Organto Foods Inc. Announces Prepayment of Convertible Notes

Executive Summary

• Organto Foods Inc. completed the pre‑payment of all outstanding 10 % convertible notes, totaling CDN $2,340,850 in principal plus $206,829 accrued interest.
• All noteholders elected cash payment rather than conversion at the $0.60 per share price, eliminating potential dilution and future debt service obligations.
• The repayment removes scheduled maturities through March 2027, enhancing financial flexibility for anticipated growth initiatives.

Key Details

• Pre‑payment amount: CDN $2,340,850 principal + CDN $206,829 accrued interest = CDN $2,547,679 total cash outflow.
• Conversion price offered: $0.60 per common share; 100 % of holders chose cash.
• Original maturity schedule:
• Dec 2025 – $922,000
• Feb 2026 – $148,000
• Additional tranches in Dec 2026, Feb 2027, Mar 2027 (all now prepaid).
• Force‑conversion clause: Would have triggered at a share price ≥ $0.90 for ten consecutive trading days; not exercised due to cash repayment.
• Strategic rationale (CEO statement): Eliminates dilution risk and debt service costs, improves cash flow, and positions the company for “greater flexibility” in executing its global organic and fair‑trade foods growth plan.
• Impact on capital structure: Reduces outstanding convertible debt to zero; improves leverage ratios and frees covenant capacity for future financing.

Notable Quotes

“The proactive prepayment of these convertible notes is a key part of our broader financing strategy… By removing the potential dilution and debt service costs related to these convertible securities, we believe we are positioning our business for greater flexibility and improved cash flow…” – Steve Bromley, Co‑Chair and CEO, Organto Foods Inc.