LOL...reconditioned 30 year old laser...lol
NOTE 10 - JOINT VENTURE AGREEMENT WITH LEI
On December 19, 2007, HyGeniLase, Inc., ("HyGeniLase") a Delaware corporation was formed. HyGeniLase is a joint venture between the Company and Laser Energetics, Inc., ("LEI"), an Oklahoma corporation, with each party owning 50% of the company. HyGeniLase was formed to develop, manufacture, market, sell and distribute dental laser process technology to the dental markets worldwide.
In this joint venture, the Company is responsible for funding HyGeniLase, clinical evaluation, process development, market development, and sales and marketing to the human and animal dental market. The Company shall be directly compensated by HyGeniLase for these functions at a rate equal to 5% of net sales less discounts. LEI is responsible for product development, product specifications, quality control, product improvement and manufacturing. LEI shall be directly compensated by HyGeniLase for these functions at a rate equal to cost plus 10% basis.
The Company is responsible for raising the initial funding of HyGeniLase in the amount of approximately $650,000: approximately $25,000 being allocated to fund a laser cost study to be conducted by LEI (all of which has been advanced); approximately $61,000 being allocated to purchase a reconditioned research laser (of which $42,664 has been advanced); and $550,000 being allocated to fund the development of a pre-production prototype Alexandrite laser system to be provided by LEI (of which $100,000 has been advanced). LEI has cancelled the balance of $18,336 due on the reconditioned laser because of its late delivery , and the Company has suspended additional payments and funding pending delivery of the research prototype by LEI.LEI’s default in delivery of the research prototype occurred for technical reasons experienced by LEI.
Upon delivery of the research prototype by LEI, subject to our satisfactory clinical evaluation, the Company plans to resume performance of its obligations under the terms of the joint venture. Neither party has called the other into default under the agreement. HyGeniLase will repay the Company for all advances it has made in connection with the initial funding after HyGeniLase has received funding of at least $750,000 (in excess of the Company’s initial funding).
The $25,000 allocated to fund the laser cost study and the $550,000 allocated to fund the development of a pre-production prototype will be (or have been) paid to LEI for the benefit of HyGeniLase, and LEI has provided the Company, for the benefit of HyGeniLase, the laser cost study and will deliver the pre-production prototype.
The Company recognized a loss on the investment in HyGeniLase for the year ended December 31, 2007 in the amount of $61,332 and for the year ended December 31, 2008 of $25,000 under the equity method of accounting.
AI
