VANCOUVER, Oct. 3, 2019 /CNW/ - Organto Foods
Inc. (TSX-V: OGO, OTC: OGOFF) ('Organto" or the
"Company"). Further to its news release of
March 27, 2019, Organto today
announced that is has received shareholder approval and final
acceptance of the TSX Venture Exchange for the sale of the
Company's processing plant and related assets including land,
buildings and processing equipment (the "Assets") located in
Patzun, Chimlatenango, Guatemala,
to Organizacion de Mercadeo S.A., ("Omega"). Final closing
remains subject to Organto receiving certain final deliverables
from Omega.
The Assets were deemed non-strategic in 2018 as a result of
Organto's transition to an asset light business model.
Organto's re-engineered vegetable and fruit operating platform,
sources and processes a variety of fresh, value-added organic and
conventional vegetable and fruit products from strategic grower and
processing partners in key sourcing regions including Mexico, Peru,
Argentina, Zimbabwe and Colombia, for year-round distribution to fast
growing consumer markets. Organto's current distribution is
centered in European markets with a focus on the development of the
Organto "I am Organic" brand.
"With the shift in our foods business to an asset light business
model, we felt there was no longer a strategic benefit to Organto
to maintain these assets." commented Steve
Bromley, Chair and Interim Chief Executive Officer of
Organto Foods Inc. "The disposal of these assets improves our
balance sheet and reduces ongoing operating costs as we continue to
focus on our asset light vegetable and fruit operating
platform."
As per the terms of the agreement signed in March 2019, Omega acquired the Assets on an "as
is" basis for consideration of USD $857,934, or approximately CDN $1,125,000. Consideration was paid via the
discharge of certain loans from Omega and related parties to
Organto in the amount of CDN $404,095
(USD $314,647), cancellation of
5,873,257 common shares of Organto at a deemed price of CDN
$0.11 per share or CDN $646,069, and the assumption of an interest-free
note payable from Omega in the amount of CDN $74,836 (USD $56,628), due on the second anniversary of the
closing date, and secured by a lien on the Assets.
ON BEHALF OF THE BOARD
Steve Bromley
Chair and
Interim 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.
ABOUT ORGANTO
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. The Organto Foods
Group is an integrated provider of year-round value-added branded
organic vegetables and seasonal organic and non-GMO fruit and
vegetable products using an asset-light business model to serve a
growing socially responsible and health conscious consumer around
the globe.
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 current business model and related expertise;
Organto's belief that they have successfully shifted to an asset
light business model in its foods business; Organto's belief that
the Guatemalan processing assets were no longer strategic to
execution of business plans; Organto's belief that the disposal of
the Guatemalan assets has improved the Company's balance sheet and
reduced operating costs; management's beliefs, assumptions
and expectations; and general business and economic conditions.
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; 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, unfavorable 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; ongoing relations
with distributors, customers, employees, suppliers, consultants,
contractors and partners and joint venturers; and risks associated
with cannabis operations and receipt of required licenses in
Colombia. The foregoing list is
not exhaustive and Organto undertakes no obligation to update any
of the foregoing except as required by law.
SOURCE Organto Foods Inc.
