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 Offering
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 Contact: 1-604-566-8466
Investor
Contact: Spencer
ChurchillInvestor Relations1-877-286-0617 ext.
113invest@goodnaturedproducts.com
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.
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