The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of AirXpanders, Inc.

Further to Gerbsman Partners sales letter of September 4, 2019 and “Update to Bidding Process” on September 9, 2019, regarding the sale of certain assets of AirXpanders, Inc. (“AirXpanders”), I am attaching an Asset Purchase Agreement (“APA”), Fixed Asset List, Trademark List, US Patent List, AirXpanders’s Data Room due diligence information list and Inventory list provided by the company.  Also, interested parties who would like to speak with Shalon Ventures regarding the potential go forward License relationship should email Barry Cheskin at bcheskin@sumadvisory.comand he will respond to you.

Please also be advised that the Bid Date for all interested parties has been moved up to Friday, September 27, 2019 from Wednesday, October 2, 2019.   The reason for this is that the fixed assets must be removed from the premises no later than September 30, 2019.

It is recommended that when potential interested parties bid, they should submit their bid on:

1. Fixed Assets Only
2. Inventory Only
3. Intellectual Property – including Patents, Trademarks, Clinical Trials, etc. Only
4. A combination of all of the above

Prior to the bid date of September 27, 2019, I would encourage and recommend that all interested parties have their counsel speak with Jonathan Bell, Esq., counsel to Oxford Finance LLC and AirXpanders Assest Liquidation Company LLC, to discuss any questions or comments of a legal nature relating to the transaction.  Jonathan is available at 617 310 6038 and bellj@gtlaw.com

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained 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.  

Ken, Jim and I will be following up to review the updated Bidding Process, schedule due diligence meetings and answer any questions regarding the “Date Certain M&A Process”.

Any and all the assets of AirXpanders will be sold on an “as is, where is” basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

Gerbsman Partners (www.gerbsmanpartners.com) has been retained by AirXpanders Assets Liquidation Company, LLC (“Seller”) to solicit interest for the acquisition of all, or substantially all of, AirXpanders’ assets (the “AirXpanders Assets”).  Seller recently stepped into a loan (the “AirXpanders Loan”) originally made by Oxford Finance LLC (“Oxford”) to AirXpanders, Inc. (“AirXpanders”), the repayment of which was secured by a pledge of substantially all of AirXpanders’ Assets.  Subsequent to the acquisition of the AirXpanders Loan, Seller is completing a UCC foreclosure with respect to the AirXpanders Assets in order to sell the AirXpanders Assets, free and clear of all liens, claims and interests, in accordance with the sale process outlined herein. 

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 AirXpanders’ Assets has been supplied by former employees of AirXpanders who are now engaged as consultants to AirXpanders Assets Liquidation Company, L.L.C. (the “Seller”).  Nothing contained herein has been independently investigated or verified by Seller, Gerbsman Partners, Oxford Finance, or their respective agents.

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

Seller, Oxford Finance, and 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 Seller’s or Gerbsman Partners’ negligence or otherwise. Consultants, 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 Seller’s, Consultants’ or Gerbsman Partners’ negligence or otherwise. 

Any sale of the AirXpanders Assets will be made on an “as-is,” “where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either expressed or implied, of any kind, nature, or type whatsoever from, or on behalf of Seller, Consultants and Gerbsman Partners. Without limiting the generality of the foregoing, Seller, Consultants and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the AirXpanders 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 Appendix A.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign the Non-Disclosure Agreement (attached hereto as Appendix A) to have access to the due diligence data room documentation (“Due Diligence Access”), and the AirXpanders Video. 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 had an opportunity to inspect and examine the AirXpanders 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 Seller or 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 Seller 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 AirXpanders Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than  Friday, September 27, 2019 at 2:00pm Pacific Daylight Time (the “Bid Deadline”) at Gerbsman Partners office, located at 211 Laurel Grove Avenue, Kentfield, CA 94904.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. In particular, please identify separately certain equipment or other fixed assets.  The attached AirXpanders fixed asset list may not be complete and bidders interested in the AirXpanders equipment must submit a separate bid for such assets. 

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.  All bids must be accompanied by a refundable deposit in the amount of $200,000 payable to AirXpanders Liquidation Company, LLC.  Refundable deposit wiring instructions will be provided at a later date. The winning bidder will be notified within three (3) business days of the Bid Deadline.   Unsuccessful bidders will have their deposit returned to them within three (3) business days of notification that they are an unsuccessful bidder. 

Seller 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.   

Seller will require the successful bidder to close within seven (7) days following acceptance of such party’s bid. Any or all of the AirXpanders Assets 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 AirXpanders Assets shall be the sole responsibility of the successful bidder and shall be paid to Seller at the closing of each transaction. 

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

Steven R. Gerbsman                                                   

Gerbsman Partners                

steve@gerbsmanpartners.com                                 

Kenneth Hardesty                                                      

Gerbsman Partners                                                    

ken@gerbsmanpartners.com

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