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Business Model Options

Simple Income Options for Medical Device Development Partnerships

Empower Medical Devices (EMD) offers you two simple income options for partnering with us to develop your product concept: A royalty-based engagement or an equity-based partnership engagement. To help you decide, we will generate a pro forma earnings statement (up to 5 years) with respective tax treatments* for both scenarios, once we have gone through our preliminary assessments and market demand review.

These options present NO RISK for you, the medical professional, because:

  1. In a royalty-based relationship, if the parties terminate the agreement or in the event of a sale, the concept rights are RETURNED to the medical professional.
  2. In an equity-based agreement, if EMD determines the product is not commercially viable, the concept rights are RETURNED to the medical professional.
EMD business royaltybased
Royalty-based Engagement
  • The professional either grants EMD an exclusive license on the concept or outright sells the concept rights to EMD for nominal consideration.EMD and the professional work together to develop the concept into a commercially viable product. EMD funds 100% of the cost of product development. In the event EMD determines the product is not commercially viable, the parties terminate the license agreement, or, in the event of a sale, EMD returns the concept rights to the professional.
  • If EMD determines the product is commercially viable, EMD markets and sells the product through its existing partnerships and distribution channels.
  • EMD pays the professional a royalty equal to a percentage of sales.
  • Royalty payments are generally taxed as ordinary income*.
EMD business equitybased
Equity-based Engagement
  • EMD and the professional form a new entity.
  • The professional contributes all concepts rights to the new entity.
  • EMD and the professional work together, through the new entity, to develop the concept into a commercially viable product. EMD either contributes or loans enough capital to the new entity to fund 100% of the cost of product development.
  • In the event EMD determines the product is not commercially viable, the parties dissolve the new entity and return the concept rights to the professional.
  • If EMD determines the product is commercially viable, the new entity markets and sells the product through EMD’s existing partnerships and distribution channels.The new entity first pays
  • EMD back for cost of development and then EMD and the professional split profits based on equity percentages.
  • Equity distributions and liquidity payments (if the parties sell the new entity) may qualify for preferred tax treatment*.

*All parties should seek independent tax advice.

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8964 Little Mountain, Road Mentor, OH 44060

Phone: 317-690-0764

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