8-K: GBT Technologies Subsidiary Sells Machine Learning Patents for $30 Million in Stock, Terminates Prior Agreement

Sentiment:

Material Definitive Agreement 22 March 2024 4:00 PM

GBT Technologies Inc.'s 50%-owned subsidiary, GBT Tokenize Corp., has sold its machine learning patents to VisionWave Technologies for $30 million in stock, while also terminating a previous patent purchase agreement with Bannix Acquisition Corp.

Delay expectedThe previous patent purchase agreement with Bannix was terminated due to the termination of Bannix's business combination agreement, which represents a delay in the original plan for the patents.

Summary

GBT Tokenize Corp., a 50% owned subsidiary of GBT Technologies Inc., has entered into a Patent Purchase Agreement with VisionWave Technologies Inc.
VisionWave will acquire the rights to certain patents and patent applications related to a machine learning technology for $30 million.
The purchase price will be paid in shares of VisionWave common stock, representing 50% of VisionWave's issued and outstanding shares.
The final purchase price may be adjusted based on a third-party valuation, and GBT Tokenize has the option to cancel the agreement if the valuation is less than $30 million.
Concurrently, GBT Tokenize terminated a previous patent purchase agreement with Bannix Acquisition Corp. due to the termination of Bannix's business combination agreement with EVIE Autonomous Group Ltd.

Sentiment

Score: 7

Explanation: The document indicates a positive development with the sale of patents for a significant amount, but the deal is subject to valuation and lock-up periods, which introduces some uncertainty.

Positives

GBT Tokenize Corp. successfully monetized its machine learning patents through a $30 million stock deal.
The agreement provides GBT Tokenize with a significant equity stake in VisionWave Technologies.
The deal includes a clause allowing GBT Tokenize to cancel if the valuation is below $30 million, protecting their interests.
The termination of the Bannix agreement removes a contingent liability and allows for a new transaction.

Negatives

The final purchase price is subject to a third-party valuation, which could result in a lower value than the initial $30 million.
The payment is in the form of stock, which is subject to market fluctuations and may not be immediately liquid.
The shares received are subject to a 12-month lock-up period, restricting GBT Tokenize's ability to sell them.

Risks

The third-party valuation could result in a purchase price lower than the stated $30 million.
The value of VisionWave's stock could fluctuate, impacting the actual value of the transaction for GBT Tokenize.
The 12-month lock-up period on the shares limits GBT Tokenize's ability to realize immediate value from the transaction.
The success of VisionWave in developing the acquired patents is uncertain.

Future Outlook

The agreement is subject to a third-party valuation, which will determine the final purchase price. The success of the transaction depends on VisionWave's ability to develop and commercialize the acquired patents.

Management Comments

The document includes signatures from Mansour Khatib, CEO of GBT Technologies Inc., Michael D. Murray, CEO of GBT Tokenize Corp., and Yossi Attia, CEO of VisionWave Technologies Inc., indicating their agreement to the terms.

Industry Context

This transaction reflects the ongoing interest in machine learning and artificial intelligence technologies, particularly in areas like radio wave transmission and imaging. The sale of patents is a common way for companies to monetize their intellectual property, and the use of stock as payment is not unusual in early-stage technology deals.

Comparison to Industry Standards

The valuation of $30 million for a portfolio of machine learning patents is within the range of similar transactions, but the final value will depend on the third-party valuation.
The use of stock as consideration is common in early-stage technology deals, particularly when the acquiring company is also in the early stages of development.
The 12-month lock-up period is a standard provision to ensure the seller has a long-term interest in the success of the acquiring company.
Comparable companies that have engaged in similar transactions include those in the AI, machine learning, and imaging technology sectors, such as those involved in radar and sensor technology.

Stakeholder Impact

Shareholders of GBT Technologies will see a potential increase in value through the sale of the patents and the equity stake in VisionWave.
Employees of GBT Tokenize may be impacted by the change in ownership of the patents.
VisionWave will gain access to valuable intellectual property, potentially enhancing its future growth.

Next Steps

A third-party valuation will be conducted to determine the final purchase price.
The transaction is expected to close within 20 calendar days from the effective date.
GBT Tokenize will receive 1,000 shares of VisionWave common stock, subject to a 12-month lock-up period.

Key Dates

Date	Description
2016-02-04	Filing date of a patent application for electronic circuits for secure communications.
2018-10-09	Filing date of a patent application for mobile database management and sharing.
2019-12-31	Issue date of patent US 10,521,614 B2 for secure communications.
2020-11-25	Filing date of a continuation patent application for mobile database management and sharing.
2020-12-01	Issue date of patent US 10,853,327 B2 for mobile database management and sharing.
2021-03-25	Filing date of a patent application for facial and body recognition.
2021-09-10	Filing date of a patent application for real-time movement, position detection, and imaging (Apollo).
2022-04-12	Issue date of patent US 11,302,032 B1 for real-time movement, position detection, and imaging (Apollo).
2022-05-30	Issue date of patent US 11,663,167 B2 for mobile database management and sharing.
2022-12-13	Issue date of patent US 11,527,104 B2 for facial and body recognition.
2022-12-22	Publication date of a patent application for real-time movement, position detection, and imaging (Apollo continuation).
2023-08-08	Date GBT Tokenize entered into a Patent Purchase Agreement with Bannix Acquisition Corp.
2024-03-11	Date Bannix sent a notice terminating its business combination agreement with EVIE.
2024-03-19	Effective date of the Patent Purchase Agreement between GBT Tokenize and VisionWave, and termination date of the Bannix agreement.
2024-03-22	Date of the 8-K filing.

Keywords

patent, machine learning, intellectual property, acquisition, technology, valuation, stock, agreement, radio wave, imaging

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