good natured Products Inc. Announces Closing of its $23.1 Million Bought Deal Offering & Debt Retirement - 03/04/2021 8:31:00 AM
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VANCOUVER, BC, March 4, 2021 /CNW/ - good natured Products Inc. (the "Company" or "good natured®") (TSXV: GDNP), a North American leader in earth-friendly plant-based products, today announced that it has closed its previously announced bought deal short form prospectus offering of common shares of the Company (the "Offering"). Pursuant to the Offering, the Company issued 19,262,500 common shares in capital of the Company (the "Offered Shares") at an issue price of $1.20 per common share (the "Issue Price") for gross proceeds of $23,115,000.
The over-allotment option granted by the Company to the Underwriters to acquire up to 15% of the Offered Shares at the Issue Price exercisable in whole or in part at any time, and from time to time, up to 30 days following the closing of the Offering (the "Over-Allotment Option") was exercised concurrently with the closing of the Offering. The issuance of the 19,262,500 Offered Shares includes the 2,512,500 Offered Shares issued pursuant to the exercise of the Over-Allotment Option.
Beacon Securities Limited ("Beacon") and Canaccord Genuity Corp. acted as co-lead underwriters and co-bookrunners in connection with the Offering on behalf of a syndicate including Integral Wealth Securities Limited, Raymond James Ltd., and Paradigm Capital Inc. (the "Underwriters").
The Underwriters received a cash commission of $1,386,900 representing 6.0% of the aggregate gross proceeds of the Offering; and 1,155,750 compensation options (the "Compensation Options") representing 6.0% of the aggregate number of Offered Shares issued pursuant to the Offering. Each Compensation Option shall entitle the holder thereof to acquire one Offered Share at the Issue Price for a period of 24 months from the date hereof.
The net proceeds of the Offering are expected to be used by the Company for potential future acquisitions, general working capital purposes, and capital expansion projects.
Insiders of the Company subscribed for a total of 41,200 Offered Shares for total gross proceeds of $49,440 under the Offering. Participation by insiders constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(1)(a) of MI 61-101, as neither the fair market value of the Offered Shares issued to such related parties nor the consideration paid by such related parties exceeded 25% of the Company's market capitalization. The Company did not file a material change report in respect of the related party transaction 21 days prior to the closing of the Offering as the details of the participation of insiders of the Company had not been confirmed at that time. Further details will be provided in a material change report to be filed by the Company subsequent to the dissemination of this press release.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933 (the "US Securities Act") or any states securities laws. They may not be offered or sold within the United States or to US Persons (as defined in Regulation S under the US Securities Act) unless registered under the US Securities Act and applicable state securities laws or an exemption from such registration is available.
Business Development Bank of Canada Debt Retirement
The Company also announced the closing of its transaction with BDC Capital inc., a subsidiary of the Business Development Bank of Canada ("BDC"), for the conversion of $2.5 million USD (at an exchange rate of $1.2753 CAD/USD, being the Bank of Canada end of day exchange rate of February 8, 2021) of the Company's existing long term credit facility into Offered Shares at the Issue Price (the "Share Settlement"). The Company issued 2,656,875 Offered Shares to BDC as part of the transaction, which increased its total ownership in good natured® to 12,323,542 Offered Shares. In addition, the Company will pay US$738,311 in cash to BDC to further reduce its outstanding debt to BDC. The Offered Shares issued to BDC pursuant to the Share Settlement will be subject to a four-month hold period from the date hereof. The Company's material financing agreements with BDC can be found on its SEDAR profile at www.sedar.com.
"BDC has been an amazingly supportive partner since we began our partnership in June 2019 and we are very happy to have them as an even more meaningful owner of the Company," stated Paul Antoniadis, CEO of good natured®. "The debt retirement further strengthens our ability to execute on our organic and acquisition growth strategy".
"The strong commercial success good natured® has achieved to date is a prime example of the outcome BDC has sought to enable by providing growth capital to emerging earth-friendly Canadian champions," stated Jahangir Bhatti, Director, Cleantech Practice at BDC Capital. "BDC's original financing helped facilitate the robust organic growth good natured® has delivered along with the acquisitions of Shepherd Thermoforming and Integrated Packaging Films. The debt conversion will lower the Company's debt outstanding and cash interest costs enabling more resources for future growth."
The good natured® corporate profile can be found at: investor.goodnaturedproducts.com
