/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
Proceeds To Be Used to Fund Internal Growth
and Accretive Acquisition Opportunities
VANCOUVER, BC and BREDA, Netherlands, Nov. 12, 2021 /CNW/ - Organto Foods Inc.
(TSXV: OGO) (FSE: OGF) ("Organto" or "the Company"), an
integrated provider of organic and value-added organic fruits and
vegetables, today announced that it has closed its previously
announced overnight marketed public offering (the "Offering") of
unsecured convertible debentures ("the Debentures") and private
placement of common shares in the capital of Organto ("Shares") for
cumulative gross proceeds of $14,027,950.
The Company closed the Offering for gross proceeds of
$8,050,000 which includes
$1,050,000 principal amount of
Debentures issued pursuant to the underwriters' full exercise of
their over-allotment option. The Offering was completed
through a syndicate of underwriters co-led by Beacon Securities
Limited and PI Financial Corp., and including Clarus Securities
Inc. and Stifel Nicolaus Canada Inc. (the "Underwriters"). A cash
commission of $483,000 was paid and
966,000 compensation options were issued to the Underwriters in
connection with the Offering. Each compensation option is
exercisable until November 2023 into
one Share of the Company at $0.50.
The Company closed the private placement of Shares (the "Private
Placement") for gross proceeds of $5,977,950 representing the sale of 18,565,062
Shares at a price of $0.322 per
Share. The Private Placement was led by Blikkenburg B.V., a
respected Dutch family office with participation from two other
Dutch investors. As part of the Private Placement, in the event of
future financings by the Company, Blikkenburg B.V. has been granted
a pre-emptive anti-dilutive right to participate in such financings
to maintain its 5% equity ownership position. No finder's fees
were paid on the Private Placement and the Shares issued will be
subject to a hold period expiring four months and one day from the
date of issue.
The Company intends to use the net proceeds from the Offering
and the Private Placement for the financing of acquisitions,
working capital and for general corporate purposes.
"The closing of these financings marks a key milestone for
Organto, significantly expanding our financial resources as we
pursue our continued aggressive growth strategy. We are
excited for the future and appreciate the support of all the
investors that participated in this financing. We are also
very pleased to welcome Blikkenburg BV as a significant strategic
investor in Organto." commented both Steve
Bromley, Chair and Co-CEO and Rients
van der Wal, Co-CEO and CEO of Organto Europe BV, and
further stated, "We continue to believe that our business model is
well positioned to meet consumer demand for ethically driven fresh
organic fruits and vegetables. We see this as an exciting
opportunity as we leverage our asset light business model and
go-to-market expertise to build out an ethics driven one-stop shop
in fresh organic fruits and vegetables via a combination of
internal growth and strategic acquisitions."
Esther Lindenbergh, Director of Blikkenburg BV stated, "As an
investor, we have spent a lot of time looking for
opportunities in the fast moving consumer goods (FMCG)
sector. We strongly believe there are numerous permanent
positive trends and tailwinds currently impacting this sector and
feel that it will be difficult for the more established players to
quickly react and take advantage of these rapid changes.
With that in mind, we believe there is
a tremendous opportunity in the branded ethical
organic fruit and vegetable vertical and we are convinced Organto
Foods Inc., supported by its digital passport, can build a fast
growing, profitable platform in Europe and globally."
The Debentures
The Debentures were issued at an issue price of $1,000 per Debenture and are direct, unsecured
obligations of the Company, subordinate to all other liabilities of
the Company.
The Debentures will mature on November
30, 2026 and will accrue interest at the rate of 8.0%,
payable annually, not in advance, on November 30th of each year commencing
on November 30, 2022. The Debentures
will be convertible into freely tradable Shares based upon the
Conversion Price (as defined herein), at any time after
November 30, 2023 and prior to the
Maturity Date. The conversion price will be $0.50 for each Share, subject to adjustment in
certain circumstances (the "Conversion Price").
The Debentures will not be redeemable by the Company at any time
on or before November 30, 2023,
except upon the occurrence of a change of control of the Company in
accordance with the terms of the debenture indenture which the
Company entered into with respect to the Offering. After
November 30, 2023 and prior to
November 30, 2026, the Debentures
will be redeemable by the Company on not more than 60 days and not
less than 30 days prior notice at a price payable equal to
$1,000 per Debenture plus accrued and
unpaid interest, provided that the volume weighted average trading
price of the Shares on the TSXV for the 20 consecutive trading days
ending five trading days prior to the applicable date on which the
notice of redemption is given exceeds 125% of the Conversion
Price.
At any time after November 30,
2023, the Company may, at its option, accelerate the
conversion of the principal amount of the then outstanding
Debentures at the Conversion Price, on not more than 60 days' and
not less than 30 days' prior notice, should the daily volume
weighted average trading price of the Shares on the TSX Venture
Exchange be greater than 125% of the Conversion Price for the 20
consecutive trading days preceding the notice.
Subject to specified conditions, the Company will have the right
to repay the outstanding principal amount of the Debentures, on
maturity or redemption, through the issuance of Shares.
The Debentures were offered pursuant to a prospectus supplement
dated November 4, 2021 filed with the
securities regulatory authorities in all provinces and territories
of Canada. A copy of the prospectus supplement and the base
shelf prospectus dated July 5, 2021
can be found under the Company's profile on SEDAR at
www.sedar.com.
The securities offered have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws, and may not be
offered or sold to, or for the account or benefit of, persons in
the United States absent
registration under the U.S. Securities Act and all applicable state
securities laws, or compliance with an exemption from such
registration requirements. This press release shall not constitute
an offer to sell, or the solicitation of an offer to buy, nor shall
there be any sale of the securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
ON BEHALF OF THE BOARD,
Steve Bromley
Chair and
Co-CEO
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 is an integrated provider of branded, private label and
distributed organic and non-GMO fruit and vegetable products using
a strategic asset-light business model to serve a growing socially
responsible and health-conscious consumer around the globe.
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.
CAUTION CONCERNING FORWARD LOOKING STATEMENTS
Certain statements included in this release may be
"forward-looking statements" within the meaning of applicable
securities laws. Forward-looking statements are typically
identified by the use of terminology such as "may", "will",
"would", "could", "expects", "plans", "intends", "anticipates" or
"believes" or the negative or other variations of these words or
other comparable words or phrases. Forward-looking statements, by
their nature, are based on assumptions, and are subject to
important risks and uncertainties. Forward-looking statements
cannot be relied upon due to, amongst other things, changing
external events and general uncertainties of the business. Actual
results may differ materially from results indicated in
forward-looking statements due to a number of factors, including
those identified in Organto's annual information form and
management's discussion and analysis of financial condition and
results of operations. The forward-looking statements contained in
this release represent Organto's expectations as of the date of
this release (or as of the date they are otherwise stated to be
made), and are subject to change after such date. However, Organto
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as required under applicable
securities regulations.
SOURCE Organto Foods Inc.