Burcon Announces Closing of First Tranche of Non-Brokered Private Placement of Convertible Debentures

Rhea-AI Summary

Burcon (OTCQB: BRCNF) closed the first tranche of a non‑brokered private placement of convertible debentures for $1.25 million, part of an aggregate financing of up to $6.3 million. Insiders and manufacturing partner owners committed at least $5.0 million in principal. The financing is conditionally approved by the TSX and the final tranche requires disinterested shareholder approval expected after a special meeting on February 20, 2026. Each debenture carries 15% interest, 48‑month maturity, and is convertible at $1.60 per share (with pre‑funded warrant option). Proceeds will fund production scale‑up, infrastructure planning, general corporate purposes and repay a short‑term loan.

Positive

• First tranche closed for $1.25 million
• Insiders/manufacturing partners committed at least $5.0 million
• Convertible conversion price set at $1.60 per share
• Proceeds earmarked to accelerate production and ingredient sales

Negative

• Debentures bear high 15% annual interest
• Final tranche requires disinterested shareholder approval
• Potential insider ownership >20% post‑closing triggers related‑party scrutiny
• Conversion and warrants introduce dilution risk

Vancouver, British Columbia--(Newsfile Corp. - January 2, 2026) - Burcon NutraScience Corporation (TSX: BU) (OTCQB: BRCNF) ("Burcon" or the "Company"), a global technology leader in plant-based protein innovation, is pleased to announce the closing of the first tranche of a non-brokered private placement of convertible debentures (the "Convertible Debentures") for an aggregate principal amount of up to $6.3 million (the "Private Placement"). Insiders of the Company and Burcon's manufacturing partner owners are committed to participating at a minimum of $5.0 million in principal amount. The Private Placement has been conditionally approved by the Toronto Stock Exchange ("TSX") subject to Burcon complying with the terms of such conditional approval, including receipt of disinterested shareholder approval.

"The strong support for this financing, particularly from our insiders and manufacturing partner owners, reflects confidence in Burcon's strategy and progress," said Kip Underwood, Burcon's Chief Executive Officer. "The closing of this first tranche strengthens our financial position and enables us to accelerate production and ingredient sales to meet increasing customer demand."

The Company will close the Private Placement in two tranches and has closed the first tranche of the Private Placement through a direct investment from its manufacturing partner owners for gross proceeds of $1.25 million. Shareholder approval is required prior to closing the final tranche of the Private Placement. Pursuant to sections 604 and 607 of the TSX Company Manual, shareholder approval will be required given the expected aggregate participation levels by insiders in the Private Placement, the consideration provided to insiders under the Private Placement, the aggregate size of the private placement overall and the expected aggregate participation by Mr. John Vassallo, a director of the Company, resulting in Mr. Vassallo and his associates and affiliates owning or controlling, directly or indirectly, greater than 20% of the outstanding shares of the Company after the Private Placement. The Company expects to close the final tranche of the Private Placement following the special meeting of shareholders scheduled for February 20, 2026. Full details of the shareholder approvals required will be disclosed in the materials for the shareholder meeting which will be mailed in due course and filed on SEDAR+.

Convertible Debenture Details

Each Convertible Debenture will consist of $1,000 principal amount, bear interest at a rate of 15% per annum, payable in full upon maturity, and be unsecured. The principal amount outstanding under the Convertible Debentures and all accrued and unpaid interest thereon will be payable in cash forty-eight (48) months from the date of issuance of the Convertible Debentures (the "Maturity Date"). The Convertible Debentures will be convertible at the option of the holder, in whole or in part, into common shares of the Company (the "Shares") at a conversion price of $1.60 per Share (the "Conversion Price") and certain holders will have the option to convert their Convertible Debentures, in whole or in part, into pre-funded warrants of the Company (the "PF Warrants") at the Conversion Price per PF Warrant. Each PF Warrant is exercisable to acquire one Share (the "PF Shares") at an exercise price of $0.00001 per PF Share.

Accelerated Prepayment or Conversion Option

At any time after the first anniversary of the issuance date of the Convertible Debentures, if the volume weighted average price of the Shares on the TSX (or such other stock exchange where the Shares principally trade) is above $3.20 (200% of the Conversion Price) for a period of 14 consecutive trading days, the Company may prepay the principal amount outstanding under the Convertible Debentures and any accrued and unpaid interest thereon to the holders of the Convertible Debentures. Upon written notice from the Company of such prepayment, a holder will have thirty (30) days from the date of such notice to accept the prepayment, failing which, the Company may accelerate the conversion of the Convertible Debentures held by such holder into Shares or PF Warrants, as applicable, at the Conversion Price.

The Convertible Debentures, the Shares issuable upon conversion of the Convertible Debentures and the PF Shares issuable upon the exercise of the PF Warrants will be subject to a four month and one day statutory resale restriction pursuant to applicable Canadian securities laws.

The Company has not registered the issuance or resale of the Convertible Debentures, the Shares, the PF Warrants or the PF Shares under the U.S. Securities Act. The Convertible Debentures, the PF Warrants and the Shares or the PF Shares issued in the United States or to U.S. Persons will be "restricted securities" and will be subject to certain additional resale restrictions.

The Company may pay a cash finder's fee in connection with the Private Placement to certain finders not to exceed 4.0% of the gross proceeds received from investors introduced to the Company by the finders.

The Company intends to use the net proceeds from the Private Placement to (a) accelerate growth through investments in: (i) inventory, labor and production capability; (ii) plan future infrastructure investments in anticipation of accelerating customer demand; (b) for general corporate purposes and (c) repay the short-term Loan announced in November 12, 2025 press release.

The Private Placement is expected to close on or about February 24, 2026 and is subject to execution of subscription agreements by the placees and to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including disinterested shareholder approval.

The issuance of Convertible Debentures to insiders under the Private Placement will be considered a related party transaction under Multilateral Instrument 61-101. The Company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(1)(a) of Multilateral Instrument 61-101 on the basis that the participation in the Private Placement by insiders does not exceed 25% of the Company's market capitalization.

The securities being offered under the Private Placement have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About Burcon NutraScience Corporation

Burcon is a global technology leader in high-performance plant-based proteins for the food and beverage industry. Our commercial ingredients offer superior taste, texture, and functionality-ideal for formulators seeking next-generation protein solutions. Backed by over two decades of innovation, Burcon holds an extensive patent portfolio covering novel proteins derived from pea, canola, soy, hemp, sunflower, and other plant sources. As a key player in the rapidly growing plant-based market, Burcon is committed to sustainability and to creating best-in-class protein solutions that are better for people and the planet. Learn more at www.burcon.ca.

Forward-Looking Information Cautionary Statement

The TSX 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 or forward-looking information within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, including statements relating to insider participation in the private placement. Forward-looking statements or forward-looking information involve risks, uncertainties and other factors that could cause actual results, performances, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements or forward-looking information can be identified by words such as "anticipate," "aim", "intend," "plan," "goal," "project," "estimate," "expect," "believe," "future," "likely," "may," "should," "could," "will" and similar references to future periods. All statements included in this release, other than statements of historical fact, are forward-looking statements. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements or information. Important factors that could cause actual results to differ materially from Burcon's plans and expectations include the implementation of our business model and growth strategies; trends and competition in our industry our future business development, financial condition and results of operations and our ability to obtain financing cost-effectively; potential changes of government regulations, and other risks and factors detailed herein and from time to time in the filings made by Burcon with securities regulators and stock exchanges, including in the section entitled "Risk Factors" in Burcon's annual information form for the year ended March 31, 2025 and its other public filings with Canadian securities regulators on SEDAR+ at www.sedarplus.ca. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Any forward-looking statement or information speaks only as of the date on which it was made, and, except as may be required by applicable securities laws, Burcon disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Although Burcon believes the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance, and, accordingly, investors should not rely on such statements.

Industry and Investor Contact
Paul Lam
Director, Investor Relations and Communications
Burcon NutraScience Corporation
490 - 999 West Broadway, Vancouver, BC, V5Z 1K5
Tel (604) 733-0896, Toll-free (888) 408-7960
plam@burcon.ca www.burcon.ca

Media Contact:
Steve Campbell, APR
President
Campbell & Company Public Relations
Tel (604) 888-5267
TECH@CCOM-PR.COM

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/279357

FAQ

How much did Burcon raise in the first tranche of the convertible debenture offering (BRCNF)?

Burcon closed the first tranche for $1.25 million toward an aggregate offering of up to $6.3 million.

What are the key terms of Burcon's convertible debentures (BRCNF)?

Each debenture is $1,000, 15% interest, 48‑month maturity, convertible at $1.60 per share with PF warrant option.

When will Burcon (BRCNF) potentially close the final tranche of the private placement?

The final tranche is expected to close on or about February 24, 2026, subject to shareholder and regulatory approvals.

Why does Burcon need disinterested shareholder approval for the BRCNF financing?

Shareholder approval is required because insiders' expected participation could result in a participant owning >20% of outstanding shares after the offering.

How will Burcon use net proceeds from the private placement (BRCNF)?

Proceeds will fund inventory, labor, production capability, infrastructure planning, general corporate purposes, and repay a short‑term loan.

What investor resale restrictions apply to the convertible debentures and shares (BRCNF)?

Debentures, shares on conversion and PF shares are subject to a statutory four month and one day resale restriction and U.S. transfer limits.