receiving positive feedback and is expected to target an expanded market for food and beverage applications. We anticipate commercial production of our canola protein to begin in the coming months, with sales to follow.
We strengthened our cash position through two equity financings, non-dilutive debt, and government assistance. By diligently managing our cash resources, we reduced operational expenses by 9% compared to the year before. Together with future recurring protein sales, we believe we have a fully funded business plan that can achieve positive cash flow. As we ramp up production, we expect our revenue to grow and extend our cash runway.
Looking ahead, we are excited about generating revenue, ramping up hemp protein production, achieving commercial success with our canola protein, and executing additional proof points on our path to profitability. We firmly believe 2024 was a transformative year for Burcon, and we look forward to continuing to report our achievements in the coming year.
Financial Results (in Canadian dollars)
During fiscal 2024, Burcon recorded $184,000 in royalty from the sale of Merit Functional Foods Corporation's ("Merit") protein products from the receivership process. During fiscal 2023, Burcon recorded $364,000 in royalty from Merit's sale of protein products.
Burcon reported a net loss of $7.5 million or $0.06 per basic and diluted share for fiscal 2024, as compared to $25.4 million or $0.23 per basic and diluted share in the prior year. The decrease in the loss is attributed to the write-off of the investment in and loans to Merit and share of loss in Merit in fiscal 2023.
Total operating expenses for fiscal 2024 decreased by $686,000 over fiscal 2023. Research and development ("R&D") expenses, including intellectual property ("IP") expenses, were $3.6 million for the year ended March 31, 2024 as compared to $4.1 million for fiscal 2023, representing a $0.5 million decrease. Of this decrease, $0.4 million was due to a decrease in IP expenses following Burcon's strategic review of its patent portfolio. Burcon focused its intellectual property spend on patents that are essential to its strategic objectives and ceased maintenance payments on non-core patents and patent applications, resulting in a reduction in patent expenses in fiscal 2024. Other R&D expenditures decreased due to lower stock-based compensation expenses, partially offset by Burcon's launching of commercial validation trials for its hemp protein isolate which contributed to increased analyses and testing costs.
General and administrative expenses were $3.6 million for fiscal 2024, as compared to $3.8 million for fiscal 2023. The decrease is mostly due to lower investor relations expenses following the Nasdaq delisting in fiscal 2023, lower legal expenses in respect of Merit and also to lower stock-based compensation expenses. These decreases were partially offset by increases in professional fees in respect of strategy development and business development activities.
During fiscal 2024, Burcon recorded funding from Protein Industries Canada ("PIC") of approximately $0.5 million which has been applied to reduce R&D expenses, G&A expenses, inventory and property and equipment. This compared to funding received from PIC in fiscal 2023 of $0.5 million.
Cash and liquidity
During this fiscal year, Burcon completed two non-brokered private placements for gross and net proceeds of $7.8 million and $7.7 million, respectively. During fiscal 2024, Burcon also met the conditions for tranche two of the Large Scale loan facility and drew down $1.0 million of the $5.0 million facility. In addition, Burcon received funding approval from PIC during fiscal 2024 for the scale-up and commercialization of hempseed and sunflower seed protein. The $6.9 million project, led by Burcon, includes funding of $3 million from PIC.
As at March 31, 2024, the Company had approximately $4.2 million of cash. Subsequent to the year-end date, Burcon committed to $712,000 of expenditures related to further production campaigns of hemp and canola protein products.
Conference Call Details
Burcon will hold an investor conference call and webcast on Wednesday, June 26, 2024 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: Wednesday June 26, 2024
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in (North America): 1-877-704-4453
Dial-in (toll/international): 1-201-389-0920
Conference ID: 13746587
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 novel plant-based proteins derived from pea, canola, soy, hemp and sunflower seeds, among other plant sources. Burcon is committed to delivering next-generation, best-in-class protein solutions, positioning itself as a key player in the rapidly expanding plant-based market. Supporting the growing trend towards a plant-based diet, Burcon offers sustainable protein ingredients that we believe are better for you and better for the planet. For more information, visit www.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. 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, 2024 and its other public filings with Canadian securities regulators on SEDAR+ at www.sedarplus.ca. 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 and Communications
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 | ||||||
| Consolidated Statements of Financial Position | ||||||
| As at March 31, 2024 and March 31, 2023 | ||||||
| (In Canadian dollars) | ||||||
| March 31, 2024 | March 31, 2023 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash | 4,197,141 | 1,456,845 | ||||
| Amounts receivable and other receivables | 591,726 | 332,118 | ||||
| Inventory | 68,319 | - | ||||
| Prepaid expenses | 330,033 | 75,902 | ||||
| 5,187,219 | 1,864,865 | |||||
| Property and equipment | 1,096,273 | 983,924 | ||||
| Deferred development costs | 5,374,149 | 5,795,650 | ||||
| Investment in and loans to Merit Functional Foods Corporation | - | - | ||||
| Goodwill | 1,254,930 | 1,254,930 | ||||
| 12,912,571 | 9,899,369 | |||||
| LIABILITIES | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | 843,449 | 590,936 | ||||
| Current portion of lease liabilities | 260,845 | 34,431 | ||||
| Deferred government assistance | 250,000 | - | ||||
| 1,354,294 | 625,367 | |||||
| Secured loan | 6,404,778 | 5,112,381 | ||||
| Lease liabilities | - | 24,310 | ||||
| 7,759,072 | 5,762,058 | |||||
| SHAREHOLDERS' EQUITY | ||||||
| Capital stock | 122,069,825 | 114,566,577 | ||||
| Contributed surplus | 17,283,934 | 16,763,830 | ||||
| Options | 7,436,262 | 7,279,559 | ||||
| Warrants | 237,201 | - | ||||
| Restricted share units | 172,776 | 127,651 | ||||
| Deficit | (142,046,499 | ) | (134,600,306 | ) | ||
| 5,153,499 | 4,137,311 | |||||
| 12,912,571 | 9,899,369 |
| BURCON NUTRASCIENCE CORPORATION | ||||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||||
| Years ended March 31, 2024 and 2023 | ||||||
| (In Canadian dollars) | ||||||
| 2024 | 2023 | |||||
| REVENUE | ||||||
| Royalty income | 184,359 | 363,913 | ||||
| EXPENSES | ||||||
| Research and development | 3,578,757 | 4,125,149 | ||||
| General and administrative | 3,624,577 | 3,764,034 | ||||
| 7,203,334 | 7,889,183 | |||||
| LOSS FROM OPERATIONS | (7,018,975 | ) | (7,525,270 | ) | ||
| INTEREST AND OTHER INCOME | 88,366 | 470,021 | ||||
| SHARE OF LOSS IN MERIT FUNCTIONAL FOODS CORPORATION | - | (5,499,906 | ) | |||
| WRITE-OFF OF INVESTMENT IN MERIT FUNCTIONAL FOODS CORPORATION | - | (7,987,304 | ) | |||
| WRITE-OFF OF LOAN TO MERIT FUNCTIONAL FOODS CORPORATION | - | (4,358,630 | ) | |||
| INTEREST AND OTHER EXPENSE | (511,585 | ) | (466,290 | ) | ||
| FOREIGN EXCHANGE (LOSS) GAIN | (3,999 | ) | 3,129 | |||
| LOSS AND COMPREHENSIVE LOSS FOR THE YEAR | (7,446,193 | ) | (25,364,250 | ) | ||
| BASIC AND DILUTED LOSS PER SHARE | (0.06 | ) | (0.23 | ) |
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/214486
SOURCE: Burcon NutraScience Corporation
