The Calix Ltd (ASX: CXL) share price is being sold off on Monday.
In afternoon trade, the ASX 300 environmental technology company's shares are down 13% to $2.45.
This leaves Calix shares trading within touching distance of their 52-week low.
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Why is this ASX 300 share falling heavily?
Investors have been hitting the sell button today despite the company announcing a binding and perpetual global licence agreement, as well as a collaboration agreement.
According to the release, the ASX 300 share's 93%-owned subsidiary, Leilac, has signed the agreement with Heirloom Carbon Technologies, which is a Direct Air Capture (DAC) company.
Leilac provides a decarbonisation solution for global cement and lime. Its technology has been developed to efficiently separate unavoidable carbon emissions ready for use or storage, without additional chemicals or processes.
The agreement specifies that Leilac and Heirloom will work together exclusively for DAC applications and that Leilac technology will be used at all future Heirloom DAC facilities, subject to conditions and both parties achieving agreed milestones.
Under the terms of the agreement, Leilac will receive a royalty based on the value of the CO2 captured with the technology. The royalty uses Leilac's standard licensing model with rates specific to the DAC application.
The royalty will have a floor price set at the greater of US$3/tonne of CO2 separated in a Leilac kiln, or 3.5% of the prevailing CO2 price for lime decarbonisation. A variable royalty rate, based on the prevailing CO2 price or value less the amortised cost of capital of the Leilac kiln per tonne of CO2 separated, will apply when above the floor price.
So why the selling?
Given that the above sounds like good news, why are investors selling down this ASX 300 share today?
Well, that's a bit of a mystery. It could be the lack of any meaningful upfront payment. Or perhaps investors were modelling in higher floor prices for the technology.
Nevertheless, management was pleased with the agreement. Calix managing director and CEO, Phil Hodgson, said:
Calix is pleased to announce a binding and perpetual licence agreement between Leilac and Heirloom. Our partnership with Heirloom creates the opportunity to apply the Leilac technology into a new and rapidly developing market. It is also an example of our commercialisation strategy in action, with partnerships and licensing arrangements enabling our core platform technology to be simultaneously applied to multiple large addressable markets.
