Plastics and Packaging | Canadian Small Cap Ast good ......Website Top Shareholders Yaletown...

good natured Products Initiation ReportAugust 15, 2018

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Equity ResearchPlastics and Packaging | Canadian Small Cap

August 15, 2018

Alp Erdogan | Senior Analyst | Ubika [email protected] | 1 (647) 479-5690

William Xiao | Associate | Ubika [email protected] | 1 (647) 828-4632

Price Performance

Market Data (TSXV:GDNP)Price (August 9, 2018 close): $0.1352-Week Range: $0.08 - $0.15Market Cap (M): $12.7MShares Outstanding: 93.9M Free Float: 67%Average Daily Volume (3 Months): 58K

Total Debt: $5.7MCash: $4.7MTotal Assets: $6.9MRevenue (FY2016) $2.1MRevenue (FY2017) $3.2MRevenue (FY2018E) $4.6M

Headquarters Vancouver, B.C., CanadaWebsite www.goodnatured.ca

Top ShareholdersYaletown Ventures II, LP 26.1%Paul Antoniadis 5.3%Michael Thomson 1.0%Jim Zadra 0.4% Noel Harvey 0.2%

ManagementPaul Antoniadis CEO & Executive Chair Don Holmstrom CFO & EVPMichael Labonté CTONoel Harvey VP - Business DevelopmentKevin Leong VP - Finance & OperationsJim Zadra Independent Lead Director:

Finance & Audit Commitee ChairSalil Munjal Director: Member of Audit & FinanceMichael Thomson Independent Director:

Member of Audit & FinanceTom Haglin Board Observer: Owner & President

of LINDAR CorpWilliam Riesbeck Board Observer: President of

Ex-Tech PlasticJon Roby Advisor: IndependentMicheal Feola Advisor: Independent

good natured Products Inc.(TSXV:GDNP)

Bioplastics: Disrupting the Petro-Chemical Plastic Market,One Package at a Time

Company Description good natured® Products Inc. (TSXV:GDNP) develops eco-friendly and renewable bioplastic (plant-based) packaging and products. The Company’s primary value proposition is to source and develop proprietary plant-based materials, and then make products utilizing the highest possible percentage of renewable content, as opposed to traditional petroleum-based plastics. Currently, the Company targets high growth in the bioplastics space by leveraging the increasing demand for plant-based packaging and products. Offering a suite of over 130 products, GDNP serves more than 100 national, regional and small business retailers, food producers & packaging distributors.

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Investment Highlights• Only pure-play stock for eco-friendly and renewable plastics. The Company’s largest competitors are petroleum plastics packaging and product manufacturers and resellers. For good natured® the most comparable industry sectors are container packaging and durable consumer goods. As the only Canadian small-cap growth stock in the space, good natured® offers investors a compelling story with an attractive risk/reward profile for the next 12-24 months.• Amazon.com’s acquisition of Whole Foods sparked the emergence of many smaller companies that want to fight in the ready-to-eat (“prepared foods”) space. Prepared food packaging constitutes the good natured® key product offering, enabling a significant first-mover advantage opportunity to access growth vehicles and make acquisitions. As opposed to the overall packaging industry, which has a 3% CAGR, ready-made meal products have grown at a rate of 30%. Prepared food products offer the highest margins for the Company, as the average luxury meal prices could range from $13 - $18. Today, there are an estimated 22 companies in Vancouver producing or delivering prepared foods to homes or offices. The Company projects that the online delivery market will generate $100M to $200M in the Vancouver market alone. GDNP is laser-focused on this high-growth segment and we expect the Company to launch new innovative packaging designs & assortments to serve the space, in addition to its existing extensive product offerings of 100 different food packages. • The global packaging market is expected to grow to $998 billion by 2020, with an implied CAGR of 3.5%. In addition, the U.S. home organizational market was $16B in 2016 and has grown at a rate of 5% CAGR since 2012. To illustrate the growing concern for eco-friendly products, out of 688 billion lbs. of globally produced plastics, less than 14% are actively recovered from our recycling bins. As such, increasing government regulations on the industry and robust demand for environmentally-friendly products are expected to be the key growth levers in the sector.

Financial Analysis & Valuation• On a relative valuation basis, good natured Products Inc. currently trades at 3.2x forward EV/Sales, a discount to the 6.2x commanded by its industry peers. We believe that at current levels, GDNP shares have an attractive risk/reward profile, given the embedded growth profile in the next 12-24 months.

http://elfm.eu/Uploads/ELFM/FILE_73D907E9-8225-4B93-91F8-10F71F59B793.PDF

http://siteresources.worldbank.org/INTURBANDEVELOPMENT/Resources/336387-1334852610766/What_a_Waste2012_Final.pdf



Table of Contents

good natured Products Summary ...............................................................................................1Industry Overview & Investment Thesis ............................................................................... 3-6 The Plastics Economy ..................................................................................................................................3-4 Chemicals of Concern ..................................................................................................................................4-5 Opportunity for Bioplastics ........................................................................................................................5-6

Company Overview ................................................................................................................. 7-8Competition ............................................................................................................................ 9-10Financial Analysis and Valuation ....................................................................................... 11-12Risks ........................................................................................................................................... 13Appendix A: Recent News ................................................................................................... 14-15Appendix B: Management ....................................................................................................... 16Appendix C: Directors .............................................................................................................. 17Disclosure ................................................................................................................................... 18





Industry Overview & Investment Thesis

The Plastics EconomyToday, a world without plastics is nearly impossible to imagine as plastics serve as the workhorse material of the modern economy due to their low cost, versatility and durability. They serve as a key enabler in many different verticals, such as packaging, construction, electronics, healthcare and transportation. As shown in Figure 1, the success of plastics is reflected in the exponential growth of their production over the last 50 years. Since 1964, global production has increased by 20x to 311 million tonnes in 2014. On a forward-looking basis, forecasts call for plastics production to double again in 20 years. According to Transparency Market Research, plastic packaging is the largest application, representing 26% of the consolidated volume. Plastic packaging volumes are expected to continue their strong growth, doubling within 13 years and more than quadrupling by 2050 to 318 million tonnes per annum.

Figure 1: Growth in Global Plastics Production (1950-2014)

Source: The New Plastics Economy (Ellen MacArthur Foundation)

While delivering many benefits, conventional petroleum-based plastics have drawbacks that are becoming apparent. More specifically, 95% of plastic packaging material value, or US$80-120 billion annually, is lost after a short, first use. Furthermore, an overwhelming 72% of plastic packaging is not recovered at all: 40% is landfilled and the balance escapes the collection systems. According to the United Nations Environment Program (UNEP), the aggregate of these after-use externalities, including greenhouse gas emissions, is conservatively estimated to be US$40 billion per year.

Figure 2: Global Flows of Plastic Packaging Materials

Source: The New Plastics Economy (Ellen MacArthur Foundation)





Due to the ballooning costs associated with after-use externalities, there is an increasing emphasis on substituting conventional plastics with plant-based alternatives (bioplastics). According to European Bioplastics, a plastic material is defined as a bioplastic if it is either biobased, biodegradable, or features both properties. In more specific terminology, the term “biobased” means that the material is at least partially derived from plant biomass, a renewable resource. The chemical process “biodegradation” is one during which microorganisms that exist in the environment convert materials into natural substances such as water, carbon dioxide, and compost. The process of biodegradation does not depend on the original resource of a material but is rather linked to its chemical makeup. In search of new material solutions and focusing on the goal of sustainable production and consumption, bioplastics have several advantages. Producing bioplastics from renewable sources is crucial for: a) improving resource efficiency through cascade use, as biomass can first be used for bioplastics and then for energy generation; b) reducing the carbon footprint in the environment; c) saving fossil resources by substituting them with biomass in the process.

Figure 3: Bio-based Plastics vs. Conventional Plastics

Source: European Bioplastics, Fact Sheet

Chemicals of Concern

Plastic packaging can have ingredients leach into the items it covers, making it critical that these ingredients are safe for consumption. However, some chemicals found in petroleum-based food packaging can lead to potential health complications. Plastic manufacturers are generally not required to disclose such ingredients found within their products, leaving the public unaware of the kind of chemicals they could be exposed to. Studies are currently being conducted on the effects of many chemicals in plastics, but there exists a lag with regulatory action.

Bisphenol A (BPA) is found in polycarbonate plastics and epoxy resins and is used in things like water bottles, food cans, and water pipes. It disrupts hormones, behaving in an estrogen-like manner on the body. This effect leads to potential health complications such as breast and prostate cancer, altered fetal brain development, and higher obesity levels in children. While Health Canada has banned BPA, the U.S. Food and Drug Administration (FDA) considers the levels non-hazardous.

Phthalates, also found in food packaging, are a large group of chemicals used in all types of household products. While different varieties of phthalates have different purposes and effects, some studies show a link between phthalates and a variety of health complications, such as endocrine disruption, asthma, infertility, and neurodevelopmental issues in children. DEPH and B79P are two types of phthalates, which are marked as potential health risks by Health Canada. While the U.S. does not prohibit use of phthalates in food packaging, it does not allow the use of several phthalates in children’s toys.

As seen in Figure 2 above, 32% of global plastic packaging leaks into the environment. The same leaching effect mentioned above can lead to harmful chemicals entering the water flow. Figure 4 highlights how plastics, and the inherent toxic chemicals penetrate into the water systems.





Figure 4: % Plastic Fibres in Tap Water, Worldwide

Source: The Guardian, Orb Media

Opportunity for Bioplastics Packaging

Currently, bioplastics account for ~0.6% of the consolidated plastics production volume (~320 million tonnes) on an annual basis. Global bioplastics production is expected to increase by 18.8% to ~2.4 million tonnes in 2022, with an implied 5-year CAGR of 3.5%. Figure 5 illustrates the five-year growth forecast in greater detail. There exist emerging secular trends which point to dynamic market growth. The increase in bioplastics use is driven by consumer demand for sustainable products, increasing regulatory pressure to protect environmental and human health by restricting petroleum-based plastics and growing corporate awareness to build socially-responsible business models.

Figure 5: Global Production Capacity of Bioplastics

Source: European Bioplastics, nova-Institute (2017)





According to Technavio Research, the global green (bioplastics) packaging market is forecasted to grow at a healthy CAGR of 8% to $278 billion by 2021. Increased environmental concerns and the need to reduce pollution have led to increased emphasis on the use of plastic resins derived from renewable sources. Bioplastic packaging products are more sustainable than conventional alternatives, as they consume less energy and natural resources, generate lower carbon dioxide emissions, are lightweight in nature and are equally as durable. Currently, North America, and specifically the U.S., accounts for the premium market share of bioplastic packaging, relative to other developed and emerging economies.

Food packaging comprised 56% of the consolidated market size in 2017 and is forecasted to dominate the segment on a forward-looking basis. The high demand for raw milk, yogurt, cheese, and other dairy products serves as the key contributor to this nascent growth outlook. Furthermore, the NPD Group points out that due to generational shifts in food consumption, grocery-prepared items have grown nearly 30% since 2008, all of which require packaging to preserve freshness and protect during transport. To conclude, we highlight the fact that the green packaging market benefits from strong end-user demand.

Figure 6: Global Production Capacity of Bioplastics in 2017 (by market segment)

Source: European Bioplastics, nova-Institute (2017)

Bioplastics have versatile uses and are utilized in an increasing number of verticals, including packaging, catering products, consumer electronics, automotive, agriculture and textiles. Packaging remains the largest field of application, comprising 58% (1.2 million tonnes) of the total bioplastics market in 2017. Figure 6 provides a market segment breakdown.





Company Overviewgood natured Products Inc. develops eco-friendly and renewable bioplastic packaging and products. The Company’s primary value proposition is to source and develop proprietary plant-based materials, and then make products using a maximized percentage of bioplastic materials, instead of traditional petroleum-based plastics. The Company’s corporate strategy focuses on two key target markets: 1) Packaging and 2) Home & Business Products. good natured® has a portfolio comprising of over 100 plant-based food packaging and 30 home & business organization products. These offerings range from packaging for baked goods, fresh fruits & veggies to totes, recyclers and waste bins.

The Company has over 100 national, regional and small business customers across 20 states and provinces. These include retailers, food producers, food growers, restaurants, packaging distributors and other consumer product companies. The Company intends to expand sales of its packaging and products by selling directly to consumers through ecommerce channels. Figure 8 provides an overview of good natured®’s current market positioning.

Figure 7: Target Market Verticals

Figure 8: Market Positioning by Product Category

Source: Company Presentation






Management has consistently telegraphed in the past that its business model is designed to be ‘capital-light’ and built for $100+ million in revenue. In more detail, the Company has secured agreements, in some cases exclusive, with top global bio-based ingredient providers with extensive production capacity. Additionally, outsourced supply chain relationships, predominantly through the acquisitions of the bioplastic divisions of Ex-Tech Plastic and LINDAR Corp. and subsequent operational agreements, have provided access to highly-scalable production, logistics and customer services. The capital efficient, variable cost manufacturing model constitutes a key competitive advantage for the Company in terms of having the ability to grow at scale in a nascent industry without incurring big capital outlays. The Company has a robust two-pronged growth strategy, targeting organic growth opportunities within its product offerings, and pursuing an opportunistic M&A plan. Organic growth is driven by a “land and expand” sales strategy that includes acquiring new customers directly, cross selling additional products to existing customers, and product line extensions with both existing and new customers in new geographic areas. The current organic sales funnel includes a platform of over 100 existing customers, along with several hundred prospective customers. Currently, it is estimated that an average customer purchases equivalent to 1.9 unique products, and management’s goal is to achieve a minimum of 5-6 products per customer, thereby enabling sticky and recurring revenue generation. When it comes to acquisitive growth, good natured® has completed several breakthrough packaging deals in recent years. On May 26, 2016, the Company acquired the bioplastics division of Ex-Tech Plastics for $1.1 million. The transaction helped fortify the variable outsourced supply chain and fulfilment operations, and opened up additional opportunities for FDA-approved, food safe thermoformed packaging. On December 22, 2016, good natured® acquired the bioplastics division of LINDAR Packaging, a recognized leader in packaging innovations, for $0.6 million. In a similar fashion, this deal was critical by way of amalgamating LINDAR’s thermoformed packaging know-how with good natured®’s focus on plant-based products and consequently providing the infrastructure to further scale the business at a faster rate. LINDAR Corp and Ex-Tech Plastic own approximately 12% of good natured®. LINDAR and Ex-Tech position good natured® as their publicly traded green division to their private owned petroleum business.





Competition

When we survey the competitive landscape for the bioplastics packaging market, we take note of a highly fragmented space, which has growing M&A activity with many small to mid-sized manufacturers and distributors. In the private space, Italian-based Novamont S.p.A is a key player that produces biodegradable compostable plastics, biolubricants, and bio-based cosmetics. With 600 employees and annual sales of €170 million in 2016, Novamont has a portfolio of about 1,000 patents. Another important private player is BioApply, a Swiss-based company that sells a variety of biodegradable bags and compost bins. Founded in 2006, BioApply develops vegetable-based compostable solutions fitting both retail and waste management processes.

Taking our competitive analysis one step further, we highlight a few publicly traded peers in the small-cap equity market. At first glance, the most comparable ones in size and market vertical are Imaflex Inc. (TSXV:IFX), Biome Technologies PLC (LSE:BIOM), Coral Products (LSE:CRU) and Carbios SA (EPA:ALCRB). On a relative valuation basis, steady-state companies trade at ~1.0x - 1.5x revenue and 7.0x - 13.0x EBITDA. It is worthwhile noting that relative valuation metrics such as EV/Sales or EV/EBITDA should not be considered a definitive yardstick for good natured®’s valuation case. In addition, the market normally attaches a relative premium to a small-cap stock such as GDNP due to the embedded growth profile. For a more comprehensive look, see Figure 9, “Publicly Traded Comparables Table”.

Figure 9: Publicly Traded Comparables Table

Source: Thomson, *Price Close as of August 9

From a value creation perspective, there has been a notable level of M&A activity in the Plastics & Packaging industry. Predominantly, the deals were sourced by strategic players (as opposed to financial players such as venture capital or private equity firms), resulting in operational synergies and economies of scale. Of significance, in May 2016, Amcor Ltd. (ASX:AMC), an Australian-based packaging conglomerate with ~$9.1B in annual top-line, acquired Toronto-based Plastic Moulders for $30 million. Similar transactions shown in Figure 10 below illustrate a highly fragmented market that is ripe for consolidation, and we expect the pace of strategic M&A to continue for the next 3-5 years.





Figure 10: Select Precedent Transactions

Source: Thomson, Company Filings





Financial Analysis & ValuationEffective in 2017, the Company changed its financial year-end from February 28 to December 31 to align with the financial reporting of most public issuers. This change in year-end resulted in the Company filing a one-time, 10-month transition year covering the period of March 1, 2017 to December 31, 2017. Revenue for the 10 months ended Dec 31, 2017 increased by 20% on a Y/Y basis to $2.5M. For a 12-month comparison, full-year revenue came in at $3.1M, implying a Y/Y increase of 51%. The revenue ramp up was driven by organic sales growth from cross selling, product line extensions and net new customer additions as well as accounting for a full year of operations from the 2016 Ex-Tech and Lindar acquisitions. Figure 11 provides a snapshot of the Company’s trending revenue and gross margin performance, dating back to FY2016.

Figure 11: Consolidated Top-Line & Gross Margin Performance


On a forward-looking basis, management projects gross margins to stabilize in the range of 30% - 35% and net new customer additions to approximate 20% per annum. On a related note, the recently announced partnership with Fuud.ca, one of the fastest growing meal delivery services in British Columbia, and the thermoformed packaging supply agreement with a U.S. industry leader, reinforce our view that the Company is successfully executing on its growth strategy to maximize value per customer, from regional players to national accounts. Consequently, our base-case revenue estimate for FY2018 is predicated on a blended average growth rate of last fiscal year and Q1/18. In this framework, we estimate that GDNP can achieve revenue growth approximating 50% on a Y/Y basis.

To accelerate growth, in February 2018, the Company closed a $5.0M convertible debenture unit private placement. Each unit comprised of one $1,000 10% 48-month convertible debenture and 1,500 common share purchase warrants. The proceeds of the financing are earmarked for product development and growing operations in both Canada and the U.S. We opine that with the closing of this financing round, GDNP is in a solid working capital position to accelerate top-line growth in the current fiscal year.





As of August 9, 2018, good natured Products Inc. had 93.9M shares outstanding. The Company had an equity market capitalization of $12.7M and enterprise value of $13.2M.

On a relative valuation basis, good natured Products Inc. currently trades at 3.2x forward EV/Sales, a discount to the 6.2x commanded by its industry peers. We believe that at current levels, GDNP shares have an attractive risk/reward profile, given the embedded growth profile in the next 12-24 months.

Figure 12: good natured Products Inc. - Income Statement

Source: Company Financials





RisksAbility to Raise Capital good natured Products Inc. does not generate enough revenue to self-fund its growth targets. Thus, the Company is reliant on financing from outside sources to develop and grow sales. Should their costs increase above budget, they would have to raise additional funds through the issuance of debt or equity. Our future expectations are based on historical estimates as well as comparable operations.

Liquidity Risk

The Company currently settles all of its financial obligations out of cash or issuances of debt and equity instruments. The Company’s approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its obligations when due, under both normal and stress conditions, without incurring unacceptable losses or risking damages to the actual and budgeted cash flows. The Board reviews and approves the Company’s operating and capital budgets, as well as any material transactions out of the ordinary course of business, including proposals on mergers and acquisitions or other major investments or divestitures. In recent years, the Company has financed its activities mainly through equity offerings, and debenture issuances.

Market Liquidity

The market price for the shares of good natured Products Inc. could have wide fluctuations. Events such as the announcement of new contracts, technological innovations, patents, commercial productions, quarterly financials, announcements of future sales, or changes in regulation, could result in wide movements in the stock price. The Company does not engage in risk management practices like hedging or derivatives. Additionally, in general, geopolitical events could adversely affect the financial markets, which could result in significant share price variation that may be unrelated to the Company’s operating performance.

Currency Risk

Currency risk arises from financial instruments that are denominated in a currency other than the Canadian dollar. The Company does business in both Canada and the US thus their revenues are in Canadian and American dollars. The Company is exposed to the risk that the value of its financial instruments will fluctuate due to changes in exchange rates.

The Company holds balances in foreign currencies that could give rise to exposure to foreign exchange risk. Sensitivity to a plus or minus 10% change in the Canadian dollar foreign exchange rate against the USD would affect the reported loss and by approximately $65,023.





Appendix A: Recent Newsgood natured® Announces Record Quarterly Revenue for the Three Months Ended March 30, 2018May 15, 2018The Company announced revenues of $1.1M, a 62% increase from the prior year quarter. Compared to the prior year period, gross profit increased by 4% while SG&A decreased 14%. Net loss decreased by 23%, making the quarter the Company’s largest growth and highest profit quarter thus far.

good natured® Signs Significant Commercial Agreement with Leading U.S. Packaging ProviderMay 2, 2018The Company announced a 40-month agreement, signed April 23, with a U.S. thermoformed packaging company. The agreement is estimated to cover up to 4M lbs of plant-based packaging material production and deliver US$1M in revenue in the current year.

good natured Products Inc. Announces Year Ended December 31, 2017 Audited Financial ResultsApril 26, 2018The Company earned $2,478,956 in revenues for the 10 months ended December 31, 2017, a 20% increase compared to the 12 months ended in February 28, 2017. Comparing to the same period, their gross profits amounted to $762,397 (20% increase), SG&A amounted to $2,762,882 (5% decrease) and incurred a net loss before other items of $2,932,069 (18% decrease). The Company has moved its fiscal year-end from February 28th to December 31st.

good natured Products Inc. Announces Closing of Convertible Debenture Financing for Gross Proceeds of $5,049,000February 28, 2018The brokered private placement offering with each of its units compromised of one $1,000 principal amount unsecured 10% convertible debenture and 1,500 common share purchase warrants has been closed. A total of 4949 units were issued, amounting to $4,949,000 in the offering. The Company has also issued addition 100 units on a non-brokered basis to a non-Canadian resident subscriber.Each debenture is convertible into a number of common shares which are computed by dividing the principal amount of the debentures by the conversion price of $0.15 per common share. The warrants entitle the holder to purchase one common share for a period of two years at $0.10 per warrant share.The debentures have an acceleration right exercisable by the Company, which will convert the debentures into common shares at the $0.15 conversion price. This right is exercisable if the stock trades at or above the volume-weighted average price of $0.15 for 20 consecutive days and on a cumulative trading volume of at least 1,000,000 common shares. The warrant has the same acceleration right, but the stock needs to trade at or above the volume weighted average price of $0.20. The Company paid a total of $271,430 in cash commission and issued 2,239,867 warrants under the same conditions for the closing of the offering.

good natured Products Inc. Announces Extension of Private PlacementFebruary 9, 2018The Company has extended the outside date for its brokered private placement offering by 30 days. It expects for the offering to close around the 20th of February, 2018.





good natured Products Inc. Announces Financial Results for the Three and Nine Months Ended November 30, 2017January 9, 2018The Company earned $737,217 in revenues in its third quarter, a 91% increase compared to the three months ended in November 26, 2016. Compared to the same period, their gross profit margin was 30% (1% increase), SG&A increase by 30% and incurred a net loss before other items of $706,224 (6% decrease). The large increase in the Company’s SG&A is attributed to their re-branding and a substantial increase in the sales growth.

good natured Appoints Industry Experts to Company Advisory Board December 28, 2017Michael Feola, President of Printflex Packaging Corporation and Jon Roby, former Senior Director of Under Armour and Nike, are the new member of the Company’s advisory board. The addition of Mr. Feola, who has 20 years of packaging experience, and Mr. Roby, with over 15 years in consumer products industries, reinforces the Company’s commitment to receive professional guidance in their growth trajectory.

good natured Products Inc. Announces Convertible Debenture Unit Private Placement FinancingDecember 18, 2017The Company announces a brokered private placement offering with each of its units compromised of one $1,000 principal amount unsecured 10% convertible debenture and 1,500 common share purchase warrants has been closed. They aim to raise a minimum of $1M and a maximum of $6.5M. The proceeds from the offering will go towards general corporate and working capital purposes.

good natured Products Inc. Begins Trading Under New Symbol GDNP, Provides Company Outlook & Announces Closing of Private Placement OverallotmentOctober 31, 2017The Company starts trading on the TSX Venture Exchange under its new symbol “GDNP.” The Company also closed its brokered private placement from August 1, 2017, with total proceeds of $1,254,000. The Company plans to drive organic growth through a “land and expand” sales strategy focusing on new customer acquisition, product line extensions, and cross selling new and existing products to the existing customer base and increase average revenue per customer. In the last three years, the size of the bioplastic industry more than doubled. This presents significant consolidation opportunities that the Company aims to pursue, creating an opportunity for further growth.

good natured Products Inc. Announces Record Revenues, Financial Results for the Three and Six Months Ended August 31, 2017October 30, 2017The Company earned $807,214 in revenues in their second quarter which is a 46% increase compared to the three months ended in August 31, 2016. Compared to the same period, their gross profit margin was 32% (no change), total expenditure decreased by 4%, SG&A increase by 11% and incurred a net loss before other items of $682,754 (16% decrease). The large growth in revenues has been driven by new customer acquisition through cross-selling opportunities and through the acquisition of LINDAR Corp.’s bioplastics division.





Appendix B: Management Paul Antoniadis – Chief Executive Officer & DirectorMr. Antoniadis brings a wealth of senior operational experience to his role as CEO at the Company and as a board director, having started and grown local and international businesses in industries ranging from fashion to consumer electronics. Mr. Antoniadis is a former CEO of Best Buy Europe, and he led Best Buy’s international expansion as President of China and SVP of International Operations, growing its business through green fielding and acquisitions from $4 billion to $12 billion annually. Mr. Antoniadis also served as VP of Sales Development for Best Buy US, where he was responsible for sales strategy, support and execution of $30.8 billion in sales. Mr. Antoniadis has been an active shareholder and member of good natured Products Inc. board and operating team since 2011.

Don Holmstrom – Chief Financial Officer and EVP of OperationsMr. Holmstrom brings extensive leadership, acquisition and operating integration and management experience coupled with detailed financial expertise and capital raising knowledge to the good natured Products Inc. team. Mr. Holmstrom has closed the acquisition and divestiture of over 180 business transactions throughout North America, close to $1 billion worth of transaction value and raised close to $100 million in debt and equity capital. Mr. Holmstrom brings hands on experience in finance, business operations management, team leadership, strategy, planning and execution to allow businesses to achieve their maximum potential. Noel Harvey – Vice President of Business Development Mr. Harvey brings over 25 years of sales and business development experience to the Company. His most recent role prior to joining good natured Products Inc. was as a Director of Business Development - Green Solutions at Ingredion Inc, a global ingredient provider to the food, personal care, paper and packaging markets. As a Director at Ingredion, Mr. Harvey received an important introduction to the need for companies that offer bio-polymer solutions to meet the demanding sustainability objectives of major corporations around the world.

Michael Labonte – Chief Technical OfficerMr. Labonte leads the product development efforts at good natured Products Inc. as well as its research and development activities. Having worked for more than 30 years within academia and the corporate world, Mr. Labonte brings extensive experience in plastics packaging design, plastics characterization, and plastics processing. Prior to joining good natured Products Inc., Mr. Lanbonte worked in technical capacities within Canadian companies such as Bombardier and Cascades. He has also designed and led university-level plastics curriculums nationally and internationally. Mr. Labonte holds a Bachelor of Business Administration from Ecole des Hautes Etudes Commerciales of Montreal, Canada and a Ph.D. from Ecole Polytechnique, one of Canada’s leading plastics technology institutions.





Appendix C: DirectorsJim Zadra – Lead Director, Independent, Chair of Audit Committee

Mr. Zadra is currently the Chief Financial Officer and Corporate Secretary at Great Panther Silver Limited, a growing silver and gold producer with mining operations and projects in Mexico and a near-term production project in Peru. Mr. Zadra is a Chartered Accountant and has over 15 years of experience in senior corporate finance roles in technology and mining. Prior to joining Great Panther, Mr. Zadra served over three years as Chief Financial Officer and Corporate Secretary of DDS Wireless International Inc. Prior to DDS, he was Vice President of Finance, North America, at Sophos, a leading global information technology security company. Mr. Zadra has also held senior roles at ActiveState Corporation, Canaccord Capital and Deloitte, and has served as a director for several venture stage public companies.

Salil Munjal – Chairman of The Board Mr. Munjal brings 20 years of senior executive, private equity and public board experience to good natured Products Inc. He is both an experienced technology investor and operator, having served as a partner at Penfold Capital, a merchant bank and earlier served as Chief Operating Officer of Leitch Technology, a technology company that was acquired by Harris Corporation (NYSE) for $560 million. Mr. Munjal is an experienced board member having served on a variety of public company boards, providing board leadership to companies undergoing significant growth and change. Mr. Munjal began his career as a corporate lawyer at Torys LLP (New York and Toronto) where he focused on Mergers & Acquisitions and corporate finance. He is a past recipient of the Canadian Society for Chemistry Silver Medal and Chemical Institute of Canada National Award and is a member of the bars of New York and Ontario.

Michael Thomson – Director

In the last 10 years, Mr. Thomson has been the founder/principal of 10 publicly traded companies operating in industry sectors ranging from natural resources to advanced materials. Since 1998, Mr. Thomson has been the President of Independent Capital Partners Inc., a corporate finance consulting firm focused on assisting client companies in going public transactions and he is a member of the Listings Advisory Committee (Calgary) for the TSX Venture Exchange.

After graduating from law school at the University of Ottawa (1983), Mr. Thomson was engaged in the private practice of law, for eight years, with three Vancouver law firms. After working for 18 months as the Legal Counsel, Corporate Finance & Listings, at the Vancouver Stock Exchange, Mr. Thomson joined C.M. Oliver & Company Limited, a founder member firm of the VSE. Mr. Thomson focused on raising capital for emerging growth issuers in various industry sectors.





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