New Private Placement of Warrants to Special Investors Vancouver, British Columbia--(Newsfile Corp. - May 17, 2022) - good natured Products Inc. (TSXV: GDNP) (the "Company" or "good natured®"), a North American leader in plant-based products, today announced a non-brokered private placement (the "Offering") of 15,000,000 of special warrants (the "Special Warrants") of the Company at a price of $0.40 per Special Warrant (the "Issue Price") for aggregate gross proceeds up to $6 million. The Company expects the Offering to be fully subscribed by strategic investors.
Each Special Warrant shall be exercisable, for no additional consideration and with no further action on the part of the holder thereof, into one unit of the Company (a "Unit") at the earlier of:
- the third business day after the date upon which a prospectus supplement to the Company's base shelf prospectus dated January 19, 2022 (the "Supplement") qualifying the distribution of the Units issuable upon exercise ?of the Special Warrants has been filed with the applicable securities regulatory authorities in ?the Canadian jurisdictions in which purchasers of the Special Warrants are resident; and
- the date which is 4 months and one day following the closing of the Offering.
The Company will use its commercially reasonable efforts to prepare and file the Supplement as soon as reasonably practicable on or after the closing of the Offering, provided, however, that there is no assurance that the Supplement will be filed prior to the expiry of the statutory four month hold period.
Each Unit will consist of one common share in the capital of the Company (a "Unit Share") and one half of one common share purchase warrant (each whole warrant, a "Warrant") of the Company. Each full Warrant will entitle the holder thereof to acquire one common share (a "Warrant Share") of the Company at a price per Warrant Share of $0.52 for a period of 24 months from the closing of the Offering. The expiry date of the Warrants will be subject to acceleration upon 30 days notice by the Company if the volume weighted average trading price of the common shares of the Company exceeds $0.65 for a period of 20 consecutive trading days ending at any time following the date which is 12 months following the Closing Date of the Offering.
The Company intends to pay a finder's fee and or an advisory fee in connection with the Offering. The finders' fee and the advisory fee will not exceed, in the aggregate, a cash payment equal to 6% of the gross proceeds raised in the Offering and the issuance of compensation options to purchase common shares equal to 6% of the number of Special Warrants sold in the Offering at a price per common share of $0.40.
The net proceeds of the Offering are expected to be used by the Company to fund the acquisition of FormTex Plastics Inc., announced in a press release dated May 4, 2022, working capital to support organic growth initiatives of the Company, and initiatives to improve the Company's operational efficiency. The Offering is subject to a number of conditions, including without limitation, approval of the TSX Venture Exchange.
Prior to the filing of the Supplement and the automatic exercise of the Special Warrants, the Special Warrants will be subject to a four-month hold period from the closing of the Offering in addition to any other restrictions under applicable law.
Good or bad, not sure, this press release sure is a lot of jargon to go through. I guess they found themselves some "angel" investors. Finders fee seems excessive, but maybe worth it so as to save FormTex acquisition. Not to familiar with how warrants work, but seems to be how management has structured deals in the past. Anyways news is out, let's see how the market reacts tomorrow.