Smoltek intends to sign an exclusive agreement with Yageo Group

Smol­tek Semi and KEMET Elec­tron­ics Cor­por­a­tion, a sub­si­di­ary of YAGEO Group intends to sign an agree­ment that would grant YAGEO Group exclus­ive right to man­u­fac­ture and sell dis­crete and embed­ded capa­cit­or products based on Smol­tek's pat­ent pro­tec­ted tech­no­logy plat­form for ultra-thin car­bon nan­ofiber capa­cit­ors (CNF-MIM). Under the inten­ded terms of the Agree­ment, Smol­tek Semi would receive a roy­alty on industry mar­ket terms based on product sales, and Smol­tek Semi would receive fees from KEMET for provid­ing spe­cif­ic tech­nic­al sup­port ser­vices to KEMET for its con­tri­bu­tion to the con­tin­ued joint com­mer­cial­iz­a­tion of CNF-MIM-based products.

Dur­ing nego­ti­ations on the terms of the next step in the col­lab­or­a­tion, Smol­tek and YAGEO have iden­ti­fied dis­tinct bene­fits of hav­ing YAGEO mar­ket and com­mer­cial­ize dif­fer­ent capa­cit­or products through its already estab­lished organ­iz­a­tion. This would facil­it­ate a faster and more cost-effect­ive way to bring CNF-MIM capa­cit­ors to mar­ket com­pared to the addi­tion­al plan­ning and invest­ments needed to form a new Joint Ven­ture entity, as was pre­vi­ously planned by the parties.

Fur­ther­more, such an arrange­ment would allow YAGEO to more effi­ciently alloc­ate resources to the col­lab­or­a­tion with Smol­tek as appro­pri­ate, includ­ing ongo­ing pay­ment to Smol­tek for spe­cif­ic tech­nic­al work car­ried out dur­ing the con­tin­ued joint com­mer­cial­iz­a­tion and indus­tri­al­iz­a­tion pro­cess, thus facil­it­at­ing a faster road to mar­ket for CNF-MIM based products.

In the light of the above, the parties are now in nego­ti­ations to enter into a glob­al exclus­ive license and ser­vices agree­ment for dis­crete and embed­ded capa­cit­ors. This agree­ment would grant YAGEO an exclus­ive glob­al right to man­u­fac­ture and sell CNF-MIM capa­cit­ors, while also allow­ing for Smol­tek to receive pay­ment for spe­cif­ic tech­nic­al sup­port services.

Although the detailed com­mer­cial terms of this agree­ment still is under nego­ti­ation, the parties have agreed on the fol­low­ing struc­ture and out­lined terms of this agreement:

• YAGEO would sup­port devel­op­ment of the CNF-MIM capa­cit­ors through pay­ment for ser­vices and or poten­tial invest­ments in Smoltek.
• The Agree­ment shall include a roy­alty-bear­ing glob­al exclus­ive license for YAGEO to com­mer­cial­ize CNF-MIM capacitors.
• The roy­alty rate shall cor­res­pond to industry mar­ket terms.
• Smol­tek would, on industry mar­ket terms, provide ser­vices in accord­ance of the agree­ment for the devel­op­ment and tech­nic­al sup­port of the Products.
• YAGEO would poten­tially make an equity based invest­ment in Smol­tek Semi and/​or Smol­tek for a minor­ity stake in either com­pany, such terms and struc­ture to be fur­ther dis­cussed and nego­ti­ated. YAGEO acquir­ing an equity pos­i­tion in either Smol­tek and/​or Smol­tek Semi is con­sist­ent with the intent of the Memor­andum of Under­stand­ing and is in the interest of both parties giv­en the anti­cip­ated devel­op­ment effort and asso­ci­ated cost to reach a viable com­mer­cial product.
• The agree­ment is depend­ent on suc­cess­ful com­ple­tion of the JDA with respect to mutu­al agree­ment on achieve­ment of Joint Devel­op­ment Agree­ment met­rics and thus com­mer­cial viab­il­ity of the CNF-MIM capacitors.

Both Smol­tek and YAGEO believe that the adjus­ted struc­ture of its future col­lab­or­a­tion, to be finally agreed upon dur­ing the first quarter of 2024.

Dis­claim­er: Although the parties are cur­rently con­duct­ing the nego­ti­ations regard­ing the Agree­ment in good faith and with good hope of final­iz­ing the Agree­ment, the above inform­a­tion shall not in any way be seen as a guar­an­tee regard­ing the out­come and con­clu­sions of the upcom­ing final nego­ti­ation phase of the Agree­ment or a guar­an­tee that the Agree­ment will be entered into by the parties or that YEAGEO will make any invest­ments in either Smol­tek Semi or Smoltek.

Top image fea­tures Far­z­an Ghavanini, CTO at Smol­tek and Philip Less­ner, EVP of YAGEO.

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