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Gerbsman Partners – Date Certain M&A Process of Adynxx, Inc., its Assets and Intellectual Property

Posted in "Date Certain M&A Process", Adynxx, Inc., Gerbsman Partners, Uncategorized on April 19, 2021| Leave a Comment »

 Sale of Adynxx, Inc. 

Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Adynxx, Inc. (Adynxx or the company) to solicit interest for the acquisition of all, or substantially all, of the assets of Adynxx.

Adynxx is a clinical stage biopharmaceutical company focused on the development of transcription factor decoy technology based in San Francisco.  Adynxx is dedicated to bringing to market novel, non-opioid, disease-modifying products to address unmet needs in the treatment of pain.  Please see attached Adynxx presentation and detail sales letter.

The acquisition of Adynxx’s assets will enable immediate access to a broad portfolio of proprietary technology, a Phase 2 clinical stage product candidate for postoperative pain (brivoligide), and an early-stage product candidate for chronic pain (AYX2).  

Adynxx has raised a total of $64M in capital funding, including $29M from venture capital investors, $20M in strategic partnership, and $5M in secured debt from Oxford Finance. Adynxx also received a grant award for up to $15M from the National Institutes of Health (NIH).

Adynxx completed a merger with Alliqua BioMedical, Inc. in 2019 that resulted in Adynxx becoming a publicly traded company.  Shortly after completion of the merger, however, Adynxx was informed by The Nasdaq Stock Market that the company’s shares would be delisted from The Nasdaq Capital Market due to noncompliance with the minimum round lot stockholders and the minimum stockholders’ equity requirement for an initial listing, despite the company having met with Nasdaq and presented a plan to satisfy the listing requirements. As a result of the delisting by Nasdaq and a change in listing requirements implemented by Nasdaq in August 2019, the company was unable to raise additional capital and unable to relist its shares on The Nasdaq Capital Market.  In May 2020, the company filed a Form 15 with the Securities and Exchange Commission to terminate their registration as a publicly traded company.  A copy of the Form S-1 registration statement filed by the company prior to terminating their status as a publicly traded company can be found here and attached.

Adynxx has a patent portfolio that consists of five families, including composition of matter and method of use for its drug candidates. The portfolio includes forty-nine patents already registered or published in the US and across major markets, plus three patents under active prosecution. See attachment.

Adynxx highlights: 

  • A novel technology platform with disease-modifying properties to treat pain
  • Lead compound, brivoligide for postoperative pain, has been studied in three Phase 2 clinical studies of postoperative and has been shown to provide long-term reduction in postoperative pain (up to four weeks) with a single administration at the time of surgery  
  • Development of brivoligide supported by a grant from NIH for up to $15M
  • Second product candidate, AYX2 for the treatment of chronic pain, is approximately 12 months from submitting an Investigational New Drug (IND) application
  • AYX2 has the potential to provide months of pain relief following a single administration, a unique and highly attractive therapeutic profile
  • Additional drug candidates can be developed from the platform for the treatment of other pain syndromes and other diseases

Adynxx has no recurring revenues, product or collaboration related. Its value lies in the clinical and preclinical assets produced by its underlying and proprietary technology.

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 Aynxx’s assets has been supplied by Adynxx.  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 Adynxx 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.

Adynxx, 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 Adynxx’s or Gerbsman Partners’ negligence or otherwise. 

Any sale of the Adynxx 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 Adynxx or Gerbsman Partners.  Without limiting the generality of the foregoing, Adynxx and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Adynxx 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.

CORPORATE HISTORY AND BACKGROUND

The acquisition of Adynxx’s assets will enable immediate access to a broad portfolio of proprietary technology, a Phase 2 clinical stage product candidate for postoperative pain (brivoligide), and an early-stage product candidate for chronic pain (AYX2).  To date, Adynxx has raised a total of $64M in capital funding, including two rounds of private equity financing totaling $29M funded by a premier team of life science investors including Domain Associates and TPG Biotech, and $5M in secured debt from Oxford Finance.

Adynxx also received a grant award for up to $15M from the National Institute on Drug Abuse (NIDA), part of the National Institutes of Health (NIH), to support clinical development of the company’s lead product candidate, brivoligide for postoperative pain.  Under this grant, the company can receive up to approximately $1.6M for funding a Phase 2 study of brivoligide in mastectomy and up to $9M for a Phase 3 study of brivoligide.

In May 2019, Adynxx completed a merger with Alliqua BioMedical, Inc. that resulted in Adynxx becoming a publicly traded company.  Shortly after completion of the merger, however, Adynxx was informed by The Nasdaq Stock Market that the company’s shares would be delisted from The Nasdaq Capital Market due to noncompliance with the minimum round lot stockholders and the minimum stockholders’ equity requirement for an initial listing, despite the company having met with Nasdaq and presented a plan to satisfy the listing requirements.

As a result of the delisting by Nasdaq and a change in listing requirements implemented by Nasdaq in August 2019, the company was unable to raise additional capital and unable to relist its shares on The Nasdaq Capital Market.  In May 2020, the company filed a Form 15 with the Securities and Exchange Commission to terminate their registration as a publicly traded company.  A copy of the Form S-1 registration statement filed by the company prior to terminating their status as a publicly traded company can be found here.

KEY ATTRIBUTES: WHY THE ADYNXX ASSETS ARE ATTRACTIVE

Adynxx believes its assets are attractive for multiple reasons:

  • Brivoligide is the only therapeutic that has shown potential for reducing postoperative pain and lowering opioid utilization in patients who are usually resistant to analgesic treatment and at risk for increased opioid usage
  • Those patients can be easily identified using the pain catastrophizing scale or PCS as part of the pre-surgical information packet completed by the patients in advance of surgery
  • Marketing and pricing studies support formulary access over 80% in both IDN and non-IDN hospitals without restriction due to easy identification of target patient population
  • Potential for very attractive commercial margins with no licensing fees
  • Phase 2 and Phase 3 clinical trials supported by a grant from NIH for up to $15M 
  • Substantially de-risked clinical development plan with clinical trial endpoints, brivoligide dose, and target patient population all identified in prior Phase 2 trials
  • Potential Phase 3 initiation in 2022 and NDA submission in 2024
  • Potential patent protection through 2038 plus extension
  • Second product candidate, AYX2 for the treatment of chronic pain, is approximately 12 months from submitting an IND and advancing to the clinic
  • AYX2 has the potential to provide months of pain relief following a single administration, a unique and highly attractive therapeutic profile
  • NO LICENSING FEES, all IP rights belong to Adynxx

PRODUCTS OVERVIEW

BRIVOLIGIDE

Lead phase 2 drug candidate for the treatment of post-operative pain in patients who score ≥16 on the pain catastrophizing scale 

Key innovations of brivoligide include:

  • The first drug that has the potential to reduce postoperative pain and reduce opioid utilization in patients with a catastrophizing phenotype who are usually resistant to analgesic treatment and at risk for increased opioid usage
  • The patients who respond to brivoligide can be easily identified in advance of surgery using the Pain Catastrophizing Scale or PCS
  • These patients represent approximately one-third of the surgical population 

·         In these patients, a single administration of brivoligide at the time of surgery has been shown to produce a sustained and clinically meaningful reduction in pain and reduction in opioid usage that lasts for weeks following surgery

·         Brivoligide is a non-opioid treatment that has the potential to eliminate the need for up to 360 million 5 mg hydrocodone (or equivalent fast-acting opioid) tablets in the US annually and have a potentially significant effect on reducing the incidence of postoperative opioid use disorders

·         Next Phase 2 study and potentially one Phase 3 study supported by a grant from NIH for up to $15M (up to approximately $1.6M for next Phase 2 trial and up to $9M for a Phase 3 trial)

AYX2 

Second product candidate for the treatment of chronic pain syndromes

Key innovations of AYX2 include:

  • Transformative therapeutic profile for the treatment of chronic pain syndromes 
  • Non-clinical data supports weeks to months of pain reduction with a single administration
  • Administered approximately one to three times per year
  • Non-addictive, non-opioid compound
  • Received a ~$600K grant as part of the HEAL initiative for non-clinical development
  • Approximately 12 months from submitting an IND
  • Mechanism of action and preclinical pharmacology published in peer reviewed journal Molecular Pain

MARKET SIZE FOR BRIVOLIGIDE – see sales letter

MARKET SIZE FOR AYX2 – see sales letter

BRIVOLIGIDE CLINICAL TRIAL SUMMARY

  • Completed one Phase 1 and three Phase 2 clinical studies
  • Showed a robust, long term and statistically significant effect in ADYX-003 study
  • Showed treatment effect was most prevalent in patients that scored 16 or higher on the PCS scale in the ADYX-004 study
  • Efficacy in target patient population (patients that score 16 or higher on the PCS scale) to be confirmed in next Phase 2 study
  • Next Phase 2 study and potentially one Phase 3 study supported by a grant from NIH for up to $15M
  • Potential NDA by 2024

BRIVOLIGIDE CLINICAL DATA

Safety

Brivoligide was well tolerated in patients in all four clinical trials conducted to date, including ADYX-001, ADYX-002, ADYX-003 and ADYX-004. Refer to the Form S-1 for details.

Efficacy

ADYX-003: The second Phase 2 study, ADYX-003, was a randomized, double-blind, placebo-controlled, two-stage study to evaluate the safety and efficacy of two dose/volume levels of brivoligide injection administered intrathecally at one of two potential lumbar spinal interspace injection sites before surgery in patients undergoing primary unilateral total knee arthroplasty.

Brivoligide 660 mg/6 mL significantly reduced pain with walking (15 meters) during the Day 7 to Day 28 period (2.0 ± 0.2 vs. 2.9 ± 0.3, p=0.026) following surgery as illustrated in the Figure below. Neither dose of brivoligide gave statistically significant reduction of pain with walking (5 meters) during the zero to 48 hour period. This early period (0-48 hours) is consistent with the time required for the effect of EGR1-driven gene regulations to show effects on neuronal activity and pain. NRS (numerical rating scale) pain scores with brivoligide 1,100 mg/10 mL did not show statistical significance compared with placebo 10 mL for pain scores with walking.  An explanation of the dose response based on increased metabolism at higher dose levels was published in the peer reviewed journal Molecular Pain.  A copy of the article can be found here.

ADYX-004: ADYX-004 was a multicenter, Phase 2, randomized, double-blind, placebo-controlled study to evaluate the safety and efficacy of brivoligide injection 660 mg/6 mL compared to placebo 6 mL administered intrathecally before surgery in patients undergoing primary unilateral TKA. 

The following assessments were used to evaluate efficacy: NRS pain assessment at rest; a defined distance walk (5 meters inpatient, 15 meters outpatient), with NRS for pain during the walk; NRS pain assessment with rising from a seated position and worst, least and average pain over the last 24 hours (collected by subjects daily via eDiary); and collection of analgesic medication data through Day 90.

A total of 210 subjects were dosed with either brivoligide 660 mg/6 mL (108 subjects) or placebo (102 subjects). A total of 198 subjects completed the study.

Efficacy

For the primary endpoint, no significant difference was observed between the brivoligide 660 mg/6 mL and placebo 6 mL treated groups. The results of the analyses of the secondary and additional endpoints in the total mITT population also did not show a clinically relevant effect of brivoligide 660 mg/6 mL vs. placebo 6 mL. Although results of the analyses were not clinically relevant, several prespecified secondary and additional endpoints based on the stratification factor of pain catastrophizing score ≥20 vs. <20 suggested efficacy of brivoligide when compared with placebo in subjects with pain catastrophizing score ≥20. These endpoints included time to achieve an NRS pain score ≤3 for worst pain over the previous 24 hours and opioid utilization over the period of 48 hours to Day 90.

A Kaplan-Meier analysis of time to achieve an NRS pain score of ≤3 for worst pain is available in the due diligence room and subject to an NDA.

ADYX-003 and ADYX-004 Data Combination and Meta-analysis by PCS

Due to the similar study design and brivoligide dose used in studies ADYX-003 and ADYX-004, these studies were combined and analyzed for consistency of pain catastrophizing score effect on brivoligide efficacy. Data for the combined studies analyzed by pain catastrophizing score ≥16 suggested a consistent therapeutic effect of brivoligide in patients scoring ≥16 on the pain catastrophizing scale and are presented in the Figures below.

In summary, high scores on the preoperative pain catastrophizing scale identifies people that may benefit from brivoligide administration before surgery. The post-hoc results from the ADYX-003 and ADYX-004 studies suggest that brivoligide allows normalization of the of the post-surgical pain response course to that observed in the majority of people with low PCS scores.

Upcoming trial(s)

ADYX-005 study

ADYX-005 is a Phase 2 randomized double-blind, placebo-controlled study to evaluate the safety and efficacy of a single intrathecal preoperative administration of brivoligide injection in patients with a PCS score ≥16 undergoing unilateral total knee arthroplasty.

The study protocol calls for approximately 122 subjects to be enrolled in the study and randomized 1:1 into two treatment groups (brivoligide injection 660 mg/6 mL and placebo 6 mL) with randomization stratified by study center. Subjects will receive study drug just prior to administration of spinal anesthesia, via the same needle.

Safety and laboratory assessments will be performed in the standard manner up to Day 28. Concomitant medications will be collected through Day 28; analgesic medications will be collected through Day 42. Pain at rest and with walking will be recorded by study staff postoperatively at follow-up visits. Daily ratings of worst pain over the previous 24 hours will be collected via electronic diary, or eDiary, by subjects every evening from Day 1 until the Day 42 visit. Analgesic medication use will be collected via eDiary by subjects daily after discharge until the Day 42 visit. Follow-up visits will occur on Days 7, 14, 21, 28 and 42 The primary endpoint will be reduction in pain with walking from Day 7 to Day 28 as measured using the NRS pain measuring tool.

ADYX-006 study (supported by up to approximately $1.6M in NIH funding)

Phase 2 randomized double-blind, placebo-controlled study to evaluate the safety and efficacy of a single intrathecal preoperative administration of brivoligide injection in patients with a PCS score ≥16 undergoing mastectomy with immediate tissue expander or implant placement.

The study protocol calls for approximately 126 subjects to be enrolled in the study and randomized 1:1 into two treatment groups (brivoligide injection 660 mg/6 mL and placebo 6 mL). Subjects will receive study drug in the lumbar intrathecal space and briefly positioned to distribute brivoligide to the thoracic region just before induction of general anesthesia.

Safety and laboratory assessments will be performed in the standard manner up to Day 21. Concomitant medications will be collected through Day 21; analgesic medications will be collected through Day 21. Data for pain at rest with general movement involving the chest and upper body, and worst pain over the last 24 hours, with deep full inspiration and forceful effective cough, will be collected by subjects via eDiary every evening from Day 1 until the Day 21 visit. NRS pain assessment upon 90-degree abduction of the ipsilateral arm (subject-selected index arm for bilateral surgery) will be collected by subjects via eDiary from Day 14 to 21 as allowed by the subject’s surgeon after drain removal. Analgesic medication use will be recorded after discharge until the Day 21 visit by subjects daily via eDiary. The Physical Well-being  BREAST-Q will be collected at screening and at the Day 21 follow-up visit by study staff. Follow-up visits will occur on Days 7 and 21. The primary endpoint will be mean pain rating with general movement involving the chest and upper body from Day 3 to Day 14.

REGULATORY

The Brivoligide IND is active and in good maintenance. An end of phase 2 (EOP2) would be requested following the next phase 2 trial(s). The target label is for the treatment of postoperative pain in all patients who score 16 or higher on the PCS. Following the EOP2 and subsequent Phase 3 pivotal trial(s), an NDA could be submitted as early as 2024.

MANUFACTURING

Adynxx relies on third-party CMOs for its drug substance and drug product needs.  Enough API is available for the upcoming phase 2 trial(s). Drug product manufacturing process is rapid, well established and can be performed in parallel to the ramp up activities of clinical trial initiation.

EXECUTIVE OFFICER/BOARD OF DIRECTORS

Matthew Ruth currently the Chief Executive Officer of Adynxx and has served as a member of our board of directors since May 2019 Mr. Ruth previously was the Senior Vice President, US Chief Commercial Officer for Adapt Pharma, a division of Emergent Bio Solutions commercializing Narcan Nasal Spray, a product that can reverse the effects of opioid and heroin overdoses. From 2012 to 2015, Mr. Ruth was Chief Operating Officer for RightCare Solutions. Mr. Ruth earned a Bachelor of Science degree from Missouri State University.

Rick Orr – Chairman of the Board. Previously Mr. Orr has served as President and Chief Executive Officer from December 2010 to June 2020. Prior to joining Adynxx, Mr. Orr was Chief Operating Officer at Corthera, Inc., a private, clinical-stage biopharmaceutical company focused on developing therapies for acute heart failure, from May 2009 to July 2010. Corthera was acquired by Novartis Pharmaceuticals Corporation in February 2010. Prior to Corthera, Mr. Orr served as Sr. Vice President of Operations at Cerexa, Inc., a wholly owned subsidiary of Forest Laboratories, Inc. focused on developing novel anti-infective therapies, from October 2007 to May 2009. Mr. Orr was part of the management team that founded Cerexa in July 2005 and served as General Counsel from the company’s inception until October 2007. Forest Laboratories acquired Cerexa in January 2007. Mr. Orr received a B.A. from The Ohio State University, an M.A. from the University of California, Santa Barbara, and a J.D. from the University of San Francisco School of Law.

Julien Mamet, Ph.D.  Board member. Dr. Mamet founded Adynxx and served as a member of its board of directors since its inception in October 2007 and as Chief Scientific Officer since December 2010 until June 2020. Previously, Dr. Mamet served as President and Chief Executive Officer of Adynxx from its inception to December 2010. Prior to founding Adynxx, Dr. Mamet completed his post-doctoral work at the Scripps Research Institute, a nonprofit biomedical research institute, from September 2006 to December 2006, and at the Genomics Institute of the Novartis Research Foundation, a research institute of Novartis International AG, a global pharmaceutical company, from February 2004 to September 2006. Dr. Mamet received a B.S. and M.S. from the University Claude Bernard in Lyon, France and a Ph.D. from the Institute of Molecular and Cellular Pharmacology in Nice-Sophia Antipolis, France.

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 Adynxx 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 Adynxx, 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 Adynxx nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes 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 Adynxx Assets.  Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, May 14, 2021at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Adynxx’s office, located at 44 Thama Street, San Francisco, CA 94105.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.  Bidders interested in specific Adynxx Assets must submit a separate bid for such assets.  Be specific as to the assets desired. 

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 Adynxx, Inc.).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

Adynxx 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 bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

Adynxx will require the successful bidder to close within 7 business days.  Any or all of the assets of Adynxx 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 Adynxx Assets shall be the sole responsibility of the successful bidder and shall be paid to Adynxx at the closing of each transaction.

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

Steven R. Gerbsman 

steve@gerbsmanpartners.com 

Kenneth Hardesty

ken@gerbsmanpartners.com

L

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12/1 Update to Intellectual Property/Patent Acquisition Opportunity from Bell and Howell

Posted in "Date Certain M&A Process", Bell and Howell, Inetellectual Property, Uncategorized on November 28, 2015| Leave a Comment »

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San Francisco, December 2015

Update – Intellectual Property/Patent Acquisition Opportunity from Bell and Howell.  In response to the questions regarding the Bell & Howell Patent acquisition opportunity, the following patents should be added to the Group specified below:

Group 1: US Patent 8,129,646 and US Patent 8,977,385. These were Continuations-In-Part of patents below.. Copies of the patents are attached.

Also, there is foreign counterpart for US Patent 7,741,545 that will be included.

Group 2: US Patent 6,510,992 should be included in Group 2 as it is part of the family from US Patent 6,793,136. Copy of the patent is attached.
Information of the Patent Portfolio’s are highlighted again below. Detailed Patent descriptions were sent with the original sales letter. If you do not have the information, we will forward the detail to you.

If you have any interest in the acquisition of these Patents, please call:

Steven R. Gerbsman (415) 505 4991 steve@gerbsmanpartners.com

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

Dennis Sholl (415) 377 1952 dennis@gerbsmanpartners.com

 

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San Francisco, November 2015

Intellectual Property/Patent Acquisition Opportunity from Bell and Howell

As part of Gerbsman Partnersfocus for maximizing value of Intellectual Property, I am attaching for your review and potential interest, two Patent Groups for acquisition from the owner, Bell and Howell, LLC . (please see attached detailed Bell and Howell Patents pptx.)

1. The focus of this portfolio of patents is on maintaining mail processing integrity using Methods and Systems for tracking and controlling mail piece processing using a unique identifier incorporated within the Postal Service Intelligent Mail Barcode (IMB) or other Postal Authority’s barcode. These Patents incorporate high performance computing, Graphic manipulation, Mail Security and Traceability.

2. The focus of this portfolio of patents is on processing of mail pieces to ensure that the mail pieces are prepared in accordance with postal authority standards.

Bids for the sale of the Patent’s will be due on December 8, 2015 and will be subject to “The Bidding Process” which is outlined below. Separate Bids are requested for each Group.

Group 1: (US Patent Nos. 6,557,755 – – 7,325,732- – 7,741,575 – – 8,063,332) –Group 1
Title:Methods and Systems for Tracking and Controlling Mail piece processing using Postal Mail-Piece Code (US Patent No. 6,557,755)
Method and System for Mail Security and Traceability (US Patent No. 7,325,732)
Mail Piece Consolidation and Accountability using Advanced Tracking Methods (US Patent No. 7,741,575)
Mail Piece Consolidation and Accountability Using Advanced Tracking Methods (US Patent No. 8,063,332)

Group 2: (US Patent Nos. 7,840,414 – -6,793,136 – -6,697,500 – -7,834,289) – Group 2

Title:  Mail processing system for address change service (US Patent No. 7,840,414)
In-line Verification, Reporting and Tracking Apparatus and Method for Mail Pieces (US Patent No. 6,793,136)
Method and System for Mail Detection and Tracking of Categorized Mail Pieces (US Patent No. 6,697,500)
Mail Processing System for Address Change Service (US Patent No. 7,834,289)

Assignee/Owner: Bell and Howell, LLC

Group 1 patents:

Innovation: The patents in this group allow a mail processing operation to use a postal authority barcode data to track every mailpiece in the mail factory, the location of that mail piece in the process and what processing steps are required for that mailpiece. This traceability aspect can extend to the delivery of the mail piece to the ultimate recipient. Mail security is addressed in the patents by identifying the mail owner for each mail piece. Mail processing efficiency is enhanced with a method for sorting and commingling mail from a plurality of mail sources and for tracking the mail pieces through the sorting and commingling all with a high degree of integrity, Traceability to the mailer ID, tray and pallet is divulged.

Advantages: Mail processing effectiveness and mailpiece traceability by the association of every mail piece to a unique identifier and the unique identifier to mailer ID, tray, pallet and processing steps is made possible.

Group 2 patents:
Innovation: The patents in this group of patents allow an enterprise to utilize mailpiece processing equipment to generate a properly formatted delivery barcode, such as the USPS Intelligent Mail® barcode, to print the IMB barcode on a mailpiece, to perform inline verification of a mailpiece to ensure it meets postal standards, to correctly enable address change service and to check the mail piece for specific characteristics that indicates additional processing is required.

Advantages: This group of patents is beneficial to any organization that is preparing mail for delivery by USPS and wishing to qualify for postage discounts. Organizations that are preparing mail, whether performed by an in house mail room or by a service provider need to ensure the mail is prepared in accordance with mail standards so that deliver performance is maintained. In addition, updating, culling of undesirable mail pieces and inline verification are all available with the patents.

Market Potential & Application Domain:

These Patents should be attractive to any entity that uses mail as a key part of their business operation, marketing or communication strategy. Potential market segments that could benefit from use of the patents include mail businesses with a mail room, mail service providers, print shops and pre-sort service providers, such as:

1. Credit card companies – (billing, membership solicitations, special offers, etc)

2. Travel companies (airlines, travel agencies, etc)

3. Music and Book Clubs, Letter Shops

4. Corporations (annual and quarterly reports, SEC documents, proxies, meeting announcements, etc)

5. Banks (statements, notifications, etc)

6. Insurance companies (statements, solicitations, etc.)

7. Utilities (statements, etc)

8. Universities (acceptances and rejections, fund raising solicitations, course listings, grades, statements, etc)

9. Large charities (museums, orchestras, religious charities, benefit organizers, etc)

10. Retailers (catalogs, special offers, credit card solicitations, etc)

11. Professional societies (IEEE, APS, ACS, etc)

12. Political parties

13. The USG and state/municipal governments

14. United States Postal Service

15. All First and Standard Class Mailers not using NetSort

Technological Key Words: Mail delivery, Intelligent Mail barcode (IMB), pre-sort. address change service (ACS), inline verification, mail security, move update, mailpiece tracking. Comingling, electronic data records

The Bidding Process for Interested Buyer

Interested parties will be invited to participate with a sealed bid, for the acquisition of the Bell and Howell Patents. Sealed bids must be submitted for each Group separately, and should be received by Gerbsman Partners no later than Tuesday, December 15, 2015 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at the Bell and Howell office, located at 3791 S. Alston Avenue, Durham, NC 27713, attn: Blake Eaddy, General Counsel. Please also email steve@gerbsmanpartners.com with any bid.

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 $100,000. The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

Bell and Howell reserves the right to, in its sole discretion, to accept or reject any bid, or withdraw any or all of the Patents 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.

Bell and Howell will require the successful bidder to close within a 7 day period after acceptance of the winning bid. Any or all of the Patents of Bell and Howell 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 Bell and Howell Patents shall be the sole responsibility of the successful bidder and shall be paid to Bell and Howell at the closing of each transaction.

About Bell and Howell, LLC

Bell and Howell is a leading global provider of multi-channel communications solutions, providing messaging technologies for print, Web and mobile delivery. They are dedicated to drive positive growth for their customers, and their suite of solutions are designed to be open, flexible, solve unique customer needs, and enable the highest quality and lowest cost production of highly relevant customer communications. Supporting these solutions is one of the largest dedicated service organizations in the industry. Headquartered in Research Triangle Park, N.C., the company maintains development and manufacturing facilities in Wheeling, Ill., Bethlehem, Pa., Rochester, N.Y., Dallas, Texas, and Waterloo, Ontario, Canada. For further information, please visit http://www.bellhowell.net.

About Gerbsman Partners

Gerbsman Partners is a private investment bank focused on maximizing enterprise value for stakeholders and shareholders and their Intellectual Property. Our team of experienced experts has helped maximize Intellectual Property stakeholder value for 91 technology, medical device, digital marketing, social commerce, life science, cyber security and solar companies through our proprietary “Date Certain M&A Process” and has restructured/terminated over $ 810 million of prohibitive real estate and equipment leases, sub-debt and creditor issues. Since 1980, Gerbsman Partners has been involved in over $ 2.3 M&A, financing and restructuring transactions.

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Successful “Date Certain M&A” of Raydiance, Inc., its Assets and Intellectual Property -Gerbsman Partners

Posted in "Date Certain M&A Process", Blog of Intellectual Capital, Board Of Intellectual Capital, Date Certain M&A, Distressed Intellectual Property, Distressed IP, Inetellectual Property, Intellectual capital, Investments, Steven R. Gerbsman, Technology, tagged , , , , on July 27, 2015| Leave a Comment »

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San Francisco, July, 2015
Successful “Date Certain M&A” of Raydiance, Inc., its Assets and Intellectual Property
Steven R. Gerbsman, Principal of Gerbsman Partners, Kenneth Hardesty and James Skelton, members of Gerbsman Partners Board of Intellectual Capital, announced today their success in maximizing stakeholder value for a venture capital and venture lending backed manufacturer of precision solutions enabled by femtosecond laser technology.

Gerbsman Partners provided Crisis Management and Investment Banking leadership, facilitated the sale of the business unit’s assets and its associated Intellectual Property. Due to market conditions, the board of directors made the strategic decision to maximize the value of the business unit and Intellectual Property. Gerbsman Partners provided leadership to the company with:

1.  Crisis Management and technology domain expertise in developing the strategic action plans for maximizing value of the business unit, Intellectual Property and assets;
2.  Domain expertise in maximizing the value of the business unit and Intellectual Property through a Gerbsman Partners targeted and proprietary “Date Certain M&A Process”;
3.  The ability to “Manage the Process” among potential Acquirers, Lawyers, Creditors Management and Advisors;
4.  The ability to Communicate with the Board of Directors, senior management, senior lender, creditors, vendors and all stakeholders in interest.
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 89 Technology, Medical Device, Life Science, Solar; Digital Marketing and Social Commerce and Fuel Cell companies and their Intellectual Property and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructuring and M&A transactions.

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

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

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The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Raydiance, Inc. – Gerbsman Partners

Posted in "Date Certain M&A Process", Date Certain M&A, Distressed Intellectual Property, Distressed IP, Inetellectual Property, Kenneth Hardesty, Raydiance, Technology, Venture Capital, tagged , , , , , , on June 15, 2015| Leave a Comment »

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

Further to Gerbsman Partners previous e-mail and sales letter of June, 2015, regarding the sale of certain assets of Raydiance, Inc., (Raydiance), I attach the form of agreement (“APA”) that we will be requesting the bidders for certain Assets and Intellectual Property of Raydiance execute and deliver in connection with such transaction. The Raydiance Assets have been previously supplied, as outlined in the Raydiance sales letter. Also attached is Exhibit B, an updated Patent list. Ken, Jim and I will be following up to review the Bidding Process.

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Raydiance, Inc. (http://raydiance.com) to solicit interest for the acquisition of all or substantially all of Raydiance’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Raydiance Assets”).

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

Prior to the bid date of July 9, 2015., I would encourage all interested parties to have their counsel speak with Cecily Dumas, Esq. of Pillsbury Winthrop, counsel to Raydiance. She is available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA. 415 983 1641 office, 415 542 8730 cell cecily.dumas@pillsburylaw.com
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 Raydiance 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 Raydiance, 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 Raydiance 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 Raydiance Assets. Sealed bids must be submitted so that they are actually received by Gerbsman Partners no later than Thursday, July 9, 2015 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Raydiance office, located at 1450 North McDowell Blvd., Petaluma, CA 94594. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.

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 $250,000 (the refundable deposit will be held in Raydiance’s legal counsel trust account.). The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

Raydiance reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all of the 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.

Raydiance will require the successful bidder to close within a 7 day period. Any or all of the assets of Raydiance 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 Raydiance Assets shall be the sole responsibility of the successful bidder and shall be paid Raydiance at the closing of each transaction. For additional information, please see below and/or contact:

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

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

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

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Date Certain M&A of Raydiance, Inc., its Assets and Intellectual Property

Posted in "Date Certain M&A Process", Board Of Intellectual Capital, Date Certain M&A, DFJ, DFJ Growth, Inc., Inetellectual Property, Intellectual capital, Kenneth Hardesty, Samsung, Steven R. Gerbsman, Technology, Uncategorized, Venture Capital, Venture Capital Dispatch, Venture Wire, Venturebeat, tagged , , , , , , on June 9, 2015| Leave a Comment »

Date Certain M&A of Raydiance, Inc., its Assets and Intellectual Property

Gerbsman Partners – http://gerbsmanpartners.com has been retained by Raydiance, Inc. (“Raydiance” or the “Company”), to solicit interest for the acquisition of all or substantially all of Raydiance assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Raydiance Assets”).

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

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 the Raydiance Assets has been supplied by third parties and obtained from a variety of sources. 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 Raydiance or Gerbsman Partners (or their respective directors, officers, staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing (the “information”), 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.

The Company, Gerbsman Partners, and their respective directors, officers, 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 Raydiance’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Raydiance 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, Gerbsman Partners or Raydiance. Without limiting the generality of the foregoing, the Company, Gerbsman Partners, and their respective directors, officers, staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Raydiance 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 Raydiance’s or Gerbsman Partners’ prior consent.

SUMMARY OF HISTORICAL INFORMATION

Raydiance develops, manufactures and markets precision manufacturing solutions enabled by femtosecond laser technology. The company’s one step all-laser solutions optimize factory work flow, beyond material processing and handling, to radically improve production efficiency and quality with unmatched part-to-part consistency, higher yields and lower costs. Raydiance solutions are deployed in factories of Fortune 500 companies worldwide and readily integrate into customer manufacturing lines or R&D environments, delivering rapid prototyping and transfer to production.

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Production Machine

Unknown

Raydiance Femtosecond Laser

Raydiance originated from a DARPA-funded research project at the University of Central Florida. Initial external funding came from entrepreneur Barry Schuler (former AOL CEO), who was recruited by DARPA to commercialize the technology. In 2007, the company moved its headquarters to Petaluma, CA where it is currently occupies a 40,000 ft2 facility. In the course of the last ten years the company has raised $80M in five rounds of financing from prominent investors including DFJ, DFJ Growth and Samsung Ventures. Headcount currently totals 61 full-time employees. The management team and Board of Directors is compromised of:

Executive Management Team Board of Directors
Richard Pierce – President & CEO

Barry Schuler, Chairman, Managing Director, DFJ Growth

John H. N. Fisher, Managing Director, Draper Fisher Jurveston

Jeff Safchik – MD, Greenstreet Partners
William R. Beyer – COO/CFO
Keith Morton– Senior Vice President, Sales
Tim Flood – Vice President, Engineering
Dr. Steve P. Sapers – Vice President, Operations
Dr. Sri Srinivas – SVP, Business Development

Raydiance reported revenue in 2014 of $11m and forecasts 2015 revenue of $21M. The chart below gives a historical perspective of Raydiance bookings and billings (revenue) growth.

Unknown
The Company’s business model is product sales-based with ASPs ranging from $275,000 to over $1,000,000. The Company’s product portfolio spans three primary categories: standalone lasers (~$275,000), to laser with beam delivery rail and software (~$525,000) through full production systems (>$1,000,000).

The Xompany is recognized as a pioneer in two key aspects of laser-based micro-machining:

1) development of the world’s first highly reliable, fiber-based commercial grade femtosecond laser and;
2) a world-class applications team that combines knowledge of femtosecond laser programming with the physics of material science to produce economical solutions in automotive, medical and consumer applications.

UnknownHow Femtosecond Lasers Improve Precision Manufacturing

A femtosecond is one quadrillionth of a second. In the world of ultrafast lasers for material processing, light pulsed in the femtosecond regime (meaning pulses that are faster than 1 picosecond) deliver energy without imparting heat, this is athermal ablation.

Femtosecond laser technology enables all-laser precision manufacturing, which eliminates the need for post-processing (such as grinding, etching, sanding or polishing) and greatly reduces operating expenses while significantly improving yields. Manufacturers can simplify and optimize factory workflow to reduce cost and accelerate time-to-market for new innovations. Femtosecond all-laser processing enables utilization of both new product designs and previously difficult to economically process materials, such as metal alloys, brittle materials (Gorilla® glass or sapphire), heat sensitive polymers and other composite materials.
Target Market Opportunity, Focus and Applications

Precision micromachining markets span a wide variety of market segments where precision defines the products. This is true for semiconductors, medical devices, aerospace, automotive and many consumer devices. Also, the world of ophthalmics and precision jewelry and watches depend on very precise processing or machining. In aggregate, the annual worldwide manufacturing market is over $100B with precision micromachining making up approximately 10% of this total or just short of $10B. The opportunity is very large however success depends on focus.

Raydiance elected to focus in three micromachining segments: medical, automotive and consumer. This focus is driven by market size and the economic advantages made possible with femtosecond laser-based processing.

Raydiance has established a defensible position in each of these segments by leveraging its unique applications expertise to develop trade secrets and know-how for complete turnkey solutions for customers in each of the segments outlined below. The common theme in all of these application areas is that laser processing allows for single step machining. In other words, traditional mechanical machining or even other laser processing leaves a rough surface after drilling, milling or cutting. These rough surfaces demand multiple steps and techniques (grinding, polishing, chemical etch) to achieve desired surface quality for precision parts. Femtosecond laser processing achieves desired surface quality in a single step – a major element of the value proposition.

Medical Applications: Unknown Implantable medical devices including metal (nitinol) and polymer (plastic) stents [picture], heart valves, catheter guide wires and surgical needles. Intricate patterns never before achieved have advanced the efficiency of heart stents helping to prolong and save lives. Femtosecond-based laser machining take a metal or polymer tube and cut the intricate patterns in a single pass yielding substantial cost savings.

Automotive Applications: UnknownFuel injector spray nozzles depend on very precise holes that determine the efficacy of both fuel economy and emissions of all engine types, be it automotive, marine, or industrial. Femtosecond-based laser machining is advancing the state of the art by allowing for different shape holes and fashioning the entrance and exit of holes. Instead of making smaller and smaller holes the shape of the holes is now allowing manufacturers to meet government regulations more efficiently.

Consumer Applications: UnknownGorilla Glass™ cutting for smartphones and tablets is a $15B standalone business today. The precision of cut glass edges determines the strength of glass and its tendency to break: a very important quality for all mobile devices. Femtosecond-based laser machining provides single cut quality eliminating the need to polish surfaces. Further, new so-called 3D or shaped glass is very well suited to the flexibility of laser-based cutting.

Customers
Raydiance has strong customer relationship with blue-chip customers across the focus market segments that the company serves. With over 150 systems shipped or installed worldwide, the company is a worldwide leader amongst ultra short-pulse femtosecond suppliers.

In the medical segment, the Company services eight (8) of the top twenty (20) medical device manufacturers worldwide.   Customers will be disclosed upon execution of a nondisclosure agreement.

In the automotive segment, the Company serves six (6) of the top twelve (12) automotive parts suppliers or manufacturers worldwide.  The Company has recently achieved an applications breakthrough to uniquely and efficiently micromachine diesel fuel injectors holes and has pending designs wins with diesel-focused customers.

In the consumer segment, the company serves some of the largest customers including Samsung.   The applications focus is on glass cutting and display repair.

A key factor in Raydiance’s success is the Company’s end-to-end customer support throughout the sales process, providing consultative services for customer application problems and refining or optimizing the efficiency of the machining process. Installation / post-installation support is also an important customer satisfaction element since the Raydiance laser is designed for remote monitoring and diagnostics through an Ethernet connection. Many customers appreciate the preventive maintenance service that can be performed “over the wire.” Raydiance’s knowledgeable team of scientists, who come from an assortment of research disciplines, can provide knowledgeable insight and have “inventioneered” multiple industry applications.

Summary of Intellectual Property

The intellectual property of the Company consists of 33 issued patents and 20 pending patents reflecting a first-to-market position. The patent strategy is both defensive and offensive. The defensive aspect is focused on what’s inside the laser whereas the offensive aspect involves patenting the processing and application know-how that allows the Company to charge for the value that is generated by its applications engineers. The Company’s offensive strategy is designed to not only protect Raydiance’s market leading position but to support the company’s ability to charge a license fee for application knowledge contained in its software embedded in products. The Company includes a royalty free software license with products sold but reserves the right to charge a future recurring revenue stream based on the development of IP for its applications.

 Category                        Issued     Pending    Total

Total                                  33                 20              53

 

Raydiance Patent Summary

In addition to granted patents and patents pending the company has accumulated 230 patentable trade secrets and know-how that are documented in a “Records of Invention” or ROI database. The ROI’s represent the following categories.:

Ultra-short Pulsed Lasers –   178

Consumer Electronics – 24

Medical – 12

General Micro-machining – 11

Automotive –  4

Spectroscopy–  1

Total =230

Summary reasons why the assets are attractive:
1.  Large Market Opportunity – The need for precision manufacturing is growing especially given the need for smaller, lighter cheaper consumer devices. The consumer segment alone is forecast to be a $2.5B market opportunity for precision glass cutting in the next five years.
2.  World class application know-how – Raydiance built a best-in-class applications development team that distinguishes the Company from all other laser manufacturers. Applications knowledge turns standalone lasers into useful, ready-to-use tools.
3.  World class fiber-based laser design and manufacturing capability – Raydiance possesses unique knowledge in what is required to design, build and service fiber-based femtosecond lasers.

4.  Diversified Base of Customers – Raydiance laser-based systems are used in three primary market segments (medical, automotive and consumer) that represents manufacturing application diversity. This diversity also creates cross-selling opportunities between the market segments and customers.

5.  Broad, highly defensible patent portfolio – The Company employs a highly defensible IP strategy, with 33 patents awarded and 20 patents pending in areas related to applications know-how, short pulse technology and power / form factor.

Detailed reasons why Raydiance assets are attractive are:

Raydiance has transformed or pivoted from being a pure laser manufacturer to a company that now delivers the much more than “just the laser.” The Company delivers turnkey packages of ingredients that make femtosecond lasers useful tools. The analogy being that a microprocessor or CPU is a very powerful semiconductor device but unless housed in a smartphone, tablet or personal computer the capabilities remain “untapped.”

The same is true with femtosecond lasers and the programming required to unleash the capabilities for solving unique material problems or precision part fabrication. This programming coupled with the right beam delivery approach is key to the company’s application approach. Depending on the specific application, the package elements vary.

The key elements include the laser, the optics (may include a scanner) to direct the beam, the part holding capability and ultimately the software programming that transforms a standalone laser into an integrated factory floor ready production tool. Raydiance recognized early that to harness the market opportunity one needs to provide turnkey solutions (full packages for customers). Customers are willing to pay for these solutions and prefer turnkey solutions as opposed to needing to contracting/hiring/outsourcing the design and problem-solving aspect of harnessing femtosecond technology.

This unique market approach is what distinguishes Raydiance and leads to these reasons for why the assets are attractive. The timing of the release of subsequent purchase orders under a major customer supply agreement has lead to working capital constraints and the opportunity to acquire all or a portion of Raydiance’s assets to be sold. The acquisition of these assets can enable the purchaser to realize significant short and long term value from the Raydiance assets as Raydiance maintains the ability to quickly scale within the context of sufficient working capital and a stronger balance sheet.

· Large Market Opportunity – The need for precision manufacturing is growing especially given the need for smaller, lighter cheaper consumer devices. The market for laser-based solutions is a subset of the $100 billion industrial manufacturing market and comprised $8.8B in 2014. Worldwide laser sales are projected to increase 6.2% in 2015, reaching a total market size of $9.3B, of which industrial laser material processing is expected to be $2.5B(1). In addition, consumer segment alone is forecast to be a $2.5B market opportunity for precision glass cutting in the next five years.

(1): Strategies Unlimited: “The Worldwide Market for Lasers: Market Review and Forecast 2014”

· World class application know-how – Raydiance has built a best-in-class applications development team that distinguishes the company from all other laser manufacturers. Applications knowledge turns standalone lasers into useful, ready-to-use tools: a fact cherished by Raydiance customers and a primary reason for Raydiance’s market leading position. In addition to building the world’s most commercially reliable fiber-based femtosecond laser, Raydiance has assembled a team of highly skilled optics, material science and machine building expertise that is able to rapidly solve customer problems and provide them a turnkey solution to meet customer requirements.

· World class fiber-based laser design and manufacturing capability – Raydiance possesses unique knowledge in what is required to design, build and service fiber-based femtosecond lasers. The company pioneered the use of real-time computer-controlled pulse stabilization and control, and the amplification techniques to achieve efficient use of fiber for high power, ultra-short pulsed lasers.

· Diversified Base of Customers – Raydiance laser-based systems are used in three primary market segments (medical, automotive and consumer) representing manufacturing application diversity. The diversity also creates cross-selling opportunities between the market segments and customers. Customers are highly dependent on the Raydiance technology today in critical applications where there is no other economical means to produce such high-precision parts is available.

· Broad, highly defensible patent portfolio – The company owns a highly defensible IP strategy, with 33 patents awarded and 20 patents pending in areas related to application development, short pulse technology and power form factor. The company has a long standing history of discoveries and inventions that are pushing the adoption of femtosecond laser technology into a broader set of applications in each of the target market segments.

To learn more about the Company’s technology or products, click on the following links.

1. Precision Machining without Heat – a white paper on the physics of no heat machining.
2. Medical Applications Overview – learn about the economics of femtosecond processing in the medical implantable device market segment.
3. Laser Spec Sheet – an overview of the technical aspects of the key component of Raydiance solutions.
4. R-Drill Spec Sheet – learn how Raydiance packages the needed pieces together to turn a standalone laser into a useful tool.

Safari does not work with the above links

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 Raydiance 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 Raydiance, 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 Raydiance 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 Raydiance Assets. Sealed bids must be submitted so that they are actually received by Gerbsman Partners no later than Thursday,  July 9, 2015 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Raydiance office, located at 1450 North McDowell Blvd., Petaluma, CA 94594. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.

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 $250,000 (the refundable deposit will be held in Raydiance’s legal counsel trust account.). The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

Raydiance reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all of the 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.

Raydiance will require the successful bidder to close within a 7 day period. Any or all of the assets of Raydiance 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 Raydiance Assets shall be the sole responsibility of the successful bidder and shall be paid Raydiance at the closing of each transaction. For additional information, please see below and/or contact:

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

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

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

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