good natured Products has secured $10 million in growth capital from BDC Capital to further accelerate organic growth.
The BDC financing will be drawn down in up to three tranches. The first tranche of $5 million is expected to be advanced to the company upon receipt of final TSX Venture Exchange approval regarding the related amendments to the company’s outstanding convertible debentures, described below.
The first tranche will be used for working capital to further accelerate organic growth. The remaining $5 million may be advanced at a later date for use in funding acquisition opportunities to expand the company’s customer base, product assortment and market reach, subject to satisfaction of certain conditions described below.
“BDC has recognized the significant business opportunity in our mission to reduce reliance on fossil fuels and remove toxicity from everyday products and packaging,” said Paul Antoniadis, CEO of good natured. “
“Petroleum-based plastics continue to be a significant environmental concern with strong interest for an environmentally friendly alternative from governments, corporations and individuals,” said Susan Rohac, vice president, Cleantech Practice at BDC. “good natured is poised to be that alternative with its proprietary plant-based bioplastic products and packaging, along with commercially competitive pricing and performance compared to incumbent plastics.”
The company may borrow from the BDC Financing the aggregate principal amount of up to $5 million which has been approved by the holders of the company’s existing unsecured convertible Debentures due February 2022. The BDC financing also contemplates up to two additional tranches for a combined $5 million in acquisition financing. However, such tranches may only be advanced if the debentures have been repaid, fully converted to equity, refinanced in accordance with the terms of the BDC financing, amended to extend the maturity date thereof (which would be subject to a separate consent requirement of the debenture holders) or any combination thereof.
Comerica Bank will remain as a senior lender to the company and will provide the company with a $1 million operating line of credit with a variable interest rate of prime + 1% at the closing of the initial $5 million first tranche of the BDC financing.
BDC has entered into a fifth loan extension agreement with Comerica. In accordance with the provisions of this extension and of the LOO. The proceeds will be used to repay an existing C$325,000 ($244,050)term loan with Comerica and for procurement of raw materials, production molds and increase in safety stock levels of inventories.
good natured produces and distributes one of North America’s widest assortments of consumer products and packaging made from the highest possible percentage of renewable, plant-based materials and no BPAs, phthalates or other chemicals of concern.