3. JOINT VENTURE AGREEMENT
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3 Months Ended |
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Dec. 31, 2012
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Interest in Unincorporated Joint Ventures or Partnerships, Policy [Policy Text Block] |
3. JOINT
VENTURE AGREEMENT
On
December 21, 2010, the Company executed an Agreement with
Webprizm.com, a Nevada corporation (“Webprizm”),
and Brenner Family Holding Corp. (“Brenner”).
Webprizm is a wholly owned subsidiary of Brenner. Brenner is
owned by a trust which beneficiaries include family of the
Company’s former (from December 21, 2010 to July 12,
2012) Chief Executive Officer.
The
Agreement provides for a Joint Venture between the Company
and Webprizm for the purpose of developing the Project
(computer software programs known as “the webprizm
system”) for commercialization. The Company agreed to
incur a minimum of $10,000,000 in research and development
expenses with respect to the commercialization of the Project
(the “Expenditures”) on or before December 21,
2015 and Webprizm granted the Company an exclusive license to
use and sublicense (with prior written consent of Webprizm)
the Project and any Improvements. Net revenue from the
Project (none through December 31, 2012) is to be divided
equally between Webprizm and the Company within 60 days of
the end of calendar year end.
The
Agreement also granted the Company an Option to acquire all
outstanding shares of Webprizm or its assets (exercisable
only after the Expenditures have been incurred on or before
December 21, 2015) in exchange for delivery of shares of
Company capital stock representing 51% of all voting rights
attached to all outstanding securities. The Company may
decide not to exercise the Option by providing written notice
to Brenner. In such event, the Joint Venture, the License,
the Option, and the Agreement is to be terminated
immediately.
The
precise timing of when the $10,000,000 Expenditures will
occur is not specified in the Agreement. However, the Company
has informally agreed to periodically reimburse Webprizm for
that entity’s actual research and development costs
incurred by it. The first payment to Webprizm was made on
February 2, 2011 in the amount of $328,997 (representing
Webprizm’s actual research and development costs
incurred from August 17, 2009 to December 31, 2010). The
Company expensed the $328,997 as “Research and
Development” in the Statement of Operations during the
three months ended December 31, 2010.
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