DGAP-News: Burcon NutraScience Corp. / Key word(s): Quarter Results
Vancouver, British Columbia, February 16, 2021 - Burcon NutraScience Corporation (TSX: BU OTCQB: BUROF) a global technology leader in the development of plant-based proteins, reported results for the fiscal third quarter ended December 31, 2020.
Operational highlights for the third quarter ended December 31, 2020:
- Burcon JV Company, Merit Functional Foods completed construction of its state-of-the-art protein production facility dedicated to the production, under license, of Burcon's novel pea and canola protein ingredients. Construction of the facility was formally completed on December 31, 2020.
- Subsequent to the quarter-end, Merit Functional Foods, achieved first commercial production of Burcon's Peazazz(R) and Peazac(R) pea proteins. Merit intends to now turn its focus to commissioning the facility to produce canola protein.
- Advanced Burcon's pipeline of development opportunities through ongoing research and development efforts as well as through ongoing discussions and negotiations with potential development partners.
- Expanded the company's research and development capacity through the lease of a satellite laboratory space at the Richardson Centre For Functional Foods and Nutraceuticals. Research activities at the new satellite lab will support Burcon's ongoing work at its Winnipeg Technical Centre. Subsequent to the quarter-end the company also expanded its Winnipeg scientific and technical team with the addition of two new research scientists. We engaged a third-party engineering firm to assist the company to plan and design a potential new and expanded technology and innovation centre, to replace the company's existing Winnipeg Technical Centre.
- Received a U.S. patent covering the company's novel process for the extraction and purification of pea protein ingredients and the pea proteins produced therefrom. The company's IP portfolio now includes 303 issued patents in various countries, with 71 in the U.S., as well as more than 225 active patent applications, including 35 in the U.S.
- Received over $3.0 million from the exercise of outstanding warrants during and subsequent to the quarter-end, effectively amounting to a non-dilutive financing. When combined with the warrants already exercised before the third quarter, nearly one-half of the outstanding warrants have now been exercised.
- Subsequent to the quarter-end, Burcon engaged a U.S. securities law firm to advise the company with the process of applying for a dual listing on the NASDAQ stock exchange.
"The timing couldn't be better for our novel protein ingredients to first come to market. Food and beverage companies need innovative highly functional protein ingredients to respond to consumers' demands for better-tasting, clean-label, and sustainably produced plant-based offerings. Merit's state-of-the-art protein production facility, with its low carbon footprint design, is well-positioned to meet this demand and profit from the projected double-digit growth of dairy and meat alternative products. Completing the construction of its state-of-the-art facility was an impressive accomplishment during such a challenging time. We are thrilled with Merit's accomplishments and look forward to Merit achieving its first sales."
"Additionally, our team of scientists and engineers at Burcon's Winnipeg Technical Centre continued development work on our pipeline of technologies for alternative plant-based proteins. We made progress on existing technologies by further innovating with pea and canola and also with entirely new plant-based protein sources. Our goal is to enter into additional partnerships as a means to bring additional plant-based protein ingredients to market."
"We also engaged a third-party engineering firm during the quarter to assist the company to plan and design a potential new and expanded technology and innovation centre. We are investigating options to replace Burcon's existing Winnipeg Technical Centre with an expanded innovation centre to provide Burcon with additional R&D bandwidth to pursue our product opportunity pipeline and to increase pilot-scale production capabilities in contemplation of partnering opportunities we are pursuing."
"During the quarter, we continued to strengthen our intellectual property portfolio adding five patents, one of which is a U.S. patent covering our novel process for pea protein production. Our intellectual property portfolio now includes 303 issued global patents and 71 issued U.S. patents."
"As a result of improved trading in Burcon's shares subsequent to the quarter-end, Burcon believes it now meets the NASDAQ's published requirements for a dual listing on the NASDAQ stock exchange. We believe we could raise awareness and expand our investor base both within the U.S. investment community as well as internationally through the addition of a NASDAQ dual listing. Burcon has engaged a U.S. securities law firm to advise the company with the process of applying for a dual listing on the NASDAQ stock exchange."
Fiscal 2021 Third Quarter Financial Results (in Canadian Dollars)
Burcon's net loss totaled $1.1 million or $0.01 per basic and diluted share for fiscal Q3 2021, as compared to a net loss of $0.8 million or $0.01 per basic and diluted share in fiscal Q3 2020.
Our share of Merit's loss for fiscal Q3 2021 was about $460,000, as compared to $178,000 in the same year-ago period. The higher loss reflects higher expenses at the Merit facility due to the construction build out, increased market development and operational activities.
Research and development expenses were about $69,000 for the three months ended December 31, 2020, as compared to $115,000 in the same year-ago period. The Company began deferring canola and pea development expenses from the second quarter of last year and also recorded production costs for inventory. Before the deferral and cost allocation, R&D costs increased by $128,000, due to salary increases, new hires and increased laboratory expense from increased research activities.
Intellectual property expenses increased by about $69,000, from $202,000 in fiscal Q3 2020 to $271,000 in fiscal Q3 2021. The Company also began deferring patent expenses in fiscal 2020 for the pea and canola patent portfolios. Before the deferral, patent expenditures did not change significantly from the same period last year.
There was no significant change in total general and administrative expenses for fiscal Q3 2021 over the same year-ago period. However, stock-based compensation expense increased by $42,000, which was offset by lower legal fees and investor relations travel expenses due to COVID-19.
At December 31, 2020, cash balances totaled $12.0 million compared to $15.0 million at March 31, 2020. During fiscal Q3 2021, warrants were exercised for proceeds of $1.8 million and additional warrants were exercised after the quarter-end for further $1.4 million.
About Burcon NutraScience Corporation
Burcon is a global technology leader in the development of plant-based proteins. With over 300 issued patents and more than 225 additional patent applications, that have been developed over a span of more than twenty years, Burcon has grown an extensive portfolio of composition, application, and process patents covering novel plant-based proteins derived from pea, canola, soy, hemp, sunflower seed and more. In 2019, Merit Functional Foods Corporation was established in a joint venture by Burcon and three veteran food industry executives. Merit Foods has built a state-of-the-art protein production facility in Manitoba, Canada, where it will produce, under license, Burcon's novel pea and canola protein ingredients. For more information visit www.burcon.ca.
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17.02.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.