Spectra Systems Corporation Licensing Agreement and Supply Agreement (7903B)
January 15 2018 - 1:00AM
UK Regulatory
TIDMSPSY TIDMSPSC
RNS Number : 7903B
Spectra Systems Corporation
15 January 2018
Spectra Systems Corporation ("Spectra")
Licensing Agreement and Supply Agreement
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Spectra Systems Corporation, a leader in machine-readable
high-speed banknote authentication and brand protection
technologies, is delighted to announce that it executed on Friday
an exclusive, worldwide, licensing agreement for one of its
existing products which is in use by 18 central banks through an
existing licensee, a major supplier of banknotes worldwide.
The licensing agreement will extend the rights to the underlying
technology, which has been in use since 2003, in perpetuity and
generate $11.2 million in royalty payments over the next five
years. The payments will be settled in eleven equally spaced
payments.
In addition, Spectra also executed a Material Supply Agreement
with the same licensee to provide them with covert materials
exclusively for a period of ten years at reduced rates relative to
the current agreement. The Board anticipates that the supply of
material, which does not incorporate minimum quantities, will
generate a total revenue of approximately $1.5 million -$2.0
million over the next five years.
It is estimated however that the combined licence and supplied
material sales will generate a contribution per annum from this
product through 2023 which is approximately 2.7 times that of the
current agreement, based on the minimum purchase requirements in
that agreement and experienced in certain recent years.
Based on the execution of these agreements, Spectra is expecting
that both its revenue and particularly its profit before taxes for
the year ending 31 December 2018 will significantly exceed market
expectations.
Dr. Nabil Lawandy, Chief Executive Officer, stated: "We are
delighted to have consummated these agreements with our existing
partner for over a decade and thereby provided shareholders with
further contracted revenues on this product, which has already been
in the market for 15 years. Together these agreements are expected
to result in over $14 million in revenues from this licensee for
this product through the period 2018-2028.
Enquiries:
Spectra Systems Corporation
Dr. Nabil Lawandy, Chief Executive Officer Tel: +1 (0) 401 274
4700
WH Ireland Limited
Chris Fielding (Managing Director, Corporate Finance) Tel: +44 (0) 20 7220 1650
This information is provided by RNS
The company news service from the London Stock Exchange
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