Item 8.01. Other Events.
On March 1, 2023, Elf Brand LLC ("EBL"), a licensee of the VPR Brands, LLP (the
"Company"), prepaid a monthly royalty payment of $500,000 pursuant to that
certain License Agreement, dated January 2, 2023, by and between the Company and
EBL (the "License Agreement"). The License Agreement was entered into in the
ordinary course of business.
Pursuant to the terms of the License Agreement, the Company granted to EBL (i)
the exclusive right to use U.S. trademark 5,486,616 for the mark ELF in
International Class 34 for use in connection with electronic cigarette lighters;
electronic cigarettes; smokeless cigarette vaporizer pipe, and all additional
marks that the Company may obtain, use and notify EBL of from time to time (the
"Mark"); (ii) the non-exclusive right to use U.S. patent number 8,205,622 (the
"Patent" and together with the Mark, the "Intellectual Property"), in connection
with electronic cigarettes, smokeless cigarette vaporizers and related products
(the "Licensed Articles") in the U.S.; and (iii) the right to manufacture, have
manufactured for it, market, promote, advertise, use, sell and distribute the
Licensed Articles subject to the terms and conditions of the License Agreement.
In exchange for the license, EBL agreed to pay to the Company a royalty equal to
5% of gross sales of the Licensed Articles, as provided in the License
Agreement. The license is exclusive with respect to use of the Mark if EBL meets
a minimum monthly royalty payment of $500,000 within six months after sales
commence. The Company may elect to cancel exclusivity if EBL does not meet the
minimum royalty expectations. The License Agreement provided for a term
effective as of the start of sales within 90 days of January 2, 2023 and receipt
of the first month's royalty, and renewing monthly with payment of the
additional minimum $500,000 monthly payment of minimum royalties within six
months after sales commence to maintain exclusivity with respect to use of the
Mark, unless sooner terminated in accordance with the terms of the License
Agreement.
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