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

Further to Gerbsman Partners sales letter of February 20,2019 regarding the sale of certain assets of TrueFacet, Inc. (“TrueFacet”), I am attaching a link below for updated information power point regarding the Assets and Intellectual Property of TrueFacet for interested parties bidding on the assets and IP of TrueFacet, TrueFacet’s Data Room due diligence information list and a draft Asset Purchase Agreement (“APA”). 

https://www.dropbox.com/s/fra03q5w3p2ozmg/TF_Deck_2019.pdf?dl=0

Prior to the bid date of March 22, 2019, I would encourage and recommend that all interested parties have their counsel speak with Salil Gandhi Esq., counsel to TrueFacet, to discuss any questions or comments of a legal nature relating to the transaction.   Salil is available at 212 813 8866 salilgandhi@goodwinlaw.com.

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit. 

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

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

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

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract, nor does it purport to contain all information that may be required or relevant to a recipient’s evaluation of any transaction and recipients will be responsible for conducting their own investigations and analysis.

The information contained in this memorandum relating to the TrueFacet Assets has been supplied by TrueFacet. It has not been independently investigated or verified by Gerbsman Partners, its agents or any other party.

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

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

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

Except as otherwise noted, this memorandum speaks as of the date hereof.  The delivery of this memorandum should not and does not create any implication that there has been no change in the business and affairs of TrueFacet since such date.  Neither TrueFacet nor Gerbsman Partners, or their respective staff, agents and attorneys, undertakes any obligation to update any information contained herein.

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.

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be required to sign a Non-Disclosure Agreement (attached hereto as Attachment A) to have access to key members of management and intellectual capital teams and 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 acknowledges and agrees to the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the TrueFacet 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 TrueFacet 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 TrueFacet 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 all or part of the TrueFacet Assets. Each sealed bid must be submitted so that it is received by the Company no later than Tuesday, March 22, 2019 at 3:00pm Eastern Daylight Time (the “Bid Deadline”) at TrueFacet’s office, located at 530 7th Avenue # 1502, New York, NY. 10018.  Please also email steve@gerbsmanpartners.com with any bid.  For additional information regarding bid requirements and considerations, please contact Steve Gerbsman at steve@gerbsmanpartners.com.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000 (payable to TrueFacet, Inc.).  The deposit should be wired to TrueFacet’s attorneys (information will be provided).  The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by TrueFacet counsel.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder. 

TrueFacet is free to conduct the sale process as it determines in its sole discretion (including, without limitation, terminating further participation in the process by any party, negotiating with prospective purchasers and entering into an agreement with respect to a sale transaction without prior notice to you or any other person) and any procedures relating to such transaction may be changed at any time without prior notice to you or any other person.  For greater certainty, TrueFacet reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

TrueFacet will require the successful bidder to close within 7 business days from the Bid Deadline. Any or all of the assets of TrueFacet 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 other taxes, if any, relating to the sale of the TrueFacet Assets shall be the sole responsibility of the successful bidder and shall be paid to TrueFacet at the closing of each transaction. 

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

 

Steven R. Gerbsman                                           

steve@gerbsmanpartners.com 

 

Ken Hardesty

ken@gerbsmanpartners.com 

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

Further to Gerbsman Partners sales letter of February 20,2019 regarding the sale of certain assets of TrueFacet, Inc. (“TrueFacet”), I am attaching a link below for updated information power point regarding the Assets and Intellectual Property of TrueFacet for interested parties bidding on the assets and IP of TrueFacet and TrueFacet’s Data Room due diligence information list. 

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

I will be sending out a draft Asset Purchase Agreement “APA” in a couple of weeks prior to the bid date of March 22, 2019.

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

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

 

IMPORTANT LEGAL NOTICE

The information in this memorandum does not constitute the whole or any part of an offer or a contract, nor does it purport to contain all information that may be required or relevant to a recipient’s evaluation of any transaction and recipients will be responsible for conducting their own investigations and analysis.

The information contained in this memorandum relating to the TrueFacet Assets has been supplied by TrueFacet. It has not been independently investigated or verified by Gerbsman Partners, its agents or any other party.

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

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

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

Except as otherwise noted, this memorandum speaks as of the date hereof.  The delivery of this memorandum should not and does not create any implication that there has been no change in the business and affairs of TrueFacet since such date.  Neither TrueFacet nor Gerbsman Partners, or their respective staff, agents and attorneys, undertakes any obligation to update any information contained herein.

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.

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be required to sign a Non-Disclosure Agreement (attached hereto as Attachment A) to have access to key members of management and intellectual capital teams and 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 acknowledges and agrees to the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the TrueFacet 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 TrueFacet 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 TrueFacet 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 all or part of the TrueFacet Assets. Each sealed bid must be submitted so that it is received by the Company no later than Tuesday, March 22, 2019 at 3:00pm Eastern Daylight Time (the “Bid Deadline”) at TrueFacet’s office, located at 530 7th Avenue # 1502, New York, NY. 10018.  Please also email steve@gerbsmanpartners.com with any bid.  For additional information regarding bid requirements and considerations, please contact Steve Gerbsman at steve@gerbsmanpartners.com.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000 (payable to TrueFacet, Inc.).  The deposit should be wired to TrueFacet’s attorneys (information will be provided).  The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by TrueFacet counsel.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder. 

TrueFacet is free to conduct the sale process as it determines in its sole discretion (including, without limitation, terminating further participation in the process by any party, negotiating with prospective purchasers and entering into an agreement with respect to a sale transaction without prior notice to you or any other person) and any procedures relating to such transaction may be changed at any time without prior notice to you or any other person.  For greater certainty, TrueFacet reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

TrueFacet will require the successful bidder to close within 7 business days from the Bid Deadline. Any or all of the assets of TrueFacet 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 other taxes, if any, relating to the sale of the TrueFacet Assets shall be the sole responsibility of the successful bidder and shall be paid to TrueFacet at the closing of each transaction. 

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

Steven R. Gerbsman                                           

steve@gerbsmanpartners.com 

Ken Hardesty

ken@gerbsmanpartners.com 

 

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SALE OF TrueFacet, Inc. 

Gerbsman Partners – http://gerbsmanpartners.com – has been retained by TrueFacet, Inc. (“TrueFacet”, or the “Company”) (https://www.truefacet.com), to solicit interest for the acquisition in whole or in part of all or substantially all of TrueFacet assets, including its intellectual property (“IP”) and its experienced team that has deep domain knowledge and technology expertise (collectively, the “TrueFacet Assets”).

Headquartered in New York City, TrueFacet is the trusted certified pre-owned marketplace for jewelry and watches, where people can shop & sell with confidence knowing every piece is price optimized and guaranteed to be authentic. TrueFacet has over 80K SKUs of top branded supply by Rolex, Cartier, Tiffany, and more available for purchase on its site. The company is also the first to partner with the major jewelry and watch brands including Longines (Swatch Group), Zenith, and over 30 others.

The TrueFacet team has deep relationships with major jewelry and watch brands, and the expertise required to source supply globally in an industry where supply is tough to get.  Access to this supply, combined with the systems and technology platform the team has built since its founding in 2014, constitute the foundation from which rapid growth in this emerging category is possible.

TrueFacet derives revenue from selling jewelry/watches to buyers and allowing consumers to trade-in via TrueFacet’s trade-in program. TrueFacet earns a take rate (commission) when an item sells. In the trade-in program, TrueFacet earns a commission on the items being traded in as well as the one being sold.

Sales for 2018 were approximately $32M and in 2017 were $40M. Net revenue in 2018 was approximately $4M and in 2017 was $4.6M.

TrueFacet has ~$500M of watches and jewelry available for purchase on its site with almost no capital investment in inventory. TrueFacet invests its capital in technology and marketing.

TrueFacet has raised approximately $25 million from leading institutional investors including Maveron, Freestyle Capital, Khosla, Social Leverage, Joe Montana’s Fund, Blue Scorpion, Leon Capital Group, and others. TrueFacet also has approximately $2M in venture debt from WTI.

IMPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an offer or a contract, nor does it purport to contain all information that may be required or relevant to a recipient’s evaluation of any transaction and recipients will be responsible for conducting their own investigations and analysis.

The information contained in this memorandum relating to the TrueFacet Assets has been supplied by TrueFacet. It has not been independently investigated or verified by Gerbsman Partners, its agents or any other party.

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

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

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

Except as otherwise noted, this memorandum speaks as of the date hereof.  The delivery of this memorandum should not and does not create any implication that there has been no change in the business and affairs of TrueFacet since such date.  Neither TrueFacet nor Gerbsman Partners, or their respective staff, officers, directors, agents and attorneys, undertakes any obligation to update any information contained herein.

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

SUMMARY OF HISTORICAL INFORMATION

TrueFacet was founded in 2014 with the goal of building the first online platform where buyers receive authenticated pre-owned jewelry & watches at a fair price and sellers can sell their items knowing they will get a great service and value back.

After launching in mid-2014, TrueFacet has experienced strong sales growth and recognized awareness.  Sales grew over 2.4X annually from 2015 to 2017 and TrueFacet has been recognized by top press including NY Times, WSJ, Financial Times, TechCrunch, WWD, and been featured on TV in outlets including Bloomberg, WSJ Live, Fox, and E News.

TrueFacet has become a leader in supply driven by its unique technology that can import supply efficiently and also process it at scale. It has also been the first online platform to partner with major jewelry & watch brands for pre-owned.

In 2018, sales dipped to approximately $32M from $40M in 2017. This was primarily due to the Paid Google marketing channel becoming inefficient driven by Google removing HHI targeting capabilities and an increase in media costs. Paid Google was one of TrueFacet’s key revenue channels and TrueFacet pulled back on it while building new demand channels, which takes time.  These new channels include partnerships such as with eBay and Walmart, new branding strategy (which can be launched with capital) and partnership with stores.

This started happening while TrueFacet was raising another round of capital in 2018. Because TrueFacet was unable to raise the amount of equity capital required to continue as an independent company, the business is being sold.

During the last 4 months (Nov 2018 – Feb 2019), TrueFacet’s reduced marketing spend has become significantly more efficient at driving topline sales. From November 2018 to date, return on ad spend has increased to 11X from 5.2X in the same period a year ago. There is an opportunity here for the right buyer to leverage TrueFacet’s unique platform and efficiency to grow revenue substantially.

Target Market:

There is a large jewelry and watch market with favorable tailwinds, with a market size estimated at $65B and YoY market growth of 7% (Source Bain & Company “Luxury goods worldwide market study, October 2017” report. YoY growth represents 2016 – 2017E).

Offline retailers and the traditional jewelry and watch brands are not reaching the next generation of digital consumers. The industry has been slow to adapt to digital and the brands are not fully penetrating the US market to reach consumers in a relevant way.

We believe that the next emerging market for this industry is digital and within the United States.

TrueFacet is well positioned in the fast growing pre-owned market trend to be a future leader in re-creating the way people shop and sell luxury. The younger generation is not walking into stores as much anymore. They want pre-owned because it holds its value better and they appreciate an experience that is relevant to them. No one owns the traditional jewelry and watch market today. With adequate capitalization or as part of a larger organization that already acquires customers efficiently, TrueFacet has the potential to become the category leader.

The consumer currently faces many issues when shopping or selling jewelry/watches, including: 35% of supply is either counterfeit or of poor quality; an absence of price transparency and 82% of sellers aren’t sure what their pieces are worth.  Overall, the experience is broken for customers and very opaque.  TrueFacet’s process and the technology that drives it, solves each of these issues by authenticating supply, validating pricing, and providing customers a great experience.

Customers: 

TrueFacet’s customers are: 1) on average 35 years old, 2) 57% female / 43% male, and 3) 91% are U.S. buyers. TrueFacet prides itself on its ability to leverage unique content to cater to the younger generation of consumers, who are an important target as the older generation ages out of purchasing in the category, and targets the mass market of jewelry & watch buyers.

Revenue Model:

The TrueFacet revenue model includes:

  1.  Take rate (commission) on items that sell. TrueFacet ended 2018 at a 16.99% take rate, up from a 15.51% take rate in 2017.
  2.  Trade-ins. When someone trades in an item they own to get another item on TrueFacet, revenue is made on both the item being traded in and the one being purchased. On average, TrueFacet’s take rate on trade-ins in 31%.
  3.  Sales for 2018 were approximately $32M and in 2017 were $40M. Net revenue in 2018 was approximately $4M and in 2017 was $4.6M.

Demand Channels:

  • The primary paid marketing sales channels for TrueFacet have been:

o   Paid Social: TrueFacet creates unique content and video to market to target customers via Facebook, Instagram, and other video / content channels. Using data around customers and behavior data, TrueFacet has been able to efficiently acquire customers from this strategy.

o   Paid Google: Search and google shopping was a key channel for over three years for TrueFacet. This is the channel that TrueFacet pulled back on in 2018, as Google removed targeting capabilities based on HHI, other changes, and an increase in media costs led it to be inefficient at scale. This became a larger macro issue and was ultimately the driver of the lower sales in 2018. Spend on Google is much lower now and TrueFacet has developed other channels which have the potential to grow going forward.

o   Re-targeting: Leveraging user behavior to target consumers digitally.

  • The non-paid channels are:

o   Email: This includes both daily email sends and behavioral based targeting based on TrueFacet’s unique data set on consumer behavior. This data is leveraged for segmentation targeting and driving a relevant experience via email.

o   Organic / Direct: SEO continues to grow YoY for TrueFacet driven by unique in-house content that is created around the brands, videos, and technical optimizations on-site.

o   Social: Instagram, Facebook and other social areas continue to be a source of referral traffic and brand building. The unique content from TrueFacet is delivered via these channels to build brand.

  • Strategic demand partnerships:

o   TrueFacet has been partnering with companies that have strong demand, such as eBay and Walmart to use the supply and experience TrueFacet has acquired and built to generate sales and build awareness of TrueFacet’s brand.

o   TrueFacet has also launched partnerships with retailers whereby the inventory that TrueFacet has can be offered offline at the retail partner’s stores or through the retailer’s online site, described as “powered by TrueFacet”). The first of these partnerships was Stephen Silver Fine Jewelers in Menlo Park, CA. Also, TrueFacet partnered with a growing jewelry brand called Messika, and powers e-commerce for them.  TrueFacet believes such partnerships represent a large growth opportunity.

TrueFacet’s key moats are supply, technology automation, and strategic brand partnerships, each of which is described below.  In combination, they power TrueFacet’s unique flywheel of buying and selling, driving customer lifetime value. 

Supply

  1. Supply has grown over time. From 2016 to 2018, TrueFacet’s average number of SKUs grew from 48K to over 100K.  In early 2019, TrueFacet began a process to optimize for quality and now maintains over 80K SKUs of top branded pieces.
  2.  The supply comes from wholesalers, retailers, consumers, and the brands themselves. TrueFacet currently has over 4,000 sellers, with approximately 10% coming from overseas (EU and Japan, as Japan is a large pre-owned jewelry market).
  3.  TrueFacet carries product by top brands. To give a brief overview of some of the brands and their SKU count today:

o   20K+ Rolex

o   5K+ Tiffany & Co.

o   4K+ Cartier

o   2K+ Omega

o   1K+ David Yurman

Unique Technology which drives supply, authentication, and quality control

  1. We have data feeds and API hooks to automate much of the supply coming into TrueFacet from business sellers (e.g. retailers, wholesalers). We also built custom tech here that can feed in products efficiently.
  2.  Expert authentication of jewelry and watches in-house and via an appraisal network of experts in specific brands and categories, including vintage. We built a network of appraisers around the country and are able to route products efficiently for verification before a buyer receives their order. This process is scalable and we have been able to do this for less than 0.20% of our margins.
  3.  Automation of quality control when processing jewelry/watches that go live. We call this “Auto QA”.
  4.  Auto QA is a system designed to identify and extract relevant product details from loosely structured and error prone data. This technology allows us to process 10s of thousands of items per week, as needed, and automatically check details, flags keywords on authenticity, pricing, and images and take a majority of them live for sale on the site. This system learns and improves over time as the system becomes smarter in detecting certain attributes of incoming pieces.

Brand Partnerships 

  1.  TrueFacet has officially and directly partnered with nearly 40 jewelry and/or watch brands including the Swatch Group (to begin with Longines), Zenith, LeVian, Messika, Raymond Weil, and more.
  2.  Have the first-ever certified pre-owned program with major brands (e.g. Longines, Zenith, and recently received permission from Breitling) where brands offer a one or two-year warranty on items purchased by TrueFacet customers.  This game-changing program cannot be found anywhere else online.
  3.  TrueFacet provides unique data to brands giving them insights on their digital consumer, how they perform on a market/city level, secondary market pricing, and competitive analysis.

Intellectual Property and Assets

  • The TrueFacet ‘mark’
  • The URL: TrueFacet.com
  • Unique technology:

o   Supply importing and data feeds

o   Supply and quality check processing automation

o   TrueFacet marketplace platform where you can buy, sell, make an offer, and trade-in

  • Unique Data on customers, brands, categories, market pricing, and more.
  • High valued customer base of 30K+ customers/transactions.
  • Valued supply base of 80K+ jewelry & watches sourced from 4K+ sellers globally.
  • Strategic partnerships with almost 40 jewelry & watch brands.
  • Increasing margins on take rate and contribution, which continue to grow.
  • Experienced team with deep domain expertise and tech knowhow that can create a category winner.

THE FOLLOWING FINANCIAL DATA IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.  PAST PERFORMANCE MAY NOT BE INDICATIVE OF FUTURE RESULTS.  THIS INFORMATION SHOULD NOT BE RELIED UPON TO MAKE FUTURE PERFORMANCE PROJECTIONS OF ANY KIND.

 

Why TrueFacet’s assets are attractive:

During the three years from 2015 thru 2017, TrueFacet grew topline sales by over 2.4X annually while increasing the margin on items sold from 12% in 2015 to 17% in 2018.   TrueFacet has come be recognized as a leader in the pre-owned trend for jewelry and watches both in the industry and with consumers.

However, recent capital constraints have made it necessary to sell TrueFacet’s assets. The acquisition of these assets can enable the purchaser to realize significant short and long term value. With adequate capital, or as part of a larger organization that already acquires customers efficiently, TrueFacet’s supply, its strategic brand partnerships, and its technology platform can enable rapid revenue growth.

 

  1. Passionate and Experienced Team: Led by key management (see in management details attached), the team has a combined 50+ years of experience in jewelry & watches with a knowhow of how to operate in this industry. Furthermore, the team is very driven and passionate about building the global leader online for jewelry & watches. Also, the majority of the company does not come from the industry and are experts in data driven marketing, tech, data analytics, and optimizing mobile/web online growth. This team combination is unique in building a category leader and key leaders/employees are important in driving the below asset.
  2. Robust Growth: The platform hasgrown strongly since its inception in late 2014Sales growth average 2.4X year over year from 2015 through 2017. In 2018, sales growth declined by 20% primarily because the google channel became inefficient. TrueFacet has begun to start and develop other demand channels, but have not had the appropriate amount of time or capital to mature.  Average order value grew from $1,900 in 2015 to $3,100 in 2018.  Rake rate grew from almost 12% in 2015 to almost 17% in 2018.
  3. Supply:  80K+ SKUs of the most sought after brands from 4,000+ sellers in the US, EU, and Japan. Majority is from the US.   TrueFacet continues to grow its supply base from retailers, consumers and the brands themselves.   A key differentiating factor for TrueFacet is its ability to get supply from consumers’ closets.  Helping them sell what they no longer wear, creates the liquidity needed to buy something new, creating a new revenue source for the industry. TrueFacet has the tools/systems to scale this virtuous cycle of consumer behavior.
  4. Technology Automation: TrueFacet built unique tech in-house to process supply for quality before it goes live for sale. This technology uses text search/scanning, image recognition, and fuzzy matching to get items live on the site.  The technology checks the following attributes: Brand, Model, Reference, Color, Metal, Gender, Size, Gemstones, Image quality, Watch movement, and Watch case. Each of these attributes is assessed automatically based on different criteria and matching of our database. The system also gets smarter over time as we learn via more data.  We can provide further details on this technology.  Supply on-boarding automation and data feeds.  TrueFacet has created syncs for eBay to let sellers pull in their supply with one-click, data feeds / API hooks into seller databases/sites to import their supply into TrueFacet, and other methods. TrueFacet’s tech is able to customize syncing inventory into TrueFacet.
  5. Data Intelligence:  TrueFacet collects and stores unique data insights around consumer behavior, brands, categories, market/city level data, and secondary market pricing for jewelry/watches. This data is valuable and can help build a unique experience for consumers and provide value for retailers / brands.    We can share further details as requested on this data.
  6. Highly Valued Customer Base:  Over 30K customer transactions who are spending on high ticket purchases. It is a highly valued customer base that can buy, sell, or trade-in and also drives strong lifetime value.
  7. Strategic Brand Partnerships in Place:The Company has direct partnerships with several jewelry & watch brands which include Zenith, Raymond Weil, Longines, LeVian, Messika, and more. Including the first-ever certified pre-owned partnership with key brands where they offer a 1 or 2-year warranty on their product on TrueFacet.
  8. Opportunity for Future Growth: TrueFacet has mainly driven demand side growth based on online marketing on channels including paid social, paid search, re-targeting, and programmatic video display. TrueFacet has extensive learnings here that have led to more efficient marketing today and which can continue to improve and grow through:   A new brand driven marketing strategy which includes out of home, scaling up video, and influencer marketing. These show signs of early potential, but due to lack of capital, have not been pursued in earnest yet. The brand driven strategy can be seen by request.  Through further investments in the trade-in program and partnerships around this to drive trade-in growth.

Please see attached –  TrueFacet Board of Directors &  Management Team at TrueFacet (for information purposes only):

The Bidding Process for Interested Buyers

Interested and qualified parties will be required to sign a Non-Disclosure Agreement (attached hereto as Attachment A) to have access to key members of management and intellectual capital teams and 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 acknowledges and agrees to the bidding procedures described herein; (ii) that it has had an opportunity to inspect and examine the TrueFacet 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 TrueFacet 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 TrueFacet 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 all or part of the TrueFacet Assets. Each sealed bid must be submitted so that it is received by the Company no later than Tuesday, March 22, 2019 at 3:00pm Eastern Daylight Time (the “Bid Deadline”) at TrueFacet’s office, located at 530 7th Avenue # 1502, New York, NY. 10018.  Please also email steve@gerbsmanpartners.com with any bid.  For additional information regarding bid requirements and considerations, please contact Steve Gerbsman at steve@gerbsmanpartners.com.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000 (payable to TrueFacet, Inc.).  The deposit should be wired to TrueFacet’s attorneys (information will be provided).  The winning bidder will be notified within 3 business days of the Bid Deadline. The deposit will be held in trust by TrueFacet counsel.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder. 

TrueFacet is free to conduct the sale process as it determines in its sole discretion (including, without limitation, terminating further participation in the process by any party, negotiating with prospective purchasers and entering into an agreement with respect to a sale transaction without prior notice to you or any other person) and any procedures relating to such transaction may be changed at any time without prior notice to you or any other person.  For greater certainty, TrueFacet reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

TrueFacet will require the successful bidder to close within 7 business days from the Bid Deadline. Any or all of the assets of TrueFacet 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 other taxes, if any, relating to the sale of the TrueFacet Assets shall be the sole responsibility of the successful bidder and shall be paid to TrueFacet at the closing of each transaction. 

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

Steven R. Gerbsman                                           

steve@gerbsmanpartners.com 

Ken Hardesty

ken@gerbsmanpartners.com 

 

 

 

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

Further to Gerbsman Partners sales letter of January 29, 2019 and update of February 4, 2019 regarding the sale of certain assets of Neograft Technologies, Inc. (“Neograft”), I am attaching updated information regarding the Assets and Intellectual Property of Neograft for interested parties bidding on the assets and IP of Neograft;  Neograft’s Data Room due diligence information list and the Neograft Asset Purchase Agreement (“APA”) with detailed Asset List.

Prior to the bid date of February 28, 2019, I would encourage and recommend that all interested parties have their counsel speak with Jeff Quillen, Esq. or Erin Klein, Esq. of Foley Hoag, counsel to Neograft, to discuss any questions or comments of a legal nature relating to the transaction.   Jeff is available at 617 832 1205 jquillen@foleyhoag.com.  Erin is available at 617 832 1288 eklein@foleyhoag.com 

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit. 

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

I will be sending out a draft Asset Purchase Agreement “APA” in a couple of weeks prior to the bid date of February 28, 2019.

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

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Neograft (http://neograftinc.com) to solicit interest for the acquisition of part or substantially all of Neograft’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Neograft 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 Neograft Assets has been supplied by Neograft. 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 Neograft or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

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

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

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and 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 had an opportunity to inspect and examine the Neograft 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 Neograft, 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 Neograft Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than February 28, 2019 at 6pm Eastern Standard Time (the “Bid Deadline”) at Neograft’s offices, located at 470 Constitution Drive, Taunton, MA 02780.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in an identifiable way. 

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000.  The deposit should be wired to an escrow agent who will be outlined in a future update.  The winning bidder will be notified within 3 business days of the Bid Deadline.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder.  

Neograft reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

Neograft will require the successful bidder to close within a 7 day period. Any or all of the assets of Neograft 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 Neograft Assets shall be the sole responsibility of the successful bidder and shall be paid to Neograft at the closing of each transaction.

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

Steven R. Gerbsman                                                                                                     

steve@gerbsmanpartners.com                  

Kenneth Hardesty

ken@gerbsmanpartners.com

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

Further to Gerbsman Partners sales letter of January 29, 2019 regarding the sale of certain assets of Neograft Technologies, Inc. (“Neograft”), I am attaching updated information regarding the Assets and Intellectual Property of Neograft for interested parties bidding on the assets and IP of Neograft and Neograft’s Data Room due diligence information list. 

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

I will be sending out a draft Asset Purchase Agreement “APA” in a couple of weeks prior to the bid date of February 28, 2019.

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

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Neograft (http://neograftinc.com) to solicit interest for the acquisition of part or substantially all of Neograft’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Neograft 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 Neograft Assets has been supplied by Neograft. 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 Neograft or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.Neograft, 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 Neograft’s or Gerbsman Partners’ negligence or otherwise. 

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

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a Confidential Disclosure Agreement (attached hereto as Appendix A) to have access to key members of management and intellectual capital teams and 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 had an opportunity to inspect and examine the Neograft 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 Neograft, 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 Neograft Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than February 28, 2019 at 6pm Eastern Standard Time (the “Bid Deadline”) at Neograft’s offices, located at 470 Constitution Drive, Taunton, MA 02780.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in an identifiable way. 

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase.  All bids must be accompanied by a refundable deposit in the amount of $200,000.  The deposit should be wired to an escrow agent who will be outlined in a future update.  The winning bidder will be notified within 3 business days of the Bid Deadline.  Unsuccessful bidders will have their deposit returned to them within 3 business days of notification that they are an unsuccessful bidder. 

Neograft reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.  

Neograft will require the successful bidder to close within a 7 day period. Any or all of the assets of Neograft 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 Neograft Assets shall be the sole responsibility of the successful bidder and shall be paid to Neograft at the closing of each transaction.

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

 

Steven R. Gerbsman                                                                                                     

steve@gerbsmanpartners.com                  

 

Kenneth Hardesty

ken@gerbsmanpartners.com

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SALE OF NEOGRAFT TECHNOLOGIES, INC.

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

Neograft is a privately held medical device company located in Taunton, MA, founded in April 2009.  Neograft is developing a novel, regenerative vascular graft based on its core electrospinning technology. The acquisition of Neograft Technologies will secure critical intellectual property and a substantial database characterizing safety and performance for its products that address a $2 Billion worldwide market opportunity. Neograft Technologies has raised three rounds (some with multiple tranches) of private financing to date totaling $40 million from private investors, a large majority from a single family fund together with other high net-worth individuals.

Neograft Technologies is developing a proprietary vascular graft that promises to improve clinical outcomes, especially in smaller vessels.  Its product is designed to become incorporated in the patient’s own tissue and then remodels over time to resemble and function as a native artery. Neograft Technologies has 25 issued US patents, 4 “Notices of Allowance”, 29 pending patent applications worldwide, and two pending trademarks.

Our core technology was first investigated as a reinforcement for saphenous vein CABG grafts, and is based partly on patents licensed from the University of Pittsburgh.  This product was evaluated in two clinical feasibility studies in 42 subjects. The results showed encouraging signs of diminished midgraft stenosis and distal anastomotic hyperplasia, but there was a limiting response at the proximal anastomosis.

The regenerative graft is based on the same core technology and has been evaluated in several animal studies.  The latest data shows encouraging signs that a similar remodeling behavior can occur using a synthetic implant.

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 Neograft Technologies’s Assets has been supplied by Neograft Technologies. 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 Neograft Technologies, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Neograft Technologies, 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 Neograft Technologies’s or Gerbsman Partners’ negligence or otherwise.

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

Historical Company Information

Neograft Technologies was established in 2009 to focus on core technology developed at and licensed from The University of Pittsburgh that focused on saphenous vein reinforcement. The company was located in Pittsburgh for the first two years before relocating to Taunton, MA.

For the first five years, the company focused exclusively on applying its core electrospinning technology on developing an intraoperative system to coat the outside surface of saphenous vein grafts to improve CABG outcomes.

In parallel, the company established an aggressive patent strategy and has created broad patent protection around this concept.  In 2015, the company acquired the intellectual property assets of Kips Bay Medical, Inc., a public, Minnesota based company that developed a product for the same CABG indication.  Together, the IP of both companies establishes a significant barrier to competition in this market.

Two clinical feasibility studies were conducted in Eastern Europe to evaluate the CABG indication with encouraging signs of attenuated mid-graft and distal disease.  However, there was a significant incidence of stenosis at the proximal connection to the aorta.

During the course of extensive experiments in animals (over 200 implants for as long as two years) Neograft discovered that its product facilitated transformation of developing tissue surrounding the product into a structure that resembles a native blood vessel.  Based on this discovery, the company decided to refocus its attention on applying the technology as a stand-alone synthetic graft.  Much of the core IP developed for the CABG indication overlaps this indication and the company has filed new patent applications that directly cover any new inventions.

Significant progress has occurred toward a clinically usable product and recent animal testing shows encouraging signs that similar remodeling of the polymer structure is feasible.

Neograft Technologies believes this technology provides a potential and sustainable commercial asset in the vascular graft market for the following reasons:

  1. The US market for peripheral, hemodialysis and coronary bypass grafts is very large and growing. Market growth via displacement of native grafts will occur with a clinically superior product. Surgeons will rapidly adopt as it eliminates the need to harvest pains.
  2. Peripheral graft failures are as high as 60% at one to three years and outcomes haven’t improved significantly over the past forty years, despite many attempts at a solution to this problem.
  3. The mechanism of action of this product is similar to several, more-complex bioengineered approaches but can be achieved through simpler and lower-costmanufacturing.
  4. Currently available heparin coated grafts are priced at 4X uncoated grafts in the US, though there is no significant difference in outcomes. A truly better product will create significant opportunity to grow revenue through increased value.
  5. The mechanism of action for the product has been demonstrated in animals, with over 200 implants followed as long as two years. The safety of the material and technology has also been demonstrated in humans, in two separate studies enrolling 42 subjects.
  6. The company has established a vertically integrated, very efficient operation, that is ISO 13485-2016 certified for producing the product.
  7. The company has established a reliable, working animal model for verifying performance of the product and also a very efficient pathway for verifying clinical performance in humans so final development steps are far more economical than typical products of this type.
  8. 25 issued US patents, 33 issued patents outside of US, 4 Notices of Allowance received, 12 US applications pending, and 17 applications pending outside of US.

Neograft Technologies Company Profile- Assets of the Company

Neograft Technologies was founded by an expert group of scientists and experienced industry executives to develop and commercialize its novel technology to improve CABG outcomes.

The company has assembled a world-class clinical and scientific advisory board and has created a compact but fully vertical operational capability to develop, test and manufacture its products.  It has also established clinical relationships within and outside of the US to effeciently evaluate its products.

Neograft opportunistically acquired the intellectual property assets and data of Kips Bay Medical, a public Minnesota based company that developed a different external reinforcement device for improving CABG outcomes that was incubated at Medtronic until its spin-off in 2007.

 

Product development and testing has all been conducted within the scope of ISO-13485 and the company is currently certified to ISO-13485 2016.

 

An extensive database exists characterizing safety and performance in-vitro, in animals and in humans.

Impact of Technology on the Market

This technology enables a novel approach to one of the remaining ‘holy grails’ in the medical world of a durable, small-diameter vascular graft. This is enabled by a surprising discovery that the company’s material provides temporary support, to allow tissue to penetrate and develop within a porous polymer matrix, but then disrupts without significant inflammation to allow environmental conditioning.

It has been shown that pulsatile pressure triggers constructive remodeling, which results in transformation of developing tissues into structures that resemble natural blood vessels. This transformation will lead to a stable, self-supportive structure that will behave like a native blood vessel.

Other tissue-engineered approaches to this problem show promise in clinical tests but are produced using very complex and inherently expensive processes.  Neograft’s technology functions via a similar mechanism of action but is much simpler and more economical to produce, so it will have comparable outcomes to these more complex product but capable to outpace them economically.

Neograft Technology’s Assets

Neograft has developed a portfolio of assets that are critical to developing, producing or marketing its proprietary regenerative vascular graft or similar constructs. In addition, our intellectual property related to venous reinforcement has significant potential as a barrier to competitive activity in this area. Our assets comprise:

  1. Patents, Patent Applications and Trademarks
  2.  Significant intellectual capital, know-how and expertise in the development and testing of vascularimplants.
  3. An extensive database of in vitro and in vivo testing, including over thirty animal implantexperiments, on over 200 implants for up to 2 years.
  4. Clinical data from two clinical feasibility studies, one publication, and two manuscripts.
  5. Fixed assets of approximately $200,000 including a 500 square foot portable cleanroom, multiple chemical fume hoods, two viscometers, two tensile testers, a portable SEM with vapor and sputter coating system, GPC system, UV and IR spectrophotometer, numerous vacuum and environmental ovens, multiple autoclave systems, large variety of standard and specialty chemical glassware, a high density slide scanner, a variety of optical microscopes and camera systems, a specialty machine shop, a large number of handheld measurement tools and instruments.

The assets of Neograft Technologies will be sold in whole or in part (collectively, the “Neograft Technologies Assets”). The sale of these assets is being conducted with the cooperation of Neograft Technologies. Neograft Technologies and its consultants will be available to assist purchasers with due diligence and a prompt, efficient transition to new ownership.

Neograft Technologies, Inc. Key Personnel

Jon McGrath — President and CEO/Board Member: Jon has led the company since 2011. Prior to Neograft, Jon was CEO of LumeRx, a venture-backed gastroenterology startup,VP of R&D and Operations at Biosphere Medical(acquired by Merrit Medical);VP of R&D and Operations at Urologix (ULGX), and VP of R&D at Pfizer/Schneider (acquired by Boston Scientific). He cofounded Harbor Medical (acquired by Teleflex) and held several positions of increasing responsibility at Medi Tech (now BostonScientific).

Mohammed El-Kurdi— Chief Technology Officer: Dr. El-Kurdi co-founded the company in 2009. He has been focused on bioengineering arterial vein grafts since 2000, beginning shortly after he joined a cardiovascular research team at the University of Pittsburgh’s McGowan Institute for Regenerative Medicine. His PhD work focused on Neograft’s core technology that formed the foundation of the company and  its central intellectual property. This work also resulted in the first peer reviewed publication of the product. Several generations later, the company has evolved a product that delivers on the promise of his early research to produce a stable and self-supporting arterial veingraft

Neograft Technologies, Inc. Board of Directors

Christopher S. Petersen, Chairman of the Board– Chris is president of RePetersen Enterprises, LLC., is Board Chairman at WeSpeke, Inc, and also serves on the Board of Directors for Medrobotics and Rinovum.  Earlier professional experience includes KPMG, LLP and ThyssenKrupp, where he was Assistant Corporate Controller.

Jon McGrath, President and Chief Executive Officer- Earlier, Jon was CEO of LumeRx, VP of R&D and Operations at Biosphere Medical; VP of R&D and Operations at Urologix, and VP of R&D at Pfizer/Schneider. He cofounded Harbor Medical (acquired by Teleflex) and held several positions of increasing responsibility at Medi Tech (now Boston Scientific).

Thomas M. Dugan, MD- Tom is a retired cardiologist and a former president of a large cardiology and cardiovascular surgery private practice group in Erie, PA.  He trained at Duke University, Georgetown University and the University of Pittsburgh.  He is currently on the Board of Medrobotics.

Brad R. Petersen, PhD- Brad is currently a Pharmacy Operations Manager at Ohio Health’s Grant Medical Center. He is also on the Board of WeSpeke, Rinovum and Medrobotics.

Richard C. Petersen Jr.- Mr. Petersen is founder and President of Petersen Jr. Enterprises. He spent 32 years with GM/DELPHI, retiring as General Director of Corporate Planning for Delphi-Steering.  He is also the Chairman of the Board for Rinovum Women’s Health LLC, and WeSpeke. He is a Director for a number of other entities that vary based on investments from time to time.

Michael Tovian- Michael (“Mike”) Tovian is Executive Consultant of Dosepoint LLC. Previously, he was President and CEO of Harmony Pharmacy and Health Center, served as Managing Director of Healthios Global, Inc., and spent 28-years prior to that with Walgreen Drug Stores, Inc, including as Vice President of Managed Care Sales and Contracting.

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a non disclosure 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 Neograft Technologies 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 Neograft Technologies, Inc., Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and neither Neograft Technologies 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 Neograft Technologies Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than February 28 at 6:00 pm Eastern Standard Time (the “Bid Deadline”) at Neograft Technologies’s office, located at 470 Constitution Dr., Taunton, MA 02780. 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 Neograft Technologies fixed asset list may not be complete and Bidders interested in the Neograft Technologies’s Assets must submit a separate bid for such assets. Be specific as to the assetsdesired.

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

Neograft Technologies reserves the right to, in its sole discretion, to accept or reject any bid or withdraw any or all assets from sale. Interested parties should understand that it is expected that the highest bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

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

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

 

Steven R. Gerbsman

steve@gerbsmanpartners.com

Kenneth Hardesty

ken@gerbsmanpartners.com

 

 

 

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The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Local Roots Farms

Further to Gerbsman Partners Update and sales letter of September 6, 2018 regarding the sale of certain assets of Precision AgriTech Inc. dba Local Roots Farms (“LRF”) and one of its subsidiaries,  I am attaching a “Table of Contents” for the LRF “Due Diligence Room”, “Local Roots Farms Draft Asset Purchase Agreement – APA” and “Wire Transfer Information” for the refundable deposit required for submitting a bid.

Prior to the bid date of October 12, 2018, I would encourage and recommend that all interested parties have their counsel speak with Stephen O’Neill, Esq. of Dorsey, counsel to LRF, to discuss any questions or comments of a legal nature relating to the transaction.  Steve is available at oneill.stephen@dorsey.com and cell 650 843 2719.

Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact.  Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit. 

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

Gerbsman Partners has been retained by Local Roots Farms to solicit interest for the acquisition of all or substantially all of LRF’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Local Roots Farms Assets”).  

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

 

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 Local Roots Farms Assets has been supplied by LRF.  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 LRF, or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Local Roots Farms, 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 LRF’s or Gerbsman Partners’ negligence or otherwise.

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

 

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreeent (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 LRF 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 LRF, 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 LRF 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 LRF Assets.  Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, October 12, 2018 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Gerbsman Partners office, located at 211 Laurel Grove Avenue, Kentfield, CA 94904.  Please also email steve@gerbsmanpartners.com with any bid.

Bids should identify those assets being tendered for in a specific and identifiable way.  The attached LRF fixed asset list may not be complete and Bidders interested in the LRF’s Assets must submit a separate bid for such assets.  Be specific as to the assets desired.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $200,000 (wire transfer information will be supplied at a later date).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

LRF reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.  Interested parties should understand that it is expected that the highest bid will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission.

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

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

Steven R. Gerbsman

steve@gerbsmanpartners.com

Dennis Sholl

dennis@gerbsmanpartners.com

Kenneth Hardesty

ken@gerbsmanpartners.com

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