I-Tech R&D Limited Partnership - Page 24




                                       - 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 rights             






Page:  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