ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 6, 2002, Balsam Ventures, Inc. ("Balsam") entered into an exclusive licensing agreement (the "Agreement") with Cool Can Technologies, Inc., ("Cool Can") granting Balsam the exclusive worldwide right and license, for a period of 40 years, to enjoy, commercialize and exploit Cool Can's proprietary Instacool self-chilling beverage container technology (the "Technology") including the right to manufacture, use and sell apparatus and products embodying the Technology. Balsam also has the right to sub-license the right to manufacture, use and sell products embodying the Technology. The consideration for the Agreement is as follows:
1. Balsam must pay Cool Can a license fee of $200,000 within 90 days of June 6, 2002;
2. Balsam must expend $1,800,000 to develop and commercialize the technology within 24 months of June 6, 2002; and
3. Balsam must pay ongoing royalties to Cool Can equal to 5% of gross profits from sales of products or 5% of gross licensing revenues subject to minimum royalty payments of $200,000 per year in each fiscal year of Balsam following the fiscal year ended June 30, 2004.
Subject to the license, the patents and trademarks included in the Technology (the "Intellectual Property") remain the property of Cool Can however, Balsam has a right of first refusal to acquire the Intellectual Property should Cool Can seek to dispose of the Technology during the currency of the Agreement.
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