DALLAS, TX -- June 26th, 2026 --Burcon Nutrascience Corporation (TSX: BU): Stonegate Capital Partners updates their coverage on Burcon Nutrascience Corporation (TSX: BU). Burcon has moved from commissioning and into early utilization, with growing customer volume setting up better fixed-cost absorption at Galesburg. The Company completed commissioning and launched commercial production across Peazazz pea protein, Puratein C canola protein, and FavaPro fava protein in FY26. Revenue increased sequentially to $0.83M in 4Q26 from $0.74M in 3Q26, and management indicated current-quarter sales were tracking toward ~50% sequential growth based on April/May activity. Burcon also set a new production record, with daily output roughly 60% above January - March levels. As volume builds, the margin opportunity should come from better utilization, steadier production cadence, and start-up costs moving out of the run-rate cost structure, rather than pricing alone.
Product Pipeline: Burcon’s commercial funnel is broadening, with 30+ purchasing customers and more than 200 active projects across pea, canola, and fava proteins. Reported revenue remains early and concentrated, but customer activity now spans nutrition powders, bars, snacks, baked goods, plant-based foods, and other food and beverage categories. Demand is being supported by higher-protein consumer products and GLP-1-related nutrition needs, where taste, purity, and functionality are central to formulation decisions. The key point is that Burcon has moved beyond one product or one application driving the story. Solatein sunflower protein remains the next portfolio extension, with commercialization targeted in 2027.
Financing Makes Room for Growth: Burcon completed the full $6.9M convertible debenture financing, with $4.0M closed during FY26 and the final $2.9M closed after year-end. The financing included insider support and parties tied to the manufacturing facility, helping align capital with the Galesburg scale-up plan. The Company also extended the first tranche of its senior secured loan to December 17, 2026, amended the interest rate to 15%, and retained $3.0M of undrawn capacity on the second tranche. Funding still matters, but the use case is now more directly tied to working capital, inventory, production scheduling, and capacity additions that support customer growth.
Financial Overview: FY26 revenue increased 494% to $2.3M, while net loss was $14.3M, or $(1.12) per share, and operating cash use was $9.2M. Cost of sales increased to $9.7M, reflecting start-up, commissioning, early production costs, and inventory write-downs at Galesburg, while R&D declined 65% and G&A declined 23% as spending shifted toward commercialization. Burcon ended FY26 with $1.0M of cash and negative working capital of $10.6M, largely tied to the current classification of the senior secured loan. Management’s stated CY26 objective is $10M of sales and positive operating cash flow. The next few quarters should be measured by revenue cadence, throughput, and whether higher utilization starts to narrow the negative gross margin profile.
Valuation: We use a DCF Model to frame our valuation of BU. Our DCF analysis relies on a range of discount rates between 10.25% and 10.75%, which arrives at a valuation range of $17.73 to $22.28 with a mid-point of $19.68.
