Naturally Advanced seeks $1.4M

Naturally Advanced Technologies Inc. on Friday said it is raising $1.4 million through a private share offering.

The Vancouver, B.C., company (OTCBB: NADVF) is led by Portland-based CEO Ken Barker, joint president of the local venture capital firm Meriwether Group and the former head of apparel for Adidas America.

The company is working to commercialize its Crailar fabric technology, which turns burlap-like hemp into a fabric as soft as cotton. It had no sales in 2009 and relies on capital from equity offerings and debt financing.

Naturally Advanced on Friday said it has arranged the issuance of up to 1.4 million units at $1 each. A unit in this case is comprised of one common share and one-half of one share purchase warrant. A warrant entitles the subscriber to buy an additional common share over three years for $1.25 per share.

Proceeds from the private placement are to be used to further develop the company’s business and for working capital. The company lost $3.9 million, or 12 cents per share, last year. Of that, $600,000 is attributable to an apparel business the company shut down earlier in the year.

Last August, the company announced a joint development agreement with Winson-Salem, N.C.-based Hanesbrands to study how Crailar fiber can be worked into mainstream production. In January, Hanes ordered about 10,000 pounds of Crailar that was delivered during the first quarter this year.

Last month, the company said it had completed spinning trials that showed Crailar can retain commercial quality and be produced in volume, which Barker said solidifies its potential for commercialization. Now the company is in its final stages of the Hanesbrands agreement, working to develop a commercially viable supply chain, as well as economic, marketing and branding strategies.

“Based on this progress, we expect this private placement to get us to the point where we start recording our initial revenue from producing commercial levels of Crailar,” Barker said Friday in a news release.

The company’s shares closed up 3.6 percent Friday to $1.14. Shares have traded between 70 cents and $1.75 in the past year.