Mountain Valley MD Holdings Inc (CSE:MVMD, OTCQB:MVMDF) announced that it has acquired an exclusive license for Agrarius Corp’s agricultural plant signalling technology in key markets including North America.
The technology, known as Agrarius, is a certified organic product designed to be applied to crops to increase yields, reduce fertilizer use, and increase resilience to pests and climate change.
"Securing the exclusive rights to distribute and sell the Agrarius product in North and South America, Central America, Mexico, and the Caribbean is viewed as a tremendous accomplishment and a major milestone for Mountain Valley MD," CEO Dennis Hancock said.
"We believe this strategic move not only positions us as a key player in the agricultural market but also allows us to open up intentional avenues for investment and growth to align tightly with our focus on increasing shareholder value.”
The company said that under the terms of the agreement and with the support of Agrarius Corp it will also be launching a performance guarantee program for the product.
Initially targeting farm operations in the US, prospective clients will be required to pay for Agrarius only after it has achieved a minimum agreed performance enhancement on the targeted crop.
The program is designed to demonstrate the “disruptive nature” of Agrarius while limiting the prospective client’s financial investment, Mountain Valley MD said.
It said it and Agrarius Corp will share in the guarantee, as such, it will not be required to pay Agarius Corp for the product until the performance threshold has been met.
"The Performance Guarantee Program completely aligns our interests with those of our farming clients to ensure optimized crop performance while limiting the clients’ risk in this unique pay-for-performance model," Hancock said.
"Introducing a new product based on aligned performance objectives and transparency within the industry we believe empowers farmers to embrace innovation and directly benefit from Agrarius’ impact to their farming outputs."
In consideration for the exclusive license for Agrarius in the territories specified and other certain terms, Mountain Valley MD will pay a one-time fee equal to US$1,325,000, comprised of US$1,085,000 worth of shares and US$240,000 in cash.
It will also pay an inventory deposit of US$275,000 for Agrarius product for the performance guarantee program, valued at US$7.5 million if the performance threshold is met.
The transaction is expected to close on or about May 1, 2024.