Verde Agritech signs deal with Undo Carbon

Executive Summary

• Verde Agritech Ltd. has entered into an exclusive agreement with Undo Carbon Ltd. to explore a commercial partnership for the creation, delivery, and sale of high-quality carbon removal credits generated from Verde's enhanced rock weathering (ERW) activities in Brazil.
• The partnership leverages Verde's glauconitic siltstone mineral resources and operational capacity in Brazil combined with Undo's ERW measurement, technology, and verification expertise.
• Successful execution of the partnership has the potential to remove hundreds of thousands of tonnes of CO2 from the atmosphere, establishing a new scalable revenue stream for Verde.

Key Details

• Partnership Structure: Exclusive agreement between Verde Agritech Ltd. (Canada/Brazil) and Undo Carbon Ltd. (UK).
• Objective: To create, deliver, and sell durable, high-quality carbon removal credits from Verde's ERW activities using glauconitic siltstone.
• Strategic Rationale:
  • For Verde: Establishes a clear path to monetize ERW activities, creating a new product/business stream and scalable revenue stream with minimal incremental capex by leveraging existing mining/processing infrastructure.
  • For Undo: Secures a reliable source of high-quality ERW feedstock and a pathway to scalable Carbon Dioxide Removal (CDR) from Brazil.
• Undo Carbon Background:
  • Winner of the $100-million XPrize carbon removal competition (April 2025).
  • Backed by Microsoft, Barclays, British Airways, and McLaren.
  • To date, has spread over 313,800 tonnes of silicate rock across 398 farms, set to permanently remove approx. 69,000 tonnes of CO2.
• Warrant Grant Terms:
  • Verde will grant Undo up to 1.7 million common share purchase warrants.
  • Allocation:
    • Initial Warrants: 100,000
    • Additional Warrants: 1,000,000
    • Incremental Success-Based Warrants: 600,000
  • Exercise Price: 120% of market price, not less than the minimum price permitted by TSX policies.
  • Term: Exercisable for 3 years from grant date.
  • Lock-up: 12-month contractual lock-up from issuance date.
  • Vesting Conditions (Tied to Cash Consideration from Qualified Offtakes):
    • Initial Tranche: Vests pro rata when cash consideration is received at a weighted average price ≥ $350 USD/tonne CO2, up to a $1 million USD target.
    • Additional Tranche: Vests pro rata when cash consideration is received at a weighted average price ≥ $300 USD/tonne CO2, up to a $39 million USD target.
    • Incremental Tranche: Vests pro rata when cash consideration is received at a weighted average price ≥ $250 USD/tonne CO2, up to a $60 million USD target.
  • Acceleration Clause: Company may accelerate expiry of vested warrants to 30 days after written notice if the 20-day VWAP on TSX equals or exceeds $2.00.
• Historical Context: This builds on Verde's July 2023 announcement regarding plans to sell carbon credits to offset emissions.

Notable Quotes

• Jim Mann, CEO and Founder of Undo Carbon: "The signing of this agreement with Verde demonstrates the potential of Undo's end-to-end platform in activating enhanced rock weathering projects globally at pace. By combining Verde's exceptional mineral resources and operational capacity in Brazil with Undo's ERW measurement and technology expertise, we're creating a blueprint for scaling durable carbon removal."
• Cristiano Veloso, Founder and CEO of Verde Agritech: "Today's exclusive agreement with Undo creates a clear path to turn Verde's enhanced rock weathering activities into a scalable revenue stream... we aim to originate and deliver durable, high-quality carbon removal credits aligned with global best practices, including leading enhanced rock weathering methodologies."