DGAP-News: Burcon Nutrascience
Corp.: BURCON ANNOUNCES CONVERTIBLE NOTE FINANCING
DGAP-News: Burcon NutraScience Corp. / Key word(s): Financing
Burcon NutraScience Corp.: BURCON ANNOUNCES CONVERTIBLE NOTE FINANCING
08.04.2016 / 13:00
The issuer is solely responsible for the content of this announcement.
BURCON ANNOUNCES CONVERTIBLE NOTE FINANCING
Vancouver, British Columbia, April 7, 2016 - Burcon NutraScience
Corporation (TSX: BU; NASDAQ: BUR) ("Burcon") announced today that it has
entered into a convertible note purchase agreement on April 7, 2016
pursuant to which it will issue a convertible note (the "Note") to Large
Scale Investments Limited (the "Lender"), a wholly-owned subsidiary of ITC
Corporation Limited ("ITC"), for the principal amount of $2,000,000 (the
Funding by the Lender and the issuance of the Note is expected to occur
after May 4, 2016 but no later than May 13, 2016. The Note will bear
interest at a rate of 8% per annum, calculated daily, compounded monthly.
Interest will accrue on the Principal Amount and will be payable on the
earlier of three years from the issue of the Note, the occurrence of an
event of default as set out in the Note, or voluntary prepayment by Burcon
(the "Maturity Date").
The Lender may convert the Principal Amount in whole or in part into common
shares in the capital of Burcon ("Common Shares") at any time commencing on
or after July 1, 2016 and up to and including the Maturity Date. The
conversion price is $4.01 per Common Share, which represents a premium of
approximately 24% over the volume weighted average trading price of the
Common Shares on the Toronto Stock Exchange (the "TSX") for the 5 trading
days immediately before April 7, 2016 (the "Conversion Price"). Burcon
also has the right, before the Maturity Date, upon written notice to the
Lender of not less than thirty (30) days, to prepay in cash all or any
portion of the Principal Amount by paying to the Lender an amount equal to
the Principal Amount to be prepaid multiplied by 110%. At any time on or
after July 1, 2016 and up to the end of such 30-day notice period, the
Lender will have the right to convert the Principal Amount in full or in
part, into Common Shares at the Conversion Price. The Note and any Common
Shares issued upon the conversion of the Note will be subject to a four
month hold period under applicable Canadian securities laws.
The payment of the Principal Amount and all accrued and unpaid interest
thereon will be subordinated in right of payment to any amount owing in
respect of secured indebtedness of Burcon. Subject to prior TSX approval
and the consent of the Lender, Burcon may pay any interest that is due and
payable under the Note through the issuance of Common Shares at a
conversion price equal to the volume weighted average trading price of the
Common Shares on the TSX for the 5 trading days immediately prior to the
date such interest is due and payable.
The net proceeds from the issue of the Note will be used for continued
research and development of Burcon's protein extraction and purification
technologies, commercialization of Burcon's pea protein technology,
continued work on Burcon's intellectual property portfolio and general
ITC is an insider and related party of Burcon as it currently holds
7,477,821 Common Shares, representing approximately 20.87% of the
outstanding Common Shares as of the date hereof. In addition, Mr. Alan Chan
and Ms. Rosanna Chau, directors of Burcon, are also directors of ITC.
Accordingly, the Note is considered a "related party" transaction pursuant
to Multilateral Instrument 61-101 - Protection of Minority Security Holders
in Special Transactions ("MI 61-101"). Burcon is relying on the exemptions
available under sections 5.5(a) and 5.7(a) of MI 61-101 from the formal
valuation and minority shareholder approval requirements, respectively. The
Note was approved by the board of directors of Burcon with Mr. Alan Chan
and Ms. Rosanna Chau abstaining from participating in the vote. Burcon
will file a material change report containing the prescribed disclosure
under MI 61-101 on or before April 15, 2016.
"We are pleased to have arranged this financing with ITC Corporation
Limited and appreciate their continued support." said Johann Tergesen,
Burcon's president and chief operating officer, adding, "Burcon has
benefited from the support of ITC Corporation Limited right back to our
founding in 1998."
The issuance of the Note is subject to the approval of the TSX.
About Burcon NutraScience Corporation
Burcon NutraScience is a leader in developing functionally and
nutritionally valuable plant- based proteins. The company has developed a
portfolio of composition, application, and process patents originating from
a core protein extraction and purification technology.
Burcon's CLARISOY(TM) soy protein offers clarity and high-quality protein
nutrition for low pH beverage systems and excellent solubility and
exceptionally clean flavor at any pH; Peazazz(R) is a uniquely soluble and
clean-tasting pea protein; and Puratein(R), Supertein(R) and Nutratein(R)
are canola protein isolates with unique functional and nutritional
attributes. For more information about the company, visit www.burcon.ca.
The TSX has not reviewed and does not accept 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 the U.S. Private Securities Litigation Reform Act of
1995 and applicable Canadian securities legislation. Forward-looking
statements or forward-looking information involve risks, uncertainties and
other factors that could cause actual results, performances, prospects and
opportunities to differ materially from those expressed or implied by such
forward-looking statements. Forward- looking statements or forward-looking
information can 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 other than statements of historical fact included
in this release are forward-looking statements, including, without
limitation, statements regarding the issuance of the Note, conversion of
the Note into Common Shares, prepayment of the Note, use of proceeds,
filing of the material change report and other expectations, intentions and
plans contained in this press release. 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 Burcon's plans and expectations include the actual results
of business negotiations, marketing activities, adverse general economic,
market or business conditions, regulatory changes and other risks and
factors detailed herein and from time to time in the filings made by Burcon
with securities regulators and stock exchanges, including in the section
entitled "Risk Factors" in Burcon's annual information form dated June 23,
2015 filed with the Canadian securities administrators on www.sedar.com and
contained in Burcon's 40-F filed with the U.S. Securities and Exchange
Commission on www.sec.gov. Any forward-looking statement or information
only speaks as of the date on which it was made and, except as may be
required by applicable securities laws, Burcon disclaims any intent or
obligation to update any forward-looking statement, whether as a result of
new information, future events or otherwise. Although Burcon believes that
the assumptions inherent in the forward-looking statements are reasonable,
forward-looking statements are not guarantees of future performance, and
accordingly, investors should not rely on such statements.
CLARISOY is a trademark of Archer Daniels Midland Company.
Media & Industry Contact:
Director, Corporate Development Burcon NutraScience Corporation
Tel (604) 733-0896, Toll-free (888) 408-7960
08.04.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
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