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January 4, 2002
IRVINE, Calif.--Naturade Inc. (OTCBB:NRDC), a marketer of soy protein products under the Naturade Total Soy brand, has received $2.5 million in working capital to expand its brand recognition. In return for its investment, Westgate Equity Partners L.P., based in St. Louis, received shares of redeemable preferred stock convertible to approximately 13.5 million shares of common stock and a three-year warrant to purchase an additional 33.6 million shares for $3.5 million. This would give Westgate 51-percent ownership in the company.
"The financial strength of our new partnership with Westgate will allow us to intensify our focus on brand-building as the number one brand of soy protein meal replacements in the mass market," remarked Bill Stewart, chief executive officer of Naturade (www.naturade.com). The company has also agreed to elect two Westgate representatives to its board of directors, bringing number of members to seven. Naturade will also pay a yearly fee of $100,000 to Westgate for providing management and consulting services.
In addition, Health Holdings & Botanicals LLC agreed to convert Naturade's outstanding debt of $5.3 million and 1.3 million shares of Series A Convertible Preferred Stock in exchange for 36 million shares of common stock. Also, Wells Fargo Business Credit agreed to extend its existing Credit and Security Agreement with Naturade through Dec. 31, 2003.
"We believe strongly in the long-term growth potential for soy protein products and see Naturade as a solid base from which to build brands that merit high consumer purchase interest and strong retailer support," stated Jay Brown, who is responsible for operational oversight of Westgate's portfolio companies.
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