NOTE 5 INTANGIBLE
We entered into
an agreement with Beijing Pengchuang Technology Development Co. (Pengchuang), Ltd., an independent Chinese company,
to purchase 50% of the intellectual property related to ultrafine particle processing. Pengchuang developed a highly efficient
and low energy consumption grinding technology, which utilizes fluid shock waves to make ultrafine particles. This technology can
be applied to the coal water slurry, solid lubricant and other material grinding processes. Through the joint development and ownership
agreement, AuraSource will enrich its intellectual property portfolio, enabling the further development of AuraCoal, its Hydrocarbon
Clean Fuel technology. AuraSource Qinzhou will utilize the particle grinding technology in its AuraCoal Qinzhou production line,
as well as license it to others in non-related industries.
We issued 600,000
shares of common stock for the acquisition of certain intangibles. We acquired intangibles of $753,530. The shares issued in connection
with the acquired intangibles were valued at $606,000 or $1.01 per share which was the share price on August 8, 2010, the acquisition
date. The Company paid cash for the remainder of the amount due.