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SALE OF BARNEV ASSETS

Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Barnev Inc. (www.birthtrack.com) to solicit interest for the acquisition of all, or substantially all of the assets and business of Barnev Inc. and its subsidiary.

Headquartered in Andover, Massachusetts, Barnev Inc. is a leader in developing labor progression monitoring systems during the active stage of labor.  Barnev Inc. is a parent company to Barnev Ltd., an Israeli based R&D company. (Barnev Inc. and its subsidiary, Barnev Ltd, are hereafter referred to collectively as “Barnev” or the “Company”).  Over the past 10 years, the Company has raised approximately U.S. $18mm in equity and debt financing from venture capital firms including aeris CAPITAL and Innomed Ventures.

In addition Barnev Ltd. received R&D grants from the Office of Chief Scientist of Israel (OCS), totaling approximately 7.35 Million New Israeli Shekels, equivalent to about $2.0 million in current U.S. Dollars.   These grants were provided based on approved research plans under the Israeli R&D law in exchange for which a royalty obligation is owed to the OCS on sales of products. In addition, a sale of the Company’s assets may require OCS approval and may trigger the payment of a portion of the sales proceeds to the OCS, or a more extensive royalty, or both. See “OCS Funding and Approvals” below and Appendix C to this letter.

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 Barnev Assets has been supplied by Barnev.  It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

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

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

Any sale of the Barnev 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 Barnev and Gerbsman Partners. Without limiting the generality of the foregoing, Barnev and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Barnev Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements including, without limitation, the OCS requirements described above, 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.

Barnev believes its assets are attractive for a number of reasons:

Barnev’s intellectual property comprises 2 issued US patents, 3 pending US patent applications, 17 issued international patents and 14 international pending patent applications.
– The Company’s BirthTrack was developed under the European Medical Device Directive and ISO 13485 and has received a CE mark.
– Barnev received FDA clearance (K060028) for its BirthTrack system and subsequently for its new accessories (K080672). No other company has received FDA clearance for marketing of a continuous labor progression monitor by automatically measuring cervical dilatation and fetal head station.
– For the purpose of receiving an FDA clearance for marketing in the US the company has completed all the required clinical studies for the continuous measurements of cervical dilatation and fetal head station during the labor process.
– More than 400 patients have been treated utilizing the Company’s  technology in various leading hospital and medical centers in the USA, Europe and Israel.
– Leading obstetricians have actively supported and employed Barnev’s devices.
– The BirthTrack received a major prize for “research excellence” from the Society of Maternal Fetal Medicine in 2005.
– The Company has recently established, with the support of its Scientific Advisory Board, a protocol for a multi center clinical study which is currently in the middle of its administrative stage.
– A new generation of the BirthTrack product is presently at an advanced stage of research and development intended to provide all fetal heart rate monitoring parameters (such as fetal heart rate, and contraction frequency measurements) as well as the measurement of cervical dilatation and fetal head station.

Barnev Company Profile
Incorporated in 2004 in Delaware, Barnev Inc. is the parent company owning 100% of the capital of Barnev Ltd., an Israeli based R&D and manufacturing company. The largest shareholder of Barnev Inc. is aeris CAPITAL which holds approximately 90% of its equity.

Over the past 10 years, Barnev has raised approximately U.S. $18mm in equity and convertible debt financing from venture capital firms including aeris CAPITAL and Innomed Ventures.

Barnev Inc. is predominantly responsible for the Sales, Marketing and Customer Support activities related to the BirthTrack. The Barnev Inc. team, led by Bob Deans, a veteran with over 23 years experience in sales and marketing of medical technology, has significant experience in medical devices in general, and particularly in the introduction of new innovative medical technologies to the U.S. market. Currently the Barnev Inc. team is focused on the implementation of a multi-center clinical study of BirthTrack in the U.S. ( i.e. site agreements, IRB applications, site trainings etc.).   This study is being implemented for the benefit of the Company’s own R&D and marketing reasons and is not mandated by any regulatory agency.

Barnev Ltd., located in Israel, is a wholly-owned subsidiary of Barnev Inc. providing R&D production and regulatory support for Barnev Inc.  Barnev Ltd. currently employs 17 highly qualified people of whom 10 are scientists and engineers. This group is led by Yossi Machtey, a veteran with 31 years of experience in the medical equipment industry. The group is proficient in ultrasound technology and has a very strong team in software sciences including algorithm development and digital signal processing (DSP) designers. The team is also responsible for compliance with governmental regulatory requirements (FDA, CE markings). In 2007 Barnev Ltd. was able to obtain FDA clearance to market the BirthTrack system using a unique 510(k) Denovo approach even though the BirthTrack system does not have a substantial equivalent in its “indication of use”.

The operation and production arm of Barnev is led by Adi Ilan, with 15 years of experience in the medical field. Mr. Ilan has overseen the construction of a complete production floor at the Company’s Israel facilities, including a clean room for production of the BirthTrack disposables, all in conformance to all standards such as ISO 14644 and ISO 13485.

The team also has vast experience in designing pivotal clinical trials and clinical trials management. Barnev has conducted multiple research and regulatory clinical trials in prestigious hospital and medical centers across the globe.
Technology

Barnev developed novel technology for the labor room, combining ultrasound technology, localization technology and software, allowing its system to present the position of sensors in space. This technology is being utilized for the continuous measurement of fetal head station and the cervical dilatation during the active stage of labor. For this application the Company developed proprietary single use sensors, as well as proprietary re-usable ultrasound transmitters. These technologies were integrated within the BirthTrack product which has been cleared by FDA and CE authorities for marketing in the U.S. and Europe, and is currently commercially available around the world. There is no embedded thirdparty  software in Barnev IP that cannot be assigned.  The only software used (other than the Barnev proprietary software) is a standard OEM Windows XP

Impact of Technology on the Market
Approximately 60% of all births in the US become non-progressive and require augmentation or intervention to avoid complications. Currently the assessment of progression is made every two hours through a manual pelvic exam. In addition it requires two consecutive exams to determine whether or not a birth is progressing or not. Added to this protracted time period is the fact that the pelvic exam has been proven through multiple studies to be inconsistent and inaccurate when multiple examiners are involved (a situation which is quite common in the hospital setting). Phelps et al. Am J Ob Gyn 1995; 173:942–945 found that Manual exams performed sporadically are accurate less than 60% of the time. Letic et al. Medical Hypotheses 2003;60:199–201 found that an error of 1 cm in the cervical dilatation within two hours could lead to incorrect conclusions on the progress of labor in 33% of cases.

The fundamental benefit of BirthTrack is that it more rapidly identifies to the clinical caregiver(s) high risk non progressive labors that could lead to fetal and/or maternal complications. For the first time caregivers in the delivery room and elsewhere can see at a glance and at any time the current state of the birth without manual intervention, while maintaining consistent measurement of progression.

BirthTrack is expected to reduce the likelihood of negative consequences of sub-optimum labor management including complications, improper use of labor augmentation and induction medication and risk of infection.  Moreover, it is expected to yield a wealth of archived data for childbirth labor analysis, research and education, with additional clinical experience, perhaps even an early prediction of risk of non-progressive labor.
Future Technologies
The Company is presently engaged in further development of its core technology. This current development is targeted in three separate areas:
1.    A next generation BirthTrack System with  a unique fetal monitor capable of measuring FHR, frequency of contractions (TOCO), Intrauterine Pressure (IUP), Maternal SPO2 as well as Cervical Dilatation and Fetal Head station.
2.    New software expected to reduce the number of internal sensors from 3 to 2,  utilizing the latest technologies developed and patented by Barnev. Early stage development of proprietary algorithms may further reduce the need for internal sensors by calculating CD with a single sensor.
3.    A new central monitoring IT system that is expected to  be capable of merging multiple bedside BirthTrack monitors into one central monitoring station. This system is intended to act as a conduit for data storage and transfer to the hospitals central electronic medical records system (EMR).

Barnev’s Assets
– Patents and Patent Applications
– BirthTrack Technology and Manufacturing Knowhow
– FDA clearance for the BirthTrack system and its disposables
– CE Mark for the BirthTrack system and its disposables
– Intellectual Capital and Expertise
– Product Inventory
– R&D, Manufacturing and Calibration Equipment

OCS Funding and Approvals
In addition to the private capital described above, the Company has received R&D grants from the Office of Chief Scientist of Israel (OCS) totaling approximately 7.35 Million New Israeli Shekels (or about U.S. $2.0 million at current exchange rates).  These grants were provided based on approved research plans under the Israeli R&D law and they are subject to a payment of royalties in an amount ranging from 3% to 5% of the sales prices of products and/or know-how, sold and/or licensed by the Company as stipulated in that law and according to the specific terms of the grants, until such time as 100% of the OCS grants plus interest have been fully recovered.  Assuming the Buyer maintains R&D and manufacturing operations for the BirthTrack system in Israel and neither transfers know-how nor manufacturing rights outside of Israel, then the total amount of royalties that will be payable in a sale transaction would be approximately U.S. $ 2.1 Million. If manufacturing were transferred to a location outside of Israel, the obligation to pay royalties could be increased by up to 200% (or a total royalty of three times the original grant amount, plus interest).

Approval from the OCS will be required in connection with this sale transaction, if the transaction includes one or more of the following scenarios:
(i)            The transaction includes the transfer of know-how from Barnev Ltd. to a non Israeli entity. In such event, the transfer of know-how to a non-Israeli entity shall be subject to transfer fee payment calculated as a percentage of the sale proceeds but not be less than 100% of the OCS grants plus interest.  If OCS approval is granted in this scenario, and the transfer fee payment is made to the OCS, it shall be deemed to include the transfer of the manufacturing rights and no separate payment will be required in connection with the transfer of the manufacturing rights. In addition, following payment of the transfer fee payment, unless otherwise determined by the OCS, the purchaser of the know-how shall be released from the restrictions of the Israeli R&D laws and regulations.
(ii)          The transaction includes the transfer of know-how from Barnev Ltd. to another Israeli entity. In such event, the approval of the OCS is more easily granted in comparison to the transfer of know-how to a non-Israeli entity,  but both the Israeli transferee of the know-how and the foreign purchaser of the assets of Barnev would be required to sign an undertaking vis-à-vis the OCS to comply with the provisions of the Israeli R&D law (the form of such undertaking can be accessed online at http://www.moit.gov.il/NR/rdonlyres/091A5C48-7BDA-42EA-85F2-1F6BDBA27547/0/undertaking.doc).

Such undertaking vis-à-vis the OCS shall be required even if the buyer does not transfer the know-how from Barnev Ltd. to any other entity.  In such event, any future transfer of know-how and manufacturing rights will be subject to the restrictions and requirements of the Israeli R&D law.
(iii)         The transaction envisions the transfer of the manufacturing rights outside of Israel. In such event, unless the transfer constitutes less than 10% of manufacturing assets,  then the royalty rate increases to an amount equal to anywhere from 120% to 300% of the actual amount of the grants received (plus interest) depending on the percentage of manufacturing transferred outside of Israel. The approval of the OCS to transfer the manufacturing outside of Israel (in comparison to the transfer of know-how outside of Israel) is more easily granted by the OCS.
It should be noted that: (i) the OCS approval required in the scenarios stipulated above is discretionary and may be subject to terms and conditions determined by the OCS, in addition to any mandatory transfer payments and/or increased royalties; (ii) the requirement to obtain OCS approval whether in connection with the transfer of know-how or manufacturing rights, shall apply even if such transfer is scheduled to occur following the sale of the assets of Barnev; and (iii) even if all royalties due to the OCS are fully paid, the know-how purchased shall be subject to the Israeli R&D law (e.g. restrictions on the transfer of know-how and manufacturing rights), unless the approval of the OCS is granted with respect to the transfer of know-how described in sub-section (i) above.

This section and Appendix C provide a brief overview to the operation of the OCS and the Israeli R&D law and regulations. Potential buyers are reminded that the foregoing summary and the summary of the Israeli R&D law and regulations law in Appendix C represent mere summaries of the provisions of this law and regulations, and are encouraged to seek their own independent counsel in connection with the operation of and compliance with the Israeli R&D law and regulations. A non-official translation of the Israeli R&D law (not including the applicable R&D regulations and guidelines) can be accessed online at :
http://www.moit.gov.il/NR/exeres/9F263279-B1F7-4E42-828A-4B84160F7684.htm

Key Personnel – Israel
Jonathan Adereth – Acting CEO and Chairman of the Board: Formerly CEO of Elscint, Ltd ( A NYSE medical imaging company ) and Chairman of the board for a variety of medical device companies. Has over 35 years of experience in medical devices.
Yossi Machtey – Director of R&D and CEO of Barnev Ltd.: Mr. Machtey brings to Barnev vast experience in management including over 10 years in management of start-up companies, 13 years experience in leading positions in Elscint Ltd, as the MRI division Marketing Manager and as an R&D project manager. Mr. Machtey holds a graduate degree in biomedical engineering from Case Western Reserve University (Cleveland OH, USA) and an undergraduate degree in mechanical engineering from Ben-Gurion University.
Adi Ilan – Director of Operations: Mr. Ilan has over 12 years experience in various operations & productions positions. Mr. Ilan served as a product manager in Oridion a leading Israeli medical equipment provider of CO2 monitoring devices. He also served as a operations manager in Brainsgate a start-up company in the area of Neuro – stimulation. He is a practical engineer with a degree in Business Administration.
Ofer Barnea  Ph.D. CTO: Dr. Barnea is the past Chairman of the Biomedical Engineering Faculty of Tel Aviv University. His research interests include biomedical measurements, instrumentation, and cardiovascular and physiological systems. He was a member of the Medical Equipment Safety Committee of the Israeli Standards Institute and is an active consultant in the development of medical devices.
Dan Farine M.D. – Medical Advisor: Dr. Farine, an internationally recognized obstetrician, is a professor of Ob/Gyn in the University of Toronto. He earned his medical degree in Tel Aviv University, trained in Ob/Gyn in Toronto and did his fellowship in Maternal Fetal Medicine in Columbia University in NY. He is Board certified in Canada and the US.  Dr. Farine served as Head of Obstetrics and the Maternal Fetal program at Mt. Sinai Hospital in Toronto.

Key Personnel – United States:
Bob Deans – General Manager US operations: Bob joined Barnev Inc. in April 2008 and in August 2009 Bob was made General Manager of U.S. Operations. Bob brings with him over 23 years of medical device, patient monitoring and diagnostic sales & marketing experience with over 10 years of early market development and start-up commercialization expertise. Bob has worked for some of the top companies in the medical device arena including Abbott, Roche, and Bayer. Bob has a BA in Business from Mount Allison University with a double major in Marketing and Economics.

Doug Smith – CFO: Mr. Smith has over 25 years of financial executive experience, including 9 years in the medical device and biotech industries. Prior to joining Barnev, Smith was the CFO for Axya Medical, Inc., a provider of knotless fixation systems for minimally invasive surgery. Doug has also held various senior-level finance positions with OmniSonics Medical Technologies, Insulet Inc., Boston Medical Technologies, and Avicena Group, Inc. Prior to entering the medical device industry, Doug spent 10 years at Thinking Machines Corporation and 7 years at Arthur Andersen & Co.

John Quigley – VP Marketing: Mr. Quigley has 25 years of business experience in diagnostic and biotech sales and marketing. Prior to joining Barnev, John was the Vice President of Sales and Marketing for Matritech, Inc. a biotechnology company focused on the early detection of cancer. In this role, John developed the clinical brand positioning for a proprietary cancer marker, launched the product, and grew sales to $14MM over a period of three years until the company was acquired by Inverness Medical.  John has also held a number of senior level marketing positions with Boehringer Mannheim, Chiron, and Bayer. He has a degree in Biochemistry from Rutgers University.

Barnev’s Board of Directors
Jonathan Adereth: Chairman of the Board,
Haifa, Israel
George Rehm: aeris CAPITAL, Zurich, Switzerland
Frank Muehlenbeck: aeris CAPITAL,
Zurich, Switzerland
Karl Steigele:  independent member, former IBM marketing manager, and consultant, Atlanta, GA, USA

Barnev’s Scientific Advisory Board

Harold Fox M.D.
: Chairman of Obstetrics and Gynecology at Johns Hopkins’ Medical School in Baltimore, MD, U.S.A
Gian Carlo Di Renzo M.D.
: Director of OB/GYN, University of Perugia, Italy
Barak Rosenn, MD: Director, Division of Obstetrics and Maternal-Fetal Medicine, Department of Obstetrics and Gynecology St. Luke’s Roosevelt Hospital Center, NYC, NY, U.S.A.
Dan Farine M.D.: Professor of OB/GYN, University of Toronto, Toronto, Canada

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 Barnev Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence (which will be held in Barnev’s Andover office – Israeli resources will be available), interested parties will be invited to participate with a sealed bid, for the acquisition of the Barnev Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Thursday, October 29, 2009 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at Barnev’s office, located at 138 River Road #104, Andover, MA 01810.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.  Be specific as to the assets desired.   Also, please specify whether you seek to maintain R&D and manufacturing capability in Israel.

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 U.S. $200,000 (payable to Barnev 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. Barnev reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.

Barnev will require the successful bidder to close within 7 business days, which time period may be extended in order to obtain OCS approval and/or any Israeli antitrust authority approval (which may be required depending on the operations and activities of the purchaser in Israel).  Any or all of the assets of Barnev will be sold on an “as is, where is” basis, with no representations or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or similar taxes, if any, relating to the sale of the Barnev Assets shall be the sole responsibility of the successful bidder and shall be paid to Barnev at the closing of each transaction.

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

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

Dennis Sholl
(415) 457-9596
dennis@gerbsmanpartners.com

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

Motti Abramovitz
972 544 774 762
motti@gerbsmanpartners.com

Steven R. Gerbsman
Principal
Gerbsman Partners
Phone: 415.456.0628, Fax: 415.459.2278
Cell: 415.505.4991
steve@gerbsmanpartners.com
thegerbs@pacbell.net
http://www.gerbsmanpartners.com

BLOG of Intellectual Capital http://www.boic.wordpress.com

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Gerbsman Partners has been retained by XTENT, Inc. to solicit interest for the acquisition of all, or substantially all, the assets of XTENT, Inc. (“XTENT”).  The Sale of XTENT’s assets is being conducted pursuant to a Plan of Complete Liquidation and Dissolution which was approved by XTENT’s board of directors on May 11, 2009 and by its stockholders on August 3, 2009 (“Plan of Dissolution”).

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

The information contained in this memorandum relating to XTENT’s Assets has been supplied by XTENT. 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 XTENT, 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 such independent investigations as they or their legal and financial advisors see fit.

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

It is expected that any sale of the XTENT 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 XTENT or Gerbsman Partners. Without limiting the generality of the foregoing, XTENT and Gerbsman Partners and their respective staff, agents, and attorneys,  hereby expressly disclaim any and all implied warranties concerning the condition of the XTENT Assets and any portions thereof, including, but not limited to, 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.

Headquartered in Menlo Park, California, XTENT, Inc. is a medical device company focused on developing and commercializing innovative customizable drug eluting stent systems for the treatment of cardiovascular artery disease.

XTENT believes its assets are attractive for a number of reasons:

XTENT’s Custom NX® drug eluting stent systems are CE Marked and represent:
– the first customizable stent system ever approved for sale
– the longest coronary stent system ever approved for sale
– the first approved stent system to allow treatment of multiple lesions using one catheter
– the first approved stent system to incorporate a post-dilatation feature into the delivery catheter.

Post dilatation is the use of a balloon to further expand a section of a stent after it has been deployed in order to better position that section of the stent against the blood vessel walls.  Other stent systems require the insertion of a separate balloon in order to post-dilatate.

XTENT’s Custom NX drug eluting stent systems received a conditional IDE (Investigational Device Exemption) from the United States Food and Drug Administration.

XTENT’s Intellectual Property includes 31 issued US patents, 57 pending US patent applications, 11 granted international patents and 99 international pending patent applications related to custom-length stent deployment, stent structure, drug eluting balloons and bioabsorbable medical implants.

Custom NX is a differentiated stent and delivery technology
– The ability to tailor the stent to the lesion is unique to XTENT and may offer significant clinical benefits
– XTENT’s segmented stent design allows for improved deliverability, flexibility and conformability
– Treatment of multiple lesions and balloon post-dilatation with a single catheter
– Treatment of long lesions up to 60mm in 6mm increments without the need to overlap
– Compelling clinical data from 248 patients in the CUSTOM I/II/III and PK trials with long term follow-up
– An existing license agreement with Biosensors for Biolimus A9 (BA-9)
– Reduce the number of SKU’s required to stock the cath lab from approximately 50 per company, down to 3

Large and well established drug eluting stent market
– Existing greater than $4.0 billion and growing worldwide drug-eluting stent market
– Existing reimbursement
– Physician base known for rapid adoption of new technologies that provide improved safety/efficacy and/or greater efficiency

Peripheral Stent: XTENT’s peripheral stent technology is a modular customizable nitinol self expanding stent which consists of a series of stent segments. These segments allow the user to customize the length of stent for the lesion treated by controlling the number of discrete segments to be deployed in situ up to 200+mm.

Bioabsorbable Stent: XTENT’s bioabsorbable stent technology has a unique method involving the integration of thermally controlled nanoparticles into the polymer of the stent. Once activated by light, the nanoparticles temporarily allow the stent to become compliant in order to allow for its expansion.

Drug Eluting Balloon: XTENT’s custom stent IP and technology can be applied to a customizable drug eluting balloon system which may offer significant potential benefits versus fixed length drug eluting balloons.  First, XTENT’s sheath protected delivery system protects the balloon’s drug coating as it is delivered to the target lesion. Second, the ability to customize the length and diameter of the stent while in the patient’s artery may reduce the incidence of geographic miss.

XTENT Company Profile

XTENT was founded in 2002 and completed its initial public offering in 2007 raising net proceeds of $68.2 million.  Prior to its IPO, XTENT raised approximately $75 million through private placements of its convertible preferred stock involving leading venture capital firms including Morgenthaler Ventures, Advanced Technology Ventures and Split Rock Partners.

XTENT is a developer of innovative customizable drug eluting stent systems for the treatment of cardiovascular disease. The XTENT® platforms have been designed for use in the heart to treat coronary artery disease, or CAD, and for use outside the heart to treat peripheral vascular disease, or PVD.  The XTENT Custom NX drug eluting stent, or DES, system is the only stent system designed to offer personalized care to today’s CAD patients, and to benefit those delivering their care by improving efficacy and efficiency while reducing costs.

XTENT’s drug eluting stent systems are the only stent systems designed to enable physicians to customize both the length and diameter of the stent at the site of the diseased section of the artery, or lesion.  In addition, XTENT’s stent systems are designed to treat single, multiple, or long lesions with one device, whereas the current generation of drug eluting stents would require multiple stents, multiple balloons and catheter exchanges.

Impact of Technology on the Market
XTENT believes that its customizable stent technology offers advantages over currently marketed fixed length drug eluting stents.
– The Custom NX is coated with a formulation of BA-9 and PLA. BA-9 is the first drug that was developed specifically for the treatment of cardiovascular disease to receive an Investigational Device Exemption from the FDA.  Additionally, PLA is a bioabsorbable material that the body ultimately absorbs over time as the artery heals.
– Using the Custom NX60 for long lesions avoids the need to overlap multiple shorter stents, potentially eliminating stent fracture and reducing inventory for the manufacturer and cath lab.
– Customizing stent length at the site of the lesion may allow for more accurate placement of stents.
– Custom NX is intended to provide faster procedures for physicians (both planning & execution) due to the ability to treat multiple lesions and perform post-dilatation with a single device and reduced exchanges.
– The average DES procedure uses 1.5 stents at an average cost of $2,000 per stent.  Custom NX offers possible cost savings by treating multiple lesions or long lesions with one device.  Potential additional cost savings may be realized by eliminating the need for a separate post-dilatation balloon.

XTENT’s Assets
XTENT has developed a portfolio of assets critical to the development and manufacture of customizable drug eluting stent systems. These assets fall into a variety of categories, including:

– Patents, Patent Applications and Trademarks
– CE Mark for Custom NX drug eluting stent systems
– Conditional Investigational Device Exemption for Custom NX drug eluting stent systems
– A license for Biolimus A-9 and bioabsorbable PLA coating from Biosensors
– Custom built equipment for manufacturing drug eluting stent systems
– Technology and intellectual property related to custom length peripheral stent systems
– Technology and intellectual property related to bioabsorbable stents
– Patient Data from 4 clinical trials involving 248 patients.

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

The Sale of the XTENT Assets is being conducted pursuant to the Plan of Dissolution.  As provided under the Plan of Dissolution, XTENT expects the sale of the XTENT Assets to be completed without any further vote or action by XTENT’s stockholders.

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 XTENT 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 XTENT, 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 XTENT 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 XTENT Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, September 18, 2009 at 3:00 p.m. Pacific Standard Time (the “Bid Deadline”) at XTENT’ office, located at 125 Constitution Drive, Menlo Park, CA 94025. Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached XTENT fixed asset list, Exhibit B attached, may not be complete and Bidders interested in the XTENT Assets must submit a separate bid for such assets. Be specific as to the assets desired. XTENT’s cash and accounts receivable are not being offered for bid as part of the XTENT 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 where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to XTENT, Inc.). The winning bidder will be notified within 3 business days after the Bid Deadline. Unsuccessful bidders will have their deposit returned to them. XTENT reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.

XTENT’s board of directors and its stockholders have previously approved a Plan of Complete Liquidation and Dissolution.  As a result, provided that the Bid conforms to the specifications outlined in this letter, the sale of XTENT’s assets will not require any additional approval of, or action by, the stockholders of XTENT.  XTENT will require the successful bidder to close within 7 business days.  Any or all of the assets of XTENT 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 XTENT Assets shall be the sole responsibility of the successful bidder and shall be paid to XTENT at the closing of each transaction.

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

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

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Gerbsman Partners www.gerbsmanpartners.com has been retained by Pegasus Biologics, Inc. www.pegasusbio.com to solicit interest for the acquisition of all, or substantially all, Pegasus Biologics Inc.’s (“Pegasus”) assets.

Pegasus Biologics, headquartered in Irvine, California, is an emerging growth regenerative medicine company focused on the manufacturing and commercialization of advanced bio-surgical solutions for soft tissue repair and regeneration.

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 Pegasus Biologics’ Assets has been supplied by Pegasus. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

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

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

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

Pegasus believes its assets are attractive for a number of reasons

·       Privately-held regenerative medicine, medical device company – capitalized in Jan 2005.

·       $31.8MM raised through Three Arch Partners, Onset Ventures, Frazier Healthcare Partners, Affinity Capital and others.

·       Has developed and is commercializing a revolutionary bioscaffold comprised of highly organized collagen, sourced from equine pericardium that encourages the healing process by addressing the demands of a challenging biological environment.

·       Core product technology is based on a proprietary processing and sterilization method resulting in a sterile, structurally sound, biologically conductive scaffold that complements soft tissue repair and adds strength to the repair over time. .

·       Known as “flexible crosslinking”, the technology maintains the native collagen architecture, which supports cellular ingrowth and resists enzymatic degradation – ideal for both soft tissue reinforcement as well as chronic wounds.

·       Has obtained exclusive worldwide licenses for the processing and sterilization of biological tissue for use in orthopedic, oral/dental, spinal and neurological, abdominal and thoracic, breast and wound applications.

·       Technology has 6 issued US patents, 5 pending US patent applications and associated International filings.

·       A revenue model consistent with other medical devices that are invoiced at the time of application (surgery).  Current ASP holding at $2200 with attractive gross margins
·       To date, over 10,000 patients have been treated with Pegasus’ products in various orthopaedic and chronic, complex wound applications

·       Received four FDA 510(k) approvals:  For Unite® Biomatrix as a collagen wound dressing (Sept. 26, 2007), for Orthadapt® as a surgical mesh for the repair, reinforcement and augmentation of soft tissues repaired by sutures or suture anchors during tendon repair surgery (Aug 5, 2005 and May 4, 2007), for Duradapt ® as a dural substitute under an IDE, and for Orthadapt® PR (Peek Reinforced), also for the repair, reinforcement and augmentation of soft tissues repaired by sutures or suture anchors during tendon repair surgery (May 5, 2009).

·       Received 1 FDA Investigational Device Exemption (IDE) to evaluate the safety and procedural success of a product called Duradapt® (a version of Orthadapt) for the repair/replacement of cranial dura mater.

·       Inventory of 4000 units valued at $667K based on cost of goods.

Revenue Summary–

Pegasus has been generating revenue since mid 2006 with both Orthadapt and Unite products.  Total revenue summary is as follows:
·     2006 – $2,958,113
·     2007 – $7,323,429
·     2008 – $9,147,515
·     Q1, 2009 – $2,479,987
Pegasus Key Accounts –
·     UCSD Medical Center – San Diego, CA
·     Alexian Brothers Hospital – Arlington Heights, IL
·     Wellstar Cobb Hospital – Marietta, GA
·     Westchester General Hospital – Miami, FL
·     Memorial Hospital of Rhode Island – Pawtucket, RI

Pegasus Biologics Company Profile

Founded in June, 2004, Pegasus is a California based, revenue stage medical device company.  Over the last 4 years, the company has raised $32MM in equity and debt from leading capital venture firms such as Onset Ventures, Frazier Healthcare Partners, Three Arch Partners and Affinity Capital.

Pegasus is becoming recognized as a global leader in bio-surgical solutions for soft tissue repair.  With thousands of successful clinical outcomes, current applications range from the repair, reinforcement and reconstruction of tendons to limb preservation and advanced wound management.

Impact of Technology on the Market
With the growing demand for advanced biologics, Pegasus is well positioned for the future.  An estimated 850,000 orthopedic soft tissue repairs and over 365,000 chronic complex wounds performed annually worldwide support this theory, and the high failure rates of tendon repair reported in the literature indicate an unmet clinical need.  The OrthADAPT® Bioimplant and Unite® Biomatrix collagen-based products are both FDA cleared and CE Marked.

Pegasus Biologics has obtained exclusive worldwide licenses for the revolutionary bio-platform technology developed for the processing and sterilization of biological tissue for use in orthopedic, oral/dental, spinal and neurological, abdominal and thoracic, breast and wound applications.

Pegasus Biologics’ Assets
Pegasus Biologics has developed a portfolio of assets critical to the repair and reinforcement of soft tissues and the treatment of chronic, complex wounds. These assets fall into a variety of categories, including:
·       Patents
·       Product
·       Product designs and prototype
·       Software and control algorithms
·       Manufacturing equipment and fixtures
·       One (1) prospective, multi-center, clinical trial under an FDA investigational device exemption. (Dura)
·       Three (3)  prospective, multi-center clinical studies for marketing purposes (Achilles tendon, arthroscopic rotator cuff, wound)
·       One (1) retrospective study for marketing purposes (open rotator cuff)
·       Current FDA regulatory clearances and CE marks
·       Data from human clinical trials/studies
·       Intellectual capital and expertise
·       Trademarks
·       Domain names

The assets of Pegasus Biologics will be sold in whole or in part (collectively, the “Pegasus Assets”).  The sale of these assets is being conducted with the cooperation of Pegasus. Pegasus and its employees may be available to assist purchasers with due diligence.  Notwithstanding the foregoing, Pegasus Biologics should not be contacted directly without the prior consent of Gerbsman Partners.

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 Pegasus Biologics’ Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Pegasus Biologics’ Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, June 26, 2009 at 3:00 p.m. Pacific Standard Time (the “Bid Deadline”) at Pegasus’ office, located at 6 Jenner Dr, Suite 150 Irvine, CA. 92618.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached Pegasus fixed asset list may not be complete and Bidders interested in the Pegasus Biologics Equipment 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 Pegasus Biologics, 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. Pegasus Biologics reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.

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

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

Steven R. Gerbsman
steve@gerbsmanpartners.com

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Gerbsman Partners has been retained by the Board of Directors of SiCortex, Inc. “SiCortex” or the “Company, to solicit interest for the acquisition of substantially all of SiCortex’s assets, including its intellectual property (“IP”), in whole or in part (collectively, the “SiCortex Assets”)

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 SiCortex 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 Gerbsman Partners (or their respective 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.

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 Gerbsman Partners’ negligence or otherwise.

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

The Company

Founded in 2004, SiCortex is a venture backed High Performance Computer systems company based in Maynard, MA. To date, the company has raised $68.1 million in funding from Flagship Ventures, Polaris Ventures, Prism Ventures, JK&B Capital and Chevron Technology Ventures.

SiCortex’s assets include: patents (granted and pending); proven, energy-efficient computer systems (the company’s core products); sophisticated systems and management software; core engineering team members; advanced simulations; chip design verification; existing and partially complete next generation products such as sub-assemblies, backplanes, racks, fans, cabinets, design tools, testing lab tools and products; software and hardware roadmap; trademarks; customers (including government intelligence agencies); The Pathscale® Compiler Suite, OEM, ISV and reseller relationships; external manufacturing relationships; experienced systems management and sales team; market presence.

Interested parties can acquire SiCortex’s core technology, market presence, sales pipeline, customer base, contacts and vendor lists enabling the purchaser to leverage existing business and customer relationships for future growth. Sales of existing products exceed 50% gross margins.

The sale of SiCortex assets is being conducted with the cooperation of the company SiCortex and its employees and retained consultants will be available to assist purchasers with due diligence and in a prompt, efficient transition. Notwithstanding this offer of assistance, SiCortex should not be contacted directly without the prior consent of Gerbsman Partners or the Board of Directors.

The SiCortex Solution

SiCortex addresses the compelling problem of data center energy constraints head-on, giving it a unique market opportunity in a world where, according to McKinsey & Company, 90% of data centers will run out of power capacity by 2010. SiCortex designs, develops and manufactures the world’s most energy efficient high performance computers (HPC). High Performance computing is typically targeted at academic, research and government agencies looking to run and operate sophisticated science. These organizations are power-constrained in their data centers and are looking for alternative solutions to cut consumption.

The SiCortex solution is a unique family of three computers (Desktop, Department and Division) scaling from 72 to just under 6000 processors in a single, compact machine. The systems consume 60-80% less electricity than comparably capable Intel-based systems (Cray, Dell, HP, IBM, sgi…). SiCortex systems are recognized as a viable alternative to Intel-based systems, and for certain applications, the preferred platform.

SiCortex created the “Green Computing Performance Index” or GCPI that is now used to measure energy efficiency of the world’s top HPC vendors. This objective index is based on industry standard benchmarks and ranks vendors on a performance/watt basis using 18 tests.

The SiCortex software stack comprises optimized Linux, open source libraries, tools and management utilities, all pre-integrated and highly engineered for ease of use and simple system management: a SiCortex system is more like a PC to operate than a typical Linux cluster. “It’s “ready to run”. These machines can be installed and be operational in less than an hour. Competitor systems can take weeks to be operational. All software running on Intel machines is binary compatible and will compile on SiCortex. SiCortex sells its products directly in North America (6 reps, 4 SE’s) and works with resellers in Europe.

Next generation products in development seek to extend SiCortex’s energy-efficiency industry leadership and broaden its market applicability to include financial services, biotech, petroleum, computer aided engineering and digital media. These next generation systems are projected to deliver a 90% energy efficiency advantage to the internet (LAMP) stack, enabling web-based businesses to increase web traffic capacity while slashing energy costs and reducing space, cooling and support costs.

SiCortex Customers and Partners

Customers include: US Government Intelligence agencies, Columbia University, MIT, Purdue, U of Michigan, U of Maine, Cambridge University, University of Colorado, GE, Booz Allen, Lockheed Martin, Argonne National Labs, NASA, and many more. SiCortex has reseller agreements in the United Kingdom with Streamline Computing, France and Nordic region with Clustervision and Germany with MegWare. SiCortex has porting arrangements with a growing number of Independent Software Vendors (ISV’s).

KEY POINTS – Why SiCortex Assets are Attractive

-Proven, delivered technology with an immediate top line revenue and performance improvement for customers looking for multi-core, highly scalable compute power with unparalleled energy efficiency.

-Market segments include Government agencies, Academia, research institutes, manufacturing, aerospace, moving into financial services, biotech, petroleum exploration/reservoir management, CAE, digital media and internet hosting…

-Over 300 codes, libraries, and applications run on the SiCortex platform with an applications engineering team porting more each week.

-Growth rate in Q1 2009 of 30% over previous quarter, 100% over Q1 2008

-75 computers delivered to customers, all running at 99% uptime with no returns and no support problems.

-Unique “system on a chip” design for elegance, efficiency and reliability

-Currently operating with >50% gross margins

-Patents support the unique technology. 1 issued, 12 pending. These patents center around the unique communications architecture built into the machine (no wires or cables) that provides for <1 microsecond access time to over 5800 processors.

-The systems fit right into existing data centers or even your office. Many customers are “tapped out” of power in their data centers; because of the machine’s efficiency, customers are able to operate our computers in small labs, hallways, even a closet (Columbia University). The unique airflow of the machine allows for this flexibility.

-Supports all Linux software, Gigabit Ethernet, Infiniband, multiple files systems (Lustre and NFS), supports a plethora of I/O devices as well as up to 70 PCI express slots. Supports flash memory.

SiCortex Product Assets are Substantial
A SiCortex system embodies numerous assets and IP. Principal assets include:

(1) Node chip: The SiCortex node chip is a proprietary design that incorporates all of the hardware elements needed for a high performance cluster computing node, except for commodity DRAM.

(2) CPU Modules: Node chips are mounted on CPU modules, which are printed circuit boards designed by SiCortex that interconnect the chips and provide power, mechanical support, system monitoring support, and attachment points for standard PCI Express I/O modules.

(3) Processors: the processors on the node chip are derived from the MIPS R5000, with SiCortex designed performance enhancements added.

(4) Level 1 and Level 2 cache: Each processor on the SiCortex node chip has a 256Kbyte Level 2 cache and a 64 Kbyte L1 cache, both designed by SiCortex. The on-chip hardware interconnect and coherency protocol that link the processor caches together was also designed by SiCortex. Both the Level 1 and Level 2 caches contain ECC protection to improve system robustness at large scale.

(5) Interconnect: the Node chips are interconnected by a proprietary fabric based on the Kautz graph topology. The fabric delivers industry-leading throughput and latency, and is implemented by a combination of switching elements on node chip, wiring on the CPU module, and and a proprietary backplane that interconnects the CPU modules.

(6) DMA Engine and microcode: the DMA engine is a custom microprocessor designed by SiCortex and optimized to support standard interprocessor communication protocols. The microcode that runs on the DMA engine supports primitive operations that are used by a wide range of communication libraries (see below).

(7) Communication Libraries: SiCortex has extensively modified and optimized numerous open source interprocessor communication libraries to take advantage of the microcode and hardware support for fast communication that is available in the DMA engine and the hardware interconnect. These include MPI, SHMEM, GASnet (which supports the UPC, coarray FORTRAN, and other parallel languages), the Lustre Network Device, and the Buffered Message interface (which supports PVFS, the Parallel Virtual File system). Outside developers are extending this work to build other libraries such as the Aggregate Remote Copy Interface (ARMCI).

(8) I/O: Every node chip includes an I/O port, compatible with third party interfaces that conform to the PCI Express standard.

(9) System software: The SiCortex system Linux kernel, commands, and libraries provide standard software interfaces that make optimal use of proprietary hardware. In addition to optimizing the Linux software base for SiCortex systems, SiCortex has added documentation, integration, and verification testing that improves the robustness and usability of the open source distribution.

(10) Packaged math libraries: The SiCortex development environment includes numerous widely-used software libraries that have been pre-built and packaged for use by application developers. The current suite of packaged libraries includes PETSc, GOTO BLAS, Atlas BLAS, SPRNG, FFTW-2, LAPACK, FFTW-3, BLACS, ScaLAPACK, GSL, NETCDF, HDF5, and GMP.

(11) SiCortex Optimizing Compiler Suite: The SiCortex optimizing compiler suite is based on intellectual property obtained through the acquisition of Pathscale LLC in 2008 (prior to the acquisition, Pathscale had been developing compiler software under contract to SiCortex). The SiCortex Optimizing Compiler Suite supports C, Fortran, and C++. All of the optimization steps in the compiler have been extensively tuned for the SiCortex architecture.

(12) GCC Tool Chain: SiCortex has adapted the open source GCC tool chain to support its systems, including modifications to the compiler and linker to enhance the performance of compiled code.

(13) Optimized Math Libraries: In addition to the packaged libraries, the SiCortex development environment inlcludes several libraries that have been hand-tuned for optimal performance on SiCortex systems. These include standard libraries for math functions (both scalar and vectorized), string manipulation, and performance-critical functions such as memory copy. These libraries are available to application developers and (where appropriate) used by the GCC tool chain and the SiCortex Optimizing Compiler Suite.

(14) Debugging tools: The SiCortex development environment includes several debugging tools, including the Gnu Debugger (GDB), a stack backtrace tool, and several options for diagnosing memory usage problems.

(15) Performance profiling tools: The SiCortex system supports a powerful set of performance profiling tools that support analysis and correction of problems that affect scalability. These tools are based on facilities inside the node chip that count events such as cache misses, CPU pipeline stalls, interprocessor messages, and IO operations.

(16) Independent Software Vendor (ISV) packages: SiCortex systems support a growing suite of packaged software available from third party developers. Today, packages include the TotalView debugger, the Tau and Vampir performance analysis tool set, and the MOAB resource management system.

(17) System Service Processor (SSP): The system service processor is a commodity X86 server that runs SiCortex-developed software that manages the system. The software includes utilities that control bootstrap, restart, and shutdown, along with software that monitors the system, sends alerts, controls the cooling subsystem, and triggers shutdown under extreme conditions such as room air conditioning failure.

(18) MSPnet: The Management Service Processor network is an Ethernet that links the System Service Processor to all of the hardware elements in the system, including power supplies, fans, temperature sensors, and the CPU Modules. MSPnet includes processors and software that run on each CPU module that monitor and control the Node Chips and on-board power distribution.

(19) Software Distribution: Distribution of system software on SiCortex systems is managed by a set of software utilities that, under the control of the system administrator, automatically fetch and install software updates from a SiCortex-maintained site on the Internet. When necessary, these utilities are also capable of deinstalling software updates.

(20) Cabinet: SiCortex systems come in three different cabinet types, ranging in size from a deskside unit that houses 72 processors to a 5′ X 5′ cabinet that houses 5,832 processors. Each cabinet includes a chassis that holds the CPU modules, one or more fan trays that cool the system, a power supply that converts computer room power to the voltages needed by the components in the cabinet, a system service processor, and other elements that support system management and I/O.

(21) Diagnostics suite: SiCortex systems come with a diagnostics suite that is used in several settings including manufacturing test, burn-in prior to shipment, and isolation of hardware faults in the field.

SiCortex experienced chip development team

SiCortex has been able to compete with teams from Intel, AMD and others 20 times the size of SiCortex by designing its own processor. SiCortex has been able to include everything except the memory. The capabilities are to include the memory controllers, a PCI Express interface, a DMA engine and even a slice of the network switch. The objective is to implement an entire cluster by iterating a single chip plus a couple of DIMMs. This has big cost savings due to size, performance, and power-consumption benefits. Not only does SiCortex believe this is cheaper, the Company is able to earn the gross margin on the CPU chip, instead of paying it to Intel or AMD.

The Company does not do full-custom design. SiCortex focus is on doing ASIC development using standard cell libraries and synthesis tools. In a given technology the clock rate is therefore lower, but the company compensates for that with more cores, and the lower clock rate is the key to low power consumption–2x the clock rate equals about 6x the power consumption… SiCortex only designs logic where the company can add value–the CPU pipeline, the cache coherency hardware, and the communication protocol hardware. Intel and AMD typically do everything in-house.

Less than 20% of the area of one of SiCortex chips is designed by the company. SiCortex’s chip team has the domain expertise to select and integrate commercially-available IP. The SiCortex chip team consists of 2 architects, 8 designers, and 20 verifiers (over half of whom are contractors). Their value is that without this key Intellectual Capital, SiCortex would have a lower-communications-performance, lower-margin, larger, higher-power-consumption product that would be much less well-differentiated from products that rely on purchased x86 CPUs and their supporting chipsets.

In summary, the SiCortex approach is most similar to that of IBM’s Blue Gene family, except oriented to the bottom 50,000 users, not the top 500.

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, as well as the due-diligence “war room” documentation (“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 SiCortex 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 SiCortex, Inc. 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 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 in a sealed bid process, for the acquisition of the SiCortex Assets. Sealed bids must be submitted so that it is actually received by Gerbsman Partners no later than, Thursday, June 25, 2009 at 2:00 p.m. (Eastern Daylight Time) (the “Bid Deadline”) at SiCortex office, located at Three Clock Tower Place # 210, Maynard, MA 01754. Also, please forward to all bids to steve@gerbsmanpartners.com

Bids should identify those assets being tendered for in a specific and identifiable way.
The attached SiCortex fixed asset list may not be complete and Bidders interested in the SiCortex Equipment must submit a separate bid for such assets, Exhibit B. 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 SiCortex, Inc.). The winning bidder will be notified within 48 hours of the Bid Deadline. Non-successful bidders will have their deposit returned to them.

SiCortex reserves the right to, in its sole discretion, accept or reject any bid, credit bid all or part of its debt, modify bidding procedures, or withdraw any or all assets from sale. SiCortex will require the successful bidder to close within a seven-day period. Any or all of the assets of SiCortex 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 SiCortex Assets shall be the sole responsibility of the successful bidder and shall be paid to SiCortex at the closing of each transaction…

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

Steven R. Gerbsman
steve@gerbsmanpartners.com

Other sources in regards to SiCOrtex: Cnet, MassHighTech, WBJournal, Boston Globe, TMCnet, GreenTech Media, NetworkWorld, GigaOm, NewYork Times.

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