Some thoughts on Ice…..
When Torvec acquired the Ice Technology it was reported as follows: “Torvec, Inc. will develop the technology for land-based vehicle applications.”
Here is a report of the history: “Then in November, 2000, Dartmouth and UTEK Corporation - a business development company dedicated to building bridges between university developed technology and commercial organizations - announced jointly that the Dartmouth Trustees had granted a worldwide exclusive license to Ice Surface Development, Inc. (ISDI), a subsidiary of UTEK, for Petrenko's ice adhesion modification system for land-based vehicle applications. ISDI was subsequently acquired by Torvec, Inc., a Rochester, New York-based developer of advanced automotive technologies. In addition to integrating Petrenko's inventions into Torvec's "Fast Tracked Vehicle," ISDI plans to develop a marketable non-thermal windshield de-icer, which would prevent ice from even forming, and further develop Petrenko's "Electrostatic IceBraker" traction system which works by inducing an electric field strong enough to significantly increase the friction between tires and ice. "There's nothing like a 60-ton tank slithering around on the ice to make you think Professor Petrenko's technology is a good idea!" said Dr. Herbert H. Dobbs, Chairman of the Board of Directors of Torvec. "This is a new direction for Torvec. Up to this point we've used only our own technology. But we think this has enormous potential." Mikhail Starostin, a Thayer School visiting professor from Russia, is helping Petrenko to develop a prototype of the windshield de-icer, while Masahiko Arakawa, a visiting professor from Japan, is working on the ice-traction system. In the future, both technologies may well be available as options on new cars -- like a sunroof or a CD player. The traction system could also be used for shoes, requiring only a simple ice sensor and a small battery.”
Of course, all if this is an overview and some reporter’s summary of the results of the underlying legal documents. Now we have an impairment event reported by Torvec’s auditing firm. And then we have a transfer back of the entire package in exchange for cash to “reimburse” the past investment costs along with a 5% Royalty share in the future commercialization.
With all the other non-impaired technologies that Torvec owns, we have the reliance on the patents for the protection of the shareholder value, while with the Ice Technology, we have no patents, only contracts to rely upon. So, I was wondering why there is a need to change the terminology from what it has been in the past to the new terminology of “the motorized and nonmotorized land vehicle field covered by the assigned license agreement”. It would seem to me that there are other fields covered by the assigned license agreement that are beyond the motorized and nonmotorized land vehicle fields.
Why not cover all fields? Why limit it to only these fields?
Also, what is the rush to liquidate the Ice Surface Development, Inc. that establishes the sellers as a group? As we know Torvec only owns 56% of the interest in that group. Will there not be any new business items to come before the group? What about the future litigation necessary to collect the Royalties? Will Torvec now be responsible to pay all the future costs for collection the Royalties in absence of the other shareholders of the Ice Surface Development, Inc.?
It was stated that there would be a royalty that is equal to 5% of the gross revenues generated by the license. Now, 5% of the manufacturer’s gross is a lot more than 5% of the royalties that will be earned by the assignee. It would seem to me that we need to clear up the base amount that the 5% is computed on. Hopefully it would be the manufacturer’s gross, not Ice Engineering, LLCs’ gross. It seems that we are setting ourselves up for 56% of 5% of 5%; which happens to be .14%.
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