Blog of Intellectual Capital

Further to Gerbsman Partners previous e-mail sales letter of March 8, 2016, regarding the sale of certain assets of Palmaz Scientific, I am providing an update on the timing for finalizing the”Bidding Process & Procedures” that need to be approved by the United States Bankruptcy Court for the Western District of Texas, San Antonio Division

Gerbsman Partners has been retained by Palmaz Scientific, Inc. 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.

On April 19, 2016, the United States Bankruptcy Court for the Western District of Texas, San Antonio Division held a hearing and approved an order granting “interim financing” to the Debtor through May 5, 2016. Debtors advised the Court that the proposed “stalking horse” bidder is in a dialog/negotiations with various creditor and investor groups concerning a consensual path forward with the objective of finalizing a “stalking horse” bid, and bid procedures and a possible plan of reorganization for review by the Debtors’ and Creditors Committee Counsel. Once this is finalized it is anticipated the Court will set a date to approve bid procedures, a “stalking horse” bid and asset purchase agreement, allowing for immediate distribution to potential interested parties.

Currently, potential interested parties who have signed an NDA will be able to perform due diligence and have access to the Debtor’s key personnel/intellectual capital, due diligence room and intellectual property lawyer.

Attached, please see a detail check list of information in the Palmaz Scientific due diligence room and a list of key personnel/intellectual capital.

I will update all potential interested parties during the first week of May on the current status and timing of projected approval of the “bidding process/procedures” that must be approved by the United States Bankruptcy Court for the Western District of Texas, San Antonio Division.

Ken Hardesty, Dennis Sholl and I are available to facilitate a continued due diligence and deal status dialog.

Best regards and thank you for your continued interest in the Palmaz Scientific Assets and Intellectual Property.
Steven R. Gerbsman
Principal
Gerbsman Partners
steve@gerbsmanpartners.com