HERE IS THE STORY BEHIND THE TYGER-LYNK
During October of 2006 the Company acquired all rights, title and interest to the patented Tiger•Lynk underwater manipulator system. On February 20, 2008, the Company finalized an agreement to sell all rights, title and interest in the Tiger-Lynk technology to Hollund Industrial Robotics Systems Inc, a privately held Canadian company (HIRS) and a Company controlled by a former director, Mr. Lonnie Hayward. The agreement with HIRS includes the mechanical arm assembly that was partially completed and stored at the Company's participating manufacturing facility in Kamloops British Columbia. Terms of the sale were amended in March 2008 and again in June 2008, in an Addendum and Addendum B agreement respectively, whereby the Company received a zero interest bearing note of $250,100 from Holland Industrial Robotics Inc (“HIRS”). The note is secured with a first priority interest in the technology in an event of default. The June 2008 Addendum B agreement modified the terms of payment, such that the amount payable to the Company was reduced from the $205,100 principal amount remaining to $140,000, a reduction of $65,100. The Company has received payments of $30,000 in July 2008, in accord with new payment terms, leaving a balance owing as of August 31, 2008 of $110,000. The remaining payment for the balance owing of $110,000 to be paid in four payments; $30,000 due Sept 15, 2008 and three payments due on the 1 st day of December 2008, January 2009, and February of 2009. The total receivable outstanding is included in the consolidated financial statements. During September 2008, the Company received $27,630 in cash and $2,370 debt forgiveness on amounts due Holland CEO, totaling the $30,000. This amount was due for the September 15, 2008 payment under the terms of the latest amendment to its agreement with Hollund. The Company has not received payments due as of December 1, 2008, or January 1, 2009. During January 2009, the Company signed an Extension Agreement, amending the prior agreement with Hollund. As terms of the agreement, Hollund will pay the Company the $70,000 balance owing on the purchase of TigerLynk, plus $15,000 in overdue consulting fees incurred by the Company, the aggregate of which payable in 3 payments specifically as follows; i) $25,000 due February 2, 2009, ii) $25,000 due April 2, 2009 and iii) $45,000 due May 2, 2009. The new Extension Agreement reasserts the Company’s right to foreclose in the event of default on the new payment terms. At February 28, 2009, the Company had received the
VALOR ENERGY CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2009 (UNAUDITED)
February 2, 2009 payment, leaving a balance owing of $70,000 (See Note 12).
During November 2008, the Company signed an agreement to provide consulting services to Hollund Industrial Marine Inc, related to the design and construction of a TigerLynk 120 underwater manipulator system. Terms of the agreement call for the Company to receive $12,500 (US) per month in consulting fees, upon project financing, plus certain bonus compensation and conditional exclusive rights to employ and market the TigerLynk underwater manipulator system to the offshore oil and gas industry. As of January 1, 2009, the agreement for consulting services has been suspended indefinitely.
On December 12, 2008, the Company received a letter from Horsepower Intellectual Property Law (“Horsepower”) informing that Mr. Gary Ackles was attempting to rescind all of the technology rights as defined in the October 17, 2006 Technology Purchase and Sale Agreement (“Agreement”). Mr. Ackles based his claim on an allegation that Aquatic Cellulose International Corp (the Company’s former name) was in violation of the Agreement by failing to pay Ackles a final cash payment of $40,000 due upon signing. On December 22, 2008, the Company retained the services of Doak Sheriff LLP (“Doak Sheriff”)of Kelowna, British Columbia, Canada, to respond to this allegation that the Company considered false and potentially damaging to the existing agreement to sell this technology to HIRS, as reported on above. On December 29, 2008, Doak Sheriff delivered a letter to Horsepower on behalf of the Company denying the allegation and including as exhibits to the letter copies of the Company’s bank records confirming the payment made to Ackles account and an acknowledgment letter signed by Ackles at the time of the transaction confirming that he had received the payment. The letter also informed Horsepower that the Company may only consider the matter closed upon Ackles completing the transfer of the Patents into the name of the Company (See Note 12).
