Star Royalties Ltd (TSX-V:STRR) has acquired a 2.5% gross revenue royalty on private solar-energy focused company MOBISMART Mobile Off-Grid Power & Storage Inc for C$300,000 in cash.
The 15-year royalty covers all current and future gross revenues and any potential business divestment revenues generated by MOBISMART, which has developed mobile power systems that can be deployed to natural disaster sites and construction, urban, rural and remote locations where off-grid power is needed.
The company has also granted MOBISMART a royalty repurchase provision, whereby the latter, in connection with a potential go-public event, could buy back the royalty in its entirety for C$10 million in cash, or partially on a pro rata basis.
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"We are proud to be supporting a greener future by investing in local and high-growth technology company, MOBISMART," said Alex Pernin, CEO of Star Royalties.
"Their products reduce or offset CO2 emissions in environmentally-sensitive areas by displacing diesel usage, which alone is a C$70 billion global market.
"In addition, their innovative business model is well positioned for high-growth sectors such as integrated power solutions, solar conversion of refrigeration vehicles and e-fleet fast-charging stations."
Pernin added: "The C$10 million royalty buyback provision reflects this growth potential. This green investment represents near-term cash flow from a top-tier jurisdiction, and we look forward to MOBISMART growing rapidly into a major off-grid power technology company across various industries and sectors."
Founded in 2013 in Toronto, Canada, MOBISMART's product lineup reduces the reliance on diesel for net zero objectives and can be deployed virtually anywhere, including construction sites, military operation and mining camps.
It also has working relationships with industry leaders such as Siemens AG, Mitsubishi Heavy Industries Ltd., Sono Motors GmbH, Victron Energy BV, and Schneider Electric SE.
Star Royalties is a precious metals and green royalty and streaming investment company, which has created the world’s first carbon negative gold royalty platform and offers investors gold exposure with an increasingly negative carbon footprint.
Contact the author at giles@proactiveinvestors.com