Burcon NutraScience arranges $4M debenture financing

Executive Summary

• Burcon NutraScience Corp. announced a non-brokered private placement of convertible debentures with a maximum aggregate principal amount of $4 million, with insiders committing to a minimum of $2 million.
• The company simultaneously executed a short-term unsecured loan agreement for $700,000 from a related party to serve as bridge financing until the debenture offering closes.
• Proceeds from the debentures are intended to accelerate growth through inventory, labor, and production investments, while the loan proceeds will support commercial production and general corporate purposes.

Key Details

• Convertible Debentures Structure:
  • Aggregate Principal: Up to $4,000,000.
  • Insider Commitment: Minimum $2,000,000.
  • Interest Rate: 15% per annum, payable in full upon maturity.
  • Maturity: 48 months from issuance date.
  • Conversion Price: $2.27 per share.
  • Prepayment/Acceleration Option: After the first anniversary, if the VWAP is above $4.54 (200% of conversion price) for 14 consecutive trading days, the company may prepay principal and accrued interest. If holders do not accept prepayment within 30 days, the company may accelerate conversion into shares at the conversion price.
  • Resale Restriction: Four months and one day statutory resale restriction applies to debentures and underlying shares.
  • Regulatory Status: Subject to TSX approval; considered a related party transaction under MI 61-101, relying on exemptions from formal valuation and minority shareholder approval as insider participation does not exceed 25% of market cap.
• Loan Agreement:
  • Amount: $700,000 unsecured loan.
  • Lender: Entity related to a Burcon director.
  • Term: Expires on the earlier of four months or the closing of the debenture offering.
  • Draw Date: November 7, 2025.
  • Interest Rate: 12% per annum, payable monthly.
  • Commitment Fee: $7,000.
  • Use of Proceeds: Accelerate commercial production/sales of proteins, general corporate purposes, and bridge financing until debenture closing.
  • Regulatory Status: Conditionally approved by TSX on Nov 4, 2025; approved by independent directors with interested director abstaining.
• Use of Proceeds (Debentures):
  • Accelerate growth via investments in inventory, labor, and production capability.
  • Plan future infrastructure investments for customer demand.
  • General corporate purposes.
  • Repay the short-term loan described above.
• Closing: Expected on or about November 28, 2025, subject to subscription agreements and regulatory approvals.

Notable Quotes

• "We are advancing through a key stage of growth as customer demand translates into commercial expansion... This financing ensures we have the capital flexibility to execute with speed and accelerate our growth trajectory. The high level of insider participation reaffirms confidence in our strategic direction and the opportunities ahead." — Kip Underwood, Chief Executive Officer