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Research & Development Funding Framework

Internal Reference — Private Page

Purpose

This notice defines how research and development initiatives are funded, governed, and evaluated within the company.

It exists to ensure long-term clarity, consistency, and alignment for current and future leadership. This framework applies to all present and future projects designated as Research & Development.

R&D Funding Model

All Research & Development initiatives are funded directly from company revenue generated by active products and services.

R&D funding is treated as strategic reinvestment, not as operating expense for commercial programs.

Funds allocated to R&D are used exclusively for:

  • Technology research and development

  • System architecture and testing

  • Artificial intelligence experimentation

  • Platform prototyping

  • Infrastructure and workflow development

  • Pre-commercial pilots and validation

No R&D initiative is assumed to be revenue-generating unless and until formally approved.

Classification of R&D Initiatives

Projects designated as Research & Development:

  • Are not operating businesses

  • Do not generate recognized commercial revenue

  • Do not distribute profits

  • Are not subject to entertainment, ticketing, or licensing accounting

R&D initiatives exist solely to establish feasibility, scalability, and long-term strategic value.

Examples may include experimental platforms, immersive systems, AI-driven concepts, or technologies requiring validation prior to commercialization.

Governance & Oversight

All R&D initiatives operate under centralized strategic oversight.

Decisions regarding:

  • Funding allocation

  • Continuation or termination

  • Advancement toward commercialization

  • Integration with other company initiatives

Are made based on objective readiness criteria, not timelines, enthusiasm, or external pressure.

No R&D project advances automatically.

Transition to Commercial Status

An R&D initiative may only transition to commercial operation when all of the following are satisfied:

  • Technical feasibility is proven

  • Systems are repeatable and documented

  • Governance and risk requirements are met

  • Formal approval is granted

Upon approval, the initiative may be reclassified, assigned a dedicated operating structure, or positioned as a revenue-generating program.

Until that point, all activity remains classified as Research & Development.

Financial Discipline & Risk Management

This framework exists to:

  • Prevent premature commercialization

  • Maintain financial clarity and separation

  • Reduce operational and regulatory risk

  • Preserve long-term strategic flexibility

Reinvestment into R&D is deliberate, disciplined, and aligned with the company’s long-term growth strategy.

Closing Statement

This structure allows the company to innovate responsibly, validate methodically, and scale intelligently.

It ensures that future projects are developed with clarity, protection, and longevity as core principles.

This framework governs how R&D initiatives operate unless formally revised.

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