(signed) J. Douglas Gilpin

(signed) David Lorne John Tyrrell

Going concern

Nature of operations

Burcon and its subsidiary are research and development companies that are developing plant protein extraction and purification technology in the field of functional, renewable plant proteins. The Company and its subsidiary have developed CLARISOY™, a soy protein; and are developing PEAZAZZ^®, a pea protein, and Puratein^®, Supertein™ and Nutratein^®, three canola protein isolates.

CLARISOY™

On March 4, 2011, Burcon signed the Soy Agreement with ADM to license its CLARISOY™ technology to ADM on an exclusive basis to produce, market and sell CLARISOY™ soy protein worldwide. The terms of the Soy Agreement include: (a) the license to ADM of all intellectual property, including know-how and trade secrets, concerning the manufacture and use of CLARISOY™, (b) payments to Burcon on a quarterly basis that begin upon certain approval by the Environmental Protection Agency and continue until the first bona fide arm’s length sale of soy products manufactured in the Semi-works Production facility are made, (c) the engineering and design of an initial commercial CLARISOY™ production plant to be completed by ADM and (d) a royalty structure that incorporates financial incentives for ADM to expand sales globally. ADM will make royalty payments to Burcon on the sales of CLARISOY™ under the 20-year Soy Agreement. Maintaining the CLARISOY™ soy protein patent portfolio during the term of the Soy Agreement is the responsibility of Burcon. In December 2012, ADM notified Burcon of the first bona fide arm’s length sale of CLARISOY™ soy protein. Pursuant to the Soy Agreement, the initial license fee payments ceased at the end of the quarter that immediately preceded the quarter in which the first bona fide arm’s length sale of CLARISOY™ manufactured in the semi-works production facility occurred. Accordingly, commencing with the quarter ended December 31, 2012, Burcon earned a percentage of net revenues from the sale of CLARISOY™ manufactured from the semi-works production facility. In March 2014, ADM provided written notice to Burcon that it intends to expand the commercial production of CLARISOY™ soy protein such that its production capacity meets the required obligations under the Soy Agreement to retain its exclusive license for CLARISOY™. If ADM does not fulfill certain obligations under the Soy Agreement, Burcon will have the option to convert the exclusive license to a non-exclusive license.

Peazazz^®

Burcon has developed a novel pea protein isolate that it has branded Peazazz^®. In June 2013, Burcon announced that it had completed the construction of a Peazazz^® semi-works production facility. The semi- works plant, located in Winnipeg, Manitoba, will enable Burcon to provide market development quantities (tonnage amounts) to customers for product and market development activities.

Burcon has executed a number of material transfer agreements (MTAs) with potential partners and customers, and has been in discussions with a select group of potential partners to discuss the commercialization of Peazazz^® and is considering various options, including building full-scale production facilities through a variety of partnerships.

Puratein^®, Supertein™ and Nutratein^®

Burcon is developing three canola protein isolate products, Puratein^®, Supertein™ and Nutratein^®. In 2008, Puratein^® and Supertein™ achieved U.S. self-affirmed GRAS (Generally Recognized As Safe) status, and in 2010, the U.S. Food and Drug Administration formally acknowledged receipt of Burcon’s GRAS notification for Puratein^® and Supertein™.

Significant accounting policies

Basis of presentation

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) applicable to the preparation of interim financial statements, including International Accounting Standards (IAS) 34, Interim Financial Reporting, on a basis consistent with those accounting policies followed in the most recent annual consolidated financial statements. These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and were approved and authorized for issue by the Audit Committee of the Board of Directors February 12, 2015.

The condensed consolidated interim financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended March 31, 2014.

Principles of consolidation

These condensed consolidated interim financial statements include the accounts of the Company and its subsidiary, Burcon NutraScience (MB) Corp. A subsidiary is an entity over which the Company has control. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with an entity and has the ability to effect those returns through its existing rights that give the current ability to direct the activities of the entity that significantly affect the entity’s returns. All material intercompany transactions and balances have been eliminated on consolidation.

Details of the Company’s subsidiary at December 31, 2014 are as follows:

The Company has adopted IAS 32, Financial Instruments: Presentation. These amendments clarify the requirements for offsetting of financial assets and liabilities. The adoption did not result in material changes to the Company’s financial statements.

The Company has adopted IFRIC 21, Levies, which provides guidance on when an obligating event occurs that gives rise to a liability to pay a government levy that is not income tax. The adoption did not have any impact on the Company’s financial statements.

Deferred development costs

Shareholders’ equity

Capital stock

Authorized

     Unlimited number of common shares without par value

On April 2, 2014, the Company completed an offering of shares by way of a rights offering for 1,860,276 common shares at $2.82 per common share for gross proceeds to Burcon of $5,245,978, and net proceeds of approximately $5.0 million. Burcon issued to each shareholder one right (the “Rights”) for each common share held by such shareholder. Every 17 Rights entitled the holder thereof to purchase one common share in the Company at a price of $2.82 per common share.

Contributed surplus

Contributed surplus comprises the value ascribed to expired warrants and options and forfeited vested options, previously categorized in either warrants or options, as applicable, within shareholders’ equity.

Options

The Company has a stock option plan in which all directors, officers, employees and consultants of the Company and its subsidiary are eligible to participate.

At December 31, 2014, 2,512,167 (March 31, 2013 - 1,986,161) options to purchase common stock are outstanding under the stock option plan. These options, when vested under the terms of the plan, are exercisable at prices ranging between $2.48 and $9.60 per common share. An additional 836,329 (March 31, 2014 - 1,176,308) options may be granted in future years under this plan. Unless otherwise determined by the Board of Directors, the options have a term of 10 years from the date of grant. The vesting terms are determined at the discretion of the Board of Directors at the time of grant. All grants are recognized using graded vesting, with each vesting tranche being valued separately, and the fair value of each tranche recognized over its respective vesting period.

General and administrative

Research and development

Basic and diluted loss per share

Related party transactions

The Company engaged a company that is controlled by an entity that has significant influence over Burcon for the following related party transactions:

Included in office supplies and services in general and administrative expenses (“G&A expenses”) for the three and nine months ended December 31, 2014 is $17,466 and $52,397, respectively (2013 - $15,791 and $47,372) for office space rental, services, and equipment rental.

For the three and nine months ended December 31, 2014, included in management fees in G&A expenses is $7,699 and $23,861, respectively (2013 - $7,738 and $27,227) for services provided. At December 31, 2014, $1,635 (March 31, 2014 - $1,423) of this amount is included in accounts payable and accrued liabilities. For the three and nine months ended December 31, 2014, included in interest and other income is $3,859 and $17,827, respectively (2013 - $2,367 and $9,358) for management services provided. At December 31, 2014, $1,494 (March 31, 2014 - $1,424) of this amount is included in amounts receivable. Included in share issue costs are fees of $nil and $1,050 incurred during the three and nine months ended December 31, 2014, respectively (deferred financing costs as at March 31, 2014 - $2,550) for administrative services provided directly for financing-related activities, of which $nil is included in accounts payable and accrued liabilities (March 31, 2014 - $1,035).

During the quarter ended September 30, 2014, the Company issued warrants to ITC Corporation Limited related to the rights offering (note 5(a)) and recorded the estimated fair value of $183,053 as financing expense (note 6).

Key management compensation

Key management includes the Company’s CEO, COO and Directors. For the nine months ended December 31, 2014 and 2013 remuneration of key management comprises:

Financial instruments

Credit risk

The financial instruments that potentially expose the Company to a concentration of credit risk are cash and cash equivalents and amounts receivable. The Company’s cash and cash equivalents may comprise interest- bearing savings instruments, with Canadian chartered banks. The Company limits its exposure to credit loss by placing its cash and cash equivalents and short-term investments with two Canadian chartered banks.

Interest rate risk

All of the Company’s financial instruments are non-interest bearing except for cash and cash equivalents that earn interest at variable market rates. Burcon’s cash and cash equivalents are held at two Canadian chartered banks to maximize interest and to diversify risk. For the three and nine months ended December 31, 2014, the weighted average interest rate earned on the Company’s cash and cash equivalents was 1.18% and 1.23%, respectively (2013 - 1.15% and 1.17%). The impact of a 1% strengthening or weakening of interest rate on the Company’s cash and cash equivalents at December 31, 2014 is estimated to be a $30,000 increase or decrease in interest income per year.

Liquidity risk

The Company manages liquidity risk through the management of its capital structure (note 12). It also manages liquidity risk by monitoring actual and forecasted cash flows taking into account current and planned operations. The Company’s estimated minimum contractual undiscounted cash flow requirements for its financial liabilities at December 31, 2014 was $502,171, all of which is due within the next 12 months. Additional information regarding liquidity risk is disclosed in note 1.

Capital disclosures

The Company considers its capital to be its shareholders’ equity.

The Company manages its capital structure to have sufficient resources available to meet day-to-day operating requirements, continue as a going concern and fund its research development program. The Company is dependent on non-operating sources of cash, primarily from issuing equity, to fund its operations and research and development program. The Company monitors its capital and the expected cash flows required to achieve its business objectives to determine its future financing needs. It seeks additional equity capital when deemed appropriate, but there is no assurance that it will be able to secure the necessary capital when required. Additional information regarding capital management is disclosed in note 1.

The Company is not subject to externally imposed capital requirements and there has been no change with respect to the overall capital risk management strategy during the three and nine months ended December 31, 2014.

Subsequent event

Subsequent to December 31, 2014, Burcon completed a private placement of 660,000 common shares at a price of US$2.50 per share for gross proceeds of US$1.65 million, or approximately CA$2.0 million. Burcon is maintaining these funds in a US dollar bank account and, therefore, the funds are subject to the risk of foreign currency fluctuations. The common shares are subject to a four-month hold period, expiring May 23, 2015.