A refresher on the HPQ deal in 2021 11. INTANGIBLE ASSETS
Fumed Silica
On June 30, 2021, the Company (HPQ) acquired intellectual property for the production of fumed silica materials.
Pursuant to the purchase agreement, the Company is committed to pay to the seller the greater of an annual royalty equal to 10% of net revenues, excluding the samples (as defined in the agreement) generated from the
exploitation of the acquired technology or the minimum amounts per the agreement.
Also, the seller is being granted the right to convert, at any time and at its sole discretion, its royalties into a 50% equity stake of HPQ
Polvere. An amount of $3,300,000 paid in cash was recorded as the cost of intellectual property.
The minimum annual royalty amounts owed when there is income under this new agreement are as follows:
$
2023 50,000
2024 100,000
2025 150,000
2026 and after 200,000
PUREVAP™ NSiR
On August 18, 2020, the Company acquired from PyroGenesis the PUREVAP™ NSiR technology for the fabrication of nano silicon materials. Pursuant to the purchase agreement, the Company is committed to pay to the seller the greater of an annual royalty equal to 10% of net revenues (as defined in the agreement) generated
from the exploitation of the acquired technology or the minimum amounts per the agreement.
Also, the seller is being granted the right to convert, at any time and at its sole discretion, its royalties into a 50% equity stake of HPQ Nano.
The minimum annual amounts under this new agreement are as follows:
2023 $ 150,000
2024 and after $ 200,000
The intellectual property, was recognized upon acquisition for a total amount of $2,400,000, paid in cash. The related liability, royalties payable, of $864,013 calculated based on estimated cash flows under the agreement over a period of 25 years at a discounted rate of 18%, was also recorded to intellectual property.