VANCOUVER, Dec. 6, 2018 /CNW/ - Organto Foods Inc.
(TSX-V: OGO, OTC: OGOFF) ("Organto" or "the Company"), an
integrated provider of value-added organic vegetable and fruit
products today announced that it has entered into a non-recourse
accounts receivable factoring facility ("the Facility") with a
multinational corporation that provides financial services to small
and medium sized enterprises ("the Lender").
"We are very pleased to have finalized this facility as it
represents a non-dilutive form of financing which is important as
we continue to build out our organic foods operations." commented
Steve Bromley, Chair and Interim
Chief Executive Officer of Organto Foods Inc. "We are working
to add further financing vehicles in the future to support
operations as we rapidly expand our supply of healthy and
nutritious fresh organic vegetable and fruit products in response
to growing global demand."
Under the terms of the Facility, the Lender will initially
provide accounts receivable financing of up to €500,000
(approximately CDN $750,000), with
potential for expansion as Organto's business grows and customer
base is expanded. The initial Facility has a term of two
years and a cost of approximately 1.1% of factored revenues.
Initial draws on the Facility have commenced and will grow as
customers are added.
Over the past number of months, Organto has restructured its
management team and repositioned its organic foods business with a
focus on three core strategies, including: (1) increasing revenue
models; (2) diversifying and deepening supply relationships; and
(3) right sizing the organization – moving from primarily a fixed
to variable cost model. Significant progress has been
realized on all strategies with Organto realizing a 228% increase
in Q-3 2018 revenues versus the same quarter in the prior year,
with Q-4 2018 revenues and results expected to show continued
improvement.
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 is an integrated provider of year-round value-added
branded organic vegetables and seasonal organic and non-GMO fruit
and vegetable products serving a growing socially responsible and
health conscious consumer around the globe. Organto has also
recently expanded into medicinal cannabis in order to capture
expected global growth in this sector and leverage Organto's
diverse sourcing, processing, logistics, import, export and organic
certification expertise. Driven by consumer demand for healthy
and organic food products, its organic foods business operates an
integrated business model with sourcing, logistical and processing
capabilities, providing complete traceability from the table back
to the field. Operations are currently located in Guatemala, The
Netherlands and the USA, as
well as third-party supply from a variety of regions, with plans to
continue to expand supply capabilities via strategic third-party
growers and processors in Africa,
Mexico and other growing regions.
Organto's medicinal cannabis operations were recently established
with the acquisition of Medicannabis S.A.S. based in
Colombia. Subject to receipt of required licenses which have
been applied for, Organto plans to cultivate, process and sell
medicinal cannabis initially in the Colombia market. 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.
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 the accounts receivable financing facility
represents an important non-dilutive form of financing; Organto's
intent too add further financing vehicles to support the
growth of its business; Organto's belief that the recent
restructuring of its foods operations will lead to continued
improvements in revenues and results; 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 and
product supply will be increased; cost increases; dependence on
customers, 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, unfavourable 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; and ongoing
relations with distributors, customers, employees, suppliers,
consultants, contractors, partners and joint venturers; the
continued growth in global demand for cannabis products and the
continued increase in jurisdictions legalizing cannabis; and the
timely receipt of regulatory approval for the acquisition of
Medicannabis and their license applications as well as shareholder
approval of the Medicannabis transaction. 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.