Mr. Kip Underwood reports

BURCON ANNOUNCES UNAUDITED FISCAL 2023 RESULTS AND REVIEWS OPERATIONS

Burcon NutraScience Corp. has released its unaudited results for the fiscal year ended March 31, 2023.

"Fiscal 2023 was a challenging year for Burcon. The company overcame setbacks, brought in new leadership and chartered a new course for the company," said Kip Underwood, Burcon's chief executive officer. "We believe in the market opportunity driven by plant-based foods and the role our technology can play in its success. Our pea, canola and soy proteins are proven on a commercial scale, while our sunflower and hemp proteins are market ready. Burcon has a portfolio of proteins that offers compelling value propositions to food formulators addressing the needs of health and sustainability. We are excited to move forward with our Burcon 2.0 strategy and look forward to capitalizing on the opportunities ahead."

Fiscal 2023 operational highlights

Burcon's focus for fiscal 2023 was to bring in new leadership for its next chapter of growth and to pursue commercialization opportunities for its portfolio of best-in-class plant-based protein ingredients.

During fiscal 2023, Burcon:

• Expanded its patent portfolio by 29 issued patents, including two additional U.S. patent grants covering a key Peazazz pea protein process and the unique process to produce protein from sunflower and other oilseeds;
• Filed three additional U.S. patent applications covering technologies for the production of sunflower seed protein, non-soy oilseed protein and soluble soy protein ingredients;
• Announced the appointment of specialty protein executive Kip Underwood as chief executive officer;
• Announced the appointment of climate tech specialist Aaron Ratner to Burcon's board of directors;
• Secured a $10-million credit facility with a major shareholder; and
• Received funding from Protein Industries Canada to support the development of food-grade high-purity protein ingredients from sunflower seeds.

Subsequent to the year-end, Burcon:

• Announced its sunflower protein process is commercially ready;
• Closed a fully subscribed $3.4-million non-brokered private placement; and
• Launched its pilot plant processing and scale-up validation services.

Management commentary

Fiscal 2023 saw Burcon go through the ebbs and flows of a growing food technology company and, ultimately, return to its innovative roots to push forward on Burcon 2.0. Merit Functional Foods Corp. was one of multiple paths to market for Burcon's unique protein ingredients and there are additional routes to market that Burcon is pursuing. The Burcon 2.0 strategic framework focuses on three themes: identifying new revenue streams; getting closer to customers and markets; and gaining more influence over the manufacture of Burcon's technology. Burcon's approach going forward is based on this strategic framework where Burcon expects to capitalize on opportunities to bring to market its innovative protein ingredients.

During the year, Burcon completed a business assessment that included a review of the market, its technologies, products and their value propositions. Burcon believes the market today for specialty plant-based protein ingredients has grown significantly and evolved from five years ago. Consumers continue to demand products that are better for themselves and better for the planet. At the same time, major investments into the food ecosystem have created a landscape of food and agri-technology companies all striving toward the same goal -- to revolutionize the food system. Both the market and competitive landscape today have evolved to the benefit of Burcon, presenting the company with new opportunities to partner and collaborate with a growing number of industry players. With that backdrop, Burcon continues to execute against its Burcon 2.0 strategy by pro-actively engaging and having continuing discussions with potential partners and customers.

Burcon announced a breakthrough in the development of a process to extract high-purity protein from sunflower seeds, the world's third-largest oilseed crop. The company's technical team of scientists and engineers developed a proprietary process to extract and purify a byproduct from sunflower oil production into a highly pure and neutral-tasting sunflower protein isolate. Subsequent to year-end, Burcon announced that it has successfully completed end-to-end validation trials of its novel sunflower protein process, a major milestone in the commercialization road map. Burcon's discussions with potential partners to bring this unique technology to market are progressing well and the company aims to launch its sunflower protein in the near future to tap into new markets and customers.

Burcon currently has a portfolio of protein technologies that offers compelling value propositions to the plant-based food market. Its pea, canola and soy proteins are commercially proven, while its sunflower and hemp proteins are validated and market ready. During the year, Burcon bolstered its IP (intellectual property) portfolio with an additional 29 patents, two of which are U.S. patent grants covering a key Peazazz pea protein process and a sunflower protein process.

As for its balance sheet, Burcon began fiscal 2024 with newly injected capital from its $3.4-million non-brokered private placement, which is expected to provide the company with sufficient runway to execute the Burcon 2.0 strategy. Burcon believes that a successful financing validates the company's shareholders' belief in the company's vision and strategy. As a result of strong support from the company's long-term shareholders, Burcon was able to raise well above its initial target under challenging market conditions. Burcon is grateful for the continued support.

In the year ahead, as part of the Burcon 2.0 initiatives, Burcon expects to work closely with its potential partners and customers, tailor its protein products and services to the needs of the market, and execute on its growth plan to secure new sources of revenue. The company is excited to move forward and see tremendous potential for its technologies in the marketplace.

Financial results (in Canadian dollars)

The increase in the year-over-year loss is attributed almost entirely to the write-off of the investment in and loans to Merit, and to the increase in the share of loss in Merit; both are unchanged from the amounts reported in the third quarter of fiscal 2023.

Total operating expenses for fiscal 2023 did not change significantly over fiscal 2022. Research and development (R&D) expenses, including intellectual property expenses, were $4.1-million for the year ended March 31, 2023, as compared with $3.3-million in the prior fiscal year. During fiscal 2023, Burcon recorded funding of approximately $453,000 from Protein Industries Canada (PIC) that has been applied to reduce R&D expenses.

Gross R&D expenses during fiscal 2023 decreased by $1.2-million over fiscal 2022, before PIC funding recorded in fiscal 2023 and also $2.2-million that was capitalized to deferred development costs in fiscal 2022. Of the decrease, IP expenses decreased by $1.0-million over fiscal 2022. During fiscal 2023, Burcon conducted a detailed review of its patent portfolio with the objective of focusing on technologies with the greatest potential value. To optimize the patent portfolio, Burcon abandoned certain non-core patent applications that were deemed to be non-essential or redundant for the purposes of achieving its strategic objectives as well as deferring maintenance payments while a detailed review was undertaken. Other gross R&D expenditures decreased mainly from staff changes, as well as cost-saving measures that were implemented to conserve cash resources.

General and administrative expenses were $3.7-million for fiscal 2023, as compared with $4.3-million in the prior fiscal year. The decrease in fiscal 2023 is due mostly to lower professional fees, investor relations expenses related to the Nasdaq Stock Market listing and to lower stock-based compensation expense.

Cash and liquidity

As at March 31, 2023, the company had approximately $1.5-million of cash. During fiscal 2023, Burcon secured a $10-million loan facility from its major shareholder, of which Burcon drew down a total of $5.0-million from the first tranche of the facility during fiscal 2023. Subsequent to the year-end, Burcon completed a non-brokered private placement for gross proceeds of $3.4-million. Burcon expects its cash resources to finance its operations to March, 2024, and further to March, 2025, if conditions for advance under the second tranche of $5-million are satisfied.

Financial disclosure advisory

The financial information presented herein is unaudited and has been prepared using international financial reporting standards (IFRS) as issued by the International Accounting Standards Board. The financial information is based on reasonable estimates and information available to the company at this time. As such, the company's actual results may vary from the financial information presented herein. In addition, the unaudited financial information presented herein does not present all information necessary for an understanding of the company's financial condition and results of operations as of and for the year ended March 31, 2023. The company expects to file its audited consolidated financial statements and management's discussion and analysis for the years ended March 31, 2023, and March 31, 2022, with securities regulators in Canada by June 29, 2023. These documents will be made available in the investors relations section of the company's website and on SEDAR.

Conference call details

Burcon will hold an investor conference call and webcast on Thursday, June 22, 2023, at 5 p.m. ET.

A link to the webcast of the conference call is available on Burcon's website under presentations. The webcast will also be archived for future playback.

Investors interested in participating in the live call can dial in using the details below.

Date:  Thursday, June 22, 2023

Time:  5 p.m. ET (2 p.m. PT)

Toll-free dial-in (North America):  1-855-327-6837

Dial-in (toll/international):  1-631-891-4304

Conference ID No.:  10021972

About Burcon NutraScience Corp.

Burcon is a global technology leader in the development of plant-based proteins for foods and beverages. Its proteins exhibit superior functionality, taste and nutrition, making them ideal ingredients for food formulators. With over two decades of experience, Burcon has amassed an extensive patent portfolio covering its novel plant-based proteins derived from pea, canola, soy, hemp and sunflower seeds, among other plant sources. Burcon is striving to become a vertically integrated provider of specialty plant-based protein solutions that deliver on health, nutrition and sustainability. Supporting the growing trend toward a plant-based diet, Burcon is developing premium protein ingredients that it believes are better for you and better for the planet.

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