NOTE 9 - JOINT VENTURE
Institut für Umwelttechnologien GmbH
In February 2009, we entered
into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (IUT) whereunder the
parties have agreed that:
|(a)||The Company has granted an exclusive license to a new IUT subsidiary,
called IUTM, to develop and manufacture products based on the Companys proprietary information. This proprietary
information is not based on the technology that had been subject to the Master License Agreement with the University of Maryland
Baltimore. The Company has also transferred to IUTM a number of items of laboratory equipment and inventory useful in connection
with the licensed information. |
|(b)||The Company retains rights to market products based on such information
as well as first consideration for marketing rights for other possible IUTM products. |
|(c)||In consideration of the license, the Company has received a 10% equity
interest in IUTM, which is organized as a private German limited liability company and IUT has assumed approximately $82,000 of
the Companys indebtedness.|
|(d)||The Companys marketing rights have been transferred to its
subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary.|
We have been advised that
IUTM is continuing the development of a brachytherapy device generally as described above but based on proprietary technology not
developed by the University of Maryland. During recent discussions with IUTM management, the prior understandings were reaffirmed.
It is now our expectation that we will receive information on at least two potential product lines under consideration and/or development
by IUTM. Upon receipt we plan to determine the extent to which we will be able to market them and to finance a marketing organization.
While our Management is optimistic as to the outcome of those discussions and future success in financing, it is not possible to
predict the probabilities of success with any degree of certainty. It was determined at August 31, 2010,
the value of the investment in IUTM was impaired. Accordingly, we recorded an impairment loss in the amount of $3,186.
On September 23, 2010,
the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical GMBH confirming
certain understandings among the parties with respect to their future relationships and business activities as originally contemplated
in their Technology Agreement of February 27, 2009, which was reaffirmed.