Saleen Automotive, Inc. (fka SLNN)

[cure]

To clarify false information being posted about IP licensing deal...

...we granted to SMI an irrevocable, fully paid-up (subject to certain royalty fees), sublicensable license during the term of the License Agreement to use all of our intellectual property on an exclusive basis worldwide other than in North America, Europe, Middle East and Australia (as applicable, the “Territory”), to make, promote, sell and otherwise exploit our intellectual property in the Territory.

GreenTech Automotive paid Saleen an initial fee for the right to use Saleen's IP to sell cars in a given territory, and these sales are "subject to certain royalty fees" that will be paid to Saleen. Now in the same sentence, this territory is defined as "worldwide other than in North America, Europe, Middle East and Australia." This means GreenTech Automotive has the right to sell Saleen-branded cars in China (which they appear to be gearing up to do so), but they must pay Saleen a royalty for these cars. This also means Saleen still has the rights to sell Saleen-branded cars in North America, Europe, Middle East and Australia (and they appear to be selling vehicles in North America according to Facebook pictures of cars they have built and shipped in America).

The next sentence says:

The License Agreement has an initial term of 10 years, with automatic renewal for periods of five years at SMI’s election provided that the number of Saleen branded vehicles sold by SMI in the prior 12-month period is not less than the average number of Saleen-branded vehicles sold by us and our subsidiaries in the most recently available three-year period.

This means that if the number of Saleen-branded vehicles that Saleen sells in North America, Europe, Middle East and Australia is greater than the number of Saleen-branded vehicles that GreenTech Automotive sells in their "Territory" (i.e. Asia/China, Africa, Antarctica, etc.), than the licensing deal does not automatically renew every five years.

A certain poster has caused a lot of confusion by falsely claiming that GreenTech Automotive has the right to sell Saleen-branded vehicles worldwide and must pay royalties only for the cars they sell in North America, Europe, Middle East and Australia. Not only does the 8-K make it pretty clear on the Territory and who has the rights to what territory, but why would the terms of the automatic renewal make sense if what that poster says is true? If it were true, Saleen would have no right to sell Saleen-branded vehicles anywhere in the world. It is clearly false, whether that poster was intentional in spreading this false information or not.

Given that Saleen was losing money overall per each vehicle they built and sold themselves in the last financial filing we saw, how could it possibly be bad news that Saleen will be receiving a royalty for every vehicle sold by GreenTech in China? This means that while every vehicle built and sold by Saleen in America might not be profitable for Saleen, we at least know that every Saleen-branded vehicle sold by GreenTech in China will be profitable for Saleen.