VANCOUVER , Oct. 8, 2019 /CNW/ - Organto Foods Inc. (TSX-V: OGO, OTC: OGOFF) ('Organto" or the "Company"). On June 27, 2019 Organto announced that it had entered into a Share Purchase Agreement to sell its wholly owned subsidiary Medicannabis S.A.S., ("Medicannabis"), a Colombian company focused on the development of medicinal cannabis, to Xebra Brands Ltd. ("Xebra") for a combination of shares of Xebra, cash and forgiveness of debt, with proceeds being used by the Company to expand its food business. This transaction allows Organto to continue to have an investment in the rapidly growing cannabis sector while focusing operationally on its core organic fruit and vegetables business.
Further to its news release of June 27, 2019 (the " June 27 Release") Organto wishes to clarify the disclosure relating to the cash consideration payable to Organto in connection with the sale of Medicannabis to Xebra Brands Ltd.
Notwithstanding the relevant disclosure in the June 27 Release relating to the cash portion of the overall consideration payable to Organto by Xebra, Organto advises that it will receive cash proceeds of CDN $321,077 and promissory notes totalling CDN $600,000 due by Organto to Xebra will be forgiven. The CDN $321,077 represents CDN $500,000 of total cash consideration payable under the Agreement (as detailed in the June 27 Release) less cash advances of CDN $187,023 , which amount is included in the CDN $600,000 of promissory notes being forgiven. The CDN $187,023 is being deducted from the CDN $500,000 otherwise due as it represents advances which were not used to fund cannabis operations, and Xebra had only agreed to forgive advances used to fund such operations.
The transaction remains subject to shareholder and TSX-V approval which the Company is currently seeking.
ON BEHALF OF THE BOARD
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.
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. The Organto Foods Group is an integrated provider of year-round value-added branded organic vegetables and seasonal organic and non-GMO fruit and vegetable products using an asset-light business model to serve a growing socially responsible and health conscious consumer around the globe.
SOURCE Organto Foods Inc.
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