Burcon Announces Year-End Results, Reviews Operations - Page 2

GlobeNewswire

Monday, June 25th 2012

In the case of Puratein^® and Supertein™ canola protein isolates, Burcon continues to work with food and beverage manufacturers to establish the value of Burcon's proteins in their food products. Burcon has executed material transfer agreements with certain major companies. In the case of Nutratein^™ canola protein isolate, Burcon has been in discussions with a leading animal nutrition company with the intention of using Nutratein^™ canola protein isolate to replace or partially replace dairy protein in certain animal feed applications.

For the coming year, Burcon's objectives are to further the development and commercialization of its soy, canola and pea products.

Soy

Burcon will support ADM in connection with its development of a commercial facility for the production, marketing and sale of CLARISOY^™ soy protein.

Canola

Burcon plans to conduct further research and development to establish the unique functional and nutritional characteristics of Supertein^™, Puratein^® and Nutratein^™ canola protein isolates. In respect of Nutratein^™, Burcon will refine the pilot process to produce a consistent product of optimum quality, flavour, colour, aroma, amino acid profile, nutritional and functional attributes. Burcon also intends to pursue a collaboration with animal feed manufacturers on animal and/or fish feeding trials using Nutratein^™. Burcon will continue to pursue product development agreements with major food, beverage and nutritional product companies to develop improved or novel applications for Supertein^™ and Puratein^® canola protein isolates into their products. Burcon will also continue to pursue a strategic alliance with a potential partner in connection with the development of a commercial facility for the production, marketing and sale of Burcon's canola protein isolates.

Pea

Burcon intends to pursue product development agreements with major food, beverage and nutritional product companies to develop improved or novel applications for PEAZAZZ^™ pea protein into their products. Burcon will also pursue a strategic alliance with a potential partner in connection with the development of a commercial facility for the production, marketing and sale of PEAZAZZ^™ pea protein.

Burcon will continue to refine its protein extraction and purification technologies, develop new technologies and related products. In addition, Burcon will further strengthen and expand its intellectual property portfolio. Burcon will also explore opportunities for acquiring or licensing into Burcon, novel technologies that will complement or enhance Burcon's intellectual property portfolio and business initiatives.

Financial Results and Highlights

Burcon reported a loss of $5,962,342 ($0.20 per share) for the year as compared to $8,806,474 ($0.30 per share) in the prior year. Included in the loss amount reported is stock-based compensation (non-cash) costs of $1,716,062 (2011 - $4,091,119). The other non-cash costs included in the loss for the year are amortization of $101,148 (2011 - $178,050) and gain on disposal of property and equipment of $3,359 (2011 - $nil).

In March 2011, the Company determined that it had met all the criteria of deferring development costs with respect to CLARISOY^™ and commenced deferring these expenditures. During the year, Burcon deferred a total of $1,778,888 (2011 - $190,284) of these development expenditures. Burcon expensed about $1,040,000 in R&D expenditures (2011 - $2,890,000). Over one-half of R&D expenditures are comprised of salaries and benefits. Before capitalizing salaries and benefits to deferred development costs, the cash portion of salaries and benefits increased by approximately $128,000 over fiscal 2011. About $83,000 of the increase is due to the addition of new technical staff at the WTC, and the balance due to annual salary increases. Other R&D expenditures, such as laboratory operation, analyses and testing expenses also increased (before capitalization to deferred development costs) due to increased CLARISOY^™ activity levels. In 2011, Burcon agreed to reimburse ADM for its share of the GRAS regulatory recognition process pursuant to the amendment of the Canola Agreement. The amount of US$360,000 was recorded as R&D expenditures in fiscal 2011.