Burcon Nutrascience Achieves Key Commercial Milestones with Plant Protein Production and Secures Growth Financing

Stonegate Capital Partners has updated its coverage of Burcon Nutrascience Corporation (TSX: BU), highlighting significant progress in the company's commercialization efforts during the second quarter of fiscal year 2026. Burcon achieved first commercial production and sales of Puratein® C canola protein and first commercial production of FavaPro™ fava protein at its Galesburg facility, while continuing to scale Peazazz® C pea protein. Following the quarter's end, the company received over $500,000 in commercial sales orders and recorded the first commercial sale of FavaPro, indicating growing market acceptance as customers transition from evaluations to purchase orders.

The company's operational flexibility enables it to respond swiftly to evolving customer demands while maintaining consistent product quality. Commercial engagement expanded significantly, with more than 200 active projects progressing through late-stage evaluations across diverse end-market applications in food, beverage, and lifestyle nutrition sectors. Second quarter execution included record production activity and successful trade-show outreach, reinforcing momentum to convert pipeline activity into recurring orders and expand shipments as production scales.

Financing initiatives during and after the quarter position Burcon for continued growth. The company announced a non-brokered private placement of up to $4.0 million in unsecured convertible debentures bearing 15% annual interest with a 48-month term and a conversion price of $2.27 per share. Insiders committed to a minimum of $2.0 million of this offering. Additionally, Burcon executed a $700,000 short-term unsecured loan with an entity related to a director at 12% interest to bridge to the debenture closing and extended the maturity of the second tranche of its senior secured loan to December 2026. Proceeds are allocated toward inventory, labor, production capability, future infrastructure planning, general corporate purposes, and repayment of the bridge loan.

Financially, Burcon generated $0.36 million in revenues during the second quarter, representing a 783% increase over the prior year period, driven by initial protein sales and contract manufacturing. Year-to-date revenue reached approximately $0.7 million. The quarter's net loss was $3.59 million, or $0.28 per share, reflecting $2.1 million in cost of goods sold that included startup and commissioning costs. Operating focus shifted toward commercialization, with research and development expenses decreasing 67% and general and administrative expenses declining 17% compared to the prior year period. The company ended the quarter with $1.8 million in cash and a working capital deficit of $8.2 million. Management reaffirmed its calendar year 2025 revenue target of $1-3 million and its calendar year 2026 outlook for $10 million plus revenue with a path to positive cash flow.

Stonegate Capital Partners' valuation analysis utilizes a discounted cash flow model with discount rates between 10.50% and 11.00%, resulting in a valuation range of $20.29 to $25.66 with a midpoint of $22.61. This assessment accounts for the company's size and relative market liquidity while recognizing the progress in commercializing its plant protein technologies. The successful production scaling and growing order book demonstrate Burcon's ability to capitalize on increasing consumer demand for plant-based protein alternatives across multiple market segments.