VPRB VPR Brands LP (QB)

Item 8.01. Other Events.

On March 1, 2023, Elf Brand LLC (“EBL”), a licensee of the VPR Brands, LLP (the “Company”), prepaid a monthly royalty payment of $500,000 pursuant to that certain License Agreement, dated January 2, 2023, by and between the Company and EBL (the “License Agreement”). The License Agreement was entered into in the ordinary course of business.

Pursuant to the terms of the License Agreement, the Company granted to EBL (i) the exclusive right to use U.S. trademark 5,486,616 for the mark ELF in International Class 34 for use in connection with electronic cigarette lighters; electronic cigarettes; smokeless cigarette vaporizer pipe, and all additional marks that the Company may obtain, use and notify EBL of from time to time (the “Mark”); (ii) the non-exclusive right to use U.S. patent number 8,205,622 (the “Patent” and together with the Mark, the “Intellectual Property”), in connection with electronic cigarettes, smokeless cigarette vaporizers and related products (the “Licensed Articles”) in the U.S.; and (iii) the right to manufacture, have manufactured for it, market, promote, advertise, use, sell and distribute the Licensed Articles subject to the terms and conditions of the License Agreement.

In exchange for the license, EBL agreed to pay to the Company a royalty equal to 5% of gross sales of the Licensed Articles, as provided in the License Agreement. The license is exclusive with respect to use of the Mark if EBL meets a minimum monthly royalty payment of $500,000 within six months after sales commence. The Company may elect to cancel exclusivity if EBL does not meet the minimum royalty expectations. The License Agreement provided for a term effective as of the start of sales within 90 days of January 2, 2023 and receipt of the first month’s royalty, and renewing monthly with payment of the additional minimum $500,000 monthly payment of minimum royalties within six months after sales commence to maintain exclusivity with respect to use of the Mark, unless sooner terminated in accordance with the terms of the License Agreement.