Organto Foods closes $8-million private placement

Executive Summary

• Organto Foods Inc. has closed a previously announced non-brokered private placement, raising $8.0 million in gross proceeds.
• The financing consists of 16 million units issued at $0.50 per unit, with each unit comprising one common share and one-half common share purchase warrant.
• Net proceeds are designated for the growth of the organic and fair-trade product platform, technology development, working capital, and potential short-term debt repayment.

Key Details

• Gross Proceeds: $8.0 million.
• Units Issued: 16 million units.
• Price Per Unit: $0.50.
• Warrant Terms: Each unit includes one-half warrant. Each full warrant allows the acquisition of one common share at an exercise price of $0.75.
• Warrant Expiry: 18 months from the closing date, subject to acceleration.
• Acceleration Clause: The company may accelerate the expiry date to 30 days after a news release if the common share closing price equals or exceeds $1.00 for 10 consecutive trading days on the TSX Venture Exchange.
• Hold Period: 4 months and 1 day from issuance per Canadian securities laws.
• Contractual Restriction: 12-month restriction on transfer commencing on the date of issuance.
• Finder’s Fees:
  • Cash fee: 7.5% of gross proceeds ($600,000).
  • Warrant fee: 7.5% of gross proceeds, paid via issuance of 1.2 million common share warrants.
  • Warrant Exercise Price (for fees): $0.50 per share.
  • Warrant Expiry (for fees): 18 months from closing.
• Use of Proceeds: Growth of organic/fair-trade fruit and vegetable platform, technology platform development, general working capital, and repayment of short-term debt.
• Regulatory Status: Completion subject to TSX Venture Exchange approval and other requisite corporate, regulatory, and security holder approvals.

Notable Quotes

• "I am very pleased to welcome this new supportive group of international investors and I would also like to thank our existing shareholders for their continued confidence. This financing strengthens our capital position and positions us to accelerate the expansion of our organic and fair-trade fruit and vegetable platform, all the while staying focused on growing our sales and distribution channels, improving our EBITDA margins, and pursuing strategic growth initiatives." — Steve Bromley, Co-chair and CEO