CitroTech Inc. 8-K

What Happened

• On April 17, 2026, CitroTech Inc. and Hexion Inc. formed HexiTech LLC, a 50/50 joint venture to develop, manufacture, commercialize and sell products using CitroTech’s fire suppression/retardant/resistant technologies (the “FR IP”). CitroTech also entered into an Intellectual Property License Agreement with HexiTech and Mighty Fire Breaker, LLC granting HexiTech an exclusive, worldwide, irrevocable license to the FR IP within a defined field of use.

Key Details

• Formation and governance: HexiTech is managed by a board of managers with one designee from each member and one independent manager; certain fundamental actions require approval by both member designees.
• Funding and advances: Hexion agreed to advance CitroTech up to $6.0 million to fund CitroTech’s capital contributions (available through Dec 31, 2027), with specified interest and 18‑month repayment terms and priority on distributions.
• Distribution and economics: Distributions are generally pro rata, but Hexion is entitled to receive 85% of distributions until specified commercialization targets are met. If CitroTech exits the joint venture, the IP license continues perpetually subject to a continuing royalty in the high‑teens to low‑twenties percent range on net sales of licensed products.
• Default and exit rights: Members must fund pro rata capital calls; a non‑defaulting member may advance unpaid amounts as an interest‑bearing loan repayable from the defaulting member’s distributions. If CitroTech fails to repay an advance within 180 days, Hexion’s option to purchase CitroTech’s membership interest accelerates.

Why It Matters

• This agreement moves CitroTech’s fire‑retardant technology toward commercialization with a partner that brings manufacturing and commercialization capabilities, potentially accelerating market entry.
• The structure gives Hexion near‑term economic priority (85% of distributions until targets) and substantial protective rights (advances, repayment priority, purchase options if CitroTech defaults), which could limit CitroTech’s near‑term cash upside from the JV.
• If CitroTech later exits the JV, it retains a continuing royalty stream (high‑teens to low‑twenties percent of net sales), which could provide long‑term revenue but only after an exit event — investors should weigh near‑term funding relief against distribution priorities and potential dilution of control in the JV.