Origin Agritech Limited (NASDAQ: SEED) has raised working capital from a single individual through an unsecured convertible note, a structure that ties the Beijing seed developer’s near-term cash position to one holder’s decisions about when to convert and when to ask for money back.

The company furnished a Form 6-K to the U.S. Securities and Exchange Commission on July 31, 2026 setting out the instrument. Its board approved the issuance on July 16, 2026 of a senior convertible promissory note with a principal amount of RMB 15,000,000, which the filing puts at approximately US$2,050,000, to an investor the document identifies only as the Purchaser. The note is dated as of June 30, 2026 and carries a funding date of July 16, 2026. The proceeds are to be paid to Hainan Aoyu Biotechnology Co., Ltd., described in the filing as the company’s PRC operating affiliate, and are earmarked for general working capital.

The terms of the note

Interest runs at 3.98% a year, calculated on a 365 day year for the actual number of days elapsed. The unusual feature is when that interest becomes real money: the filing states that interest accrues and is payable only if and when the purchaser elects repayment in cash, on conversion, or at maturity. The note matures three years from the date the entire principal is funded, a date the document calls the Final Funding Date, and it is unsecured.

From that Final Funding Date until maturity the holder may convert all or part of the outstanding principal into ordinary shares at US$1.50 per share, subject to customary anti-dilution adjustments. After the first anniversary of the Final Funding Date the holder may instead require Origin Agritech to repay principal in cash together with accrued interest, on written notice, with payment due within thirty business days. The company may prepay at any time without penalty, but only with the prior written consent of holders of a majority of the aggregate outstanding principal.

Shares delivered on conversion carry a lock-up of six months from the date of issuance, during which they cannot be sold, transferred, pledged or otherwise disposed of without the company’s prior written consent or another permission under applicable securities laws. Origin Agritech attached the form of the note as Exhibit 4.1 and said the summary in the report is qualified by that document. As of July 31, 2026 the company reported 12,143,526 ordinary shares issued and outstanding, a figure that excludes shares issuable under options, warrants and other convertible securities.

Why the paper is restricted

The note and the underlying shares were issued as a private placement relying on an exemption from registration under the Securities Act of 1933, and both are restricted securities. The statutory basis for that kind of placement sits in Section 4 of the Act, codified at 15 U.S.C. 77d, which exempts transactions by an issuer not involving any public offering. Nothing in the exemption relieves the holder of the resale problem it creates.

That problem is governed by Rule 144. Where the issuer is, and has been for at least 90 days before a sale, subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, a minimum of six months must pass between acquisition of restricted securities from the issuer and any resale in reliance on the rule. Origin Agritech is a reporting foreign private issuer, so the shorter clock applies. The contractual lock-up in the note therefore runs for the same six month span as the shortest available statutory holding period, which means the negotiated restriction adds little beyond what federal law already imposes on this holder.

The balance sheet the note is landing on

Origin Agritech’s most recent interim disclosure, furnished on May 21, 2026 for the six months ended March 31, 2026, shows why a two million dollar facility matters. Net revenue for the first half of fiscal 2026 was RMB49.2 million, or US$7.1 million, against RMB72.3 million a year earlier, a decline the company attributed to a shift in its product portfolio toward new corn seed products and away from external seed tolling. Total operating expenses fell 44% to RMB18.4 million, driven by a 70% drop in general and administrative expenses to RMB7.6 million, while research and development spending rose 11% to RMB5.7 million and selling and marketing costs rose 93% to RMB5.1 million.

The company reported a net loss attributable to it of RMB14.4 million, or US$2.1 million, compared with RMB25.6 million a year earlier. Cash and cash equivalents stood at RMB13.4 million, or US$1.9 million, at March 31, 2026, down RMB2.5 million from RMB15.9 million at September 30, 2025. Total current liabilities were RMB155.6 million, or US$22.5 million, against total assets of RMB92.6 million. Interest expense for the half year was RMB1.6 million, up from RMB0.5 million, which the company said reflected a higher amount of borrowed funds.

The annual report on Form 20-F for the year ended September 30, 2025 sets out the fuller figures. The auditors’ reports for fiscal 2023, 2024 and 2025 all carry a going concern statement. The FY2025 filing records negative operating cash flow of RMB 22.9 million, a net loss of RMB 58.0 million, net current liabilities of RMB 83.3 million, an accumulated deficit of RMB 634.2 million and a shareholders’ deficit of RMB 61.5 million. During that year the company sold 3,859,300 shares under an at-the-market arrangement for gross proceeds of $5.36 million, and paid a cash dividend to non-controlling interests of US$0.15 million.

Analysis: the terms of a single-holder note

Set the note against the at-the-market programme it follows and the two structures differ in mechanism. The ATM raised $5.36 million across a fiscal year by selling stock into the market bid; the note raises roughly US$2,050,000 in a single instrument from one person, at a fixed conversion price, with no immediate dilution. The auditors’ reports have carried a going concern statement for three consecutive fiscal years. What the note gives the holder is a choice of outcome: the holder decides whether this ends as equity at US$1.50 or as a cash claim after twelve months, and can wait a year before choosing.

The interest mechanic works differently from a cash-pay coupon. Coupon that accrues but is payable only on repayment, conversion or maturity means no cash leaves Hainan Aoyu during the life of the instrument unless the holder elects repayment. The company reported RMB13.4 million of cash and RMB155.6 million of current liabilities at March 31, 2026. It also means the 3.98% rate does not measure the full cost of the instrument, because it does not price the conversion right.

The put is the largest single cash exposure the instrument creates. From the first anniversary of the Final Funding Date, the holder can demand RMB 15,000,000 plus accrued interest inside thirty business days. On the March 31, 2026 cash balance that would be most of the company’s liquidity. The filing does not say whether the principal has been funded in full, so the Final Funding Date, and with it both the maturity and the put date, is not fixed by the public record.

Two further limits are worth naming. The disclosure identifies neither the purchaser nor any relationship to the company or its officers, so the public record does not show whether the purchaser is connected to the company or its officers. And the exhibit is a form of note rather than an executed copy, so the terms as summarised are what the board approved rather than what was necessarily signed. The next places to look are the fiscal 2026 annual report, for the funded amount and the accounting classification of the conversion feature, and any subsequent report disclosing conversion or a repayment demand.