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Everyday Edisons - Annuity Agreement question -
by timmcgreal » Fri Jan 11, 2008 9:17 am
- timmcgreal
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Hello -
I am trying to interpret the highlighted sentence:
2.2 As used herein, the phrase “ NET RECEIPTS â€
I am trying to interpret the highlighted sentence:
2.2 As used herein, the phrase “ NET RECEIPTS â€
by Road Show » Fri Jan 11, 2008 9:37 am
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Road Show - Brown Belt
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Hi Tim,
I think this section is very clear. It seeks to define the phrase "Net Receipts", which it does. Net Reciepts is clearly defined as "Gross Reciepts" less "Expenses", and some examples of the types of expenses one might reasonably expect during the course of transacting business are spelled out. Just so that there are no misunderstandings as to what types of expenses will be deducted from Gross Receipts to arrive at the total of Net Receipts, they give a clear view of the source of the expenses being withheld from Gross Receipts, which is the statement that YOU highlighted. Nowhere does it mention that any expenses are withheld from Net Receipts.
As to your concern here:
This is true. If you expect someone to do the "dirty work" for you, then you will have a hard time finding anyone willing to do so without having some say-so in the deal. If you cannot live with the terms, or do not trust the people with whom you are dealing, then you should not sign the agreement and just keep on walking. If, on the other hand, you look at what you stand to gain, and are happy with that, then you should allow a trusted partner the courtesy of developing the "learning curve" for your product that has, presumably, never been manufactured before, and may not have a developed distribution channel. You cannot have your cake and eat it too.
Just my nickle.
Good luck,
RSG
I think this section is very clear. It seeks to define the phrase "Net Receipts", which it does. Net Reciepts is clearly defined as "Gross Reciepts" less "Expenses", and some examples of the types of expenses one might reasonably expect during the course of transacting business are spelled out. Just so that there are no misunderstandings as to what types of expenses will be deducted from Gross Receipts to arrive at the total of Net Receipts, they give a clear view of the source of the expenses being withheld from Gross Receipts, which is the statement that YOU highlighted. Nowhere does it mention that any expenses are withheld from Net Receipts.
As to your concern here:
Also concerning is that it appears that the inventor would no longer have any control with respect to the product - period. What if it is not marketed/priced/distributed "efficiently"?
This is true. If you expect someone to do the "dirty work" for you, then you will have a hard time finding anyone willing to do so without having some say-so in the deal. If you cannot live with the terms, or do not trust the people with whom you are dealing, then you should not sign the agreement and just keep on walking. If, on the other hand, you look at what you stand to gain, and are happy with that, then you should allow a trusted partner the courtesy of developing the "learning curve" for your product that has, presumably, never been manufactured before, and may not have a developed distribution channel. You cannot have your cake and eat it too.
Just my nickle.
Good luck,
RSG
by timmcgreal » Fri Jan 11, 2008 9:48 am
- timmcgreal
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Hello RSG,
Thanks for your opinion!
Does this mean that “overhead or general and administrative expenses of ASSIGNEE or the manufactured cost of the product being soldâ€
Thanks for your opinion!
Does this mean that “overhead or general and administrative expenses of ASSIGNEE or the manufactured cost of the product being soldâ€
by Road Show » Fri Jan 11, 2008 10:22 am
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Road Show - Brown Belt
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Tim,
Read 'em and weep...lol!
Again, this is common for someone who will be doing all the grunt work to not have their expenses incurred eat into their take in the revenue generated. You are, for the most part, in it on a "free pass", so take it for what it means in your wallet and not what it means to them. If you can't live with it, then walk.
Many years ago my father got involved with an investment in some property as a limited partner. He learned a valuable lesson on how revenue can be diverted into subsidiary companies hired to maintain the real estate, in this case apartment complexes in Los Angeles, so that the revenue going into these "subcontracting" companies benefitted only the General Partners, which was a group headed by a California State Senator who was later convicted for accepting "bribes" in an unrelated case. Pay attention to the details and find out if any revenues will be funneled into companies in which E.E. or it's parent company has a financial stake.
RSG
Read 'em and weep...lol!
NET RECEIPTS shall not include any amounts attributable to overhead or general and administrative expenses of ASSIGNEE
Again, this is common for someone who will be doing all the grunt work to not have their expenses incurred eat into their take in the revenue generated. You are, for the most part, in it on a "free pass", so take it for what it means in your wallet and not what it means to them. If you can't live with it, then walk.
Many years ago my father got involved with an investment in some property as a limited partner. He learned a valuable lesson on how revenue can be diverted into subsidiary companies hired to maintain the real estate, in this case apartment complexes in Los Angeles, so that the revenue going into these "subcontracting" companies benefitted only the General Partners, which was a group headed by a California State Senator who was later convicted for accepting "bribes" in an unrelated case. Pay attention to the details and find out if any revenues will be funneled into companies in which E.E. or it's parent company has a financial stake.
RSG
by timmcgreal » Fri Jan 11, 2008 10:50 am
- timmcgreal
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Thanks RSG - great insight.
It is understandable (and fair) that EE would not want legit expenses to eat into their profit. What appears to be most problematic is that the term "overhead" is completely subjective, and EE's interpretation may be quite different from the inventors.
With respect to the "control" issue previously mentioned, it again is understandable (and fair) that EE would want to have some control with respect to the development/pricing/distribution of the product. What is problematic is that EE does not have some of the control, they have ALL of it. Once the agreements are signed, and submitted, and your invention is selected, the deal is sealed, and you no longer have any control. A book written by Robert G. Merrick entitled "Stand Alone, Inventor!" was an eye-opener for me because it made me realize that giving the "control" away can be extremely detremental if the commercialization is not handled correctly.
In my case, I have one product in which I have worked on for thousands of hours, it is now fully developed, and tooling completed. Working on packaging, instructions, distributuon, etc. As I have put in so much time, money, and sweat into this product, I have decided to not enter this product.
However, one of the other ideas I have that has "risen to the top" of my "idea" list is a different story. Since almost no time, money, or sweat has been expended, it is easier to justify entering this product -
It is understandable (and fair) that EE would not want legit expenses to eat into their profit. What appears to be most problematic is that the term "overhead" is completely subjective, and EE's interpretation may be quite different from the inventors.
With respect to the "control" issue previously mentioned, it again is understandable (and fair) that EE would want to have some control with respect to the development/pricing/distribution of the product. What is problematic is that EE does not have some of the control, they have ALL of it. Once the agreements are signed, and submitted, and your invention is selected, the deal is sealed, and you no longer have any control. A book written by Robert G. Merrick entitled "Stand Alone, Inventor!" was an eye-opener for me because it made me realize that giving the "control" away can be extremely detremental if the commercialization is not handled correctly.
In my case, I have one product in which I have worked on for thousands of hours, it is now fully developed, and tooling completed. Working on packaging, instructions, distributuon, etc. As I have put in so much time, money, and sweat into this product, I have decided to not enter this product.
However, one of the other ideas I have that has "risen to the top" of my "idea" list is a different story. Since almost no time, money, or sweat has been expended, it is easier to justify entering this product -
<p>Best regards,</p><p>Â Tim</p>
by Road Show » Fri Jan 11, 2008 4:20 pm
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Road Show - Brown Belt
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Tim,
I think these inventor shows are ideally suited to the novice inventor, or the "idea" guy/gal who does not have the resources or skills to take a product to market. In my opinion, the Everyday Edison show may be the best of it's kind out there, but it is still what it is. A person, such as yourself, who has invested heavily in their product concept in both time and money, is sure to be reluctant to just hand over their "baby" to strangers for commercialization. You just have to be honest with yourself about how likely you will be going it alone to make money from your invention...remembering that you have to recoup what you've spent before you're in the black. How much over and above that breakeven amount will make the whole effort worthwhile? This is where the rubber hits the road.
RSG
I think these inventor shows are ideally suited to the novice inventor, or the "idea" guy/gal who does not have the resources or skills to take a product to market. In my opinion, the Everyday Edison show may be the best of it's kind out there, but it is still what it is. A person, such as yourself, who has invested heavily in their product concept in both time and money, is sure to be reluctant to just hand over their "baby" to strangers for commercialization. You just have to be honest with yourself about how likely you will be going it alone to make money from your invention...remembering that you have to recoup what you've spent before you're in the black. How much over and above that breakeven amount will make the whole effort worthwhile? This is where the rubber hits the road.
RSG
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