VANCOUVER, June 25 /CNW/ - Burcon NutraScience Corporation (TSXV - BU) ("Burcon") today reported financial results for the fiscal year ended March 31, 2007 and provided a review of the year's operations.
A summary of the highlights of the past year include:
- Signed a number of material transfer agreements ("MTAs") with certain
globally recognized food and beverage companies as well as companies
involved in the fields of consumer nutritional products and medical
nutrition products;
- Raised gross proceeds of $5.0 million (net proceeds of $4.9 million)
through a rights offering;
- Raised $1.25 million through the exercise of outstanding warrants and
options; and
- Was granted a European Patent for novel protein isolate derived from
any flax oilseed, including the low linolenic acid variety Linola(TM)
oilseed;
- Was granted a U.S. patent over a novel and commercially important
component of its protein extraction and purification technology which
enable an improved yield of oilseed protein isolate in an oilseed
meal aqueous extraction procedure;
- Was granted two U.S. patents for the novel uses of Burcon's
Supertein(TM) canola protein isolate as a functional component in
food compositions; and
- Announced in June 2007 that it has amended the license and
development agreement with Archer Daniels Midland ("ADM") to proceed
with regulatory recognition for canola Puratein(R) and Supertein(TM)
canola protein isolates.
In early fiscal 2007, Burcon, in conjunction with ADM, focused its work on the large-scale production of its canola protein isolate products, Puratein(R) and Supertein(TM). Burcon also processed a large quantity of meal through an external facility, and together with process control and improvements, produced the best final product quality to-date.
During the year, Burcon entered into a number of MTAs with globally recognized food and beverage and other companies that will test Burcon's canola protein isolates in food matrices, beverage and nutritional products etc. while protecting certain intellectual property interests of all of the parties involved. Burcon and ADM have provided samples of the canola protein isolate products, Puratein(R) and Supertein(TM) to ADM's third-party customers who have entered into MTAs.
During the year, Burcon raised over $6 million through a rights offering as well as warrant and option exercises to continue to fund its research and development activities.
In the coming year, Burcon will continue to direct its efforts at commercializing Puratein(R) and Supertein(TM) canola protein isolates. The two main areas of focus will be to continue the process of sampling Burcon's proteins with major food and beverage companies under MTAs as well as activities associated with pursuing regulatory recognition for Burcon's canola proteins in both the U.S. and Europe.
Financial Results and Highlights
--------------------------------
Burcon reported a net loss of $3,546,630 or $0.15 per share for the year ended March 31, 2007, as compared to $2,857,149 or $0.13 per share for the prior year.
Research and development ("R&D") expenses increased by approximately $353,000 from the prior year. Salaries and benefits account for approximately one-half of R&D expenditures and remained relatively stable after taking into account the stock-based (non-cash) compensation expense of about $151,000 (2006 - $93,000). Analyses and testing increased by about $200,000 from fiscal 2006 due primarily to the costs incurred for the large-scale production of meal at an external facility. This meal was later used to produce canola proteins that were sent as samples to ADM's third-party customers for applications testing and will also be used for regulatory feeding trial studies. Laboratory operation costs increased by approximately $31,000 due mainly to higher repairs and maintenance costs on older equipment.
General and Administrative ("G&A") expenses include salaries and benefits, financing costs, investor relations, office supplies and services and travel and meals. Of the total G&A expenses, approximately $417,000 (2006 - $384,000) relate to stock-based compensation. Excluding the effect of stock-based compensation of about $33,000 in 2007 (2006 - $12,000), investor relations expenses increased by approximately $52,000. The increase in investor relations expenses is due primarily to travel expenses incurred for meetings with potential investors, brokers and analysts in North and South America and Europe, as well as the appointment of Roderick Adams during 2007 to perform investor relations services in the United Kingdom. Included in G&A expenses are financing expenses of $173,000 (2006 - $152,000) as the estimated fair value of the warrants issued to the guarantors of the rights offering.
Total professional fees incurred in 2007 increased by about $301,000 over 2006. This was due primarily to Burcon incurring significant foreign patent agent filing fees and disbursements from several patents that had entered National Phase during the year.
At March 31, 2007, the Company's cash position was $6,172,067, as compared to $2,511,053 at March 31, 2006. During the year, Burcon raised net proceeds of $4.9 million from a rights offering and $1.3 million from the exercise of outstanding options and warrants. Burcon expects to incur approximately US$740,000 in the regulatory recognition process. Burcon's management believes that it has sufficient resources to fund its expected level of operations and working capital requirements to at least October 2009.
About Burcon NutraScience
Burcon is a research and development company developing a portfolio of composition, application, and process patents around its plant protein extraction and purification technology. The goal of Burcon's research is to develop its patented process to utilize inexpensive oilseed meals for the production of purified plant proteins that exhibit valuable nutritional, functional or nutraceutical profiles. Burcon, in conjunction with Archer Daniels Midland, is currently focusing its efforts on developing the world's first commercial canola proteins, Puratein(R) and Supertein(TM). Canola, recognized for its nutritional qualities, is the second-largest oilseed crop in the world after soybeans. Burcon's goal is to develop Puratein(R) and Supertein(TM) to participate with soy, dairy, and egg proteins in the expanding multi-billion-dollar protein ingredient market, with potential uses in prepared foods, nutritional supplements, and personal care products.
ON BEHALF OF THE BOARD OF DIRECTORS
"Johann F. Tergesen"
Johann F. Tergesen
President & Chief Operating Officer
The TSX Venture Exchange 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 that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement of our products, statements about future market conditions, supply and demand conditions, and other expectations, intentions and plans contained in this press release that are not historical fact. Our expectations regarding the prospect for future success depend upon our ability to develop and sell products, which we do not produce today and cannot be sold without further research and development. When used in this press release, the words "goal", "intend", "believes" and "potential" and similar expressions, generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties. In light of the many risks and uncertainties surrounding the development of a source of protein from canola meal, you should understand that we cannot assure you that the forward looking statements contained in this press release will be realized.
Burcon NutraScience Corporation
Consolidated Balance Sheets
As at March 31, 2007 and 2006
2007 2006
$ $
Assets
Current assets
Cash and cash equivalents 6,172,067 2,511,053
Amounts receivable 19,503 11,365
Prepaid expenses and deposits 77,866 91,020
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6,269,436 2,613,438
Property and equipment 893,523 975,729
Goodwill 1,254,930 1,254,930
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8,417,889 4,844,097
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 295,547 201,583
-----------------------------
Shareholders' Equity
Capital stock 25,018,046 18,551,107
Contributed surplus 3,692,747 3,692,747
Options 1,585,192 1,025,673
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Deficit (22,173,643) (18,627,013)
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8,122,342 4,642,514
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8,417,889 4,844,097
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Burcon NutraScience Corporation
Consolidated Statements of Operations and Deficit
For the years ended March 31, 2007 and 2006
2007 2006
$ $
Expenses
Research and development 1,655,199 1,301,739
General and administrative 1,153,608 1,030,260
Professional fees 769,758 468,331
Management fees and services 144,164 115,011
Amortization 2,422 2,825
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Loss from operations (3,725,151) (2,918,166)
Other income
Interest 178,521 61,017
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Loss for the year (3,546,630) (2,857,149)
Deficit, beginning of year (18,627,013) (15,769,864)
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Deficit, end of year (22,173,643) (18,627,013)
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Basic and diluted loss per share (0.15) (0.13)
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