TORONTO AND SEATTLE–(BUSINESS WIRE)–POSaBIT Systems Corporation (“POSaBIT“or the”society”) is pleased to announce the entry into force of a software license agreement signed after market close on August 22, 2022 (the “License Agreement”) under which POSaBIT granted a non-exclusive worldwide license to a major cannabis technology partner (the “Licensed”) to market the Company’s point-of-sale technology (the “Licensed Property”).
Under the license agreement, the licensee paid the company a one-time royalty of $500,000. In addition, in consideration for the license, the Licensee shall pay the Company 20,000,000 USD guaranteed over four years. The fee will be a monthly fee paid per point-of-sale device deployed by Licensee or its affiliates during the applicable month, subject to a minimum monthly fee payment of between $325,000 and $512,500 for the four first years of duration. In accordance with the License Agreement, the Licensee has prepaid the aggregate minimum royalties for the first year of the term, which is equal to 3,900,000 USD.
Licensee shall have the right, exercisable at any time after the third anniversary of the License Agreement, to redeem its royalty payment obligations by paying Company an amount equal to the greater of (i) US$30,750,000; and (ii) five times the royalties payable by the Licensee for the preceding twelve calendar months. The Company has also granted Licensee a right of first refusal with respect to any exclusive license or sale to a third party of the Licensed Property. The License Agreement may be terminated by Licensee upon 180 days notice, provided that notice cannot be given within the first four years of the term of the License Agreement.
POSaBIT (CSE: PBIT) is a financial technology company that provides unique and innovative point-of-sale and payment processing systems for cash-only businesses. POSaBIT specializes in solving pain points for complex, high-risk emerging industries like cannabis with an all-in-one solution that is compliant, user-friendly, and uses premium hardware. POSaBIT’s unique solution provides a safe and transparent environment for merchants while creating a better overall consumer experience. For more information, visit www.posabit.com.
This press release contains forward-looking statements, including statements regarding our business strategy, product development, product development schedule, events and plans of action. Statements that are not purely historical are forward-looking statements and include all statements regarding beliefs, plans, prospects, expectations or intentions regarding the future, including words or phrases such as “anticipate”, “goal”, “may”, “will”, “could”, “should”, “could”, “may”, “intend”, “expect”, “believe”, “estimate” , “predicts”, “potential”, “plans”, “is designed for” or similar expressions suggesting future results or the negative thereof or similar variations. Forward-looking statements may include, among other things, statements about the terms of the license agreement; expectations of commercialization of the licensed property; our future growth strategy and rate of growth; and our anticipated trends and challenges in the markets in which we operate. These statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which POSaBIT will operate in the future, including demand for our products and the ability to achieve objectives. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect. Given these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements.
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited thereto, business, economy and capital. market conditions; the ability to manage our operating expenses, which may adversely affect our financial condition; our ability to remain competitive as other, better-funded competitors develop and market competitive products; regulatory uncertainties; market conditions and demand for and prices for our products; our relationships with our customers, distributors and business partners; our ability to successfully define, design and launch new products on a timely basis that meet the needs of our customers; our ability to attract, retain and motivate qualified personnel; competition in our industry; our ability to maintain our technology leadership; our ability to manage the risks inherent in foreign operations; the impact of technological changes on our products and our industry; our inability to develop new and innovative products; our ability to successfully maintain and enforce our intellectual property rights and defend claims of third parties for infringement of their intellectual property rights; the impact of intellectual property litigation that could materially and adversely affect our business; our ability to manage working capital; and our reliance on key personnel.
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All dollar figures mentioned in this document are expressed in US dollars.