Organto Announces Bridge Financing
Vancouver, B.C. (FSCwire) - Organto Foods Inc. (TSX-V: OGO, OTC: OGOFF) (“Organto) a leading vertically integrated provider of value-added branded organic vegetables, today provided details of a planned bridge financing based on the sale by certain significant insider shareholders of a part of their shareholdings in private transactions, and subsequent investment of certain of the proceeds by the sellers by means of bridge loans to Organto.
In furtherance of the above referenced transactions, approximately 26.6 million shares are planned to be sold privately, with approximately 12.0 million freely tradeable shares sold to third-party investors and approximately 13.9 million shares, which are bound by certain escrow provisions, sold to directors and insiders in accordance with escrow agreement provisions. In addition, certain directors and insiders have agreed to provide approximately 3.2 million freely trading shares in exchange for 3.4 million shares which are subject to escrow provisions, and these freely trading shares are subsequently being swapped in private transactions to third-party investors, bringing the total number of shares sold to third parties to 15.2 million shares.
Upon completion of the proposed transactions which are expected to close in a series of tranches, Organto expects to receive approximately CDN $925,000 in bridge loans with related parties. The bridge loans will be unsecured and due in one year, with a weighted average interest rate of approximately 6.36% payable at the end of one year. Proceeds of the loans will be used for general working capital purposes.
Arnoud Maas, Chief Executive Officer of Organto commented, “We are pleased to be completing this innovative and non-dilutive bridge financing, and I want to thank the parties for their willingness to participate in the transaction and provide non-dilutive bridge financing to the Company. We remain excited by our business and this bridge financing will provide needed funds as we continue to roll-out our vertically integrated year-round branded produce platform.”
The financing and related private share sales are expected to close in a number of tranches and are expected to be completed in late February or early March, 2018.
In addition, Organto has entered into a Debt Settlement Agreement with Columbus Gold Corp., a related party service provider, to settle debts in the amount of CDN $250,000 arising from services provided to Organto during the period December 2015 through December 2017. Organto has also entered into Debt Settlement Agreements with two of its directors, Jeffrey Klenda and Javier Reyes, to settle debts in the amount of CDN $52,000 for fees incurred in the period December 2015 through December 2016. A total of 2,323,076 common shares will be issued based on the 20-day volume weighted average price as traded on the TSX Venture Exchange immediately prior to January 11, 2018. Final issuance of these shares is subject to acceptance of the TSX Venture Exchange.
Organto is also seeking TSX Venture Exchange acceptance of a Shares for Services agreement dated January 1, 2018 between it and Columbus Gold Corp. who will provide accounting, financial reporting and other administrative services to Organto for the period January through May 2018 for a total fee of $50,000. Shares will be issued in June 2018 based on the then current 20-day volume weighted average price as traded on the TSX Venture Exchange.
The Company is also planning to cancel and return to treasury 718,505 common shares to settle amounts due from Marcus Meurs and Fresh Organics Inc., related parties, totaling CDN $96,998, as per the terms of a Management Services Agreement dated March 1, 2017. As per the terms of this agreement, the shares are to be cancelled at a price of $0.135 per share. The final cancellation and return to treasury of these shares is subject to acceptance by the TSX Venture Exchange.
ON BEHALF OF THE BOARD,
Arnoud Maas
Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
For more information contact:
Investor Relations
604-634-0970
1-888-818-1364
info@organto.com
ABOUT ORGANTO
Organto is a vertically integrated provider of year-round value-added branded organic produce serving a growing socially responsible and health conscious consumer around the globe. Organto employs a business model that is integrated from the “table to the field”. Driven by consumer demand for healthy and organic food products, it operates an integrated business model with extensive logistical, processing, sourcing and growing capabilities, providing complete traceability from the table back to the field. Operations are currently located in Guatemala, The Netherlands and the USA, as well as secured third-party supply from regions in Africa and Peru, with plans to continue to expand year-round supply capabilities via strategic third-party growers and processors diverse growing regions. Organto’s business model is rooted in its commitment to sustainable business practices focused on environmental responsibility and a commitment to the communities where it operates, its people and its shareholders.
FORWARD LOOKING STATEMENTS
This news release may include certain forward-looking information and statements, as defined by law including without limitation Canadian securities laws and the “safe harbor” provisions of the US Private Securities Litigation Reform Act of 1995 (“forward-looking statements”). In particular, and without limitation, this news release contains forward-looking statements respecting Organto’s business model and markets; the expectations of the new website being a responsive customer information platform; the acceleration of commercial efforts as supply expands, the commitment to developing a leading organic vegetable brand; and the importance of the website in connecting with consumers. Forward-looking statements are based on a number of assumptions that may prove to be incorrect, including without limitation assumptions about the following: the ability and time frame within which Organto’s business model will be implemented and product supply will be increased; consumer demand will exist for a new organic vegetable brand; cost increases; dependence on suppliers, partners and contractual counter-parties; changes in the business or prospects of Organto; unforeseen circumstances; risks associated with the organic produce business generally, including inclement weather, unfavourable growing conditions, low crop yields, variations in crop quality, spoilage, import and export laws and similar risks; transportation costs and risks; general business and economic conditions; and ongoing relations with distributors, customers, employees, suppliers, consultants, contractors, partners and joint venturers. The foregoing list is not exhaustive and Organto undertakes no obligation to update any of the foregoing except as required by law.
To view the associated document to this release, please click on the following link:
public://news_release_pdf/organto02222018.pdf
To view the original release, please click here
Source: Organto Foods Inc. (TSX Venture:OGO, OTC Pink:OGOFF)
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