The Alkaline Water Company Inc. (NASDAQ: WTER) stock was rocketing during extended trading session on Friday. Alkaline Water shares saw a remarkable increase of 51.58%, reaching a price point of $0.3030. In the standard trading session, the stock for Alkaline Water concluded at $0.1999 falling 14.21%. The impetus behind this after-hours upswing can be attributed to a licensing accord disclosed by WTER in its regulatory submission.
In a document sent to the U.S. Securities and Exchange Commission (SEC), Alkaline Water (WTER) officially stated that on October 17, 2023, one of its fully-owned branches, Alkaline 88, LLC, initiated an Exclusive Licensing, Co-packing, and Distribution Contract with Clean Bottling Inc.
As per the conditions of the License Agreement, Clean Bottling is presently empowered with the sole privileges to produce, endorse, publicize, circulate, and promote the entire assortment of Alkaline 88 bottled water goods on a worldwide level. WTER’s subsidiary has granted Clean Bottling the exclusive rights and a license to employ related trademarks and proprietary trade secrets.
As a reciprocal arrangement for these rights and services, the Alkaline Water subsidiary will receive a fixed monthly royalty payment of US$200,000 for a duration of five months commencing from November 1, 2023, through March 31, 2024. Subsequently, starting April 1, 2024, Alkaline 88 is entitled to an ongoing monthly royalty payment computed as the higher of US$200,000 or 4% of the gross monthly sales of the Licensed Products. Furthermore, the License Agreement comprises standard clauses pertaining to exclusivity, termination, and indemnification.
In addition to these provisions, Alkaline Water has concurred to transfer all of Alkaline 88’s rights, interests, and title in the Licensed Products and associated trademarks to Clean Bottling upon the occurrence of particular triggering events, including those linked to insolvency, bankruptcy, or corporate reorganization. As consideration for the Acquired Assets, Clean Bottling has agreed to remit a sum of US$400,000 to WTER’s subsidiary on the closing date.
Clean Bottling is also committed to rendering a sequence of 24 uniform monthly installment payments, each amounting to US$19,166.67, which will be due and payable until the total payment equals US$4,600,000. The contractual period of the License Agreement is set to endure for five years, unless it is terminated prematurely in accordance with the terms delineated therein.
