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RRM PATENTS

Task Management, Inc.    Assignee

June 2, 2017

 

Real Return Methodologies has 12 Issued patents.

 

These can be divided into four general categories:

 

  1. Constant/Known/Stable Purchasing Power financing and inflation-immunized derivatives;

  2. Investment companies;

  3. Electronic markets; and,

  4. Usury-Free, Shared Risk

 

 

Constant-Dollar Financing and Inflation-Immunized Derivatives

 

*US Patent No. 6,760,710 B1

 “IMPROVED PROCESS AND PRODUCTS PRODUCED THEREBY, APPARATUS, AND ARTICLES OF MANUFACTURE, FOR COMPUTERIZED CONVERSION OF PREFERRED-RETURN INSTRUMENTS” …

is our fundamental patent in the area of constant-dollar financing.

 

It resolves the accounting tax, trading and clearing questions by creating an equivalent nominal-dollar instrument that can be accounted for in the financial statements and in the calculation of taxes using the existing rules that apply to any nominal-dollar instrument.  The equivalent nominal-dollar instrument generates all of the numbers (e.g., the amount of nominal-dollar interest, the amount of the nominal-dollar payment, and the remaining nominal-dollar balance of the financing) that are needed in order to create financial statements calculate tax liabilities, execute trades and clear those trades. 

The change in the nominal-dollar balance for a period equals the amount of nominal-dollar interest accrued during the period minus the nominal-dollar payment for the period, just as in a nominal-dollar instrument that is not equivalent to a constant-dollar instrument.  According to the present U.S. tax code, nominal-dollar interest accrued during the period is taxable income for the holder of the instrument and a deductible expense for the borrower.  For individuals, partnerships and limited-liability companies the accrued interest is not deductible until it is paid in cash, for corporations it is deductible as it accrues.

 

Utilizing this patent enables all participants in global capital formation to have access to the lowest cost of capital over time. It does so without requiring the use of swaps or any derivatives.  Transparency in reporting is improved.  Benefits are garnered by the borrowers, lenders, and intermediaries.  Earnings, balances sheets and credit ratings are dramatically improved.  Challenges of FASB 33, GASB 34, ORSA and Regulation XXX for insurance industry, amongst many others, are eliminated.  It applies to all marketable methods of debt capital formation in all marketable currencies.  The potential for generation of free cash flow, increased income, stronger balance sheets, higher credit scores, new customers, and increased fees from origination, services, data, sales, trading , clearing, and service fees. 

 

Present market capabilities are limited to variable real rates of return.  With application of this patent all debt structures can be set in a FIXED REAL RATE OF RETURN, thereby increasing the overall size of the market. 

 

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*U.S. Patent No. 7,702,550

 “MULTIPLE COMPUTER SYSTEM SUPPORTING A PRIVATE CONSTANT DOLLAR INSTRUMENT” is a continuation in part of US Patent No. 6,760,710 B1.  This patent application covers the use of multiple computer systems in implementing constant-dollar financing.  The computer systems may be connected intermittently and/or continuously.  They may be connected using the internet, intranets, by wired means, wireless means, etc.  The computer systems may include an originating computer, a servicing computer, a broker/dealer computer, an investment banking computer, a commercial banking computer, an investment banking computer, a mortgage banking computer, an investment manager computer, an investor computer, etc.  More than one computer of any type may be included in the system. 

 

Applications of this published application enable the user to be the “back office” for the entire FIXED REAL RATE market place.  The fees, usage charges, rentals, etc. has the potential of a commanding income.

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*U.S. Patent No. 7,752,105  

“COMPUTER-AIDED PROCESS OF FUNDING, INCLUDING A PRIVATE CONSTANT DOLLAR INSTRUMENT” covers the use of constant-dollar financial instruments in financing applications including:  1) securitization (both with pass-through securities and with asset-backed securities tranched by seniority and/or maturity); 2) leveraged-lease financing; and, 3) financial intermediation (e.g., depository institutions, life insurance companies, etc.).

 

 and  *U.S. Patent No. 7,747,489

" COMPUTER-AIDED PROCESS FOR REAL PURCHASING POWER FINANCIAL PRODUCT"

 

Constant-dollar financial instruments (page 7, line 29 through page 8, line 30 of the U.S. application) are financial instruments whose terms (payment amounts, rate of return or interest rate, schedule of remaining principal balances, etc.) are specified in units of constant purchasing power. 

 

Constant-dollar financial instruments are converted (page 8 line 31 through page 9 line 9 of the U.S. application) into equivalent nominal-dollar financial instruments using our patented process (U.S. Patent No. 6,760,710 B1).

 

Securitization using constant-dollar financial instruments is covered in the U.S. patent application on:  1) page 14 line 22 through page 18 line 16; and, 2) page 24 line 7 through page 25 line 16.

 

Leveraged lease financing using constant-dollar instruments is covered in the U.S. patent application on page 23 line 10 through page 24 line 6.

 

Financial intermediation using constant-dollar financial instruments is covered in the U.S. patent application on:  1) page 18 line 17 through page 21 line 22; and 2) page 25 line 17 through page 26 line 5.

 

With these patents, the creation of pass-through instruments, trancheing, financing levels (i.e. mezzanine financing), creation of products for banks, savings and loans, life insurance companies, annuity companies, property and casualty companies, retirement plans, generational wealth transfers, ESOP’s, etc. are protected.

 

 

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*U.S. Patent No. 8,108,300

"COMPUTER-SYSTEM CONTROL RELATED TO STANDARD APPLICATION IN USUREY-FREE, SHARED-RISK FINANCING" expands our coverage of constant-dollar financing (including securitization, financial intermediation, etc.) into the area of Shariah’ compliant Islamic financing. 

 

In addition to its uses in Islamic financing, the technology disclosed in this application can also be create more efficient capital structures in the non-Islamic world through the use of subordinated constant dollar income bonds where the interest is tax-deductible but default does not trigger bankruptcy.  The subordinated constant-dollar income bonds can be used to replace a portion of the expensive common equity financing, thus reducing the firm’s cost of capital.  The fixed real payments can be matched to the firm’s expected real income, thus minimizing default risk for any given capital structure.

 

With this published application, true global flows of capital are possible.  With this application the taxes, laws, etc of both the Western capital markets and those that follow the Islamic faith have the ability to meet at the common lower ground of capital formation in purchasing power parity. 

 

 

*U.S. Patent No. 7,680,713

“CONTROLLING A COMPUTER-AIDED PROCESS”

and

* U.S. Patent No. 8,392,302 "COMPUTER-AIDIED PROCESS FOR INFLATION-IMMUNIZED DERIVATIVES"

 

 

These applications include:  1) a computer-aided process for pricing and trading a constant-dollar instrument (page 19 line 31 through page 24 line 10 and page 34 lines 19-30); and, 2) a computer-aided process for managing risk including the creation, trading and pricing of inflation-immunized derivatives of all types (page 24 line 11 through page 33 line 3 and page 34 lines 19-30).  Pricing and trading are essential processes for an exchange.

 

Here we have found the ability for all to have access to inflation immunized currencies and commodities.  The business applications for “business currency risk”, international pricing, international capital flows, and stabilization of currencies or baskets of currencies will streamline and increase the efficiency and transparency of global capital/cash flows.

 

 

 

Investment Companies

 

 

*U.S. Patent No. 6,938,009 B1 “DIGITAL COMPUTER SYSTEM AND METHODS FOR A SYNTHETIC INVESTMENT AND RISK MANAGEMENT FUND” and

             *U.S. Patent No. 7,062,459 B1 “DIGITAL COMPUTER SYSTEM AND METHODS FOR MANAGING A SYNTHETIC INDEX FUND.”

             * U.S. Patent No. 7,266,520  "DIGITAL COMPUTER SYSTEM AND METHODS FOR MANAGING AN AUCTION MARKET FOR PREFERRED-RETURN SECURITIES."

 

As per their titles, these three patents deal with investment funds that use derivatives to create investment (and/or risk management) portfolios for the investors in the fund. 

 

A special feature of the funds is their ability to create and manage unique portfolios of investments (and/or hedges) for different investors and/or groups of investors in the fund.  The set of unique portfolios contained within the fund may be managed by some combination of:  1) the investors themselves: 2) investment managers selected by (and paid by) the investors: 3) investment managers employed by the fund; and/or, 4) investment rules (including, but not limited to, index replications) selected by the investors and/or their investment managers.

 

We see these as a quantum evolution to the ETF market.  Application of these patents enables the sponsor of the method and products to provide to the market place the ability for CUSTOMIZABLE portfolios and indices for asset liability management, actuarial calculations, cash flow needs, future purchasing power requirements, et al.  Each portfolio can be created with or without hedges for specific members of a group or groups of investors.  The different levels of service and charges can be based on a schedule of services provided.  An example might be the lowest cost for the qualified investor who requires no support to a totally managed account.

 

Investment mangers, pension boards, or anyone with a level of financial stewardship, either hired by the investor or by the sponsor of a specific fund can define the screens, rules, trading levels, executions prices, etc. they find to be the highest correlation to their philosophy, process and disciplines. 

 

For the licensee of the patents, revenues can be garnered in multiple channels.  Modeling, trading, monthly access fees, clearing, access to models, software rentals, etc.

 

 

 

Electronic Markets

 

* U.S. Patent No. 7,266,520  "DIGITAL COMPUTER SYSTEM AND METHODS FOR MANAGING AN AUCTION MARKET FOR PREFERRED-RETURN SECURITIES."

*U.S. Patent No. 7,644,029  "DIGITAL COMPUTER SYSTEM FOR A SYNTHETIC INVESMENT AND RISK MANAGEMENT FUND."

*U.S. Patent No. 7,477,651  "DIGITAL COMPUTER SYSTEM FOR OPERATING A CUSTOMIZABLE INVESTMENT FUND."

 

 

These will provide the ability to have an earning potential comparative to any physical or electronic exchange. They include special features for maximizing trading efficiency and minimizing trading costs for all RRM securities, regardless of issue size and trading volumes.

Real Return Methodologies

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Riverside, Illinois 60546

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or

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