/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. 4, 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 is has priced
its previously announced overnight marketed public offering (the
"Offering") of unsecured convertible debentures of the Company
("the Debentures") and has entered into a underwriting agreement
with a syndicate of underwriters co-led by Beacon Securities
Limited and PI Financial Corp., which also includes Clarus
Securities Inc. and Stifel Nicolaus Canada Inc. (the
"Underwriters").
The size of the previously announced base Offering has been
increased to $7,000,000. 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 common shares in the capital of
the Company ("Shares") based upon a conversion price per Share (the
"Conversion Price"), at any time after November 30, 2023 and prior to November 30, 2026 (the "Maturity Date"). The
Conversion Price will be $0.50 for
each Share, subject to adjustment in certain circumstances.
In connection with the Offering, the Company has granted the
Underwriters an option (the "Over-Allotment Option"), exercisable
in whole or in part at the sole discretion of the Underwriters at
any time up to 30 days following the closing of the Offering, to
sell up to an additional principal amount of Debentures
representing up to 15% of the Offering. If the Over-Allotment is
exercised in full, the gross proceeds under the Offering will be
$8,050,000.
The size of the previously announced private placement of Shares
(the "Private Placement") has also been increased to expected gross
proceeds of approximately CDN $5,975,000 based on the sale of approximately
18,565,000 Shares at a price of $0.322 per Share. The Private Placement was led
by a respected Dutch family office with participation from two
other Dutch investors. As part of the Private Placement, the Dutch
family office will be granted a pre-emptive anti-dilutive right
to maintain its 5% equity ownership position in the event of
future financings by the Company. No finder's fees were paid on the
Private Placement and the Shares issued will be subject to a hold
period expiring four months from the date of issue.
Both the Offering and the Private Placement are expected to
close on or about November 12, 2021
(the "Closing Date") or such other date as the Company and the
Underwriters may agree. The closing of the Offering and Private
Placement is subject to a number of conditions, including without
limitation, the receipt of all necessary regulatory and stock
exchange approvals, including the approval of the TSX Venture
Exchange ("TSXV") and the applicable securities regulatory
authorities.
"We are really pleased to announce these financings and
appreciate the support of our investors. This financing marks a key
milestone for Organto, significantly expanding our financial
resources as we pursue our continued aggressive growth strategy,"
commented Steve Bromley, Chair and
Co-CEO and Rients van der Wal,
Co-CEO and CEO of Organto Europe BV. "We believe that demand for
ethically driven branded fresh organic fruits and vegetables will
continue to grow globally as consumers seek healthy foods that are
produced in a sustainable and transparent manner. We see this as an
exciting opportunity for Organto 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."
The Debentures
The Debentures will be issued at an issue price of $1,000 per Debenture. The Debentures will be
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, 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 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 to be entered
into on the Closing Date 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.
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.
A preliminary prospectus supplement for the Offering was
previously filed with the securities regulatory authorities in all
provinces and territories of Canada on November 3,
2021. A final prospectus supplement is expected to be filed
with the securities regulatory authorities in all provinces and
territories of Canada on
November 4, 2021. The Company will
pay the Underwriters a cash commission of 6.0% of the gross
proceeds of the Offering, and compensation options valued at 6.0%
of the gross proceeds of the Offering divided by the Conversion
Price that will be issued to the Underwriters on completion of the
Offering. Each such compensation option is exercisable into one
common share of the Company at the Conversion Price for a period of
24 months following the closing of the Offering.
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.
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.
Copies of the base shelf prospectus and, any supplement thereto
to be filed in connection with the Offering, can be found on SEDAR
at www.sedar.com.
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.
