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Archive for March, 2016

Here are the technologies that are making drones safer and accelerating adoption

Drone Hardware MarketBI Intelligence

Drones turned the corner in 2015 to become a popular consumer device, while a framework for regulation that legitimizes drones in the US began to take shape. Technological and regulatory barriers still exist to further drone adoption.

Drone manufacturers and software providers are quickly developing technologies like geo-fencing and collision avoidance that will make flying drones safer. The accelerating pace of drone adoption is also pushing governments to create new regulations that balance safety and innovation. The FAA is set to release new regulations this spring could help boost adoption. Safer technology and better regulation will open up new applications for drones in the commercial sector, including drone delivery programs like Amazon’s Prime Air and Google’s Project Wing initiatives.

In a new BI Intelligence report, we forecast sales revenues for consumer, enterprise, and military drones. We also project the growth of drone shipments for consumers and enterprises. We detail several of world’s major drone suppliers and examine trends in drone adoption among several leading industries. We examine the regulatory landscape in several markets and explain how technologies like obstacle avoidance and drone-to-drone communications will impact drone adoption.

Enterprise Drone ShipmentsBI Intelligence

 

Here are some of the key takeaways:

  • We project revenues from drones sales to top $12 billion in 2021, up form just over $8 billion last year.
  • Shipments of consumer drones will more than quadruple over the next five years, fueled by increasing price competition and new technologies that make flying drones easier for beginners.
  • Growth in the enterprise sector will outpace the consumer sector in both shipments and revenues as regulations open up new use cases in the US and EU, the two biggest potential markets for enterprise drones.
  • Technologies like geo-fencing and collision avoidance will make flying drones safer and make regulators feel more comfortable with larger numbers of drones taking to the skies.
  • Right now FAA regulations have limited commercial drones to a select few industries and applications like aerial surveying in the agriculture, mining, and oil and gas sectors.
  • The military sector will continue to lead all other sectors in drone spending during our forecast period thanks to the high cost of military drones and the growing number of countries seeking to acquire them.

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A History Lesson We All Should Know…..
Who Was Haym Solomon?
Read this fascinating history of the $1 bill – all the way to the bottom to know about Haym Solomon. It is short.

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On the rear of the One Dollar bill, you will see two circles. Together, they comprise the Great Seal of the United States. The First Continental Congress requested that Benjamin Franklin and a group of men come up with a Seal. It took them four years to accomplish this task and another two years to get it approved.
If you look at the left-hand circle, you will see a Pyramid.

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Notice the face is lighted, and the western side is dark. This country was just beginning. We had not begun to explore the west or decided what we could do for Western Civilization. The Pyramid is uncapped, again signifying that we were not even close to being finished. Inside the Capstone you have the all-seeing eye, an ancient symbol for divinity. It was Franklin ‘s belief that one man couldn’t do it alone, but a group of men, with the help of God, could do anything.
‘IN GOD WE TRUST’ is on this currency.

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The Latin above the pyramid, ANNUIT COEPTIS, means, ‘God has favored our undertaking.’
The Latin below the pyramid, NOVUS ORDO SECLORUM, means, ‘a new order has begun.’
At the base of the pyramid is the Roman numeral for 1776. (MDCCLXXVI)

If you look at the right-hand circle, and check it carefully, you will learn that it is on every National Cemetery in the United States .
It is also on the Parade of Flags Walkway at the Bushnell, Florida National Cemetery , and is the centerpiece of most heroes’ monuments.
Slightly modified, it is the seal of the President of the United States , and it is always visible whenever he speaks, yet very few people know what the symbols mean

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The Bald Eagle was selected as a symbol for victory for two reasons:
First, he is not afraid of a storm; he is strong, and he is smart enough to soar above it.
Secondly, he wears no material crown. We had just broken from the King of England .
Also, notice the shield is unsupported. This country can now stand on its own.
At the top of that shield there is a white bar signifying congress, a unifying factor. We were coming together as one nation.
In the Eagle’s beak you will read, ‘ E PLURIBUS UNUM’ meaning, ‘from many – one.’
Above the Eagle, we have the thirteen stars, representing the thirteen original colonies, and any clouds of misunderstanding rolling away. Again, we were coming together as one.
Notice what the Eagle holds in his talons. He holds an olive branch and arrows. This country wants peace, but we will never be afraid to fight to preserve peace. The Eagle always wants to face the olive branch, but in time of war, his gaze turns toward the arrows.
An (untrue) old-fashioned belief says that the number 13 is an unlucky number. This is almost a worldwide belief. You will almost never see a room numbered 13, or any hotels or motels with a 13th floor. But think about this:

America, which relies on God (not a number) to direct and lead, boldly chose:

13 original colonies,
13 signers of the Declaration of Independence ,
13 stripes on our flag,
13 steps on the pyramid,
13 letters in ‘Annuit Coeptis’,
13 letters in ‘ E Pluribus Unum,’
13 stars above the eagle,
13 bars on that shield,
13 leaves on the olive branch,
13 fruits, and if you look closely,
13 arrows.
And finally, notice the arrangement of the 13 stars in the right-hand circle. You will see that they are arranged as a Star of David.

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This was ordered by George Washington who, when he asked Haym Solomon, a wealthy Philadelphia Jew, what he would like as a personal reward for his services to the Continental Army. Solomon said he wanted nothing for himself, but he would like something for his people.The Star of David was the result. Few people know it was Solomon who saved the Army through his financial contributions…then died a pauper. Haym Solomon gave $25 million to save the Continental Army, money that was sorely needed to help realize America’s –our- freedom and independence from England .
Therein lies America ’s Judeo-Christian beginning.
Most American children do not know any of this.
They are not taught because their teachers do not know this.
[We were not taught!]
On America ’s Freedom:
Too many veterans gave up too much to let these meanings fade.
Too many veterans never came home at all.
They served and died for you and for me.

I hope you will share this page so many can learn about the UNITED STATES DOLLAR BILL and what it stands for.
Let’s do whatever we can for America
while never, ever forgetting:
In God we trust!

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Sallie Krawcheck, Steve Schwarzman, and 5 other successful entrepreneurs share the No. 1 lesson they learned from failing

Sallie KrawcheckREUTERS/Keith BedfordSallie Krawcheck, former head of Bank of America’s wealth and asset management division and the current CEO and cofounder of Ellevest.

Before I wrote my first book, I went to half a dozen writers conferences trying to learn how to “land the book deal.”

Most of the advice was pretty generic, save for one person’s.

The author was no J.K. Rowling, but she had moderate success and was seen by us in the audience as the person to aspire to.

As I listened intently, she described how the most boring part of her story was actually getting the book deal — far more interesting were all the rejections she confronted along the way.

Hearing her describe her painful rejections inspired me to go ahead with my own ambitions — if she could continually persevere in the face of numerous obstacles, what was to stop me?

No doubt, we learn far more about ourselves and our potential when we face failures. In fact, some CEOs have told me that they won’t even look at senior candidates who haven’t failed at least once in their careers. Eric Ries, author of “The Lean Startup,” which has become a bible of sorts for the startup entrepreneur, describes the acumen he honed after failing several times.

So what exactly do we learn from failing? I asked several highly successful people that question for my podcast, Radiate, and here are the seven best. (Click on their names to hear them talk about it in their own words):

1. Sallie Krawcheck learned how to redefine success. When she got fired from her second big Wall Street job, Krawcheck reassessed her career path and became an entrepreneur. She’s far more fulfilled today than she ever was in banking — even though the pay admittedly was nicer before. “Do you define yourself by the amount of money you make?” she said. “Do you define yourself by whether you have a corporate jet? I define myself by impact… What impact do I want to have … earlier in my career when you’re an investment banking analyst it’s hard to have an impact.”

2. George Zimmer learned his business model didn’t work. Ten years into his company, the former Men’s Wearhouse CEO was near bankruptcy — he traversed the country looking for half a million dollars in funds. Luckily, at the very end, his mother bailed out the business, but Zimmer says he learned a very valuable lesson: His business model wasn’t working. “It was from that problem that we actually redesigned the economic model in the mid-1980s and adopted everyday low pricing,” Zimmer said. Decades later, he was generating billions in sales.

3. Steve Schwarzman learned to speak his mind. Few people are as successful as private equity billionaire Schwarzman, but at one point, he was a high school senior like the rest of us applying for college admission. That’s about where the similarities end. When Schwarzman was rejected by Harvard, he did what almost none of us would do — called the dean to tell him he made a mistake. “I thought that they had made an error, or if they hadn’t made an error, at least they weren’t satisfying my objective,” he said. Schwarzman went on to Yale, and Harvard later felt that dull pang of regret.

4. Jay Margolis learned the importance of staying true to yourself. The retail veteran behind brands like Reebok, Esprit, Tommy Hilfiger, and others learned how important it is for the corporate culture to fit you. From day one, he recalls how he didn’t feel at home at Hilfiger. “Our values were different in terms of how we saw running a business and caring about what gets done and just how you work, and there were people in the company that I just wouldn’t have hired,” he said. Sure enough, it wasn’t long before he was let go. “You have to live your values. The company has to live your values. You have to have people who live the values.”

5. Andrea Jung learned it’s not about the title but doing something you love. When Jung was initially passed over for the CEO job at Avon, she didn’t leave. Instead, she worked her butt off for her rival. “I never woke up saying, I have to be the CEO. That wasn’t my end goal,” Jung said. “I guess really my end goal was to do work that I loved, to be able to contribute at a level and do work that I’m passionate about. And so I made the decision to stay.” It turned out staying was the right decision — the CEO abruptly left and Jung ended up with the top job anyway.

6. Trevor Burgess learned the importance of thick skin. When Burgess came out in college to his fraternity brothers, one called him a “renounced sodomite.” The backlash was painful and lonely. The bank CEO says, looking back, that the ugly episode helped him learn how to deal with rejection and criticism early on. “Going through that sort of experience, it taught me a couple of things,” he said. “One, that I needed to have really thick skin if I was going to survive, in the business world especially. And number two is that I did have to be authentic. I needed to be myself completely if I was going to be successful.”

7. Alan Patricof learned that the world is a bigger place than New York City. Patricof is a legend in the venture capital world, but even he makes mistakes. One particularly painful one is his decision to turn down investing in Starbucks. “I said, ‘Are you crazy? I mean, we’ve got coffee shops in New York. We’ve got two in every single block. They just call them luncheonettes or coffee shops. Why in the world do we need another coffee shop?'” Patricof said. “I didn’t understand the culture and what Starbucks was really about. It wasn’t a coffee shop. It was really a way of life … we suffer from thinking that since we have it in New York or it won’t work in New York that it won’t work some other place. That’s a discipline we keep trying to improve.”

Read the original article on Inc.. Copyright 2016. Follow Inc. on Twitter.

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The R.I.P. Report – Startup Death Trends

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Companies typically die around ~20 months after their last financing round and after having raised $1.3 million. Companies in the social industry saw the highest of number of startup failures in the period in question.

Want to identify acqui-hire targets? Get our list of dying tech companies.

Earlier, we’d described how the acqui-hire has become the exit du jour for startups struggling to stay afloat. While the acqui-hire does provide a nice alternative to death, it is a fairly recent phenomenon and is by no means a guarantee. For most tech companies whose intellectual property or talent is not compelling enough to catch the eye of the Googles, Facebooks, or Yahoos of the world, the cold hard reality is death. (See our compilation of 51 startup failure post-mortems)

We wanted to take a look at CB Insights data on tech companies that died between 2010 and 2013 to see what we can learn about startup mortality.  A few notes first:

  1. Startup death is surprisingly hard to identify.  Many startups are essentially dead but limp along for years in zombie-like fashion. So although on life support, these walking dead startups are not included in this analysis since they’re not officially deceased.  Shikhar Ghosh, a senior lecturer at Harvard, who’d studied startup mortality found that “VCs bury their dead very quietly” further compounding the issue of identifying dead companies.
  2. Survivorship bias reigns.  We tend to fawn over the few billion dollar exits and hear little of the failures. As a result, there is less data out there about startup death. Ultimately, this is bad for the ecosystem as Jason Cohen explains in his essay on the topic of survivorship bias, “The fact that you are only learning from success is a deeper problem than you imagine”, but this is a topic for another day.
But despite those challenges, we are increasingly tracking startup mortality data. In our efforts to algorithmically rate private companies, it’s critical to understand both the successes and failures to train our models.
Without further delay….

In each year since 2010, 70% of all dead tech companies have been in the internet sector. This is hardly a surprise as within tech, a majority of funding and deals has gone to the internet sector and so it would follow that the sector would have the largest proportion of dead companies.  The % of companies dying within the internet sector has stayed relatively range bound over the last several years as well.

Mobile has seen far more volatility in terms of its share of dead companies.  Mobile talent being highly coveted has made these firms a prime target for acqui-hires but as investors pour billions into mobile-first companies, it is likely the # of failed mobile startups will also climb.


Most Dead Companies Died Before Raising >$1M

 

55% of failed startups raised $1M or less, and almost 70% companies died having raised less than $5M overall.  Not a big surprise. Companies at the earliest stages are the most vulnerable due to limited financial runway, immature products and businesses and general uncertainty about whether the market needs what they’ve built.  This is why we’ll see more startup orphans.

While the dead companies on our list raised $11.3M on average, the median funding raised which is a better measure in this case was $1.3M.

20 months: The Average Time Between a Company’s Last Funding Round and Death

 

71% of the dead companies lasted less than two years after their last funding round. While some companies can take up to five years after their last funding round to be officially declared dead, the average company dies ~20 months from its last funding round in the absence of additional funding or acquirers. The median time is 16.5 months, or a little under a year and a half. In comparison, getting acquihired on average takes 2-4 fewer months, so if you haven’t seen either more capital or an interested acquirer by the 15-month mark, things are not looking good.  The line between death and an acqui-hire especially is quite thin.

Death is not specific to a particular type of sector or industry. In fact, the companies on our dataset represent a fairly diverse set of subindustries. To help you identify what’s not hot, the subindustries with the most dead companies, both over the past four years and in 2013, are shown below.

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San Francisco,  March, 2016
“Terminating/Restructuring Prohibitive Real Estate, Licenses, Payables & Contingent Liabilities”
Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various Balance Sheet issues for their technology, mobile, life science, medical device, cyber security, solar and cleantech portfolio companies. These companies were not necessarily in Crisis, had CASH (in some cases significant CASH) and/or investor groups that were about to provide additional funding. In order stabilize their go forward plan and maximize CASH resources for future growth, there was a specific need to address the Balance Sheet and Contingent Liability issues as soon as possible.

Some of the areas in which Gerbsman Partners has assisted these companies have been in the termination, restructuring and/or reduction of:

  1.  Prohibitive executory real estate leases, computer and hardware related leases and senior/sub-debt obligations – Gerbsman Partners was the “Innovator” in creating strategies to terminate or restructure prohibitive real estate leases, computer and hardware related leases and senior and sub-debt obligations. To date, Gerbsman Partners has terminated or restructured over $810 million of such obligations. These were a mixture of both public and private companies, and allowed the restructured company to return to a path of financial viability.
  2.  Accounts/Trade payable obligations – Companies in a crisis, turnaround or restructuring situation typically have accounts and trade payable obligations that become prohibitive for the viability of the company on a go forward basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize enterprise value based on the reality and practicality of the situation.
  3.   Software and technology related licenses – As per the above, software and technology related licenses need to be restructured/terminated in order for additional capital to be invested in restructured companies. Gerbsman Partners has a significant track record in this area.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 91 technology, mobile, life science, medical device, solar, digital marketing/social commerce, cyber security companies and their Intellectual Property, through its proprietary “Date Certain M&A Process” and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington, DC, McLean, VA, San Francisco, Orange County, Europe and Israel.

GERBSMAN PARTNERS
Phone: +1.415.456.0628
Email: steve@gerbsmanpartners.com
Web: www.gerbsmanpartners.com
BLOG of Intellectual Capital: blog.gerbsmanpartners.com

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Back in 1996, Steve Jobs gave a presentation with a bunch of predictions about the future – it turns out he nailed it

steve jobsMario Tama / Getty

In 1996, Google was still a research project at Stanford, the state-of-the-art PC operating system was Windows 95, and Amazon was a small startup selling books.And Steve Jobs was not yet back at Apple when he gave a remarkably prescient interview to Wired’s website the same year. Although the iMac, iPod, and iPhone were still years away, and Jobs was working at NeXT, he clearly saw where the computing industry was headed.

And although his later work at Apple clearly influenced the way things turned out, he still offers a slew of predictions that are shockingly accurate today.

Here’s what Jobs got right: http://www.businessinsider.com/nine-predictions-about-the-internet-steve-jobs-nailed-20-years-ago-2016-3?op=0#

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 gp_nl_header-1 SALE OF PALMAZ SCIENTIFIC, INC.
Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Palmaz Scientific, Inc. (www.palmazscientific.com) to solicit interest for the acquisition of all, or substantially all, the assets of Palmaz Scientific, Inc.

Headquartered in San Antonio, Texas, with Operations based in Fremont, California, Palmaz Scientific is a medical device company founded in 2008 with disruptive technology platform which will likely change the medical device industry by creating unique way of designing and developing medical implants.

Palmaz Scientific has raised two rounds of private equity financing to date totaling more than $40 million. Palmaz Scientific owes approximately $20 million to creditors, including approximately $12 to senior secured creditors.

On March 4, 2016, Palmaz Scientific, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Western District of Texas, San Antonio Division. Palmaz Scientific intends to sell all or substantially all of its assets pursuant to 11 U.S.C. § 363. As part of that process, Palmaz Scientific intends to seek bankruptcy court approval for bidding and sale procedures related to the auction and sale of its assets. Palmaz Scientific anticipates having a stalking horse bidder in place shortly. It is anticipated that the bankruptcy court will approve bid procedures that will require a bidder to submit a cash deposit of $250,000 and otherwise qualify to bid by submitting financial information confirming such bidder’s ability to close on any sale. When the bankruptcy court has approved the bidding procedures, potential bidders will be provided a copy of same. In the interim potential bidders will only be able to access Palmaz Scientific’s data room by executing the non-disclosure agreement provided to each bidder by Gerbsman Partners.

Please see attached: (1) Exhibit A, NDA; (2) Fixed Asset Equipment Inventory Log; (3) PSI detail IP Portfolio; (4) Detail Sales Letter and Company Overview; (5) Detailed Company IP Summary

IMPORTANT LEGAL NOTICE:

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 Palmaz Scientific Assets (defined below) has been supplied by Palmaz Scientific. It has not been independently investigated or verified by Gerbsman Partners or its agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Palmaz Scientific, or 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.

Palmaz Scientific, 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 Palmaz Scientific’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Palmaz Scientific 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 behalf of Palmaz Scientific or Gerbsman Partners. Without limiting the generality of the foregoing, Palmaz Scientific and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Palmaz Scientific 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 Palmaz Scientific’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

PALMAZ SCIENTIFIC, INC.

Palmaz Scientific is a medical technology company promoting its knowhow to the medical device industry with an objective toward developing collaborative relationships that could provide revenue opportunities to the company for licensing, engineering services or funded development, as well as possible equipment sales, contract manufacturing or production of its own devices for sale. Through collaborative activities with highly respected medical device companies, Palmaz Scientific patented Physical Vapor Deposition (PVD) methods and processes have been independently tested and validated. Separately, Palmaz Scientific has completed a first-in-man study of its patented micro-groove technology in cooperation with a Fortune 500 medical device company. In addition, Palmaz Scientific could continue its own development efforts to innovate its methods and processes regarding Physical Vapor Deposition as well as to develop its own medical devices.

Palmaz Scientific believes its assets are attractive for a number of reasons:
1. A decade of research and development by Dr. Julio Palmaz and his team has led to important discoveries relevant to various implantable medical devices and that drive the Palmaz Scientific technology platform.
2. Extensive intellectual property portfolio. Palmaz Scientific has built a very extensive and in-depth intellectual property portfolio comprising 256 issued U.S. and international patents and 182 active U.S. and international pending patent filings in active review globally.
3. Multiple medical device applications. Palmaz Scientific’s intellectual property portfolio includes patents covering an array of other potential product applications such as: drug delivery devices, valves (cardiac and venous), grafts (e.g. Peripheral, arterio-venous, CABG), embolic protection devices, angioplasty balloons, occlusion devices, vascular stent and many others.
4. Palmaz Scientific Patented Physical Vapor Deposition (PVD) methods and processes allow for the design and manufacturing of for thin film, low profile, implantable devices with bio-metals of high purity and finely ordered structure.
5. Palmaz Scientific Patented Physical Vapor Deposition (PVD) methods and processes allow for design and manufacture of monolithic stents resulting in variable integrated strut geometry within a single stent.
6. Palmaz Scientific PVD technology platform allow for manufacturing of medical device with specifications not otherwise possible or available with current methods used in the market today.
7. Patented Physical Vapor Deposition methods and processes enable the development of superior devices in the neurovascular aneurysm market.
8. Taking advantage of the higher strength of our PVD alloys allows for very low profile stent prototypes to be used in patients with vascular disease in infra-popliteal vessels (i.e. Below the Knee, BTK) allowing for use of introducer sheaths smaller in diameter than any current stent systems. This would allow foot approach into BTK vessels with obvious advantages; no risk of groin or popliteal hemorrhage and no compromise to the supply vessels.
9. Patented Photolithography processes and methods for fabricating certain topographical patterns at the microscopic level of vascular implant that positively influence cell colonization, thus promoting site healing.
10.The Palmaz Scientific micro groove technology has the potential to make inroads into the stent market metal adluminal surface which would benefit from our micro groove technology to promote faster re-endothelialization and hence decrease the need for oral antiplatelet medication.
Palmaz Scientific Company Profile

Palmaz Scientific Inc. is a research and development company dedicated to the advancement of the technology and science of medical implants headquartered in San Antonio, Texas, with operations in Fremont, California. Many years of deliberate, systematic research have led to a deeper understanding of the interaction of structured materials with biological fluids and tissues. This has allowed Palmaz Scientific not only to delve into the current frontiers of implantable medical devices but into developing fields such as tissue engineering, artificial and semi-artificial organ replacement, and interactive implantable devices.

Palmaz Scientific has developed technologically advanced techniques to fabricate a new generation of super materials. These efforts were the result of systematically studying the limitations of current implantable materials and the application of new technologies, many of which had to be adapted from areas of science not commonly found in the medical arena like microelectronics, energy and aerospace science.

Palmaz Scientific could commercialize its portfolio of patents first, through licensing and technology arrangements, and second through joint ventures and technology sharing agreements. Palmaz Scientific could also decide to manufacture its own products.

Impact of Technology on the Medical Device Industry

The science underlying medical therapeutics is rapidly changing toward faster, more effective and safer methods to cope with the ever-increasing demand. Palmaz Scientific is uniquely positioned to participate significantly in this changing medical environment. Palmaz Scientific believes that devices in the near future will be made with non-conventional methods with the incorporation of advanced computer interfaced, beam and vacuum technologies. This will address the need to push the current limits of conventional technology posed by material and structural failure. Conventional materials such as medical tubing and reductive manufacturing techniques like laser and electrochemical polishing have currently reached their limits.
Space-age materials and techniques produced at Palmaz Scientific have yielded surprisingly low-profile structures with mechanical performance equal or better than larger, bulkier counterparts. This is the result of producing highly ordered materials with optimized crystalline structures, homogeneity and freedom from contaminants commonly present in natural materials. These advanced materials exhibit superior physical performance parameters and greater resistance to environmental degradation when functioning as implants. Also, their bulk and surface homogeneity promote uniform cellular response and predictability in tissue interaction that translates into superior clinical results.

By achieving a new level of control in the material-tissue interaction Palmaz Scientific was introduced to new technological possibilities such as advanced submicroscopic designs optimized for cellular receptor interaction, incorporation of microfluidics, bio-sensing and microelectronics. Developing fields such as tissue engineering, stem cell lines and 3D cell printing, are expected to necessitate structural platforms made by advanced technologies such as the ones being develop by Palmaz Scientific.

Palmaz Scientific is part of the new generation of manufacturing methods currently known as sub-microscopic and nanotechnologies. Conventional raw materials and serial manufacturing by hand-made reductive techniques, are fraught with structural variability, material defects and poor yields. Instead, highly automated, computer interfaced manufacturing will constitute the new generation of platform technologies likely to re-define the future of medical intervention.

Potential Game Changing Intellectual Property Portfolio

A decade of research has resulted in an intellectual property portfolio of 256 issued U.S. and international patents and 182 active U.S. and international pending patent applications primarily from the following important discoveries:

· Biometals of high purity and ordered structure can be fabricated using physical vapor deposition.

· Thin and thick film PVD-based metals can be used to produce low profile implantable devices.

· Topographical patterns at the microscopic level can positively influence cell colonization of prosthetic surfaces.

Based on a deep understanding of tissue and blood interactions with metal surfaces at the atomic and molecular levels, Palmaz Scientific designed and engineered nanotechnology processes using Physical Vapor Deposition (“PVD”) and innovative nanotechnology designs to produce thin film metals of thickness as small as 5 microns (i.e. The approximate size of one blood cell) and as thick as 260 microns. The PVD process deposits layers of atoms on a substrate to produce durable, high purity thin film metals that can be formed into low profile implantable medical devices (i.e. widths smaller than 75 microns). In addition, a proprietary patented metal surface micro design has been found to accelerate the healing process of these implantable medical devices. This approach to implantable medical device structure is believed to be unique and a potential game changing technology platform for the future of implantable medical devices.

The Palmaz Nanotechnology Platform may benefit many potential applications such as:
· Thin Film Covered Stents
· Monolithic Thin Film Stents
· Implantable Bioreactor Platforms for Cell Lines
· Cancer Drug Delivery
· Vascular Drug Delivery (Bare Stents, Covered Stents, Grafts, Balloons)
· Valves (Heart, Venous)
· Surgical and Endovascular Patches
· Microsurgical Components
· Grafts (Peripheral, A/V, CABG)
· EPDs (Embolic Protection Devices)
· Occlusion Devices
· Bare Metal Stents
· Angioplasty Balloons
· Wires, Sheaths, Delivery Systems
· Cosmetic and Orthopedic Implants
· Erectile Dysfunction Indications
· Optical Devices
Commercialization Opportunities

Palmaz Scientific’s extensive intellectual property portfolio is the foundation for a technology platform with many potential implantable medical devices, including stents that address coronary, peripheral and intracranial indications as well as implantable devices in orthopedic and cosmetic prosthetic specialties. We believe that it is possible that any of these technologies could be commercialized independently by us or via collaborative relationships including opportunities for licensing and engineering services as well as possible equipment sales and/or contract manufacturing.

Palmaz Scientific’s Assets

Palmaz Scientific has developed a portfolio of assets critical to the development and manufacture of its revolutionary technology platform. These assets fall into a variety of categories, including:

· Patents, Patent Applications and Trademarks
· Significant intellectual capital, know-how and expertise in the design and manufacture of medical device implants using Palmaz Scientific patented Physical Vapor Deposition processes and methods
· Design and quality assurance test equipment
· Fully-outfitted manufacturing equipment for the design and testing of medical device implants
· Clinical data from a first in human study evaluation microgroove technology.

The assets of Palmaz Scientific will be sold in whole or substantially in whole (collectively, the “Palmaz Scientific Assets”). The sale of these assets is being conducted with the cooperation of Palmaz Scientific. Palmaz Scientific and its employees will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership. Notwithstanding the foregoing, Palmaz Scientific should not be contacted directly without the prior consent of or Gerbsman Partners.

The Board of Directors of Palmaz Scientific has decided to maximize the value of Palmaz Scientific Assets through an orderly liquidation sale, which might include the use of section 363 of Title 11 of the United States Code to incentivize purchasers to maximize the amount bid for such assets

Pending Litigation

Chapter 11 Bankruptcy cases of Palmaz Scientific, Inc., Case No. 16-50552, Advanced Bio Prosthetic Surfaces, Ltd., Case No. 16-50555, ABPS Management, LLC, Case No. 16-50556, and ABPS Venture One, LTD, Case No. 16-50554, all pending in the Western District of Texas, San Antonio Division.

Harriman v. Palmaz Scientific, Inc., et al.; 134th Judicial District, Dallas County, Texas, Cause No. DC-15-12314

1. Plaintiff Susan E. Harriman has sued defendants Palmaz Scientific, Inc., Julio Cesar Palmaz, Steven Brett Solomon, Gary Zimpelman, John Asel, John Does 1-20 and Jane Does 1-20.

2. Defendants Palmaz Scientific, Inc., Julio Cesar Palmaz, Steven Brett Solomon have filed counterclaims against Susan E. Harriman for (1) Tortious Interference with Existing Contracts, (2) Tortious Interference with Prospective and Continuing Business Relations, (3) Defamation, and (4) Business Disparagement.

3. Defendant (as Third Party Plaintiff) Palmaz Scientific, Inc. has filed third-party claims against Alan Chesler, Ehrenberg Chesler Interests, LLC, Ehrenberg Chesler Securities, Inc., and IMS Securities, Inc. for (1) Tortious Interference with Existing Contracts, (2) Tortious Interference with Prospective and Continuing Business Relations, (3) Defamation, and (4) Business Disparagement.

4. Defendants Julio Cesar Palmaz and Steven Brett Solomon have filed third-party claims against Alan Chesler, Ehrenberg Chesler Interests, LLC, Ehrenberg Chesler Securities, Inc., and IMS Securities, Inc. for (1) Tortious Interference with Prospective and Continuing Business Relations, (2) Defamation, and (3) Business Disparagement.

Ehrenberg, et al. v. Palmaz Scientific, Inc., et al. 162nd Judicial District, Dallas County, Texas, Cause No. DC-15-11994

1. Plaintiffs Mildred V. Ehrenberg, Richard Benedikt, M.D., Arie Salzman, M.D., and Plant Family Investments Ltd. have sued defendants Palmaz Scientific, Inc., Steven B. Solomon and Julio Palmaz, M.D.

Advanced Bio Prosthetics Surfaces Ltd., et al. v Akin Gump Strauss Hauer & Feld, Baker Botts, L.L.P., and Cecil Schenker; 225th District Court, Bexar County Texas, Cause No. 2014-CI-16776

1. Plaintiffs Advanced Bio Prosthetic Surfaces, Ltd. ABPS Venture One, Ltd. ABPS Management, L.L.C., Palmaz Scientific, Inc., and Dr. Julio Palmaz have sued Akin Gump Strauss Hauer & Feld, L.L.P. Baker Botts, L.L.P., and Cecil Schenker for breach of fiduciary duty, fraud, and conspiracy.

Palmaz Scientific, Inc. v. Susan E. Harriman, United States District Court, Western District of Texas, San Antonio Division, Case No. 5:15-cv-734

1. Plaintiff Palmaz Scientific, Inc. sued defendant Susan E. Harriman for (1) Tortious Interference with Existing Contracts, (2) Tortious Interference with Prospective and Continuing Business Relations, (3) Defamation, and (4) Business Disparagement.

2. This action was dismissed without prejudice on October 7, 2015 for lack of subject matter jurisdiction

Palmaz Scientific, Inc. Key Personnel

Scott Carpenter — Senior Director for Research & Development,
More than 25 years in medical device development. Experience in the development of surgical tools, vascular stents and orthopedic implants. Co-author of Nitinol technical publications and inventor on 100+ US and worldwide patents

Palmaz Scientific, Inc. Board of Directors
Dr. Eugene A. Sprague, Director

Over 40 years as an investigator in the area of cardiovascular research with emphasis on arterial pathophysiology and vascular device development and currently holds the position of Professor of Cardiology in the Department of Medicine at the University of Texas Health Science Center at San Antonio.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected 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 Palmaz Scientific 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 Palmaz Scientific, Inc., 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 neither Palmaz Scientific nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same.

For additional information, please see below and/or contact:

Steven R. Gerbsman
(415) 456-0628
steve@gerbsmanpartners.com

Kenneth Hardesty
(408) 591-7528
ken@gerbsmanpartners.com

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