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Posts Tagged ‘balance sheet restructuring’

Terminating/Restructuring Prohibitive Real Estate, License, Payables & Contingent Liabilities

 

Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various balance sheet issues for their technology, life science, medical device, cyber security, solar and cleantech portfolio companies.

These companies were not necessarily in crisis, but had cash (in some cases significant cash reserves) and/or investor groups that were about to provide additional funding. In order to stabilize their Go-Forward-Plan and maximize cash resources for future growth, there were specific needs to address Balance Sheet and Contingent Liability issues as soon as possible.

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

 

Prohibitive Executory Real Estate Leases, Computer and Hardware-related Leases and Senior/Sub-debt Obligations

 Gerbsman Partners was the “innovator” in creating strategies to terminate or restructure prohibitive real estate leases and senior and sub-debt obligations.

To date, we have terminated or restructured $810 million of such obligations for private and public companies, and which has allowed them to return to financial viability.

 

Accounts/Trade Payable Obligations

 Companies in a crisis, turnaround or restructuring situation typically have account and trade payable obligations that become prohibitive for the viability of the company on a go-forward-basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize value based on the reality or practicality of the situation.

 

Software and Technology-related Licenses

 As per the above, software and technology-related licenses need to be restructured/terminated in order for additional capital to be invested in restructured companies. Gerbsman Partners has a significant, successful track record in these areas.

 

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 103 companies in a wide and diverse spectrum of industries. In the process, GP has successfully restructured/terminated over $810 million of real estate executor contracts and equipment lease/sub-debt obligations, and has assisted in over $2.3 billion of financings, restructurings and M&A transactions.

 

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

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

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

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

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 94 Technology, Life Science, Medical Device, Solar, Digital Marketing/Social Commerce companies and their Intellectual Property, through its proprietary “Date Certain M&A Process” and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

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

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GERBSMAN PARTNERS
Phone: Cell: +1 415 505 4991
Email: steve@gerbsmanpartners.com
Web: www.gerbsmanpartners.com
BLOG of Intellectual Capital: blog.gerbsmanpartners.com

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

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

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

About Gerbsman Partners

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

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

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

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San Francisco, November, 2013
“Terminating/Restructuring Prohibitive Real Estate, License, Payables & Contingent Liabilities”
Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various Balance Sheet issues for their technology, life science, medical device and cleantech portfolio companies. These companies were not necessarily in Crisis, had CASH (in some cases significant CASH) and/or investor groups that were about to provide additional funding. In order stabilize their go forward plan and maximize CASH resources for future growth, there was a specific need to address the Balance Sheet and Contingent Liability issues as soon as possible.

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

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

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 79 Technology, Life Science and Medical Device companies and their Intellectual Property,, through its proprietary “Date Certain M&A Process” and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

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

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

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We all know that mergers are not easy. Here is some news in regards to the Oracle/ Sun merger from Daily Finance.

“As expected, the E.U. raised objections to the Oracle (ORCL) buyout of Sun (JAVA) at about the same time that the Department of Justice approved the deal. The E.U.’s objection is based on the large market share that the two tech companies would have in the MySQL software business.

European authorities have been deviling American companies for years. In 2001 they killed the GE (GE) deal to purchase Honeywell (HON), which would have been the crowning achievement of Jack Welch’s tenure at the world’s largest conglomerate. The E.U. has troubled Microsoft (MSFT) and Intel (INTC) over antitrust concerns, and now it has brought up similar issues with Oracle’s plans.

The aggressive stance of the Europeans could threaten other deals in the works, starting with the planned joint venture in the search industry betweenYahoo! (YHOO) and Microsoft. Action on the merger could bring Google’s (GOOG) huge market share in the search industry under scrutiny. Even the Kraft (KFT) deal with Cadbury might be aggressively reviewed — if it ever happens. That transaction would give Kraft a huge portion of the gum and chocolate businesses in Europe.”

Read the full article here.

 

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Here is a market commentary from Financial Times.

“Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply , while government bond yields have gently increased but stayed low and stable.

This recovery in risky assets is in part driven by better economic fundamentals. We avoided a near depression and financial sector meltdown with a massive monetary, fiscal stimulus and bank bail-outs. Whether the recovery is V-shaped, as consensus believes, or U-shaped and anaemic as I have argued, asset prices should be moving gradually higher.

But while the US and global economy have begun a modest recovery, asset prices have gone through the roof since March in a major and synchronised rally. While asset prices were falling sharply in 2008, when the dollar was rallying, they have recovered sharply since March while the dollar is tanking. Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.

So what is behind this massive rally? Certainly it has been helped by a wave of liquidity from near-zero interest rates and quantitative easing. But a more important factor fuelling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates – as low as negative 10 or 20 per cent annualised – as the fall in the US dollar leads to massive capital gains on short dollar positions.”

Read the full story here.

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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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