Organto Foods Announces C$1.0 M Private Placement Financing with a Strategic Investor

Rhea-AI Summary

Organto Foods (OGOFF) has announced a non-brokered private placement to raise C$1.0M through the issuance of 4,000,000 units at C$0.25 per unit. Each unit includes one common share and one-half warrant, with each full warrant exercisable at C$0.35 for 18 months. The company reported strong Q1 2025 performance with 193.5% sales growth, 298.1% gross profit growth, lowest operating costs ratio, and first positive EBITDA. The funds will be used for general working capital, with potential participation from directors and officers. The placement requires TSX Venture Exchange approval and includes a four-month hold period. CEO Steve Bromley attributes the improved performance to extensive restructuring and strategic realignment over the past 18 months.

Positive

• Q1 2025 sales growth of 193.5% year-over-year
• Gross profit growth of 298.1% in Q1 2025
• Achieved first-ever positive EBITDA quarter
• Lowest cash operating costs as percentage of sales in company history
• Strong momentum continuing through Q2 2025

Negative

• Dilutive effect of new share issuance
• Additional warrants could lead to further dilution if exercised
• Related party transaction with potential insider participation

TORONTO, ON AND BREDA, THE NETHERLANDS / ACCESS Newswire / June 18, 2025 / Organto Foods Inc. (TSXV:OGO)(OTC PINK:OGOFF) ("Organto" or the "Company") today announced it plans to complete a non-brokered private placement of up to 4,000,000 units of the Company (the "Units") at a price of $0.25 per Unit (the "Private Placement"), with each Unit consisting of one Common Share in the capital of the Company (a "Common Share") and one-half common share purchase warrant of the Company (a "Warrant").

Each full Warrant shall entitle the holder thereof to acquire one Common Share (a" Warrant Share") at a price per Warrant Share of C$0.35 for a period of 18 months from the closing date of the Private Placement.

"We're very pleased with our operational performance, having realized first quarter sales growth of 193.5%, gross profit dollar growth of 298.1%, our lowest cash operating costs as a percentage of sales in our history and our first-ever positive EBITDA quarter. Our business has continued to accelerate through the second quarter, which is quite encouraging, and we believe is a reflection of the strong momentum in our business. These results are the direct outcome of the extensive restructuring and strategic realignment we've executed over the past 18 months, laying a solid foundation for sustained growth, stability, and a clear path to profitability. With our continued growth and improvement in our share price, we believe it is prudent to complete this Private Placement as we conservatively manage our balance sheet." commented Steve Bromley, Chair and Chief Executive Officer.

The Company may pay finders' fees in connection with the Private Placement. The net proceeds from the Private Placement will be used to fund general working capital.

Certain directors and officers of the Company may acquire securities under the Private Placement. Any such participation would be considered to be a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any units issued to or the consideration paid by such persons will exceed 25% of the Company's market capitalization.

Completion of the Private Placement will be subject to the prior approval of the TSX Venture Exchange as well as all other requisite corporate, regulatory and security holder approvals, as applicable. Further, all securities issued pursuant to the Private Placement described above will be subject to a minimum hold period of four months and one day from their date of issuance. There can be no assurance that the Company will be successful in completing the Private Placement.

ON BEHALF OF THE BOARD

Steve Bromley
Chairman and CEO

For more information, contact:

Investor Relations
John Rathwell, Senior Vice President, Investor Relations & Corporate Development
647 629 0018
info@organto.com

ABOUT ORGANTO

Organto is a leading provider of branded, private label, and distributed organic and non-GMO fruit and vegetable products using a strategic asset-lighter business model to serve a growing socially responsible and health-conscious consumers. 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 ("forward-looking statements"). In particular, and without limitation, this news release contains forward-looking statements respecting Organto's business model and markets; Organto's belief that the Company has made solid progress in the restructuring and realignment of its business focused on a clear path to profitability, sustained growth and long-term stability; Organto's belief that the impact of restructuring and realignment efforts was a key driver of its first quarter results; and Organto's belief it is prudent to complete this Private Placement as the Company conservatively manages its balance sheet. Forward-looking statements are based on a number of assumptions that may prove to be incorrect, including, without limitation, the assumption that the Company will be able to complete the Private Placement and obtain all regulatory and requisite approvals in a timely manner and on acceptable terms. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in forward-looking statements in this news release include, among others, regulatory risks; risks related to market volatility and economic conditions; risks related to unforeseen delays; and risks that necessary financing will be unavailable when needed. For further information on these and other risks and uncertainties that may affect the Company's business, see the "Risks and Uncertainties" and "Forward-Looking Statements" sections of the Company's annual and interim management's discussion and analysis filings with the Canadian securities regulators, which are available under the Company's profile at www.sedarplus.ca. Except as required by law, Organto does not assume any obligation to release publicly any revisions to forward-looking statements contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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.

SOURCE: Organto Foods, Inc.

View the original press release on ACCESS Newswire

FAQ

What are the terms of Organto Foods' (OGOFF) private placement announced in June 2025?

Organto Foods announced a C$1.0M private placement of 4,000,000 units at C$0.25 per unit, with each unit consisting of one common share and one-half warrant exercisable at C$0.35 for 18 months.

How did Organto Foods perform in Q1 2025?

Organto Foods reported strong Q1 2025 performance with 193.5% sales growth, 298.1% gross profit growth, lowest operating costs ratio, and achieved its first-ever positive EBITDA quarter.

What will Organto Foods use the private placement proceeds for?

The net proceeds from the private placement will be used to fund general working capital needs of the company.

Who can participate in Organto Foods' private placement?

The private placement is open to investors, and company directors and officers may participate, subject to regulatory approval and a four-month hold period on issued securities.

What regulatory approvals are needed for Organto Foods' private placement?

The private placement requires TSX Venture Exchange approval and other requisite corporate, regulatory, and security holder approvals before completion.