Focus on Core Organic Foods
Platform
VANCOUVER, Oct. 23, 2019 /CNW/ - Organto Foods Inc.
(TSX-V: OGO, OTC: OGOFF) ('Organto" or the
"Company"). Further to its news release of
June 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 Colombian cannabis subsidiary, Medicannabis S.A.S.
("Medicannabis") to Xebra Brands Ltd. ("Xebra").
Formal closing remains subject to certain closing deliverables
which are expected to be completed in the near term.
Xebra is a private cannabis company, focused on the design and
delivery of unique wellness and leisure products. It has
acquired cultivation and processing licences and holds exclusive IP
to render cannabinoids water soluble. Xebra is developing
brands, and cannabis-infused beverages in Colombia and Mexico, for sale globally where cannabis is
legal. Trademarks are being filed worldwide for Xebra's
inaugural cannabis infused beverage brands, including:
MADCAP soft drinks, HIGHJACK energy drinks
and HolaHi iced teas. Xebra's Mexican
subsidiaries, Elements Bioscience and Sativa
Group, specialize in CBD wellness products, with 13
applications awaiting approval. Xebra is aiming for a public
listing in Q2 2020.
"We are excited to be a significant shareholder of Xebra Brands,
providing Organto with an important asset for the future. We
believe the continued execution of their business plan should
create tremendous shareholder value that can be monetized to
benefit Organto's shareholders," commented Steve Bromley, Chair and Interim CEO of Organto
Foods Inc. "With this transaction we will continue to have an
investment in this exciting and fast-growing sector while focusing
operationally on our core organic vegetables and fruit
platform. We believe the opportunity in organic fruits and
vegetables is significant as global healthy eating and wellness
trends continue to drive strong growth on a global basis.
With our recent repositioning and diverse customer base and supply
chain capabilities, we believe we are well-positioned to capture
this market opportunity, as evidenced by our recently announced
record revenues for the third quarter of 2019."
As per the terms of the Agreement with Xebra, Organto will
receive 7,124,630 common shares of Xebra, representing 7.44% of the
proforma outstanding shares of Xebra. The former shareholders and
advisors of Medicannabis are also to receive collectively 2,875,370
common shares of Xebra and in turn they will surrender for
cancellation 7,461,538 common shares of Organto previously issued
to them as part of the original acquisition of Medicannabis by
Organto.
Organto will also receive net cash proceeds of CDN$321,077 and will have promissory notes
totalling CDN $600,000 due by Organto
to Xebra forgiven. In addition, Organto has been granted a
ROFR (right-of-first refusal) to distribute Xebra's cannabis
products throughout Europe.
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 Xebra's execution of their business plan
should create tremendous shareholder value that can be monetized;
Organto's belief that the opportunity in organic vegetables and
fruits is significant as healthy eating and wellness trends
continue to drive growth; Organto's belief that they are well
positioned to capture the organic foods market opportunity;
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.
