Organto completes $2.34M convertible note prepayment

Executive Summary

• Organto Foods Inc. has completed the prepayment of all outstanding 10% convertible notes, totaling $2,340,850 in principal plus $206,829 in accrued interest.
• All noteholders elected to receive cash payments rather than converting the notes into common shares, despite the option to convert at 60 cents per share.
• The company states this move is part of a strategy to optimize capital structure, remove potential dilution, and improve cash flow for future growth.

Key Details

• Total Repayment Amount: $2,547,679 (comprising $2,340,850 in principal and $206,829 in accrued interest).
• Note Terms: 10% convertible notes with a conversion price of 60 cents per common share.
• Holder Election: 100% of noteholders chose cash repayment over conversion during the 30-day notice period.
• Original Maturity Schedule: The notes were originally scheduled to mature in tranches through March 2027, with specific tranches due in December 2025 ($922,000), February 2026 ($148,000), December 2026, February 2027, and March 2027.
• Conversion Feature: The notes could have been force-converted if the stock traded at or above 90 cents per share for 10 consecutive trading days.
• Strategic Rationale: CEO Steve Bromley cited the removal of dilution and debt service costs as key benefits, aiming to position the company for greater flexibility and long-term shareholder value.

Notable Quotes

• "The pro-active 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 as we execute on plans to continue to advance our global organic and fair-trade foods platform." — Steve Bromley, Co-Chair and CEO