Eco Building Products, Inc. has secured up to $3.4 million in financing to help it meet existing levels of demand and expand for future growth, a development the company attributes to a mysterious "Major Big Box Customer" (read: Home Depot).
The funds will go toward filling a backlog of pending purchase orders and to increase its production capacity at its manufacturing facilities.
"This funding represents a transformational milestone for the company from a revenue growth and sales trajectory standpoint," said president and CEO Steven Conboy. "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 $60 billion 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."
The exact breakdown goes as follows: For backlogged ordres, up to $1.4 million in capital in equal installments of $350,000 over the next four months. By the fourth month, the company hopes to meet a sales goal of $1.5 million. Additionally, $800,000 in two tranches will go toward boosting production capacity (currently, the company's capacity stands at $750,000 per month. The funds will boost that number to $2 million per month).
Eco Building Products is also entering into an expandable revolving credit facility agreement for $1.2 million to support its supply chain.
The growing demand for Eco Red Shield lumber comes on the heels of what the company considers a successful second pilot commercial launch program.