07:26:55 EDT Fri 29 Mar 2024
Enter Symbol
or Name
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CA



Organto Foods Inc
Symbol OGO
Shares Issued 112,263,903
Close 2018-06-28 C$ 0.08
Market Cap C$ 8,981,112
Recent Sedar Documents

Organto Foods' president, COO leaves

2018-06-28 09:59 ET - News Release

Mr. Steve Bromley reports

ORGANTO PROVIDES CORPORATE UPDATE

Organto Foods Inc. has provided an update on a number of matters including the planned closing of the previously announced private placement, the strengthening of its balance sheet through the elimination of $3.27-million of debt and payables, the restructuring of the loan due to Omega SA, and the departure of Marcus Meurs as president and chief operating officer.

The company is also planning to reprice certain outstanding share purchase warrants and issue new stock options.

Planned closing of private placement

Organto is targeting to close its previously announced non-brokered private placement on July 5, 2018. On June 7, 2018, the company announced its intention to complete a non-brokered private placement of up to 20 million units of Organto at a price of eight cents per unit for gross proceeds of up to $1.6-million, with each unit consisting of one common share and one-half warrant, exercisable to purchase one additional Organto common share at a price of 15 cents for a period of 12 months after the closing date. The exercise date of the warrants will be subject to acceleration in the event that the closing price of Organto's common shares is greater than or equal to 25 cents per share for a period of 10 consecutive trading days, subject to certain conditions.

Strengthening of balance sheet

Organto has entered into agreements which will result in the elimination of over $3-million of debt and payables through the early conversion of convertible debentures, the settlement of a convertible loan and shares for debt settlements.

Early conversion of convertible debentures

Organto has reached an agreement with the holders of outstanding convertible debentures with a face value of $2,035,000 to convert the debentures, plus accrued interest and related conversion fees, into common shares of Organto. Under the terms of the agreement, Organto has agreed to issue a total of 13,330,273 common shares to the holders of the debentures, representing 11 million common shares issued to convert the face value of the debentures at a conversion price of 18.5 cents per common share, and 2,330,273 common shares to convert accrued interest and related conversion fees at a conversion price of 10 cents per common share.

The debentures were issued on June 8, 2017, for a term of three years, and bearing interest of 8 per cent per annum, payable in arrears starting one year after the date of issuance. Holders had the option to convert the principal amount of their debentures into common shares of Organto at a conversion price of 35 cents per share through June 20, 2020.

Settlement of convertible loan

Organto entered into a convertible loan agreement in March, 2016, with a face value of $590,000 (U.S.). Based on the automatic conversion terms of the loan, the amount outstanding has been automatically converted to common shares of Organto.

The original loan was dated March 30, 2016, and was subsequently amended to i) extend the due date of the loan to June 30, 2018, and ii) to revise the conversion price of the loan from 42 cents per common share to 33 cents per common share. The loan provided for automatic conversion at a conversion price of 33 cents per common share in the event the company completed an equity financing resulting in gross proceeds of at least $5.0-million. The company completed such an equity financing in September, 2017, for gross proceeds of $5,163,531.

As a result of the automatic conversion of the loan, 2,269,230 common shares were issued to the holder of the loan.

Shares for debt settlements

As announced on Feb. 22, 2018, Organto has entered into debt settlement agreements with Columbus Gold Corp., a related party that provided services, and two of its directors to settle debts in the amount of $302,000 arising from services provided to Organto during the period December, 2015, through December, 2017. A total of 2,323,076 common shares will be issued upon acceptance by the TSX Venture Exchange.

In addition, Organto entered into a shares for services agreement dated Jan. 1, 2018, between the company and Columbus Gold Corp. which provided accounting, financial reporting and other administrative services to Organto for the period January through May, 2018, for a total fee of $50,000. A total of 666,666 common shares will be issued based on the 20-day volume-weighted average price as traded on the TSX Venture Exchange at May 31, 2018. Final issuance of these shares is subject to acceptance by the TSX Venture Exchange.

Organto has also entered into a debt settlement agreement with a former officer as full and final settlement for amounts payable of $78,691 (U.S.). As per the terms of the debt settlement agreement a total of 1,066,666 common shares will be issued based on the 20-day volume-weighted average price as traded on the TSX Venture Exchange at June 15, 2018. Final issuance of these shares is subject to acceptance by the TSX Venture Exchange.

Restructuring of loan due to Omega SA

Organto has entered into an amended agreement with Arturo Bickford, a former officer and director, to restructure liabilities totalling $298,248 (U.S.) owed to Mr. Bickford and/or his affiliated companies under the terms of a previous settlement agreement. Under the terms of the amended agreement, monthly amounts payable have been amended, the payment term extended and certain outstanding interest costs waived. See note 7 of Organto's financial statements for the quarter ended March 31, 2018, available on SEDAR and on the company's website, for further details of the liabilities.

The proposed restructuring, which is subject to the approval of the TSX-V, consists of Organto making the following payments to the debtors related to amounts outstanding: (1) a cash payment of $55,000 (U.S.) upon the closing of the planned private placement; (2) monthly payments of $15,000 (U.S.) commencing 30 days after closing of the planned private placement and continuing for four months (total payments of $60,000 (U.S.)); and (3) monthly payments of $22,906 (U.S.) commencing 30 days after the completion of the payments noted in (2) above and continuing for eight months (total payments of $183,248).

Repricing of share warrants

The company issued share purchase warrants as part of a private placement in 2017 and is proposing to adjust the pricing of the following share purchase warrants:

  • 12,699,634 share purchase warrants originally exercisable at a price of 25 cents per warrant share until June 20, 2019. The new exercise price will be 17 cents per warrant share;
  • 2,165,208 share purchase warrants originally exercisable at a price of 25 cents per warrant share until Aug. 3, 2019. The new exercise price will be 17 cents per warrant share;
  • 19,565,000 share purchase warrants originally exercisable at a price of 25 cents per warrant share until Sept. 11, 2019. The new exercise price will be 17 cents per warrant share.

Also, the company will adjust the existing accelerated expiry provision of these warrants. Originally, if the closing price of the company's shares was 35 cents or greater for a period of 10 consecutive trading days, then the warrant holders had 30 days to exercise their warrants. The company plans to change this to a closing price of 22 cents or greater for 10 consecutive trading days and adjust the exercise period to 20 days.

Issuance of stock options

Organto has granted incentive stock options to certain officers who have recently joined the company to purchase up to an aggregate of 600,000 common shares at an exercise price of 15 cents per share. One hundred twenty-five thousand of the options vest immediately with the remainder vesting 20 per cent annually over the next four years. All of the foregoing options expire on Oct. 10, 2022.

Departure of Marcus Meurs, president and chief operating officer

The board of directors announces the departure of Mr. Meurs from his position as president and chief operating officer, effective June 18, 2018. The board of directors thanks Mr. Meurs for this contribution, as well as his work in originally establishing Organto, and wishes him well in his future endeavours.

Steve Bromley, chair and interim chief executive officer, will assume the role of president effective immediately. There are no plans to fill the chief operating officer role in the near term given the revised structure which has been implemented by the company.

About Organto Foods Inc.

Organto is an integrated provider of year-round value-added branded organic vegetables and seasonal organic and non-GMO (genetically modified organism) fruit and vegetables 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 sourcing, logistical and processing capabilities, providing complete traceability from the table back to the field. Operations are currently located in Guatemala, the Netherlands and the United States, as well as third party supply from a variety of regions, with plans to continue to expand supply capabilities via strategic third party growers and processors in Africa, Mexico and other growing regions.

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