Mr. Paul Antoniadis reports

GOOD NATURED PRODUCTS INC. ANNOUNCES PROPOSAL TO AMEND CONVERTIBLE DEBENTURES

Good Natured Products Inc. is proposing to amend the terms of its 7.0 per cent convertible unsecured subordinated debentures in the principal amount of $17.25-million due Oct. 31, 2026. This effort is intended to improve financial flexibility, lower finance costs and strengthen the company's balance sheet.

The proposed amendments to the convertible debentures will have four key benefits for the company's capital structure and operating cash flow: (1) meaningfully extend maturity of the convertible debentures; (2) reduce cash interest payments; (3) reduce total debt outstanding; and (4) provide the company with flexibility to pay interest in cash or common share equivalents.

The company has called a meeting to be held on April 30, 2024, of the holders of the convertible debentures in order to consider certain amendments to the trust indenture dated Oct. 28, 2021. The amendments, if approved by the requisite majority of the debentureholders, will result in the following changes to the terms of the convertible debentures:

1. Partially redeeming an aggregate of 50 per cent of the principal amount outstanding under the convertible debentures, such that the current principal amount of $17.25-million shall be reduced to $8,625,000 in consideration for the issuance of 70.5 million common shares of the company, with a deemed value of $8,625,000 (12.2 cents per common share). The common shares would be distributed to the debentureholders on a pro rata basis, on or around May 6, 2024, to those debentureholders of record as of May 3, 2024, and the interest upon the principal amount of debentures called for redemption shall cease to be payable from and after the redemption date. Although the company intends to affect the partial redemption on May 6, 2024, or as soon as practicable thereafter, there is no guarantee that the redemption date will be May 6, 2024. Any accrued and unpaid interest on the debentures that make up the partial redemption will be paid in cash on or around May 6, 2024. Prior to and excluding April 30, 2024, the redeemed debentures will accrue interest at a rate of 7 per cent per annum; if applicable, subsequent to and including April 30, 2024, the redeemed debentures will accrue interest at a rate of 10 per cent per annum;
2. Amending the terms of the convertible debentures such that the interest payment dates (which are currently biannual) shall occur once annually on Dec. 15 of each year (the accrual date);
3. Amending the definition of interest rate in the convertible debenture indenture to increase the interest rate on the convertible debentures from 7.0 per cent to 10.0 per cent per annum;
4. Amending the terms of the indenture to allow, at the election of the company, for the payment of the interest accrued on the convertible debentures through the issuance of common shares, which shall have a deemed price per share equal to the greater of: (1) the 10-day volume-weighted average price (VWAP) prior to the accrual date; or (2) the minimum acceptable price to the TSX Venture Exchange, pursuant to the policies of the TSX Venture Exchange;
5. Amending the terms of the convertible debentures such that the maturity of the convertible debentures will be extended from Oct. 31, 2026, to Dec. 15, 2029;
6. Approving an application to delist the convertible debentures from trading on the TSX-V, which delisting is expected to occur on or around May 3, 2024;
7. The semi-annual interest payment of $603,750 due April 30, 2024, on the convertible debentures will be deferred, such that a total of $603,750 will be paid in conjunction with the first annual interest payment due Dec. 15, 2024, on the same terms as described above on a pro rata basis, which payment may also be satisfied through the issuance of common shares. The deferred payment shall be paid to debentureholders of record as at April 29, 2024.

Debentureholders will have the opportunity to vote on the convertible debenture amendments as a single resolution at the debentureholder meeting.

The board of directors of the company unanimously recommends that the debentureholders vote for the proposed convertible debenture amendments.

As of the date of this announcement, holders of 43.2 per cent of the outstanding convertible debentures (the supporting debentureholders) have signed consent agreements with the company, pursuant to which such supporting debentureholders have consented to the convertible debenture amendments and agreed to vote in favour of the convertible debenture amendments at the debentureholder meeting. The company will continue to seek additional written consents to support the convertible debenture amendments in advance of the debentureholder meeting.

If approved, the convertible debenture amendments would be made effective by a supplemental indenture entered into following the debentureholder meeting.

The record date for determining the debentureholders entitled to receive notice of and vote at the debentureholder meeting is March 22, 2024. Further information with respect to the convertible debenture amendments will be contained in a proxy solicitation statement of the company to be sent to debentureholders in connection with the debentureholder meeting.

The convertible debenture amendments are subject to approval by the TSX-V and formal approval by holders of at least 66-2/3rds per cent and a majority of the minority* of the principal amount of the convertible debentures voted at the debentureholder meeting.

Related party transaction

Directors and executive officers of the company, as a group, beneficially own, control or direct, directly or indirectly, $35,000 principal amount of convertible debentures, representing approximately 0.2 per cent of the outstanding principal amount of the convertible debentures. Participation by the related parties constitutes a related party transaction as defined under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. 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 convertible debentures held by the related parties nor the consideration paid by such related parties for the convertible debentures exceeded 25 per cent of the company's market capitalization.

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.

* Majority of the minority means approval of a majority of the votes cast by the debentureholders who are entitled to vote at the meeting, other than promoters, directors, officers or other insiders (as that term is defined in the policies of the TSX-V) of the company, and their associates and affiliates.

We seek Safe Harbor.