- 10 -
percent of the total budget from its own source of funds.
The primary loan through the IDB was made for the sole
purpose of encouraging the conduct of the research and
development in Israel. Each time I-Tech disbursed funds from the
IDB loan to an R&D company, the R&D company was required, within
72 hours, to lend I-Tech 5.5 percent23 of the amount so disbursed
to that R&D company (secondary loan).24
In addition to funding the five R&D projects, I-Tech
allocated $990,000 of the offering proceeds to a “blind pool” or
“discretionary account” to be used at the discretion of Capital,
the managing general partner, as additional funding for one or
more of the R&D projects or other R&D projects. The blind pool
of $990,000 was invested in two other R&D projects promoted by
Mr. Slavitt.25
R&D Agreements
Under the terms of each R&D agreement, ATA granted I-Tech
certain rights, title, and interest in and to the R&D companies’
existing technology and technology to be developed in the R&D
22(...continued)
returns.
23This was 5.55 percent in the case of Hal Robotics.
24I-Tech repaid the nonrecourse loans from the R&D companies
to I-Tech. These loans were repaid from the funds received by I-
Tech from Efrat, AiTech, and Oshap when those R&D companies
exercised their options. These transactions were noted on the
partnership’s tax returns.
25Medical R&D Associates Limited Partnership and Israel
Technology-5 Limited Partnership.
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Last modified: May 25, 2011