Star Metro - Organto Foods Closes Private Placement, Debt Settlement and Amendments to Convertible Notes

VANCOUVER, BC AND BREDA, THE NETHERLANDS / ACCESS Newswire / April 16, 2025 / Organto Foods Inc. (TSX-V:OGO)(OTC PINK:OGOFF)(FSE:OGF) ("Organto" or "the Company"), today announced that is has closed its previously announced private placement (see press releases dated March 20 and April 1, 2025) in the amount of 53,099,910 common shares at a price of C$0.10 per share (the "Private Placement Shares") for gross proceeds of C$5,309,991 (the "Private Placement"). Of the total raised the Company received C$468,000 in subscriptions in August 2024, and additional C$150,000 and US$200,000 in October 2024 (collectively the "Initial Tranches") however due to the imposition of a Failure to File Cease Trade Order ("FFCTO") by the British Columbia Securities Commission (the "BCSC") on July 16, 2024, the Company was not permitted to close a private placement at that time. The FFCTO was revoked on January 2, 2025, and the Company's shares were reinstated for trading on the TSX Venture Exchange ("TSXV") on March 12, 2025. The Company then recommenced efforts to raise equity capital and has now raised gross proceeds of C$5,309,991, inclusive of the Initial Tranches. The Company notes that funds received by the Company under the Initial Traches have been used by the Company for its ongoing operations.

The Company has also settled outstanding debt in the aggregate amount of C$2,243,300 comprised of:

• all principal amounts and interest owing on promissory notes and short-term loans in the aggregate amount of C$2,186,906; and

• accounts payable owed to creditors in the aggregate amount of C$56,394,

In addition, the Company has completed the previously announced amendments (the "Convertible Note Amendments") to convertible notes in the aggregate principal amount of approximately C$2,543,350 plus unpaid interest, bearing interest at the rate of 10% per annum (the "Convertible Notes") (see press releases dated March 20 and April 1, 2025). The Convertible Notes had an original term of 24 months from the date of issuance and incurred interest at a rate of 10% per annum to be paid annually in arrears on the first anniversary of the date of issuance (the "First Interest Date") and the second anniversary of the date of issuance (the "Second Interest Date"), respectively and could be converted, at the holder's sole discretion, into common shares of the Company at a price of C$3.00 per share (the "Conversion Price"). In the event that the closing price of the Company's common shares equals or exceeds C$4.50 per share for a period of 10 consecutive trading days or more on the TSXV, the Company could force conversion of the Convertible Notes into common shares (the "Acceleration Price").

As a result of the Convertible Note Amendments, the terms of Convertible Notes have been amended as follows:

1. interest payments that were payable, as of the First Interest Date and Second Interest Date, respectively, were settled through the issuance of 1,695,568 common shares (the "Convertible Note Settlement Shares") at a price of C$0.30 per Convertible Note Settlement Share to settle interest payable on each of the First Interest Date and the Second Interest Date in the aggregate amount of C$508,670;

2. the maturity dates of the Convertible Notes were extended by one (1) year in respect of 50% of the principal amount and by two (2) years in respect of the remaining 50% of the principal amount;

3. the C$3.00 Conversion Price was replaced with a C$0.60 Conversion Price; and

4. the C$4.50 Acceleration Price was replaced with a C$0.90 Acceleration Price.

Certain directors and/or officers of the Company acquired a total of:

• 2,570,310 common shares under the Private Placement for a total purchase price of C$257,031, representing 4.8% of the total Private Placement Shares issued;

• 381,023 common shares under the Debt Settlement for a total issue price of C$38,102.30, representing 1.7% of the total Debt Settlement Shares issued; and

• 67,966 common shares under the Convertible Note Amendments for a total issue price of C$20,389.80, representing 4.0% of the total Convertible Note Settlement Shares issued.

Each such participation is considered to be a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101") and is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any shares issued to, or the consideration paid by such directors and officers, exceeds 25% of the Company's market capitalization.

Finder's fees of C$255,568 were paid in respect of the Private Placement. $236,968 was paid via the issuance of 2,369,680 common shares (the "Finder's Fee Shares") at a deemed price of C$.10 per share, and $18,600 was paid in cash. The Company will use the net proceeds of the Private Placement to fund general working capital. The Private Placement Shares, Debt Settlement Shares Convertible Note Settlement Shares and Finder's Fee Shares are subject to a hold period of four months and one day from their date of issuance.

This news release does not constitute an offer to sell or solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

ON BEHALF OF THE COMPANY,

Steve Bromley
Chair and Chief Executive Officer

For more information contact:
Investor Relations
[email protected]
John Rathwell, Senior Vice President, Corporate Development and Investor Relations
647 629 0018

ABOUT ORGANTO

Organto is a leading provider of branded, private label, and distributed organic and non-GMO fruit and vegetable products using a strategic asset-lighter business model to serve a growing socially responsible and health-conscious consumers. 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 ("forward-looking statements"). In particular, and without limitation, this news release contains forward-looking statements respecting the Company's use of net proceeds from this Private Placement. Forward-looking statements are based on a number of assumptions that may prove to be incorrect, including, without limitation, the assumption that the Company will use the net proceeds from the Private Placement for general working capital purposes. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in forward-looking statements in this news release include, among others, uncertainty regarding the outcome of negotiations with the Company's creditors; regulatory risks; risks related to market volatility and economic conditions; risks related to unforeseen delays; and risks that necessary financing will be unavailable when needed. For further information on these and other risks and uncertainties that may affect the Company's business, see the "Risks and Uncertainties" and "Forward-Looking Statements" sections of the Company's annual and interim management's discussion and analysis filings with the Canadian securities regulators, which are available under the Company's profile at www.sedarplus.ca. Except as required by law, Organto does not assume any obligation to release publicly any revisions to forward-looking statements contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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.

SOURCE: Organto Foods, Inc.

View the original press release on ACCESS Newswire

S.Cloutier--SMC