Risk ReductionRisk ReductionBudget Request Budget Request

PresentationPresentation

Risk Reduction Budget RequestsRisk Reduction Budget Requests

For our Risk Reduction group, we will For our Risk Reduction group, we will outline the following line items for budget outline the following line items for budget approval:approval:

PayrollPayrollPatent AttorneyPatent AttorneyLicensing FeesLicensing FeesPatent Processing FeesPatent Processing Fees

Payroll OutlinePayroll Outline

As per our conversation (1/6/04) with our As per our conversation (1/6/04) with our Business Development Advisor Sandra Business Development Advisor Sandra Matalonis of NEOSE, we have composed Matalonis of NEOSE, we have composed yearly salaries for our risk reduction yearly salaries for our risk reduction officers.officers.

We need a total of We need a total of $750,000 a year$750,000 a year for our for our departmental payroll.departmental payroll.

PayrollPayroll

Director of Business Development: Director of Business Development: $125,000 a year$125,000 a year..

Director of Licensing:Director of Licensing:

$125,000 a year.$125,000 a year. Staff Analysts (10):Staff Analysts (10):

($50,000 each) ($50,000 each) $500,000 a year$500,000 a year total. total.

TOTAL: TOTAL: $750,000 a year$750,000 a year..

Patent AttorneyPatent Attorney

Corporate Patent Attorney (different from a Corporate Patent Attorney (different from a corporate attorney due to Bar restrictions)corporate attorney due to Bar restrictions)

Payroll- Payroll- $150,000 a year$150,000 a year Employment Options:Employment Options:

Travel to Washington, DC monthly.Travel to Washington, DC monthly. Work in Washington, DCWork in Washington, DC

Patent Attorney Option #1Patent Attorney Option #1

Must travel to DC 2 times a month to Must travel to DC 2 times a month to research at USPO.research at USPO.

As per Expedia.com:As per Expedia.com:Flight from Newark to Dulles + Hotel 2 nights Flight from Newark to Dulles + Hotel 2 nights

+ car rental fees = $843 a trip+ car rental fees = $843 a trip$843 X 2 trips a month = $1,686 a month$843 X 2 trips a month = $1,686 a month

$1,686 X 12 months = $1,686 X 12 months = $20,232 a year$20,232 a year (BAD OPTION)(BAD OPTION)

Patent Attorney Option #2Patent Attorney Option #2

Maintain office in DC to conduct research Maintain office in DC to conduct research at USPO.at USPO.

Furnished office rental As per Washington Furnished office rental As per Washington Post classified ad dated 1/6/04:Post classified ad dated 1/6/04: ““BAILEYS XROADS --Ofcs. Furn, DSL, centr loc, BAILEYS XROADS --Ofcs. Furn, DSL, centr loc,

ample prkg. Recp area/conf rm. ample prkg. Recp area/conf rm. Ideal for lawyers.Ideal for lawyers. Starting at $499.”Starting at $499.”

$499 a month X 12 = $499 a month X 12 = $5,988 a year.$5,988 a year. (GOOD OPTION)(GOOD OPTION)

Patent Attorney TotalPatent Attorney Total

Payroll: $150,000 a yearPayroll: $150,000 a yearOffice Expense: $5,988 a yearOffice Expense: $5,988 a year

Total=Total= $155,988 a year$155,988 a year

Licensing FeesLicensing Fees With Projected Sales of $10 Million… With Projected Sales of $10 Million… To in-license three technologies: To in-license three technologies:

Upfront Fees (1% projected sales)Upfront Fees (1% projected sales) 1% = $100,0001% = $100,000$100,000 x 3 technologies= $100,000 x 3 technologies= $300,000$300,000

Royalties on sales (% of projected yearly sales)Royalties on sales (% of projected yearly sales)Films (0.25% annually) = $25,000 Films (0.25% annually) = $25,000 Design (0.25% annually) = $25,000 Design (0.25% annually) = $25,000 Lens (0.5% annually) = $50,000Lens (0.5% annually) = $50,000

TOTAL= $100,000TOTAL= $100,000

Licensing Fees = Licensing Fees = $400,000 annually$400,000 annually

Patent Processing FeesPatent Processing FeesWe plan to file fifty design patents on our We plan to file fifty design patents on our

glasses per yearglasses per year$ 340 (application fee) X 50 patents= $ 340 (application fee) X 50 patents=

$17,000 $17,000 yearlyyearly

We plan to file five general patents on our We plan to file five general patents on our novel technologies per yearnovel technologies per year$ 770 (application fee) X 5 patents=$ 770 (application fee) X 5 patents=

$3,850 yearly$3,850 yearlyTOTAL PATENT PROCESSING FEESTOTAL PATENT PROCESSING FEES

$20,850 yearly$20,850 yearly

Risk Reduction Budget RecapRisk Reduction Budget Recap

Payroll:Payroll: $750,000$750,000Patent Attorney: Patent Attorney: $155,988$155,988Licensing Fees:Licensing Fees: $400,000$400,000Patent Processing Fees: Patent Processing Fees: $ 20,850$ 20,850

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TOTAL:TOTAL: $1,305,988$1,305,988