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VANCOUVER - Burcon NutraScience Corporation (TSX:BU) (OTCQB:BRCNF) announced Wednesday a non-brokered private placement of convertible debentures for up to $4 million, with company insiders committing to at least half of the total amount. The offering represents approximately 19% of the company’s current market capitalization of $20.73 million, according to InvestingPro data.
The convertible debentures will carry a 15% annual interest rate, mature in 48 months, and be convertible into common shares at $2.27 per share, according to the company’s press release statement. The conversion price represents a 33.5% premium to the current share price of $1.70, while InvestingPro analysis suggests the stock is slightly undervalued based on its Fair Value model. The offering is subject to Toronto Stock Exchange approval.
After the first anniversary of issuance, Burcon may prepay the debentures if its share price exceeds $4.54 for 14 consecutive trading days.
The plant-based protein technology company intends to use proceeds to fund inventory, labor and production capability investments, plan for future infrastructure, handle general corporate expenses, and repay a recently executed $700,000 short-term loan.
The offering is expected to close around November 28, 2025, pending regulatory approvals.
Burcon also disclosed it entered a four-month loan agreement on November 7 with an entity related to a company director for $700,000 at 12% annual interest. This loan will be repaid upon closing of the convertible debenture offering.
Both transactions qualify as related party transactions under securities regulations, with Burcon relying on exemptions from formal valuation and minority shareholder approval requirements as insider participation does not exceed 25% of the company’s market capitalization.
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