Archive for June 1st, 2010

Sale of Teranode Corporation

Gerbsman Partners has been retained by Teranode Corporation to solicit interest for the acquisition of all, or substantially all, of Teranode’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Teranode Assets”).

The sale is being conducted with cooperation of Teranode. Teranode and its employees will be available to assist the purchasers with due diligence and assist with a prompt and efficient transition.


The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to Teranode’s Assets has been supplied by Teranode Corporation. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of Teranode Corporation’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Teranode Corporation’s Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on or behalf of Teranode Corporation and Gerbsman Partners. Without limiting the generality of the foregoing, Teranode Corporation and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Teranode Corporation Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

This memorandum contains confidential information and is not to be supplied to any person without Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non disclosure agreement attached hereto as Exhibit A.


Teranode Corporation (“Teranode” or the “Company”) is an innovative provider of business intelligence and lab automation solutions for the Life Science markets. Founded in 2002, the Company evolved from a team of scientists and professors from the University of Washington. Teranode has produced two award winning software platforms, Fuel and XDA. The Teranode proprietary technology can also be applied to any R&D business intelligence market, including agribusiness, healthcare research, legal research, market research, etc.

Teranode is a privately held, venture capital backed company. Over $12 million has been invested to date from Ignition Partners, Trident Capital, Black-River Asset Management and WRF Capital.

Teranode presently employs 10 full-time employees and its product development is based in Seattle, WA with field consultants in the Boston, MA area.

Teranode’s Fuel platform supports next-generation, distributed business intelligence optimized for life sciences R&D pipeline management.

Teranode’s XDA platform has automated chemistry and biology labs at some of the world’s largest research companies and institutes.

Teranode Corporation’s assets are attractive for a number of reasons:

• Teranode has over $12M invested in product and business development, from major venture investors Ignition Partners, Trident Capital, Black-River Asset Management, and WRF Capital.

• Teranode revenue

Year Revenue
2007 $1.7M
2008 $1.8M
2009 $1.9M
2010 (est) $2.3M

• 20-year, transferrable technology copyright agreement with University of Washington, from 2003-2023

• US patent 7,010,760 awarded in 2006: Batch-based method and tool for graphical manipulation of workflows; Trademarks for XDA, Fuel, Teranode.

• Teranode XDA includes a blue-chip customer base of leading pharmaceutical, biotechnology, research, and academic organizations, including Pfizer, GSK, AstraZeneca, MIT, St. Jude, Fred Hutchinson CRC, Calibrant, Tethys, Nastech, Novartis, CSBI

• Teranode’s new Fuel platform has a growing customer base as opportunities are mined within the pharmaceutical and biotechnology industry in partnership with Oracle, Spotfire and Microsoft, along with a pipeline of additional opportunities :

Business Area Engagement
Target Validation – Monsanto, Genstruct
Biologics Development – Boehringer Ingelhiem, Biogen-Idec
Small Molecule Development – Boehringer Ingelhiem, Novartis
Pipeline Decision Support – Monsanto, Pfizer
Clinical Trials Management – BMS
Adverse Event Reporting & Surveillance- Pfizer

• Together Fuel and XDA provide a complete R&D automation and business intelligence platform, optimized for easy customer installation onsite, or hosted as a SaaS offering by a major vendor seeking to expand and accelerate its solutions and solutions-building capabilities in the life sciences and related R&D markets

• The Company is a leading innovator in the emerging semantic technology field: – “Teranode is at the forefront of bringing semantics-based business intelligence solutions to R&D organizations.” – VP, Biotherapeutics Division, Large Multinational Pharmaceutical

Teranode Software and Intellectual Property Assets

Teranode has developed a portfolio of assets critical to Product and Process Development, including:

· Patents
· Platform and Application Software Products
· Product and solution designs and prototypes
· Software and control algorithms
· Automated software configuration & testing process & framework
· A closed loop development, documentation, QA process management system for global software development
· Intellectual capital and expertise
· Trademarks
· Domain names

A summary of the Fuel and XDA product technology development to date is as follows

· >1500 business requirements and automated test cases
· >1 Million lines of Java, C#, Javascript, and PL/SQL code, SOA Architecture
· >75 person-years of development (currently 5 person team)
· 3 full releases of XDA, 3 full releases of Fuel Platform and Applications Modules
· 5 Complete XDA Application Modules (XDA Protocol Modeler, Protocol Player, Biological Modeler, TMS Server, SDK)
· 7 Complete Fuel Application Modules (Ontology Browser, Document Autotagger, Dataset Definition tool, View Definition tool, Fuel Application Server, Fuel Sharepoint Template Library, Fuel SDK)
· 4 XDA and 2 Fuel Application Suites Configured – XDA Chemistry Synthesis, Chemistry Purification, High-Content Screening, RNAi Automation; Fuel Antibody Biologics Research, Genetics Trait Analysis
· > 50 Integrations (including MS Sharepoint, Oracle 10 and 11G, MS SQLServer, Spotfire tools and analytic wofklow server, various laboratory instrument and robotic platforms, chemistry structure visualization, chemistry and biologics registries, ontologies including NCI, GO, MeSH, SNOMED; pathway model formats including SBML, KEGG, MATLAB; etc.)
· Thousands of tasks completed in the development project plans
· Completely traceable documented development methodology


• United States Patent 7,010,760 – Arnstein , et al. March 7, 2006
Batch-based method and tool for graphical manipulation of workflows: An autofill algorithm provides tools for defining and automatically executing batch based procedures in an adaptive hierarchical workflow environment, and may be suitable for a large variety of applications including laboratory procedure planning, execution, documentation, as wells ad driving robotic apparatus.

Key Personnel

Joseph Duncan, Chairman and CEO
Mr. Duncan is a co-founder of Teranode. Prior to Teranode, he was CIO and VP Technology at Critical Path, a SaaS email provider to corporations and internet services companies. In 1999, Critical Path was voted the fastest growing, best managed technology company in the world by Forbes.com, a year in which Critical Path grew from 700,000 to over 33,000,000 active hosted email accounts. From 1993-1997, Joseph Duncan was Sr. Vice President at Oracle Corporation, where he was instrumental in engineering a turnaround of Oracle’s enterprise developer tools, and introduced the JDeveloper Suite to Oracle, which has become its primary database tools offering. Before Oracle, he ran the Paradox product development organization at Borland International. In 1993, Paradox for Windows achieved 40% share of the global PC database market, and won 20 product-of-the-year awards from industry publications. Prior to that, Mr. Duncan was a Director in the Advanced Products Division of Lotus Corporation, when Lotus was the world’s largest software company.

Neil Fanger, Ph.D., Chief Business Officer
As a Teranode co-founder, Dr. Fanger brings valuable leadership, management and partnering experience. Dr. Fanger has over 15 years experience in the life science industry, both in R&D and business development. He was most recently Professional Staff at the University of Washington, where he bridged biological research with computer science and mathematics. His previous industry experience includes developing new technologies, identifying drug targets, and designing therapeutics for clinical trial evaluation at Corixa and Immunex.

Chris McClure, Vice President – Professional Services
Mr. McClure works directly with customers to ensure Teranode products are aligned with the needs of the life sciences industry. He is responsible for managing a team of engineers and project managers to expand business and drive successful projects to completion. His previous experience includes Consulting Services Manager for IDBS leading the New England Region, and Drug Discovery as a Biochemist at AstraZeneca, Enanta and Mitotix. Mr. McClure has been a member of the Teranode team for more than 5 years.
Michael Kellen, Ph.D., Director of Product Development
Mr. Kellen is responsible for directing Teranode’s enterprise software development team. He has over 10 years experience developing software for both corporate and academic organizations in the life sciences. Mr. Kellen has been with Teranode since its inception in 2002 and played a vital role in building Teranode’s award winning Protocol and Biological Modeler applications. He holds a doctorate in computational biology from the University of Washington.

The Bidding Process for Interested Buyers

The Bidding Process for interested buyers Interested and qualified parties will be required to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Teranode Corporation’s Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Teranode Corporation’s Assets. A sealed bid must be submitted so that it is actually received by Gerbsman Partners no later than Wednesday June 23, 2010 at 3 p.m. Pacific Daylight Time (the “Bid Deadline”) at Teranode Corporation’s office, located at 411 First Avenue S, Suite 700, Seattle WA 98104 . Please also send an email to steve@gerbsmanpartner.com with your bid.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of Teranode Corporation.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Teranode Corporation). The deposit should be wired to Teranode’s attorneys Murray & Murray, A Professional Corporation. The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by Company’s counsel. Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful bidder . Teranode Corporation reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Teranode Corporation will require the successful bidder to close within a 7 day period. Any or all of the assets of Teranode Corporation will be sold on an “as is, where is” basis, with no representation or warranties whatsoever. All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Teranode Corporation’s Assets shall be the sole responsibility of the successful bidder and shall be paid to Teranode Corporation at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

Steven R. Gerbsman
415 456-0628

Kenneth Hardesty
408 591-7528

Merle McCreery
303 929-7628

Dennis Sholl
415 457-9596

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