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VANCOUVER, BC, May 9, 2022
/CNW/ - Good natured Products Inc. (the "Company" or
"good natured®") (TSXV: GDNP), a North
American leader in plant-based products, today announced that it
will be seeking a 5 business day extension of the time period to
file the prospectus supplement for its previously announced bought
deal offering of units (the "Offering") described in the Company's
press releases of May 4, 2022 and
May 5, 2022, pending resolution of an
issue described further below.
On Friday, May 6, 2022, the
Company was made aware that for the fourth quarter of 2021, the
Company has not met its fixed charge coverage ratio ("FCCR")
covenant under the senior credit agreement dated October 28, 2021 between the Company and its
primary lender. As of the date of this press release, the Company
is of the view that, based on interpretation, there may not be a
breach of the FCCR covenant. If it is determined there was a breach
of the FCCR covenant, the Company and its primary lender would work
on a plan to try to waive that covenant for the period ended
December 31, 2021 and the underlying
default under the senior credit agreement. If a breach is confirmed
this may impact the classification of debt obligations in the
Company's financial statements for the year ended December 31, 2021.
The Company reaffirms that it expects to report revenue for the
first quarter of 2022 (Q1 2022) in the $24.0
million to $26.0 million
range, an increase of approximately 200% to 230%, compared to
$7.9 million for the three months
ended March 31, 2021, with gross
margin estimated between 24% and 26%. The Company intends to
proceed with its acquisition of the assets of Formtex Plastics
Corporation (the "Acquisition"), as announced in its press release
dated May 4, 2022. The Company also
believes to be in compliance with the FCCR covenant and all other
covenants, under the senior credit agreement with its primary
lender for Q1 2022.
The Company, with Beacon Securities Limited and National Bank
Financial Inc. as co-lead underwriters, have entered into an
amendment to the previously announced engagement letter dated
May 4, 2022 that provides the Company
with up to 5 additional business days to file a prospectus
supplement relating to the Offering, subject to the Company
obtaining exemptive relief from the B.C. securities commission to
permit the foregoing. The Company will be contacting the B.C.
securities commission to seek such exemptive relief, but at this
time, there can be no assurances that such relief will be
available.
The good natured® corporate profile can be found at:
investor.goodnaturedproducts.com
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 plant-based products made from rapidly renewable resources
instead of fossil fuels. The Company is focused on making it easy
and affordable for business owners and consumers to shift away from
petroleum to better everyday products® that use more
renewable materials, less fossil fuel, and no chemicals of
concern.
good natured® offers over 400 products and services
through wholesale, direct to business, and retail channels. From
plant-based home organization products to certified compostable
food containers, bio-based industrial supplies and medical
packaging, the Company is focused on making plant-based products
more readily accessible to people as a means to create 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
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
This press release contains "forward-looking statements"
within the meaning of applicable securities laws. Forward-looking
statements can be identified by words such as: "anticipate,"
"intend," "plan," "budget," "believe," "project," "estimate,"
"expect," "scheduled," "forecast," "strategy," "future," "likely,"
"may," "to be," "could,", "would," "should," "will" and similar
references to future periods or the negative or comparable
terminology, as well as terms usually used in the future and the
conditional. Examples of forward-looking statements include, among
others, the expected closings of the Acquisition and the Offering,
the availability of exemptive relief to permit the prospectus
supplement for the Offering to be filed late, the availability of a
waiver of any potential breach of the FCCR covenant under the
Credit Agreement, the possibility of converting the Offering into
another form of securities offering such as a private placement, or
completing a different offering of securities in the future, and
the possibility of a requirement to restate the Company's
previously filed annual financial statements for the year ended
December 31, 2021.
By their nature, forward-looking statements involve known and
unknown risks, uncertainties, changes in circumstances and other
factors that are difficult to predict and many of which are outside
of the Company's control which may cause our actual results,
performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
the Company's current beliefs, expectations and assumptions
regarding the Company's ability to successfully close the
Acquisition and the Offering, the future of its business, future
plans and strategies, projections, anticipated events and trends,
general market conditions, the economy and other future conditions.
Therefore, you should not rely on any of these forward-looking
statements. Important factors that could cause actual results and
financial conditions to differ materially from those indicated in
the forward-looking statements include, among others:
- The risk that exemptive relief to permit the Company to file
a prospectus supplement late for the Offering will not be
available, or that the Company may be required to terminate the
Offering and to have a cooling off period before any offering of
securities may be permitted.
- The risk that the Company may be required to restate its
annual financial statements if the FCCR covenant was
breached.
- The risk that the Company, if required to restate its annual
financial statements, may not be able to proceed with any offering
of securities until restated annual financial statements are
filed.
- The risk that the primary lender does not provide a waiver
of any breach of the FCCR covenant and attendant risk that the
Company is in default under its senior credit agreement with the
primary lender.
- The risk that the closing conditions for completion of the
Offering are not satisfied.
- The risk that the closing conditions for completion of the
Acquisition are not satisfied, including due to lack of
financing.
- Risks relating to general economic, market and business
conditions.
- Unforeseen delays in the timelines for any of the
transactions or events described in this press release.
The Company considers its assumptions to be reasonable based
on currently available information, but cautions the reader that
its assumptions regarding future events, many of which are beyond
the control of the Company, may ultimately prove to be incorrect
since they are subject to risks and uncertainties that affect the
Company and its businesses. When relying on the Company's
forward-looking statements and information to make decisions,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. The Company
has assumed that the material factors referred to above will not
cause such forward-looking statements and information to differ
materially from actual results or events. However, there can be no
assurance that such assumptions will reflect the actual outcome of
such items or factors.
Other than as required under securities laws, the Company
does not undertake to update this information at any particular
time.
Forward-looking statements contained in this news release are
based on the Company's current estimates, expectations and
projections regarding, among other things, sales volume and pricing
which it believes are reasonable as of the current date. The reader
should not place undue importance on forward-looking statements and
should not rely upon these statements as of any other date. All
forward-looking statements contained in this news release are
expressly qualified in their entirety by this cautionary
statement.
SOURCE Good Natured Products