POSaBIT Systems Corporation (OTCQB:POSAF) signed a software license agreement on August 22, 2022 pursuant to which POSaBIT has granted a non-exclusive, worldwide license to a large cannabis technology partner to commercialize the corporation’s point-of-sale technology.
Under the terms of the license agreement, the licensee has paid to the corporation a one-time fee of $500,000. Additionally, in consideration for the license, the licensee will be required to pay to the corporation $20 million guaranteed over four years. The fee will be a monthly royalty paid per point-of-sale device deployed by the licensee or its affiliates during the applicable month, subject to a minimum royalty monthly payment of between $325,000 to $512,500 for the first four years of the term. In accordance with the license agreement, the licensee has prepaid the aggregate minimum royalty fees for the first year of the term, which are equal to $3.9 million.
The licensee will have the right, exercisable at any time after the third anniversary of the license agreement, to buy-out its royalty payment obligations by paying the corporation an amount equal to the greater of $30.75 million and five times the royalty payments payable by the licensee for the previous twelve calendar months. The corporation has also granted the licensee a right of first refusal with respect to any exclusive license or third-party sale of the licensed property. The license agreement may be terminated by the licensee on 180 days’ notice, provided that notice may not be given within the first four years of the term of the license agreement.
Photo by Giorgio Trovato on Unsplash
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