Burcon Nutrascience Achieves Key Commercial Milestones with Plant Protein Production

Stonegate Capital Partners has updated coverage on Burcon Nutrascience Corporation, highlighting significant commercial progress in the second quarter of fiscal year 2026. The plant protein technology company 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 production of Peazazz® C pea protein.

Following the quarter's end, the company received more than $500,000 in commercial sales orders and recorded the first commercial sale of FavaPro, indicating growing market acceptance as customers complete product evaluations and transition to purchase orders. This operational flexibility enables Burcon to respond quickly to evolving customer demands while maintaining consistent product quality across its protein portfolio.

Customer engagement has expanded significantly, with more than 200 active projects progressing through late-stage evaluations across diverse applications in food, beverage, and lifestyle nutrition markets. The company's second quarter execution included record production activity and successful trade-show participation, building momentum to convert pipeline opportunities into recurring orders and expand shipments as production capacity increases.

To support this growth trajectory, Burcon 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. The financing includes a conditional accelerated prepayment or conversion feature if the share price trades above $4.54 for 14 consecutive trading days. Company insiders committed to a minimum of $2.0 million of the offering. Additionally, the company 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 from these financing activities are designated for inventory buildup, labor expansion, production capability enhancement, future infrastructure planning, general corporate purposes, and repayment of the bridge loan. These financial maneuvers provide the capital necessary to support the company's scaling operations and market expansion efforts.

Financially, Burcon generated $0.36 million in revenues during the second quarter, representing a 783% increase over the same period last year, driven by initial protein sales and contract manufacturing activities. 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 expenses. Operating focus has shifted toward commercialization, with research and development expenses decreasing 67% and general and administrative expenses down 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. Subsequent developments included receipt of over $500,000 in orders, the convertible debenture offering announcement, the $700,000 director loan, and the senior secured loan maturity extension. 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 using a discounted cash flow model with discount rates between 10.50% and 11.00% arrives at a valuation range of $20.29 to $25.66 with a midpoint of $22.61 per share. This assessment accounts for the company's size and relative market liquidity while recognizing the growth potential in the expanding plant-based protein market.