VANCOUVER, Feb 28, 2005 (Canada NewsWire via COMTEX) -- Burcon NutraScience Corporation (TSXV-BU) ("Burcon") today reported financial results for the three and nine months ended December 31, 2004.
During the third quarter, Burcon and Archer Daniels Midland (ADM) carried out additional research to investigate modifications to the process for the extraction and production of Puratein(R) and Supertein(TM). Although further work is still required, Burcon and ADM's teams are pursuing two promising alternative modifications that could provide the sought-after improvements. Once Burcon and ADM are satisfied with the overall quality of the protein that can be produced under the refined technology, samples will be produced to conduct toxicology studies.
Financial Results and Highlights
Burcon reported a net loss of $637,306 ($0.04 per share) and $2,475,536 ($0.14 per share) for the three and nine months ended December 31, 2004, respectively, as compared to $579,818 ($0.04 per share) and $1,824,180 ($0.12 per share) for the comparative periods in fiscal 2004.
Research and development expenses amounted to $287,840 and $1,109,625 for the current quarter and nine-month period, respectively, compared with $319,130 and $967,411 in the same comparable periods last year. The decrease in the current quarter can be attributed to amortization. The increase for the nine-month period is attributed primarily to stock-based compensation expense (a non-cash expense), external research expenses related to a bio-functionality study and a loss on disposal of equipment, offset by a decrease in amortization expense.
General and administrative expenses amounted to $136,903 and $730,813 for the current quarter and nine-month period, respectively, compared with $156,513 and $490,249 for the comparable periods last year. The increase is due almost entirely to stock-based compensation expense recorded as a result of stock options granted to certain employees and directors during the quarter. The increase was partially offset by the decrease in salaries and benefits due to the departure of a senior officer at the end of the second quarter.
Professional fees amounted to $203,068 and $594,508 for the three and nine months ended December 31, 2004, respectively, compared with $82,722 and $298,704 for the same periods last year. The increase is mostly attributed to patent legal fees and disbursements due to several of the Company's patents entering into National Phase that began in the first quarter and continued throughout the year, during which national applications were filed in selected countries.
At December 31, 2004, Burcon's cash position amounted to $1,596,447, and its working capital position was $1,586,515. Due to the higher patent filing and maintenance activities, the Company revised its original forecast during the first quarter with respect to patent legal fees and disbursements. Given the revised estimates, Burcon's management believes that it has sufficient resources to fund its expected level of operations and working capital requirements to September 2005. This estimate excludes potential proceeds from any outstanding stock options or warrants being exercised. Complete financial statements for the period ended December 31, 2004, Management's Discussion and Analysis and other Company documents may be found on SEDAR at www.sedar.com.
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 and Supertein 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.