Burcon closes $6.3-million first tranche of financing

Executive Summary

• Burcon NutraScience Corp. has closed the first tranche of a non-brokered private placement of convertible debentures, raising gross proceeds of $1.25 million.
• The total offering is for up to $6.3 million, with insiders and manufacturing partners committed to a minimum of $5 million.
• The final tranche is pending shareholder approval at a special meeting scheduled for February 20, 2026, with an expected full closing date of February 24, 2026.

Key Details

• Transaction Structure: Non-brokered private placement of convertible debentures.
• First Tranche Closed: Gross proceeds of $1.25 million, funded directly by manufacturing partner owners.
• Total Offering Size: Up to $6.3 million in aggregate principal amount.
• Insider Commitment: Insiders and manufacturing partner owners are committed to participating at a minimum of $5 million in principal amount.
• Debenture Terms:
  • Principal Amount: $1,000 per debenture.
  • Interest Rate: 15% per annum, payable in full upon maturity.
  • Maturity: 48 months from issuance date.
  • Security: Unsecured.
• Conversion Terms:
  • Conversion Price: $1.60 per share.
  • Alternative Conversion: Certain holders may convert into prefinanced warrants at the conversion price.
  • Warrant Exercise Price: $0.001 per prefinanced share.
• Accelerated Prepayment/Conversion Option:
  • Trigger: If the volume-weighted average price (VWAP) of shares on the TSX exceeds $3.20 (200% of conversion price) for 14 consecutive trading days, after the first anniversary of issuance.
  • Mechanism: Company may prepay principal and accrued interest; if holders do not accept within 30 days, the company may accelerate conversion into shares or prefinanced warrants.
• Resale Restrictions: Four-month-and-one-day statutory resale restriction applies to convertible debentures, shares, prefinanced warrants, and prefinanced shares.
• Use of Proceeds:
  • Accelerate growth via investments in inventory, labor, and production capability.
  • Plan future infrastructure investments to meet customer demand.
  • General corporate purposes.
  • Repay a short-term loan announced on November 12, 2025.
• Regulatory/Shareholder Approval:
  • Conditionally approved by the Toronto Stock Exchange (TSX).
  • Disinterested shareholder approval is required for the final tranche due to expected insider participation exceeding 20% of outstanding shares post-transaction.
  • Special meeting of shareholders scheduled for February 20, 2026.
  • Expected full closing date: On or about February 24, 2026.
• Finder’s Fees: The company may pay cash finder’s fees not exceeding 4.0% of gross proceeds to certain finders.
• Related Party Transaction: Issuance to insiders is considered a related party transaction under Multilateral Instrument 61-101; the company intends to rely on exemptions from formal valuation and minority shareholder approval requirements as insider participation is expected not to exceed 25% of market capitalization.

Notable Quotes

• "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."