Altrova Health Signs Exclusive U.S. Distribution Agreement to Launch Its Detection and Wellness Portfolio Across the United States

CSE: ROVA | OTCQB: ATVHF | FSE: WF8

Overview

Altrova Health Inc. announced that it has entered into an exclusive distribution agreement (the "Distribution Agreement") with Reliability Funding LLC ("Reliability" or the "Distributor"), appointing Reliability as the Company's exclusive sales agent and distributor for its product portfolio across the entire United States, according to the company. The Distribution Agreement establishes a U.S. distribution channel for Altrova Health's detection, protection and wellness products and marks the Company's formal entry into the U.S. health and safety market, the company stated.

To fund the launch and commercialization of this new U.S. channel, the Company concurrently announced a non-brokered private placement of units of the Company (the "Offering") for gross proceeds of up to US$500,000. According to the press release, all dollar amounts in the release are expressed in Canadian dollars unless otherwise indicated.

Key Highlights

• Reliability Funding LLC has been appointed as Altrova Health's exclusive sales agent and distributor throughout the United States, responsible for driving sales, business development, customer onboarding and account management across retail, online, commercial, healthcare and government accounts, according to the company.
• The appointment covers Altrova Health's current and future product lines spanning its detection, protection and wellness portfolio, with the exception of the NIRLAB SA NIRLIGHT drug analysis device, which is expressly carved out of the arrangement, the company stated.
• The Distribution Agreement has an initial term of two years and provides for automatic renewal for successive terms based on the achievement of agreed performance thresholds, according to the release.
• Reliability is entitled to a share of the profit generated on U.S. sales of the Company's products as compensation for the exclusive rights granted and the sales, marketing and business-development services provided, with the Company retaining the balance of the economics on those sales, according to the company.
• The Distribution Agreement does not provide for any guaranteed purchase orders, minimum purchase commitments or guaranteed sales, and the company states there can be no assurance as to the level of sales, if any, that will be generated under the arrangement.
• The concurrent non-brokered private placement is for gross proceeds of up to US$500,000.
• Each Unit will be issued at a price of C$0.05 per Unit and will consist of one common share and one Common Share purchase warrant, with each Warrant entitling the holder to acquire one additional Common Share at an exercise price of C$0.06 per Common Share for a period of three years following the applicable closing date of the Offering, according to the company.

Strategic/Operational Context

According to the company, the Distribution Agreement is structured as an incentive-aligned partnership under which Reliability is responsible for identifying and developing qualified sales opportunities, introducing and servicing customers, and building out the Company's U.S. sales channels, while Altrova Health retains ownership of its brands, intellectual property and manufacturing and supply function and is responsible for supplying product, onboarding and activating customers, and fulfilling orders. The Company believes the arrangement aligns the Distributor's incentives directly with U.S. revenue growth at limited fixed cost to the Company, according to the release. The appointment forms part of the Company's strategy to scale commercialization of its portfolio in the United States, the company stated.

"The United States represents an important market for our products, and partnering with an exclusive distribution partner lets us move into that market with focus and speed," said Geoff Benic, Chief Executive Officer of Altrova Health. "This agreement gives us a U.S. distribution platform for our detection, protection, and wellness products while we continue to do what we do best, build great products and stand behind our brands. We intend to use the proceeds of the concurrent financing to put inventory, onboarding and sales support in place so we can convert this opportunity into commercial traction."

The Financing

• Each Unit will be issued at a price of C$0.05 per Unit, consisting of one Common Share and one Common Share purchase Warrant.
• Each Warrant entitles the holder to acquire one additional Common Share at an exercise price of C$0.06 per Common Share for a period of three years following the applicable closing date of the Offering.
• The securities to be issued under the Offering will be offered and issued pursuant to available prospectus exemptions under applicable securities laws, according to the company.
• All securities issued under the Offering will be subject to a statutory hold period of four months and one day from the applicable date of issuance, in accordance with applicable securities laws and the policies of the CSE.
• Completion of the Offering remains subject to the receipt of all required regulatory approvals, including the approval of the CSE, and the satisfaction of other customary closing conditions, and the Offering may close in one or more tranches, according to the release.
• The Company intends to use the net proceeds of the Offering to implement and commercialize the Distribution Agreement, with the minimum proceeds intended to be allocated to product procurement and initial inventory required to support the launch of the U.S. distribution channel, customer onboarding and related items, approved product, training, marketing and sales, and general corporate and working capital purposes, according to the company.
• The Company may pay finder's fees and issue finder warrants in connection with the Offering in accordance with applicable securities laws and the policies of the CSE.

About Reliability Funding

Reliability Funding is a U.S. based distributor led by Yehuda "Jay" Adams, an accomplished entrepreneur and executive with extensive experience building and scaling companies, sales channels and distribution platforms. His career spans telecommunications, cellular services, prepaid calling cards, consumer products, financial services and, most recently, the peptide sector. Adams' leadership experience includes serving as CEO of venture-backed businesses, Cuentas Mobile, a subsidiary of publicly traded Cuentas Inc., and Fusion Global Services, a joint venture with the then-publicly traded Fusion Connect. He has led organizations generating more than $100 million in annual revenue and developed nationwide distribution networks serving tens of thousands of retail locations. Through Reliability Funding, Adams brings deep experience in operational development, strategic partnerships and direct-to-retailer and direct-to-consumer distribution, according to the company.

What to Watch Next

• Completion of the Offering, which remains subject to receipt of all required regulatory approvals, including CSE approval, and may close in one or more tranches.
• Implementation and commercialization of the Distribution Agreement using the net proceeds of the Offering, as described by the company.
• Development of Reliability's U.S. sales channels across retail, online, commercial, healthcare and government accounts.

About Altrova Health Inc.

Altrova Health Inc. (CSE: ROVA) (OTCQB: ATVHF) (FSE: WF8) is a Canadian public company building a growing portfolio of health solutions across detection, protection, treatment, and wellness. The Company's current product portfolio includes exclusive Canadian distribution rights for the NIRLAB SA ("NIRLAB") NIRLIGHT drug analysis device, the ToxiShield fentanyl and drink-spiking detection product line, and the O-Spray product line, alongside the rapid detection strip portfolio of its subsidiary Drug Lab 118 Ltd.

Read full press release here.

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