- 24 - mention I-Tech’s expected or anticipated involvement in the marketing or production of any discoveries. In Mr. Slavitt’s promotional letter to potential investors, he stated that the limited partnership will provide the funding for research and development of five separate R&D projects. He further stated that when the research and development activities were completed and marketing commenced, I-Tech would receive royalties based upon gross sales and that options existed allowing the royalties to be converted into equity in the R&D companies at a later date. Mr. Slavitt’s letter does not mention or even suggest that I-Tech intended to exploit any successfully developed technology on its own. Mr. Slavitt’s promotional letter, read in conjunction with the PPM, leads us to the conclusion that the plan from the beginning was for the R&D companies to exercise their buy-out options and for I-Tech to exercise its equity options in the R&D companies or their affiliates. Indeed, the buy-out options essentially guaranteed that I-Tech did not have a realistic prospect of exploiting any discoveries in its own trade or business. Since the R&D companies could exercise the buy-out options after a minimal waiting period, they would surely exercise the options if their projects were profitable enough to justify incurring the cost of manufacturing and marketing. As a result, I-Tech stood to receive production and marketing rightsPage: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: May 25, 2011