If no deal by end of the month (expiration of option to license for $7MM), then there will be no deal with BTI. While BTI might want to wait, permitting the option to expire will open the door to every other BT, and removes their ability to renegotiate and secure the technology.
For $7MM (pocket change for BTI), its brings XXII to the table to renegotiate a better deal for both BTI and XXII.
If no deal with BTI, it seriously questions the value of the technology to BT.
Regarding talk of "renegotiating" the terms (rights of the parties) in the current license option (expiring October 1st), ... there is no "right" to re-negotiate. Out of practical necessity, both parties would want to because the current deal is a bad for both.
Esad's post is the more likely scenario for amending the terms of the licensing agreement, if renegotiation takes place:
"Best thing I can see is a renegotiated deal with BTI giving us $25 million and we lowering the split to 8-12% and taking away their exclusivity.."
(except...taking away exclusivity in U.S. (outside of XXII's rights) would likely not be given up by BTI.)
The even more likely scenario is that BTI will either want it all or not.
If they want it, IMHO, they will take it all now, including World-Wide rights (to the exclusion of XXII)...but at what price and on what terms? Surely a minimum annual licensing revenue, regardless of sales to prevent BTI from burying the technology, would be required.
But another "punt the ball down the field" scenario would be for BTI negotiates a one year extension (another "option" for an upfront fee, perhaps $7MM, with new terms for both parties, including another upfront licensing fee or limited buyout of the World Wide rights to the technology for tobacco only) and they wait out any new FDA rules/regs on VLN.
If BTI doesn't exercise now, they won't be back.
In any of these cases...its going to be a question of who blinks first. Very interesting dilemma for both parties.
