From March 31 2011 10K
In March 2011, we agreed to form a joint venture with engage:BDR, Inc., an on-line marketing company that offers both premium and placement-specific display marketing solutions and the ability to distribute campaigns through its own display platforms and channels. engage:BDR partners with most of comScore's top 1000 websites (globally) for the most advanced display marketing capabilities. Under the joint venture agreement, engage:BDR will provide a full range of online marketing services to the joint venture, including developing brand strategy, the design of all digital media and interfaces, online media planning and buying, leveraging and integrating social media, and customer analysis.
The following is a summary of the principal provisions of the joint venture (the “Joint Venture”) with engage:BDR, Inc.:
A. The first product to be marketed and sold through the Joint Venture shall be Oxis’ ErgoFlex™ product. Additional Oxis products designated by Oxis will be offered by the Joint Venture. If both parties agree, third party products may also be offered through the Joint Venture. However, nothing in the Joint Venture is intended to prohibit us from marketing, distributing and selling ErgoFlex™ or any of our other current or future products by means other than through online sales.
B. Oxis and engage:BDR will make the following capital contributions to the Joint Venture:
(a) We will contribute up to $1,500,000 during the first year following the formation of the Joint Venture. These funds will be provided if, when and as needed by the Joint Venture. Our cash capital contribution will be used (i) to purchase ErgoFlex and other products from Oxis, at our cost, without any markup, (ii) to purchase website media inventory from engage:BDR, at engage:BDR’s cost, without any markup, and (iii) to fund the Joint Venture’s other operating costs, including insurance costs, marketing expenses, fulfillment costs, merchant processing costs, and employee’s salaries. During the initial start-up phase of the Joint Venture, we will, at our own cost and expense, also provide services to re-package and label our existing nutraceuticals for sale through the Joint Venture.
(b) At its own cost and expense, engage:BDR will design, develop and provide to the Joint Venture, on a turnkey basis, all online product offering systems and technologies, including website layouts, landing pages, graphic designs, display advertising, rich media, in-banner and in-stream video development. During the initial start-up phase of the Joint Venture, engage:BDR will, at its own cost and expense, also manage all day-to-day online activities of the Joint Venture.
C. Cash from operations in excess of the amounts needed for its operations and for reasonable reserves, shall be distributed by the Joint Venture in the following order:
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(a) First, to Oxis and engage:BDR until (i) Oxis has received, on a cumulative basis, an amount equal to the cash it has contributed to the Joint Venture, and (ii) engage:BDR has received, on a cumulative basis, an amount equal to 100% of the purchase price paid by the Joint Venture for the website media inventory it purchased from engage:BDR.
(b) Thereafter, all excess net operating cash will be distributed 65% to Oxis and 35% to engage:BDR.
D. The administrative affairs of the Joint Venture shall be managed by a committee consisting of one representative of each Joint Venture member.
and now a year later the agreement is:
In March 2012 we signed a term sheet with engage:BDR that further evidences our arrangement and that permits both parties to commence operations under the arrangement. The parties contemplate that the existing binding arrangement will be evidenced by a formal limited liability company agreement that the parties are preparing. The following is a summary of the principal provisions of our joint venture arrangement (the “Joint Venture”) with engage:BDR, Inc.:
A. We have agreed to grant the Joint Venture an exclusive license for the on-line marketing of products containing EGT™. The first product to be marketed and sold through the Joint Venture shall be Oxis’ ErgoFlex™ product, which product was successfully test marketed in mail offering in late 2010 and early 2011. Additional Oxis products designated by us will be offered by the Joint Venture. If both parties agree, third party products may also be offered through the Joint Venture. However, nothing in the Joint Venture is intended to prohibit us from marketing, distributing and selling ErgoFlex™ or any of our other current or future products by means other than through online sales.
B. Oxis and engage:BDR have agreed to make the following contributions to the Joint Venture:
(a) Oxis will contribute up to $240,000 during the first year following the formation of the Joint Venture. These funds will be provided if, when and as needed by the Joint Venture. Our cash capital contribution will be used (i) to purchase ErgoFlex and other products from Oxis, at our cost, without any markup, (ii) to purchase website media inventory from engage:BDR, at engage:BDR’s cost, plus a 15% administrative mark-up, and (iii) to fund the Joint Venture’s other operating costs. engage:BDR has agreed to waive the 15% administrative mark-up through December 31, 2012.
(b) In addition to the cash, our contribution to the Joint Venture includes the exclusive license for the on-line marketing of any products created by Oxis which utilize its proprietary EGT™.
(c). engage:BDR , at its own cost and expense, is designing, developing and providing to the Joint Venture, on a turnkey basis, all online product offering systems and technologies, including website layouts, landing pages, graphic designs, display advertising, rich media, in-banner and in-stream video development. During the initial start-up phase of the Joint Venture, engage:BDR will, at its own cost and expense, also manage all day-to-day online activities of the Joint Venture.
Cash from operations in excess of the amounts needed for its operations and for reasonable reserves, shall be distributed by the Joint Venture in the following order:
(a) First, to Oxis on a cumulative basis, an amount equal to the cash that we contributed to the Joint Venture, and
(b) Thereafter, all excess net operating cash will be distributed 50.1% to Oxis and 49.9% to engage:BDR.
Guess after a year trying OXIS could only come up with $ 240,000 of the 1.5 million so the terms were changed to reflect the cash situation and OXIS commision was cut back 14.9%, from 65% to 50.1%
