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Good Natured Products Inc. Provides Update on Restructuring of Business Operations and Financial Affairs

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Good Natured Products Inc. (GDNPF) has entered into a binding subscription agreement with HUK 149 , an affiliate of Hilco Capital, as part of its restructuring under CCAA proceedings. The transaction involves a $315,000 cash consideration and includes the incorporation of a Residual Company to hold certain excluded assets and liabilities. The Purchaser will acquire 100% of new common shares while existing shares will be cancelled without consideration. Current shareholders will not receive any payments or distributions, and the company will be delisted from TSX Venture Exchange. The transaction is expected to close around October 31, 2024, subject to court approvals.

Good Natured Products Inc. (GDNPF) ha stipulato un accordo di sottoscrizione vincolante con HUK 149, un'affiliata di Hilco Capital, nel contesto della ristrutturazione ai sensi delle procedure CCAA. L'operazione prevede un corrispettivo in contante di 315.000 dollari e include l'incorporazione di una Residual Company per gestire a determinati beni e passività escluse. L'acquirente acquisirà il 100% delle nuove azioni ordinarie, mentre le azioni esistenti saranno annullate senza corrispettivo. Gli attuali azionisti non riceveranno alcun pagamento o distribuzione e la società sarà esclusa dalla TSX Venture Exchange. Si prevede che l'operazione si concluda intorno al 31 ottobre 2024, soggetta all'approvazione del tribunale.

Good Natured Products Inc. (GDNPF) ha firmado un acuerdo de suscripción vinculante con HUK 149, una afiliada de Hilco Capital, como parte de su reestructuración bajo las disposiciones del CCAA. La transacción implica una consideración en efectivo de 315,000 dólares y incluye la incorporación de una Residual Company para mantener ciertos activos y pasivos excluidos. El adquirente adquirirá el 100% de las nuevas acciones comunes, mientras que las acciones existentes serán canceladas sin contraprestación. Los accionistas actuales no recibirán ningún pago o distribución, y la empresa será retirada de la TSX Venture Exchange. Se espera que la transacción se cierre alrededor del 31 de octubre de 2024, sujeta a las aprobaciones judiciales.

Good Natured Products Inc. (GDNPF)는 CCAA 절차에 따른 구조 조정의 일환으로 Hilco Capital의 계열사인 HUK 149와 구속력이 있는 구독 계약을 체결했습니다. 이 거래는 315,000 달러의 현금 대가를 포함하며 특정 제외 자산과 부채를 보유하기 위한 Residual Company의 설립이 포함됩니다. 구매자는 새로운 보통주 100%를 인수하게 되며 기존 주식은 무상으로 취소됩니다. 현재 주주들은 어떤 지급이나 배당도 받지 않으며, 회사는 TSX Venture Exchange에서 상장폐지됩니다. 이 거래는 2024년 10월 31일쯤에 종료될 것으로 예상되며, 법원의 승인을 조건으로 합니다.

Good Natured Products Inc. (GDNPF) a conclu un accord de souscription contraignant avec HUK 149, une filiale de Hilco Capital, dans le cadre de sa restructuration selon les procédures du CCAA. La transaction implique une contrepartie en espèces de 315 000 dollars et comprend la création d'une Residual Company pour détenir certains actifs et passifs exclus. L'acheteur acquerra 100% des nouvelles actions ordinaires tandis que les actions existantes seront annulées sans contrepartie. Les actionnaires actuels ne recevront aucun paiement ni distribution, et la société sera radiée de la TSX Venture Exchange. La transaction devrait être finalisée aux alentours du 31 octobre 2024, sous réserve de l'approbation des tribunaux.

Good Natured Products Inc. (GDNPF) hat eine verbindliche Subskriptionsvereinbarung mit HUK 149, einem Tochterunternehmen von Hilco Capital, im Rahmen seiner Umstrukturierung nach dem CCAA abgeschlossen. Die Transaktion umfasst eine Barzahlung von 315.000 Dollar und die Gründung einer Residual Company zur Verwaltung bestimmter ausgeklammerter Vermögenswerte und Verbindlichkeiten. Der Käufer wird 100% der neuen Stammaktien erwerben, während bestehende Aktien ohne Gegenleistung annulliert werden. Aktuelle Aktionäre erhalten keine Zahlungen oder Ausschüttungen, und das Unternehmen wird von der TSX Venture Exchange gestrichen. Der Abschluss der Transaktion wird um den 31. Oktober 2024 erwartet, abhängig von der Genehmigung durch die Gerichte.

Positive
  • Additional working capital funding to be provided by Purchaser's affiliate
  • Purchaser to provide operational and financial turnaround expertise
Negative
  • Existing shareholders will receive no compensation or distributions
  • Company shares to be delisted from TSX Venture Exchange
  • Low transaction value of only $315,000
  • All current board members except Paul Antoniadis will resign
  • Trading of shares remains halted

Vancouver, British Columbia--(Newsfile Corp. - October 24, 2024) - good natured Products Inc. (TSXV: GDNP.H) (OTC Pink: GDNPF) (the "Company" or "good natured®"), a North American leader in eco-friendly food packaging, bio-based plastic extrusion and plant-based products, has provided an update on the restructuring of its business operations and financial affairs under the Companies' Creditors Arrangement Act (the "CCAA") proceeding pursuant to the order (the "Initial Order") obtained from the Supreme Court of British Columbia (the "Court") under the CCAA on June 28, 2024 with the associated stay of proceedings subsequently extended by the Court up to and including October 25, 2024. On October 17, 2024, the Court extended the stay of proceedings up to and including October 31, 2024 (the "Stay of Proceedings").

As a result of the sale and investment solicitation process (the "SISP") conducted by the Company with the assistance of Capital West Partners and under the oversight of Alvarez & Marsal Canada Inc., as monitor of the Company (in such capacity, the "Monitor"), under the Stay of Proceedings (as extended), the Company has entered into a binding subscription agreement (the "Agreement") with HUK 149 Limited, a private United Kingdom limited company (the "Purchaser"), an affiliate of leading UK based turnaround investor Hilco Capital and an arms' length party to the Company, with completion subject to among other conditions, approvals of the Court and the United States Bankruptcy Court for the Northern District of Illinois Western Division (the "United States Court"). After a thorough review, with its financial and legal advisors, of available qualified bids received as part of the SISP and careful consideration of the interest of all of its stakeholders, the Company's board of directors, following a unanimous recommendation of its special committee, determined that entering into the Agreement is the best alternative for the Company.

Terms of the Agreement

The transactions contemplated by the Agreement (collectively, the "Transaction") are achieved through a reverse vesting order and provide for a reorganization of the Company and its subsidiaries (the "Company Entities") that involves: (a) the incorporation of a new entity ("Residual Company") to ultimately hold certain excluded assets and liabilities of the Company and related entities and all of the shares of the Residual Company being transferred to the Monitor as agent and bare trustee on behalf of the shareholders of the Company prior to the closing of the Transaction; (b) the Purchaser subscribing for new common shares of the Company (the "Purchased Shares") and all of the existing equity (other than the Purchased Shares) being cancelled or redeemed, without consideration, and the Purchased Shares issued to the Purchaser representing 100% of the issued and outstanding common shares of the Company following such cancellation and issuance; and (c) the acquisition by the Purchaser of the Company Entities (other than certain excluded assets and liabilities to be transferred directly or indirectly to the Residual Company).

The aggregate cash consideration offered under the Agreement by the Purchaser is $315,000. The Purchaser has paid to the Monitor, in trust, prior to the execution of the Agreement, a deposit in the amount of $200,000 which will be applied in accordance with the terms of the Agreement. In addition to the cash consideration paid, an affiliate of the Purchaser will provide substantial additional working capital funding to the Company to implement the turnaround plan. Alongside this committed funding, the Purchaser will be providing hands-on operational and financial turnaround expertise.

Next steps in the restructuring and effect of the sale proposal on the creditors and the shareholders

The Company will seek approval of the Transaction from the Court on or about October 28, 2024 and recognition of such Court approval in the Company's Chapter 15 proceedings in the United States Court shortly there after, on or about October 30, 2024. Subject to receipt of approvals of the Court and the United States Court, among other closing conditions set out in the Agreement being satisfied or waived, the Transaction is anticipated to close on or about October 31, 2024.

Following the closing of the Transaction, the Residual Company will be bankrupted and its affairs will be settled pursuant to applicable bankruptcy legislation. Based on the terms of the Agreement and the consideration to be received by the Company, the Company anticipates that holders of the Company's existing common shares will not receive any payments for, or distributions on, their common shares in connection with the CCAA proceedings, nor will they hold any interest in the Company following the completion of the bankruptcy.

Upon the closing of the Transaction, all current directors of the board of directors of the Company, other than Paul Antoniadis, will resign from their positions. Additionally, on or before the closing of the Transaction, the common shares of the Company are expected to be suspended from the NEX Board of the TSX Venture Exchange and delisted within 30 days. Trading in the common shares of the Company has been halted on the NEX Board of the TSX Venture Exchange and will remain halted as confirmed by the TSX Venture Exchange.

Additional information regarding the CCAA proceedings, including details of the bankruptcy of the Residual Company, and all of the Court materials filed in the CCAA proceedings, may be found at the Monitor's website: https://www.alvarezandmarsal.com/goodnatured

The good natured® corporate profile can be found at: goodnaturedproducts.com/pages/investor

About good natured Products Inc.

good natured® is at the forefront of North America's shift toward sustainability, showcasing over 90 plant-based packaging designs and an extensive portfolio of more than 400 products and services. These offerings are purposefully designed to reduce environmental impact by using more renewable materials, less fossil fuel, and eliminating chemicals of concern.

Manufactured locally in the US and Canada, good natured® engineers and distributes a diverse range of bio-based products across various sectors, including grocery, restaurant, electronics, automotive, and pharmaceutical via both wholesale and direct channels.

The Company is dedicated to providing an industry-leading customer experience in order to encourage the transition to renewable alternatives. By making it easy and affordable for businesses to adopt bio-based products and packaging, good natured® aims to empower them to reach their sustainability objectives.

For more information: goodnaturedproducts.com

For further information regarding the CCAA proceedings, please contact Alvarez & Marsal Canada Inc., the Court-appointed Monitor of the Company and its subsidiaries by fax at 604-638-7441, or by email at goodnatured@alvarezandmarsal.com. Its website address is https://www.alvarezandmarsal.com/goodnatured.

Neither the NEX Board of the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the NEX Board 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. Specific forward-looking statements in this press release may include, but are not limited to, statements with respect to the CCAA proceedings, the approval of the Transaction by the Court under the CCAA and timing thereof, the approval of the United States Court and timing thereof, the closing of the Transaction and timing thereof, delisting of the common shares from the NEX Board of the TSX Venture Exchange, and bankruptcy of the Residual Company and the effect to shareholders.

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 information contained in this news release is based on our current estimates, expectations and projections regarding, among other things, the approval of the Transaction by the Court under the CCAA, the approval by the United States Court, satisfaction of the conditions precedent to the completion of the Transaction, the anticipated results of the Transaction, future plans and strategies, projections, future market and operating conditions, supply conditions, end customer demand conditions, anticipated events and trends, general market conditions, the economy, financial conditions, sales volume and pricing, expenses and costs, all necessary court orders and approvals are obtained to permit the Company to implement its restructuring plans, and other future conditions which we believe are reasonable as of the current date. Important factors that could cause actual results and financial conditions to differ materially from those indicated in the forward-looking statements include, but are not limited to: the approval of the Transaction by the Court under the CCAA, the approval by the United States Court, completion of the Transaction, risks relating to general economic, market and business conditions and unforeseen delays in the realization of the Company's plans, risks related to the loss of key manufacturing equipment, capability or facilities, the performance of plant-based materials and the ability of the Company's products and packaging to meet significant technical requirements, changes in raw material supply and costs, labour availability and labour costs, fluctuations in operating results, and other related risks as more fully set out in the Annual Information Form dated April 29, 2024 of the Company and other documents disclosed under the Company's filings at www.sedarplus.com. 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 statements contained in this news release are expressly qualified in their entirety by this cautionary statement.

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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/227678

FAQ

What is the value of HUK 149 's acquisition of Good Natured Products (GDNPF)?

The aggregate cash consideration offered under the Agreement is $315,000, with a $200,000 deposit already paid to the Monitor in trust.

When will Good Natured Products (GDNPF) be delisted from TSX Venture Exchange?

The company is expected to be delisted within 30 days after the closing of the Transaction, which is anticipated around October 31, 2024.

What will happen to existing shareholders of Good Natured Products (GDNPF)?

Existing shareholders will not receive any payments or distributions for their shares, and will not hold any interest in the company following the completion of the bankruptcy.

When is the restructuring transaction expected to close for Good Natured Products (GDNPF)?

The transaction is anticipated to close on or about October 31, 2024, subject to Court and United States Court approvals.

GOOD NATURED PRODS INC

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