Sky Harvest Windpower Corp. agreed to buy a vertical axis wind turbine manufacturing and sales business from a private Canadian company in consideration of the issuance of 650,000 shares of its common stock, cash payments totaling $65,000, and the grant of an option to the vendor to acquire up to 550,000 shares of its common stock at a price of $0.10 for a period of five years.
As part of the agreement, Sky Harvest has acquired the intellectual property rights relating to the wind turbine design, and leasehold interests in both manufacturing facilities and equipment.
Unlike most wind turbines that have blades that rotate around a horizontal axis, a vertical axis wind turbine has blades that spin vertically around a horizontal mast. They are primarily used in remote areas to provide electricity to communication towers, mines, and communities that typically rely on diesel or propane for power generation, which results in reduced costs to the user, as well as a smaller environmental impact through the reduced use of fossil fuels and no risk of on-site diesel spills.
Sky Harvest has agreed to pay the vendor a royalty of $200 for every vertical axis wind turbine that it sells for a period of ten years. The vendor will also receive 500,000 voting shares of the subsidiary company that holds the wind turbine assets if that company's shares trade publicly on a recognized stock exchange or quotation system.
Sky Harvest has received written expressions of interest for the purchase of over 13,000 vertical axis turbines from parties in four different countries. The sale of such number of turbines would generate revenue of about $250 million. Sky Harvest has also entered into discussions with additional parties with compatible technology regarding the potential joint venture development of additional wind turbine products.