Business
Burcon Issues Shareholder Letter Regarding JV, Merit Functional Foods
Vancouver, British Columbia--(Newsfile Corp. - February 8, 2023) - Burcon NutraScience Corporatio...
About this update from Burcon Nutrascience Corporation
[{"type":"text","content":"Burcon Issues Shareholder Letter Regarding JV, Merit Functional FoodsVancouver, British Columbia--(Newsfile Corp. - February 8, 2023) - Burcon NutraScience Corporation (TSX: BU) (\"Burcon\" or the \"Company\"), a global technology leader in the development of plant-based proteins for foods and beverages, today issued a letter to shareholders from its Chief Executive Officer, Kip Underwood.Dear Shareholders, I am writing to you in my 10th week as CEO of Burcon NutraScience Corporation. I joined Burcon because I believe in the future of plant-based foods and the role Burcon's innovation can play in enabling that future. During the past few weeks, I have learned about both future opportunities and near-term challenges. One challenge, in particular, is our investment in Merit Functional Foods Corporation (\"Merit\"). It is important to us that you understand how the Merit situation affects Burcon, our actions, and our forward plan. Independent of these short-term issues, I am even more convinced today that our innovative plant protein technologies will play a critical role in the future success of plant-based foods and in improving the health of our planet. Merit Functional Foods Corporation SituationFor the past six months, Merit has made significant progress. Daily production performance has improved while sales continue to increase as compared to prior year. Customers have provided feedback that the products are \"best-in-class\". Unfortunately, the overall financial performance of the business has fallen short of expectations and led to the current cash flow concerns. Since inception, the shareholders of Merit, including Burcon, have provided significant financial support to Merit.  Most recently, in September 2022, Burcon announced that the shareholders of Merit provided loans in the aggregate amount of $3 million to address Merit’s anticipated liquidity requirements as it continued to ramp up its production and sales.  In late 2022, Merit began a process to identify a new strategic investor for its business. To-date, no funding has been received from a new investor.  In the near term, we have real concerns about Merit's financial situation and viability. The situation has forced Burcon to reassess our participation in the Merit business and led us to take a series of actions which are outlined below....