October 28, 2021 — (Vancouver, BC) good natured Products Inc. (the “Company” or “good natured®”) (TSX-V: GDNP) today announced that it has closed its previously announced public offering (the “Offering”) of convertible unsecured subordinated debentures (the “Debentures”), for aggregate gross proceeds of $17.25 million which includes the exercise in full by the underwriters of their over-allotment option to sell up to an additional $2.25 million principal amount of Debentures. The Offering was co-led by National Bank Financial Inc. and Beacon Securities Limited, with a syndicate including Canaccord Genuity Corp., Integral Wealth Securities Limited, Raymond James Ltd., Paradigm Capital Inc., and PI Financial Corp.
The Company also announced the signing of the previously announced $35.8 million senior credit facility with National Bank of Canada (“National Bank”).
The Debentures will trade on the TSX Venture Exchange (“TSX‐V”) under the symbol “GDNP.DB”. It is anticipated that the Debentures will commence trading on October 28, 2021.
The debentures mature on October 31, 2026, and accrue interest at the rate of 7.00%, payable semi-annually in arrears on April 30 and October 31 of each year, commencing April 30, 2022. The Debentures are convertible at the holder’s option into fully paid common shares of the Company (“Shares”) at any time prior to the earlier of 5:00 pm Eastern Time on October 31, 2026 (the “Maturity Date”), and the business day immediately preceding the date fixed for any redemption. The conversion price is $1.06 for each common share, subject to adjustment in certain circumstances.
The net proceeds of the Offering will be used to fund the redemption of the Company’s indebtedness under its existing credit facilities, in conjunction with borrowings under the new senior credit facility. In addition to this, proceeds will be available for the Company to pursue growth initiatives and working capital requirements.
The Debentures are not to be redeemable by the Company at any time on or before October 31, 2024, except upon the occurrence of a change of control of the Company in accordance with the terms of the debenture indenture entered into with respect to the Offering. After October 31, 2024 and prior to October 31, 2025, the Debentures will be redeemable by the Company on not more than 60 days and not less than 30 days prior notice at a price payable equal to $1,000 per Debenture plus accrued and unpaid interest, provided that the volume weighted average trading price of the Shares on the TSX‐V for the 20 consecutive trading days ending five trading days prior to the applicable date on which the notice of redemption is given exceeds 125% of the conversion price. On or after October 31, 2025 and prior to the Maturity Date, the Debentures will be redeemable by the Company on not more than 60 days and not less than 30 days prior notice at a price payable equal to $1,000 per Debenture plus accrued and unpaid interest.
A cash commission of 5% of gross proceeds of the Offering was paid to the Underwriters at closing.
The Debentures were offered pursuant to a short-form prospectus dated October 21, 2021 (the “Prospectus”) filed in each of the provinces of Canada other than Quebec, which describes the terms of the Offering. A copy of the short-form prospectus is available under the Company’s profile on SEDAR at www.sedar.com.
The Debentures and the Common Shares issuable upon the conversion or redemption of the Debentures, have not been and will not be registered under the U.S. Securities Act of 1933 (the “1933 Act”) or state securities laws. Accordingly, the Debentures may not be offered or sold to U.S. persons except pursuant to applicable exemptions from the registration requirements of the 1933 Act and applicable state securities laws is available.
$35.8 Million Senior Credit Facility with National Bank
The secured senior credit facility consists of:
- $15 million revolving working capital facility with a 2-year term and an uncommitted $10 million accordion available at the discretion of National Bank;
- $4 million revolving term credit facility to finance capital expenditures, amortized over 84 months; and
- $6.755 million non-revolving term credit facility.
Indebtedness under the senior credit facility would bear interest at the Canadian Bankers’ Acceptance Rate plus 2.75% and be secured by all existing and future subsidiaries of the Company, including a first mortgage on the Company’s Brampton, ON manufacturing facility to replace the existing mortgage on such facility, with a 25-year amortization.
The credit agreement relating to the senior credit facility has been signed, and closing is expected to occur shortly upon satisfaction of the conditions precedent set out in the credit agreement, including payouts of existing secured creditors using the proceeds of the convertible debentures.
“The closing of these new funding agreements marks a key financing milestone for the Company, significantly strengthening our working capital position while reducing our blended average interest rate on our debt and materially reducing our principal payments over the next three years” stated Paul Antoniadis, CEO of good natured®. “We now have additional resources to help fund organic growth initiatives and our acquisition strategy”.
About good natured Products Inc.
good natured® is passionately pursuing its goal of becoming North America’s leading earth-friendly product company by offering the broadest assortment of eco-friendly options made from plants instead of petroleum. We’re all about making it easy and affordable for business owners and consumers to switch to better everyday products® made from renewable materials and free from chemicals of concern.
Part of the sustainable consumer goods market, good natured® offers over 400 products and services through wholesale and retail channels, including our own e-commerce stores. From plant-based home organization products to compostable food containers, bioplastic industrial supplies and medical packaging, we’re focused on delivering a great customer experience and to make more plant-based products readily accessible to more people as the path to deliver meaningful environmental and social impact.
For more information: goodnaturedproducts.com
On behalf of the Company:
Paul Antoniadis – Executive Chair & CEO
1-877-286-0617 ext. 113
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibilities for the adequacy or accuracy of this release.
Cautionary Statement Regarding Forward-Looking Information
Information regarding the Offering contained in this news release constitutes forward-looking information within the meaning of securities laws.
The forward-looking information contained in this news release are based on certain key expectations and assumptions made by the Company, including expectations and assumptions regarding prompt satisfaction of the remaining conditions precedent to funding under the credit agreement, its capital resources for the three years and the use of the net proceeds of the Offering. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Forward looking information is subject to various risks and uncertainties, including without limitation the discretion of the Company with respect to the use of proceeds and other risks and uncertainties contained in its continuous disclosure documents available at www.SEDAR.com.
Other than as required under securities laws, we do not undertake to update this information at any particular time.
Forward-looking information contained in this news release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.