Good Natured Products Inc (GDNP.V) claims to offer the widest assortments of consumer products and packaging made from plant-based materials with the highest percentage of renewable (up to 35% recycled content), containing no BPAs, phthalates or other chemicals of concern.
GDNP.V operates in two verticals: Food Packaging and Home & Office Products with over 130 SKUs. The company reports 120+ customers across 20 states & provinces ranging from large chains to small business retailers. Manufacturing and part of the R&D is outsourced via various partners.
Macro-Economics Drivers
The global packaging total addressable market is estimated at $980B by 2020, (2.9% CAGR) while the global “green” packaging market size is $274B by 2020. Hence, the "green" packaging portion accounts for roughly 25% of total packaging market. With US home organic products there was a recent burst from 2012-2016; CAGR 5%. However, a slower growth rate is expected to about 2.9% CAGR for a total addressable market of $16B in 2022.
Management
GDNP.V's management team is well rounded. From an ex-Best Buy executive to a business development team with packaging and renewable experience. Of note. a CTO with a Ph.D in Bioplastics Packaging, as well as, a few patents to the company's credits (under the former name).
GDNP.V has investments from Lindar Corp (6M shares)* and Ex-Tech Plastic (6.5M shares). * 4.5M shares from Lindar are pending.
Both Lindar Corp. and Ex-Tech Plastic CEO sit on the GDNP.V's board of directors among other packaging industry members.
Recent Milestones.
Jun. 26 - Announces AGM Results
Jul. 11 - hello, cupcake switches to good natured plant-based packaging.
Tacoma-based cupcake shop, has made the switch away from petroleum-based PET to good natured®‘s plant-based materials.
July 17 - Issues 100,000 stock options to the Canadian Cancer Society. Options are exercisable for 10 years at a price of C$0.15 per common share.
The Canadian Cancer Society has partnered with four other deserving Charities (Centre for Addition and Mental Health Foundation, Juvenile Diabetes Research Foundation, Heart and Stroke Foundation and The Lung Association) and the TSX-Venture on an Option to Give program.
“One of the driving forces behind our business is to shine a light on hazardous chemicals lurking in everyday products. A number of additives commonly used in the traditional plastics industry, like BPAs, phthalates and styrene, have been highlighted internationally as hazardous to human health and potentially carcinogenic. Showing our support for like-minded organizations like the Canadian Cancer Society is core to our common goal of eradicating this terrible disease.” - GDNP.V's CEO.
Aug. 7 - Engages Independent Trading Group (ITG) Inc. IIROC dealer #84, for market maker services. ITG will trade shares of good natured® on the TSXV with the objective of maintaining a reasonable market and improving the liquidity of good natured® common shares.
Under the terms of the agreement, ITG will receive $3,250 per month payable quarterly in advance. The agreement will continue in effect unless terminated by either party. There are not performance factors contained in the agreement and ITG will not receive shares or options as compensation. ITG and the Company are unrelated and unaffiliated entities.
Aug. 28 - Q2 FY18 Earnings (ended june 30, 2018). Q2 FY18 and YTD revenues increased 59% and 60% to $1.06M and $2,.8M relative to $0.670M and $1.36M YoY. Q2 FY18 and YTD net losses before interest, depreciation, and stock compensation, were -$0.49M and -$0.97M compared to $0.55M and $1.34M YoY - an improvement of 12% and 27%, respectively.
Cash reserve of $4,08M on June 30, 2018 compared to $0.79M on Dec. 31, 2017. “This latest record-setting quarter represents our 10th straight quarter of over 45% quarter over quarter revenue growth,” said Paul Antoniadis, CEO
Sept. 6 - Launch family of compost collectors now available at London Drugs. Now also available throughout Western Canada at London Drugs.
Sept. 13 - Launched plant-based herb and microgreen packaging. A wide assortment of plant-based herb and microgreen packages from hanging fresh herb containers ranging in capacities from 0.25 and 2.50 ounces, to a variety of larger, versatile micro-green packaging.
Oct. 3 - grown here farms switches to good natured plant-based packaging to meet micro greens demand
Oct. 25 - Selected by US-based hydroponic indoor farmer, Your Local Greens. Indoor City Farming is rapidly gaining popularity within the global hydroponics market that’s poised to grow to about $13.7 billion by 2025.
Nov. 14- Receives $0.85M in innovation funding from Canadian Government. WINN is a $100 million, five-year, federal government program that is providing funding to small and medium sized businesses to help them commercialize their products, services and processes.
This is the second time since the program’s inception that GDNP.V has received funding, with a combined total of $2.45 million since 2014.
As depicted by the chart, the stock has lost quite a bit of valuation in the last six months. The ITG hiring, record Q2 earnings, London Drugs launch seems to have no impact on the trajectory. This is somewhat surprising given the nature of these developments. Despite the Q2 loss, the company reported $4.3M in cash. Also the transparency on the ITG deal is not routinely openly encountered on the Venture.
With 94M shares (67% in float), an $11M Market capitalization, insiders ownership of 45%, a promising convertible debenture ($5M at $0.15 cents -33M shares) and warrant schedule (above $0.15 cents), this company got our attention.
Currently trading at a near 52 week low ($0.08), we consider GDNP.V good to go.
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