Under the terms of the agreements, the Company will receive up to $1.4 million in capital in equal installments of $350,000 over the next four months, to support the filling of backlogged orders and meet increasing demand for Eco Red Shield, with the goal of reaching sales of $1.5 million in the fourth month, which will potentially put the Company in a cash flow positive position. Concurrently, the Company received equity financing of $800,000 in two tranches to support the expansion in production capacity at its core manufacturing facilities from $750,000 in production capacity per month to $2,000,000 per month, as well as retire approximately $300,000 in convertible debt financing previously entered into on unfavorable terms.
In addition, the Company will enter into an expandable revolving credit facility agreement for $1.2 million to support its supply chain that will allow the Company to confidently increase its marketing efforts and demonstrate long term sustainability to its Major Big Box Customer.
"This funding represents a transformational milestone for the Company from a revenue growth and sales trajectory standpoint," said Steven Conboy, President & CEO of Eco Building Products. "We now have the capital needed to meet a recent dramatic increase in demand for Eco Red Shield from our Major Big Box Customer, who is now in a position to begin aggressively marketing our product to its massive customer base as an optimized solution to meet key unmet needs in the $60B North American lumber industry. We have positioned ourselves extremely well to meet an expected continued surge in demand for fire-resistant and mold-resistant lumber in the new construction industry, especially in light of recent wildfires in San Diego County and mold-related housing condemnations following Hurricane Sandy in New Jersey and Long Island. We believe Eco Red Shield has the potential to replace existing entrenched chemical products in the wood treatment industry, with the potential to reach over $1 billion in sales."
Eco Building Products, Inc. is a manufacturer of treated wood products that are protected against fire, mold/mycotoxins, fungus, rot-decay, wood ingesting insects and termites.
