Cosmetic Development Systems The Solutions your looking for.

DEVELOPING THE FORMULA

1. Contract to develop formula. If you wish to hold title to the finished formula, we will quote to you a laboratory hourly fee with a maximum 'cap' on the hours. A $2M deposit, applicable as credit towards the purchase of the formula is required for us to begin research. Upon completion, constituted by your approval of one of up to three submissions, the formula and title (evidenced by a bill of sale) will be transferred to you. Simultaneously we shall submit our bid for producing and filling your formula.

2. Formula lease with option to purchase: If initially holding title to your formula is not a high priority, or is economically not feasible, "leasing the formula with option to purchase" is an attractive alternative. In this case you lease your formula annually for $100 for the 1st year (taken from your deposit) with $50 incremental annual increases. The balance of your initial $2M (min. deposit) is refunded as credit against the purchase of product manufactured from the formula. You retain the sole rights to the use of the formula so long as your lease is current and your annual purchases from the formula exceeds $5,000. Your lease contract contains an option to purchase at twice the formulas' original formulating cost. The obvious advantage to you is our funding the R & D costs until such time as you choose at your option to acquire that formula. Many of our clients choose to hedge their risk and increase available cash flow in this manner.

Cosmetic Development Systems
996 Lawrence Drive, bldg. 300, Newbury Park, CA 91329, USA
Ph: 805-498-7536 Fax: 805-499-9759
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