UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 15, 2005
IBHAS TECHNOLOGIES INC
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(Exact name of registrant as specified in its charter)
Nevada 98-0370398 000-50329
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
ZEEV SHERF STREET #14
JERUSALEM 97842
ISRAEL
(Address of principal executive offices and Zip Code)
+972 545-662-102
(Registrant's telephone number, including area code)
Copies to:
Gregory Sichenzia, Esq.
Sanny J. Barkats, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communication pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On August 15, 2005 IBHAS TECHNOLOGIES INC., ("IBHAS") entered into a
letter of intent for a licensing agreement with Tracetrack Technologies Ltd.,
("Tracetrack"), pursuant to which IBHAS and Tracetrack will enter into a
definitive licensing agreement upon satisfaction of certain conditions
precedent, including Tracetrack obtaining approval for the license from the
Office of the Chief Scientist of the Israeli Ministry of Trade and Commerce
("OCS"). IBHAS has agreed to pay $100,000 to Tracetrack within three (3)
business days from the execution of the letter of intent as consideration.
1. Upon execution of the definitive license agreement IBHAS will obtain an
exclusive license from Tracetrack which it shall grant IBHAS, conditional
upon receipt of OCS approval, an exclusive, worldwide, perpetual license
to make any and all uses of the Licensed Technology, specifically
including, without limitation, the rights to use the Licensed Technology
for research and development, to commercialize the Licensed Technology,
the Product or any other products thereof in any manner, including without
limitation by the development, use, marketing, distribution, sale and/or
provision of any products or services thereunder, and grant sublicenses
and secondary sublicenses under the License to third parties, subject to
the conditions set forth under Section 5 in the L.O.I, . Tracetrack will
refrain from using the Licensed Technology in any manner whatsoever, other
than pursuant to IBHAS instructions in relation to research programs
and/or manufacture of the Product.
2. The License and the right to manufacture, make and/or have made the
Product will be granted to IBHAS as part of the License, on the condition
that (i) IBHAS will establish in Israel a wholly-owned subsidiary that
shall establish an R&D center in Israel, recruit employees and carry out
R&D activities for the continued development of the Product, and (ii) the
Subsidiary shall be the sole sub-licensee under the License to use the
Licensed Technology for the continued development of the Product and sole
sub-licensee of the Manufacturing Rights; provided however that IBHAS will
be entitled to assemble the Product and/or manufacture parts thereof
(other than the proprietary membrane and some parts of the software)
outside of Israel, if and to the extent required by TSA (US Transportation
Security Agency) or a similar governmental authority, and/or in accordance
with the US purchase requirements in connection with the US foreign aid
financing extended to Israel.
3. IBHAS will pay Tracetrack royalties at the rate of three percent (3 %) of
Net Sales (which term shall be defined in the License Agreement). The
Royalty Payments shall be paid on a quarterly basis within 15 days of the
end of each calendar quarter with respect to the Net Sales of such
preceding quarter. In addition, in the event that the Royalty Payments
shall be lower than the royalties due from Tracetrack to the OCS, IBHAS
will pay Tracetrack the Additional Amount together with the Royalty
Payments. IBHAS commitment to pay Royalty Payments to Tracetrack shall
remain in force until the earlier of: (i) the lapse of five (5) years from
the First Commercial Sale of the Product (which term shall be defined in
the License Agreement) or (ii) the aggregate amount of Royalty Payments
(including any Additional Amounts) paid by IBHAS to Tracetrack (exclusive
of the Upfront Payment) shall amount to $2.5 million.
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Tracetrack was founded by Dr. Fredy Ornath, a veteran of the Ordnance
Corps of the Israeli Defense Forces and a former professor of the Technion
Engineering School, Israel's most reputable technical and engineering institute.
Dr. Ornath, is the owner of 58.45% shares of the outstanding common stock of
IBHAS, and the owner of 99.8% shares of the outstanding common stock of
Materials Systems Ltd a company which owns Tracetrack. Dr. Ornath fully
disclosed his relationship with Tracetrack to the Board of Directors and
Officers of IBHAS. This letter of intent was entered into for the benefit of
IBHAS and was approved by its Board of Directors on August 18, 2005. The Company
management believes the terms of the obligations with Tracetrack are on terms at
least as favorable as could be obtained from unrelated third parties.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
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10.1 Letter of Intent between Ibhas Technologies Inc. and
Tracetrack Ltd, dated August 15, 2005
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 18, 2005
IBHAS TECHNOLOGIES INC.
By: /s/ Jacob Eluz
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Jacob Eluz
Chief Executive Officer
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