Organto Foods Inc.
TSX VENTURE : OGO

Organto Foods Inc.

June 21, 2016 09:00 ET

Organto Announces Letter of Intent to Form Organto Mexico S.A.

VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 21, 2016) - Organto Foods Inc. (TSX VENTURE:OGO) ("Organto") today announced that it has entered into a Letter of Intent (LOI) for a new food and agricultural joint venture with a privately owned real estate investment management firm in Mexico. The LOI is non-binding, subject to completion of a definitive agreement, which is anticipated to be completed prior to the end of the year.

The purpose of the proposed joint venture is to form Organto Mexico S.A., an operating company to acquire, develop, own, manage or otherwise invest in food & agriculture assets or entities which produce, directly or indirectly, organic fruits and vegetables throughout Mexico, for sale into the U.S., European, Latin American and Asian markets, including Mexico, with the objective of developing Organto Mexico into one of the premier food & agriculture companies producing, packaging, marketing and distributing organic and conventional produce that is grown on farmland and controlled growing environments (i.e., greenhouses) in Mexico.

Peter Gianulis, President & CEO of Organto, said, "This is a major move toward the development of an operating platform in Mexico, with a strong local partner, in an agricultural market that borders the U.S., the largest organic market in the world, and is in one of the largest and most important agricultural economies globally."

The LOI is intended to facilitate further discussion concerning the creation of a joint venture for the purpose of creating Organto Mexico and contains broad terms of a potential transaction through which Organto Inc. would own 50% and a private investor would own 50% of the outstanding class A shares of Organto Mexico. In addition, the joint venture would seek to form pooled investment funds to acquire or rent farmland and/or land reserves in which to produce organic fruits and vegetables across Mexico.

The LOI is non-binding and the transaction is subject to entering into a definitive agreement between the parties containing terms and conditions yet to be negotiated.

ON BEHALF OF THE BOARD,

Peter L Gianulis, President & CEO

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

This 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 the company's intention to complete a joint venture with a privately owned investment management firm in Mexico to establish a 50%-company-owned operating business in Mexico to be named Organto Mexico S.A., including the anticipated time frame to negotiate, complete and sign a comprehensive definitive agreement for the proposed joint venture; future plans for operations and types of produce expected to be grown in Mexico; general plans for the growth and development of the Organto Mexico business; management's goals and objectives; the future prospects for the company; 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 successful completion of a definitive agreement regarding the proposed joint venture; the ability of the joint venture parties to establish operations in Mexico for Organto Mexico S.A.; obtaining all required approvals for the proposed transaction, including acceptance by the TSX Venture Exchange; achieving sufficient levels of agricultural production in Mexico; risks associated with doing business in a new country; establishing a sufficiently large market share of purchasers for the product to be produced in Mexico; cost increases; dependence on suppliers, partners and contractual counter-parties; changes in the business or prospects of the company; unforeseen circumstances; risks associated with the organic and conventional produce business generally, including inclement weather, unfavourable growing conditions, low crop yields and similar risks; general business and economic conditions; and ongoing relations with employees, consultants, partners and joint venturers. The foregoing list is not exhaustive and we undertake no obligation to update any of the foregoing except as required by law.

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