Burcon announces signing of $10 million loan agreement


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Vancouver, British Columbia–(Newsfile Corp. – June 21, 2022) – Burcon NutraScience Corporation (TSX: BU) (NASDAQ: BRCN) (“Burcon“or the”Company“), a global technology leader in the development of plant-based proteins for food and beverages, today announced that it has entered into a loan agreement (the “Loan agreement“) under which Large Scale Investments Limited (the “Lender“), a wholly owned subsidiary of Firewood Elite Limited (“Firewood“), will provide Burcon with a secured loan (the “Ready“) up to $10 million (the “Amount of the loanFirewood is wholly owned by Mr. Alan Chan, Director of Burcon.

Upon satisfaction of certain conditions relating to each tranche, the loan proceeds will be available in two tranches of $5 million each. The first tranche, which is currently available to the Company, has a maturity date of July 1, 2024 and the second tranche will have a maturity date which is 24 months from the closing date of that tranche (in each case, the “Due date“). The Lender will receive a commitment fee of 1% of the undrawn amount of the Loan Amount in respect of each tranche: (i) on the closing date of such tranche and (ii) on each annual anniversary of the date closing date of this tranche. The withdrawn portion of the loan amount will bear interest at the rate of 8% per annum (the “Main balance“). Interest on the principal balance will accrue monthly, not in advance, and will be payable on the due date of the applicable installment.

Net loan proceeds will be used to continue Burcon’s joint venture activities, commercialization efforts, partnership discussions for its plant-based protein technologies, continued research and development of protein extraction and purification technologies of Burcon, work on Burcon’s intellectual property portfolio. and for other general corporate purposes.

Firewood is an insider and related party of Burcon as it currently indirectly owns 22,866,574 common shares of Burcon (“Ordinary actions“), representing approximately 21.03% of the outstanding common shares. In addition, Mr. Alan Chan, a director of Burcon, is also a director of Firewood and the lender, respectively. The loan is considered a “related party transaction” pursuant to to Multilateral Instrument 61-101 – Protection of Minority Holders of Securities in Special Transactions (“MI 61-101Burcon is relying on the exemption available under section 5.7(1)(f) of the minority shareholder approval requirement of NI 61-101. In addition, the loan is exempt from the formal valuation requirement of NI 61-101 as it is a related party transaction under item (j) of the definition of “related party transaction” of NI 61-101. Loan Agreement has been approved by the independent members of Burcon’s Board of Directors, Mr. Alan Chan having abstained from voting Burcon will file a material change report containing the information required under NI 61-101 no later than late June 30, 2022.

“We are delighted to have arranged this non-dilutive financing with a major shareholder of Burcon,” said Peter H. Kappel, Interim CEO and Chairman of the Board of Burcon, adding that “we have laid the foundation for partnerships additional strategies and with this support we can continue our commercialization efforts.”

The loan agreement was conditionally approved by the TSX on June 17, 2022.

About Burcon NutraScience Corporation

Burcon is a global technology leader in the development of plant-based proteins for food and beverages. With over two decades of experience in formulating high-purity proteins that have superior functionality, taste and nutrition, Burcon has amassed an extensive patent portfolio covering its novel vegetable proteins derived from peas, canola, soy , hemp, sunflower seeds, among other source plants. In 2019, Merit Functional Foods Corporation (“Merit Foods“) was established between Burcon and three veteran food industry executives. Merit Foods has since built and commissioned a state-of-the-art protein production facility in Manitoba, Canada, which produces, under license from Burcon, the best-in-class pea and canola protein for the food and beverage industries. www.burcon.ca.

Caution Regarding Forward-Looking Information

The TSX has not reviewed and accepts no 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 United States law. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, including representations regarding the drawdown of the loan, the satisfaction of the closing conditions of the drawdown and the availability of the second tranche of the loan. Forward-looking statements or forward-looking information involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements or forward-looking information may be identified by words such as “anticipate”, “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 plans and Burcon’s expectations include our ability to comply with Nasdaq listing rules, the implementation of our business model and growth strategies; trends and competition in our industry, our future business development, our financial condition and our results of operations and our ability to profitably obtain financing; potential regulatory changes governmental organizations; and other risks and factors detailed herein and from time to time in Burcon’s filings with securities and stock exchange regulators, including in the section entitled “Risk Factors” in Burcon’s Annual Information Form. Burcon for the fiscal year ended March 31, 2021 and its other public filings with Canadian securities regulators on SEDAR at www.sedar.com and with the United States Securities and Exchange Commission on EDGAR at www.sec. gov. This list is not exhaustive of factors that could affect the Company’s forward-looking statements or information. Any forward-looking statement or information speaks only as of the date on which it is made and, except as required by applicable securities laws, Burcon disclaims any intention or obligation to update any forward-looking statement, whether whether as a result of new information, future events or otherwise. Although Burcon believes that the assumptions inherent in forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, investors should not rely on such statements.

Industry contact details
Paul Lam
Director, Investor Relations
Burcon NutraScience Corporation
Tel (604) 733-0896, Toll Free (888) 408-7960
[email protected] www.burcon.ca

Contact Investor
James Carbonara
R.I. Hayden
Tel (646) 755-7412
[email protected]

Media Contact:
Steve Campbell, April
Campbell & Company Public Relations
Tel (604) 888-5267
[email protected]

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/128358

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