CA - Blackberry to sell its non-core patents and patent applications to Malikie Innovations for up to $900M terminates agreement with Catapult
2023-03-21 07:23:49 ET
After terminating its agreement with Catapult, BlackBerry Limited ( NYSE: BB ) has inked an agreement to sell substantially all of its non-core patents and patent applications to Malikie Innovations Limited, a newly-formed subsidiary of Key Patent Innovations Limited (KPI) for a combination of cash at closing and potential future royalties in total up to $900M.
BlackBerry will sell 32,000 patents and applications to Malikie, excluding 120 monetizable non-core patent families and existing revenue generating agreements.
There are no funding restrictions on the deal. A reputable US-based investment business with more than $30 billion in assets under management has agreed to provide funding.
John Chen, Executive Chairman & CEO, BlackBerry said, "This transaction, once complete, will further strengthen our balance sheet while simplifying our business and enabling increased focus on our core IoT and Cybersecurity opportunities."
As per the agreement terms, BlackBerry will get $170M in cash at closing and another $30M in cash no later than the third anniversary of the transaction. The firm will also be eligible for annual cash royalties from the BlackBerry patent profits, which will be calculated as follows: 8% of the first $500M in profits; 15% of the next $250M in profits; 30% of the next $250M in profits; and 50% of all succeeding profits.
The initial cap on royalties paid to BlackBerry will be $700M, with a yearly cap increase of 4% of the $700M that has not yet been paid to BlackBerry as of the date of the increase.
However, Malikie's costs will also be capped in the calculation of profits generated.
The company terminated the agreement with Catapult, as it was unable to secure financing.
Looking at the stock action, shares up more than 6% in Tuesday's premarket session. Over a period of one year, BB have lost about 50% of its value.
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Blackberry to sell its non-core patents and patent applications to Malikie Innovations for up to $900M, terminates agreement with Catapult