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approximately 26 years. Prior to his retirement from the IDF in
1974, Mr. Yaakov served as chief of research and development.
Mr. Yaakov met with Mr. Slavitt, an investment banker, in
June 1984. Mr. Yaakov and Mr. Slavitt decided to form I-Tech as
a limited partnership to fund research projects of four startup
Israeli companies that were previously funded by Advanced
Technology Associates, L.P. (ATA), as well as a fifth Israeli
company.
Pursuant to a Confidential Private Placement Memorandum
(PPM) dated August 6, 1984, 68 units in the limited partnership
were offered for sale to investors. The limited partnership
interests were offered in units of $100,000 each.8
In Mr. Slavitt’s promotional letter to prospective
investors, he stated, in part:
I-Tech R&D Limited Partnership will provide the funding
for research and development of five separate R&D
projects which will be included in our limited
partnership.
* * * * * * *
The Limited Partners’s cash investment will be spread
over four calendar years and will produce the following
approximate tax losses per $100,000 unit:
Cash Invested Tax Loss
1984 $28,200 $64,860
1985 39,726 80,103
1986 26,180 53,695
1987 5,894 11,906
8Petitioner purchased a one-half share for $50,000.
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