I just came across this announcement they have sold the Cardinal...

I just came across this announcement they have sold the Cardinal technology for "cash payment of $225,000 (plus GST) plus a 10% share of net profit on commercialisation of the technology by the purchaser"

It made me look up what they paid for it less than 2 years back. I remembered the deal smelt very dodgy to me at the time....

Here is what I found from ASX announcement dated 5th March 2007....

Under the Sale Agreement, the Company has agreed to purchase the intellectual property rights in
Cardanal’s CPI software and associated assets from Cardanal for $100,000 and the issue of
72,727,273 ordinary shares in the share capital of the Company to Cardanal. The shares will be
escrowed for one year from the date of issue.

.....

The Sale Agreement is also conditional on the Company entering into a service agreement with Dr
Ginzburg. The key terms of Dr Ginzburg’s service agreement are summarised as follows:
• Dr Ginzburg is employed as Chief Scientific Officer for 5 years at a salary of $180,000 per
annum (exclusive of superannuation);
• Dr Ginzburg is to act as chair of the Company’s scientific advisory board;
• Dr Ginzburg receives a sign-on payment of $250,000;
• Subject to settlement of the Sale Agreement, Dr Ginzburg is entitled to a further $250,000
on or before 21 June 2007;
• Subject to completion of the Sale Agreement and the intellectual property acquired under
the Sale Agreement being successfully integrated with the Company’s technology, Dr
Ginzburg is entitled to certain payments and issues of shares. Apart from achieving
successful integration, the payments and issues are linked to the performance of the
Company’s share price. If the conditions are satisfied, Dr Ginzburg could receive up to a
further $500,000 and up to 25,000,000 shares in the share capital of the Company. Any
shares issued by the Company under these arrangements will be escrowed for a period of
12 months from the date of their respective issue.
• If the Sale Agreement does not complete, for whatever reason, the Service Agreement will
terminate immediately and Dr Ginzburg will only be entitled to his salary up until
termination.


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So, apart from the $100k + $1,600,000 worth of IMI shares (at 2.2c each) for selling the technology, Ginzberg gets (on top of a $180k (+super) salary) $250k sign on bonus + another $250k bonus (for?) and then if certain (what???) conditions are met up to a further $500k and 25,000,000 IMI shares.

I have to ask, was this incompetence on a grand scale or another case of the shareholder getting a nice big shafting?