PRODUCT DEVELOPMENT SCENARIO

    Inventors and Eagle Innovations will work together through the following sequence, depending on the current stage.

    1.   NEED RECOGNITION – Is the function new, or how is it being done now?  
How much would a company be willing to pay for something new or better to do it?

    2.   IDEAS for SOLUTIONS – List all conceivable ways of accomplishing the function,
besides the way you currently have in mind.

    3.   MARKET RESEARCH – How big is the market?  What products are serving the market need now?  List all categories
of industry that might be potential markets; consider  variations of design for different market segments.  

    4.   PATENT SEARCH – What similar products have been patented?  (Only 5% of patented products reach the market; the
other 95% must be searched out of the patent files.)  What design ideas could be legally taken and incorporated form existing
patented drawings?  Eagle Innovations does the patent searching.  

    5.   PRODUCT DESIGN – Steps 5, 6 & 7 may be done by either Eagle Innovations or the  Inventor, but preferable in a
cooperative effort.  Steps 5, 6 & 7 go around in a loop until the design is perfected and/or costs are optimized.  

    6.   PROTOTYPING – then design modifications.

    7.   TESTING – then more design modifications.

    8.   COSTING – is considered beginning in the design phase.  Cost is influenced by alternative manufacturing methods and
by production and sales volumes.

    9.    PRICING – New industrial products that will save companies money will be priced to reflect the value of those
savings, with maximum margins for Eagle Innovations and maximum royalties.

   10.   MARKETING – Initially, new products will be direct marketed through Industrial Equipment News (IEN) and/or
other industrial new product publications.

   11.   MANUFACTURING – Eagle Innovations is planning to have an in-house manufacturing facility.  However, products
that require electronics will be sub-contracted out to other appropriate manufacturers.  The primary source will be nearby
Kalow Technologies.   
www.kalowtech.com

   12.   PATENT APPLICATION - A lower cost Provisional Patent Application allows 12 months to test-market the product,
etc.  By then the Final Patent Application must be filed.  Eagle Innovations will handle both.

   13.   INVENTOR’S ROYALTIES – There are two options for licensing your invention*.  (A) If Eagle Innovations
manufactures and markets it, you will be offered a 5% royalty (on the selling price).  Eagle Innovations will incur all costs;
you will not be asked to pay for anything.  (B) If Eagle Innovations licenses it to another company, you will receive 50% of
the royalties that Eagle Innovations receives. (However, if all product development costs are not recouped by an up-front
payment from that company, royalty sharing will not begin until the break-even point.)  

    *The third party investor would want a portion as well so this is only hypothetical.