|Note 4 – Intellectual Property|
On October 27, 2014, the Company entered into an intellectual property agreement with Mr. Hatem Essaddam wherein the Company purchased a certain technique and method for $445,050 allowing for the depolymerization of polyethylene terephthalate at ambient temperature and atmospheric pressure. The Company will use such technique in its processing plant. The technology is being amortized using the straight-line method over the estimated used life of the patents 7 years. As of February 28, 2015 $212,800 of the purchase price was outstanding, which amount was paid in full during the year ended February 29, 2016.
In addition to the $445,050 paid by the Company under the Intellectual Property Assignment Agreement, the Company is required to make additional payments totaling CDN$800,000 Mr. Essaddam within sixty (60) days of each of the following milestones (the "Milestones") having been met, as follows:
|(i)||CDN$200,000 when an average of twenty (20) metric tons per day of terephthalic acid meeting the is produced by the Company for twenty (20) operating days;|
| ||(ii)||CDN$200,000 when an average of thirty (30) metric tons per day of terephthalic acid is produced by the Company for thirty (30) operating days;|
| || || |
| ||(iii)||CDN$200,000 when an average of sixty (60) metric tons per day of terephthalic acid is produced by the Company for sixty (60) operating days; and|
| || || |
| ||(iv)||CDN$200,000 when an average of one hundred (100) metric tons per day of terephthalic acid is produced by the Company for sixty (60) operating days.|
As of February 29, 2016 the Company is still in its test pilot program, none of the Milestones have been met, and accordingly no additional CDN$200,000 payment has been made.
Additionally, the Company is obligated to make royalty payments of up to CDN$27,000,000, payable as follows:
|(a)||10% of gross profits on the sale of all products derived by the Company from the technology assigned to the Company under the agreement;|
|(b)||10% of any license fee paid to the Company in respect of any licensing or other right to use the technology assigned to the Company and granted to a third party by the Assignee;|
|(c)||5% of any royalty or other similar payment made to the Company by a third party to whom a license or other right to use the technology assigned to the Company has been granted by the Company; and|
|(d)||5% of any royalty or other similar payment made to the Company by a third party in respect of a sub-license or other right to use the technology assigned to the Company granted by the third party.|
As of February 29, 2016, we have not made any royalty payments under the Intellectual Property Assignment Agreement.
In re Hatem Essaddam:
US2015361616 (A1) ? 2015-12-17
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PROCESS FOR ISOLATING CELLULOSE FROM CELLULOSIC BIOMASS, ISOLATED CELLULOSE OF TYPE I AND COMPOSITE MATERIALS COMPRISING SAME
Page bookmarkInventor(s):Applicant(s):Abstract of US2015361616 (A1)
Described herein are processes for the production of a cellulose pulp and processes for isolating cellulose from cellulose-containing biomass. The processes of the invention comprises contacting the biomass with a source of anions and a source of cations, the source of anions and the source of cations being selected to react exothermically with the biomass and with each other. The processes of the invention have the particularity of generating exothermic reactions through enthalpies of reaction and mixture. Accordingly, the processes of the invention do not require any supply of external energy since the required energy is provided by chemical reagents that are already present in the biomass or added as needed. The invention also relates to isolated cellulose obtained from these processes and the use of same in various materials.