$VPRB just signed a $14.9M settlement/license deal with R.J. Reynolds — am I missing something here?
I’ve been digging into VPR Brands ($VPRB) after their latest 8-K and wanted to get some other opinions on this because the size of the deal relative to the company caught my attention.
On July 10, VPR Brands entered into a Settlement and Patent License Agreement with R.J. Reynolds Vapor Company related to VPRB’s U.S. Patent No. 8,205,622.
According to the 8-K, the deal includes **$14.9 million in consideration** and resolves the litigation between the two companies.
In return, R.J. Reynolds and its affiliates receive a **non-exclusive, worldwide, fully paid-up, perpetual and irrevocable license** covering defined products under the patent. Importantly, the agreement says there is **no right to sublicense**.
What I find interesting is what this potentially says about the underlying patent.
R.J. Reynolds is obviously a major player in the industry, and they chose to settle and secure a permanent license rather than continue fighting the litigation. That doesn’t automatically prove the patent is valid or that VPRB will win against anyone else — the agreement specifically contains no admission of infringement, validity or liability — but a $14.9M settlement/license agreement seems significant for a company the size of VPRB.
The bigger question to me is whether this has implications beyond the RJR case.
If the patent potentially covers products being sold by other major companies, does the RJR agreement strengthen VPRB’s position in pursuing additional licensing agreements or settlements? Or is this more likely to be viewed as a one-time resolution specific to RJR?
I’m also curious how people are valuing the $14.9M payment itself relative to VPRB’s current size and what the company’s balance sheet could look like once the transaction is reflected in its financials.
I have a position in $VPRB, so obviously do your own DD. I’m interested in hearing the bear case too, especially from anyone familiar with patent litigation and licensing.
https://www.stocktitan.net/sec-filings/VPRB/8-k-vpr-brands-lp-reports-material-event-9aa87dfffa66.html
