Sale Aligns with Strategic Asset Light
Organic Foods Business Model
VANCOUVER, March 27, 2019 /CNW/ - Organto Foods Inc.
(TSX-V: OGO, OTC: OGOFF) ('Organto" or the
"Company"). Organto today announced that it has entered
into an agreement to sell the Company's processing plant and
related assets including land, buildings and processing equipment
(the "Assets") located in Patzun, Chimlatenango, Guatemala, to Organizacion de Marcadeo S.A., a
company controlled by Arturo
Bickford and Jorge Guzman
Efrain ("Omega").
As per the terms of the agreement, which is subject to final
acceptance by the TSX Venture Exchange, Omega will acquire the
Assets in an arm's length transaction on an "as is" basis for
consideration of USD $857,934, or
approximately CDN $1,125,000.
Consideration will be 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.
"With the successful shift in our organic foods business to an
asset light business model over the past number of months, we felt
there was no longer a strategic benefit to Organto to maintain
these assets. As a result, we feel it is in the Company's
best interests to dispose of these assets and put them into the
hands of a party that is committed to the local growing area and
economy." commented Steve Bromley,
Chair and Interim Chief Executive Officer of Organto Foods
Inc. "The disposal of this asset is expected to improve our
balance sheet and reduce ongoing operating costs as we continue to
focus on our asset light organic vegetable and fruit operating
platform."
Organto's organic vegetable and fruit operating platform
utilizes an asset light business model, sourcing a variety of fresh
value-added organic vegetable and fruit products from strategic
grower partners in key sourcing regions including Mexico, Peru,
Argentina, Zimbabwe, for year-round distribution to fast
growing consumer markets. Organto's current distribution is
focused on European markets with a focus on the development of the
Organto "I am Organic" brand.
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. Organto is
comprised of two independent business units, i) the Organto Foods
Group, and ii) the Organto Global Cannabis Group. 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. The Organto Global Cannabis Group is focused on the
growing market for medicinal cannabis around the world, with
initial efforts focussed on key regions of Latin America, utilizing low-cost natural
growing operations and a diverse and exclusive IP seed library to
deliver the medicinal properties consumers expect.
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 organic 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 will improve the Company's
balance sheet and reduce 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.