Burcon NutraScience Corp Executes $10 Million Loan Agreement with Large Scale Investments Limited to Fund Plant-Based Technology Commercialization Efforts
Burcon NutraScience Corp (TSX:BU, NASDAQ:BRCN) said it has entered into a $10 million loan agreement with Large Scale Investments Limited to fuel joint venture operations and commercialization efforts in plant-based foods .
Large Scale Investments is a wholly owned subsidiary of Firewood Elite Limited, which is owned by Burcon director Alan Chan.
“We are delighted to have arranged this non-dilutive financing with a major Burcon shareholder,” said Peter Kappel, Interim CEO and Chairman of the Board of Burcon. “We have laid the groundwork for additional strategic partnerships and with this support we can continue our commercialization efforts.”
READ: Burcon NutraScience signs term sheet with largest shareholder for proposed $10 million credit facility
Burcon, which is developing plant-based protein technology for food and beverages, said it would use the additional proceeds for partnership discussions for its plant-based protein technologies, further research and development of extraction technologies and Burcon’s protein purification, work on its intellectual property portfolio and for other general corporate purposes.
The loan amount 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 this tranche.
Large Scale Investments will receive a commitment fee of 1% of the undrawn amount of the Loan Amount in respect of each Tranche on the Closing Date of such Tranche and on each annual anniversary of the Closing Date of such Tranche, as a statement.
The drawn portion of the loan amount will bear interest at the rate of 8% per annum. Interest on the Principal Balance will accrue monthly, not in advance, and will be payable on the due date of the applicable portion.
Firewood currently indirectly owns 22,866,574 shares of Burcon, representing approximately 21.03% of the outstanding shares. The loan agreement was approved by independent members of Burcon’s board of directors, with Alan Chan abstaining from voting.
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