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May 8, 2015 Update to the Bidding Process- “BID DATE NOW MAY 20” Date Certain M&A of the Assets and intellectual Property of Digital Caddies (US) Inc.

Posted in Uncategorized, tagged , , , , , on May 8, 2015| Leave a Comment »

The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Digital Caddies (US) Inc.

Further to Gerbsman Partners previous e-mail sales letter and bidding process of May 4, 2015 and April 27, 2015, regarding the sale of certain assets of Digital Caddies (US), Inc., (Digital Caddies), I attach the form of agreement (“APA”) that we will be requesting the bidders for certain Assets and Intellectual Property of Digital Caddies execute and deliver in connection with such transaction and wire transfer information for the refundable deposit required with bids The Digital Caddies Assets have been previously supplied, as outlined in Digital Caddies sales letter. Ken, Jim and I are available to follow up and review the Bidding Process.

Please be aware that the Bid Date below has been changed and is now Wednesday, May 20, 2015.

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Venture Lending & Leasing VI, Inc. and Venture Lending & Leasing VII, Inc. (together “WTI”), the senior secured lender to Digital Caddies (US), Inc., (“Digital Caddies”) to solicit interest for the acquisition of all or substantially all of Digtial Caddies’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Digital Caddies Assets”) http://www.digitalcaddies.net . Please be advised that the Digital Caddies Assets are being offered for sale pursuant to Section 9-610 of the Uniform Commercial Code. Purchasers of the Digital Caddies Assets will receive all of Digital Caddies’s right, title, and interest in the purchased portion of WTI’s collateral, which consists of substantially all of Digital Caddies assets, as provided in the Uniform Commercial Code.

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

Prior to the bid date of Wednesday, May 20, 2015, I would encourage all interested parties to have their counsel speak with Jeffrey Klugman of Greene Radovsky Maloney Share & Hennigh LLP, counsel to WTI. (phone 415 248 1533 or 415 981 1400; email jklugman@greeneradovsky.com). He is available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA.

I have also attached wire transfer information for the refundable deposit of $200,000.00 that is required for interested parties when they submit a bid. The wire transfer information is for the trust account of Greene Radovsky Maloney Share & Hennigh LLP, counsel to WTI. All refundable deposits will be held in trust by Greene Radovsky Maloney Share & Hennigh LLP and the deposits will be sent back to non-successful bidders.
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 Digital Caddies 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 WTI, Gerbsman Partners, or Digital Caddies, 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 WTI, Digital Caddies, 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 Digital Caddies Assets. Sealed bids must be submitted so that they are actually received by Gerbsman Partners no later than Wednesday, May 20, 2015 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Digital Caddies office, located at 15210 N. Scottsdale Rd # 280, Scottsdale, AZ 85254. Sealed bids may be accepted sooner than May 20, 2015 and accepted by WTI. Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Venture Lending and Leasing VII, Inc.). The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

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

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

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

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

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

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The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Digital Caddies (US) Inc.

Posted in Uncategorized, tagged , , , , , , on May 5, 2015| Leave a Comment »

The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Digital Caddies (US) Inc.

Further to Gerbsman Partners previous e-mail sales letter and bidding process of April 27, 2015, regarding the sale of certain assets of Digital Caddies (US), Inc., (Digital Caddies), I attach the form of agreement (“APA”) that we will be requesting the bidders for certain Assets and Intellectual Property of Digital Caddies execute and deliver in connection with such transaction and wire transfer information for the refundable deposit required with bids The Digital Caddies Assets have been previously supplied, as outlined in Digital Caddies sales letter. Ken, Jim and I are available to follow up and review the Bidding Process.

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Venture Lending & Leasing VI, Inc. and Venture Lending & Leasing VII, Inc. (together “WTI”), the senior secured lender to Digital Caddies (US), Inc., (“Digital Caddies”) to solicit interest for the acquisition of all or substantially all of Digtial Caddies’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Digital Caddies Assets”) http://www.digitalcaddies.net . Please be advised that the Digital Caddies Assets are being offered for sale pursuant to Section 9-610 of the Uniform Commercial Code. Purchasers of the Digital Caddies Assets will receive all of Digital Caddies’s right, title, and interest in the purchased portion of WTI’s collateral, which consists of substantially all of Digital Caddies assets, as provided in the Uniform Commercial Code.

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

Prior to the bid date of Thursday, May 28, 2015., I would encourage all interested parties to have their counsel speak with Jeffrey Klugman of Greene Radovsky Maloney Share & Hennigh LLP, counsel to WTI. (phone 415 248 1533 or 415 981 1400; email jklugman@greeneradovsky.com). He is available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA.

I have also attached wire transfer information for the refundable deposit of $200,000.00 that is required for interested parties when they submit a bid. The wire transfer information is for the trust account of Greene Radovsky Maloney Share & Hennigh LLP, counsel to WTI. All refundable deposits will be held in trust by Greene Radovsky Maloney Share & Hennigh LLP and the deposits will be sent back to non-successful bidders.
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 Digital Caddies 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 WTI, Gerbsman Partners, or Digital Caddies, 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 WTI, Digital Caddies, 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 Digital Caddies Assets. Sealed bids must be submitted so that they are actually received by Gerbsman Partners no later than Thursday, May 28, 2015 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Digital Caddies office, located at 15210 N. Scottsdale Rd # 280, Scottsdale, AZ 85254. Sealed bids may be accepted sooner than May, 28, 2015 and accepted by WTI. Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Venture Lending and Leasing VII, Inc.). The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

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

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

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

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

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

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April-May, 2015 – DATE CERTAIN M&A OF DIGITAL CADDIES INC. – Gerbsman Partners

Posted in Uncategorized, tagged , , , , , , , on April 27, 2015| Leave a Comment »

DATE CERTAIN M&A OF DIGITAL CADDIES INC.

Gerbsman Partners (http://www.gerbsmanpartners.com) has been retained by Venture Lending & Leasing VI, Inc. and Venture Lending & Leasing VII, Inc. (together “WTI”), the senior secured lender to Digital Caddies, Inc., (“Digital Caddies”) to solicit interest for the acquisition of all or substantially all of Digtial Caddies’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Digital Caddies Assets”) http://www.digitalcaddies.net . Please be advised that the Digital Caddies Assets are being offered for sale pursuant to Section 9-610 of the Uniform Commercial Code. Purchasers of the Digital Caddies Assets will receive all of Digital Caddies’s right, title, and interest in the purchased portion of WTI’s collateral, which consists of substantially all of Digital Caddies assets, as provided in the Uniform Commercial Code.

The sale is being conducted with the cooperation of WTI and Digital Caddies. Digital Caddies has advised WTI that it will use its best efforts to make its employees available to assist purchasers with due diligence and assist with a prompt and efficient transition at mutually convenient time.

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 Digital Caddies Assets has been supplied by third parties and obtained from a variety of sources. It has not been independently investigated or verified by WTI or Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by WTI or Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing (the “information”), as a statement, opinion, or representation of fact. Please further note that all information provided herein relating to the operations of Digital Caddies business and its market positions relates to periods on or prior to April 21 2015. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

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

Any sale of the Digital Caddies 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, WTI and Gerbsman Partners. Without limiting the generality of the foregoing, WTI and Gerbsman Partners, and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Digital Caddies 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 is not to be supplied to any other person without Gerbsman Partners’ prior consent. The information contained herein is not subject to the Non-Disclosure Agreement, however any additional requested information will require execution of the attached NDA attached hereto as Exhibit A. Also attached is a detail sales letter, Exhibit B, Digital Caddies Fixed Asset List (the assets of Digital Caddies is subject to a secured lien by the IRS. It the objective to clear this lien prior to a final transaction.

BACKGROUND

Digital Caddies, Inc. (“Digital Caddies,” “CADY” or the “Company”) is a corporation which was incorporated under the laws of the State of Oklahoma on September 7, 2011. The shares of stock and warrants of the Company were previously held in the name of DNA Beverage Corp., a Nevada Corporation. Since inception, the company has raised a total of $7.8M that has been invested into the technology and the network. $1.7M was raised privately by the company, and $6.1M was raised through Paulson Investments, a leading national boutique investment bank headquarted in Portland Oregon.

Digital Caddies, Inc. is a golf-centric technology and information-dissemination company that uses tablet technology and wireless connectivity to create, a content and informational medium that enables advertisers to directly market to golfers through multifunctional web-enabled interactive tablets installed on golf cars owned by the Company’s customer golf course businesses.

These Internet-connected interactive tablets are designed to provide services to both golfers and golf courses alike.

Once interactive tablets are installed, players can be provided with a number of interactive services and applications, such as GPS-based hole/course information, scoring applications, messaging platforms (for cart-to-cart and cart-to-course communications), the ability to wirelessly call for the beverage cart, plus news, weather, sports, and entertainment. (most features are not yet available)

More importantly, the platform provides a broad portfolio of course management tools designed to enable golf course managers to improve player pace of play via GPS-based cart tracking and communications, potentially increase merchandise and concession sales via real-time on-tablet promotions, and access to additional revenue streams (e.g., sale of local advertising.).

With an always on, always connected device in front of the golfer for four and a half hours while they play golf, the network generates a significant number of impression opportunities with the affluent golfer.

An impression opportunity is calculated as the number of times we can potentially place an advertisement in front of that golfer.

Currently our software provides up to 3 ad locations (300X250 size) that are always on the screen plus one additional larger custom ad location. Each ad location is completely interactive and can be linked to URLs and other content that the advertiser might like to provide.

With 4 ad locations integrated into our software and a 4.5 hour round of golf (270 minutes) and assuming 30 second intervals between ads, we provide an impression inventory of approximately 2,000 for every round of golf that is played. (If you assume there are 2 golfers in the golf cart, which is usually the case, the effective inventory is 4,000)

Therefore, each golf course can produce over 120,000,000 impression opportunities every year (the average golf course completes 30,000 rounds of golf per year).

These impressions are what the company sells to advertisers in order generate revenue – we are a publisher.

Pricing for these ad units vary based on many factors and are typically priced in the form of a price for 1000 impressions, referred to as “CPM” (Cost per thousand).

In order to calculate the revenue possibility, take the number of impressions available and divide it by 1000 and multiply it by the CPM Rate then multiply it by the “fill rate,” which is defined as the number of impressions actually sold. Single golf course example: 120,000,000 impression opportunities X 10% fill rate X $2 CPM rate = $24,000

We believe that advertisers will be very interested in presenting their message on our Digital Caddies because of our ability to generate a large number of impression opportunities and provide them an opportunity to interact with affluent consumers in ways that have not been possible before.
Event Timeline
1.  Fall 2012 business plan completed
2.  2013 $1.7M raised to complete proof of concept
3.  New management brought in to run the company – founder Brad Nightingale moved out
4.  Alpha version of the Digital Caddies platform launched in June 2013 then beta in November of 2013.
5.  Spring 2014 $6.1M raised to build the network
6.  Platform was formally launched in April of 2014 with a business model where the basic platform was free for select golf courses and revenue was to be generated through advertising sales and add on software upgrades.
7.  Rapid growth of the network commenced and by August of 2014 approximately 140 golf facilities were on the network (165 Eighteen Hole Equivalents or “EHE’s)
8.  Several advertising partnerships were established during this time including agreements with Double Click For Publishers, Google Adx, Nexage, Smaato, LiveRail, Brightroll, Access Sports Media and more, to help monetize the network through advertising sales.
9.  Fall 2014 revenue expectations set by the partners did not materialize
10. Winter 2014 secured our first few large brand advertisers including Fidelity, Callaway and Golf Now
11. Winter 2014 engaged with Roth Capital to fund additional growth – financing failed due to market conditions that effected their investment partners plus time lost due to Christmas holidays.
12. With no capital to sustain the network management resigned in February 2015 and Brad Nightingale stepped back in to operate the business
13. Dramatic cuts to costs occurred and operating costs dropped from $250,000+ per month to $60k+.
March 2015 renegotiated a partnership deal with Sprint to change the business model whereby Sprint charges the golf course for the wireless connectivity.
14. As of April 1st, any golf course that wished to keep our service now has to pay $15 per tablet per month for connectivity but can cover their cost by either charging the golfer a fee of approximately $0.35 per golfer or by selling local advertising to put on the platform. The average course requires 2 advertisers per hole per month.
15. In the last 3 weeks, approximately 25 have agreed to keep or install the service, 60 facilities have decided to remove the system and the rest are still undecided.
16. Any equipment we receive back from courses, can easily be re-purposed and used at a new customers location
17. Company is already seeing interest from new locations for the service and with over 15,000 golf courses in the United States with very few that have GPS for golf, there is lots of opportunity

As we re-build the network under our new business model, we still believe the majority of our revenue will come from the sale of advertising although the focus will be more geared towards local advertising from businesses surrounding the golf courses we are installed on. Once the network is re-established, we will resume selling advertising to national brands and also sell value added upgrades to the golf course.

Digital Caddies Assets
14,500 tablets and all related equipment in inventory including:
5000 7” color touch screen devices manufactured by ZTE
9,500 10” color touch screen Tab 2 tablets manufactured by Samsung.
Formal partnership with Sprint
Fully functioning network
http://www.digitalcaddies.net Domain
Completed website and marketing material
Database of all golf courses in the United States populated with detailed information
Rep network in place for distribution

Intellectual Property
Software (copyrighted)
Intellectual Capital
People – dedicated/loyal team
10+ years of industry experience
Established Customer base
Complete Database of all golf courses in the United States
Highly scalable process in place
Solution for powering tablets on the golf cart
“The Players Network” trademark (applied)

Barrier To Entry
First Mover Advantage – The company is recognized as a first mover in the industry utilizing new technology and software in the market segment
We are known and trusted in the golf industry with over 10 years of relationships. The golf industry is not welcoming to new-comers.

Why are the Assets Attractive
Great working partnership with Sprint Corp. – Sprint provides us the people and resources to manage the wireless connectivity for the tablets at the golf course.
Currently there are approximately 2000 tablets active or being activated on the network at this time.
Already have relationships with brand advertisers
Banana Boat to begin advertising at golf courses and give away samples of a new sunscreen – $55,000 gross revenue per 4 week campaign
Established relationships with 3rd party advertising networks
Proven technology and network performance
Over 10 years of experience in GPS/Technology for golf courses
We have all the necessary people in place
The product has been widely accepted and approved by the industry
Processes are in place to allow for a highly scalable re-build of the network
Price point is currently still the lowest in the marketplace
New business model requires very little additional capital
Significant revenue and growth opportunities with more investment capital
Streamlined process that allows us to prepare and deliver tablets to be installed in under 5 days allowing for rapid growth
Experienced team of people and partners

Brad Nightingale – Founder
Mr. Nightingale (44 years old) the founder of Digital Caddies, Chief Executive Officer and Chairman. Mr. Nightingale founded Digital Caddies in 2003 and introduced a low cost, easy to use and easy to implement GPS service to golf courses. The device was installed on golf carts at golf courses and the company grew to have over 150 golf course customers by 2007. After managing the company through the recession, Mr. Nightingale established the new business plan to utilize tablet technology that the company is using today. Prior to founding the company, Mr. Nightingale had a career in finance where he advised and financed early stage technology companies.

Theodore Konyi – CoFounder
Mr. Konyi (60 years old) is a Director, co-founder and investor in Digital Caddies. Mr. Konyi takes an active role with the company and assists with all aspects of the business including managing the wireless relationship with our partner Sprint. Mr. Konyi is also President and Chief Executive Officer of Maxwell Mercantile Inc., a merchant bank specializing in small technology and energy investments. As founder of the Maxwell, he has been actively involved in the start-up and growth phases of many corporations.

Ted Bradley – Advertising & Marketing
Ted Bradley (40 years old) is responsible for managing and executing on all aspects of the revenue generation part of the business. Prior to joining the company in June 2013, Mr. Bradley had been instrumental in building several Digital Out of Home Networks from the ground up, including sales strategy, planning and execution. His experience includes senior media sales roles with many companies including: Telephoto Technologies Inc., where he was responsible for sales and business development; OnTrack Media where he served as Vice President of Media, Sales and Operations; Roberts Media Network – Vice President of Sales and Marketing. From 2009 to the present, Mr. Bradley has served as a board member for the Digital Place Based Advertising Association (DPAA).

Tony Giannandrea – Controller
Mr. Giannandrea (age 54) manages all finances for the business. He is experience as a senior accountant started with Spartan Homes where he managed entire operations, and was primarily involved with financial reporting to the Parent company on 13 limited liability companies throughout four counties in southeast Michigan. He was also responsible for reporting directly to commercial lenders and private investors. Prior to working with Digital Caddies, Mr. Giannandrea was a founder and operator of other early stage companies including Premiere Enterprises, building high-end custom homes and Fusion Tech, an technology company that used infrared to repair asphalt for commercial centers and municipalities.

Allan Kaplan – Advisory Board
Mr. Kaplan (age 43) is an investor in Digital Caddies and advises the company on all aspects of the business. He is an entrepreneur with strong experience in Internet infrastructure and consumer services. He was a founder of Limelight Networks, GlobalCenter, Entera, Primenet. Some notable early stage investments he has been involved with include Facebook, Zynga, Alibaba, Flipkart, and Linkedin.

Other Key Operation Partners
Yourbow – DFP specialist that traffic all our advertisements
HScott Mobile – manage, source and implement all 3rd party mobile monetization partners
Techmileage – Manage all aspects of our network and assisted with the development of the software.
Digital Wasabi – Manages all development of the software for the tablets and network.

Solutions for Golfers

Digital Caddies connects golfers to advertisers by installing multifunctional web-enabled interactive tablets (currently manufactured by Samsung) in golf cars that operate on our customer golf courses. These Internet-connected interactive tablets are designed to provide a host of services to both golfers and golf courses alike. Once interactive tablets are installed on a golf course, players can be provided with a number of services and applications, such as GPS-based hole/course information, interactive maps to navigate distance information on the course to hazards or layup locations or to the green so golfers can select a location of where the hole is located that day.


In future versions, the platform will be able to provide real-time scoring applications and leaderboards, messaging platforms (for cart-to-cart messaging), the ability to easily notify the beverage cart that you want service, the ability to order food from the clubhouse, get news, weather and sports and even watch TV. The android based tablet platform is very flexible and many other services and features can be easily added.

Solutions for Golf Courses

Our platform provides a broad portfolio of course management tools designed to enable course managers to improve player pace of play via GPS-based cart tracking and communications. Through any web connected device, a golf course manager can view where every golf cart is on their golf course and communicate with the carts through a messaging system. This allows the golf course to better manage the pace of play on the golf course which is one of the most important factors in running a golf course and keeping golfers happy. The platform also provides a pace of play monitor so courses can easily see what groups might be falling being the regular pace of play.

In addition, golf courses can use the system to potentially increase merchandise and concession sales via on-tablet advertising and promotion. Golf courses are also provided the opportunity to sell to local advertisers to add an additional revenue stream. All of these services are currently provided to our customer golf course free of charge and the only fee they are required to pay is to Sprint for the wireless connectivity. By utilizing the platform, golf courses can also save money in many ways. More efficient management of pace of play may require a reduced need for course marshals, using the geo-fencing service, courses can be notified if a cart is removed/stolen from the golf course, cart history can show maintenance crews where golfers have travelled on the course so they can be more efficient plus managers can confirm whether or not a golfer has completed a round of golf when they try to play 2 rounds for the price of one.

Additional features and upgrades we can develop for additional revenue:

1. Enhanced Graphics (already completed)
2. Beverage cart call button to notify the cart girl that you require service. The cart girl will have access to a map showing where all the golf carts are on the course that want service, allowing her to be more efficient and sell more product. (in production)
3. Create an online community where golfers can provide all their information and track their game and keep stats – called the Players Network
4. Allow golfers to watch sporting events/financial news live on the platform
5. Capture email addresses of every golfer for the golf course and Digital Caddies
6. Display “best score on this hole today”, average scores, lifetime scores
7. Show average scoring on the hole by handicap so golfers know how hard the hole is to play
8. Allow YouTube channel to record daily welcome video, playing tips from the pro, message from a CEO for a golf tournament or for a charity event.
9. Social Media posting of highlights and scorecards.
10. Automatic tie-in of scores to official handicap systems
11. Food ordering with linked payment system for on course purchases PayPal/visa etc
12. Custom advertising for tournament sponsorship ads
13. Live scoring and tournament scoring for shotgun scrambles, best ball etc posted live on a real-time leaderboard that can be viewed on any web enabled device.
14. Allow forwarding of ads they are interested in to their email for later review
15. Data collection – repeat rounds, length of rounds, total number of holes played, total number of golfers and many more
16. Display pace of play information on the tablet automatically so golfer knows if they need to speed up.
17. Scores will be maintained and tracked in a database so they can be accessed later so when a golfer returns to a course, the system automatically recalls scorecards from their previous rounds so they can compare their current round.
18. Maintain stats like, greens in regulation, fairways hit, number of puts, missed fairway left or right, stored that golfers can review later
19. Instant sale promotions from clubhouse “next hour buy 1 bud light get a bag of chips for free”
20. Ability to score different types of games, match, skins, stableford and many more
21. Adding paypal or similar donation button for tournaments and charity events to raise money during their outing
22. Play golf against a virtual professional on the tablet.
23. Enabling the golf course to enter the daily pin positions via a + or – indicator displayed near the center of green number. For example, if the pin is 5 yards past the center of the green there will be an indicator that shows “PIN +5”. There has to be an easy way for the golf course to enter this number each day.
24. Import/Export files to tie into current reservation systems, inventory control and POS systems.
25. Private golf courses – provide the name of the person on the carts so members can see who is slow playing on the course. (by request from a golf course)
26. Add a “make a suggestion” under the I menu
27. Find your ball. When someone hits their ball in an area they might find hard to navigate, they can click on the map the approximate area they think their ball landed so when driving there the tablet will tell them where they need to go
28. Welcome message to golfer by name which will also provide a name to the cart girl so golfers can be treated like members.

Competitive Business Conditions, the Issuer’s Competitive Position in the Industry, and Methods of Competition;

The Golf GPS Market is competitive and is primarily composed of two segments: (i) companies that offer golf GPS systems directly to consumers; and (ii) companies that offer golf GPS systems directly to businesses. Our business focus is to offer our Digital Caddies golf GPS system directly to golf businesses, and not to individual consumers. Golf courses have different needs than individual golfers, such as the need for course management functionality, cart tracking, food and beverage service options, and mechanisms to promote golfer retention, we do not believe that consumer products that provide golfers with Golf GPS will adversely affect our business because they lack features that are specially customized to meet the needs of golf courses and golf course operators.

With the fact that our business model is based primarily on generating revenue from advertising displayed though the Digital Caddies platform, an argument could be made that our competitors are also any other advertising medium however the unique approach the company takes by providing a value added services that golf courses use through our platform, we consider our biggest competitors to be other companies that currently offer golf GPS systems directly to golf businesses, such as public/private golf courses, golf resorts, etc. It should be noted that these systems do not implement our strategy of using web enabled, open source applications to be able to seamlessly deliver advertising and content to their platforms.

There are many “mom and pop” type companies that offer basic GPS systems for golf courses but only 2 other companies have had any presence in the market that provide good quality GPS services directly to golf courses in a manner which is similar to the product we provide. Our largest potential competitor in this space is GPS Industries, a Florida based company formed in 2009 from the amalgamation of multiple companies that have existed in the marketplace for many years. GPS Industries is a private company so specific details about the Company are not available, but we believe based on the history of the amalgamated companies that their total customer base is about 400 courses out of a total of 15,000 golf courses in the US. Their system is considered to be the most advanced in the market place but comes with a hefty cost of approximately $300,000 for the average golf course. Another competitor is DSG Tag Systems. This company provides similar GPS services to Digital Caddies. Their product was launched last year and we estimate has a customer base of less than 50 golf courses and costs the average golf course approximately $150,000.

With over 15,000 golf courses in the United States we believe that the market has not yet reached saturation and that there is room for growth in this market segment.

Advertising Partners

Liverail
DFP – Double Click for Publishers
Smaato
Nexage
Mopub
Millenial Media
Brightroll
Aerserve
Mobile Theory
The Rubicon Project
Access Sprots Media
Starcom
Direct ads sold and Pipeline

Callaway
Golf Channel
Golf Now
Golf Advisor
Adidas
Taylormade
Banana Boat
Bermuda Tourism
Sprint
Samsung
PGA
World Golf Tour (online game)
Magna Global
Pepsi
Advantage Marketing
Eaton Golf Pride
Quicken Loans
Amex
]ATT
Lexus North East
Bridgestone
Macy’s
Bank of America
Heinekin
Lexus
Honda
Clarion Capital Partners
Aruba Tourism

Impressions and Ad Formats
Digital Caddies reached over 300 million impressions opportunities per month to approximately 400,000 people when the network was in place with 140 facilities. The platform currently supports many standard IAB formats, including the following sizes:

Full page video ads
Full page rich media/static ads
300×600 sky scraper
Medium Rectangle – 300×250
Custom ad sizes also available

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 Digital Caddies 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 WTI, Gerbsman Partners, or Digital Caddies, 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 WTI, Digital Caddies, 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 Digital Caddies Assets. Sealed bids must be submitted so that they are actually received by Gerbsman Partners no later than Thursday, May 28, 2015 at 3:00 p.m. Pacific Time (the “Bid Deadline”) at Digital Caddies office, located at 15210 N. Scottsdale Rd # 280, Scottsdale, AZ 85254. Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Venture Lending and Leasing VII, Inc.). The winning bidder will be notified within 3 business days of the Bid Deadline. Unsuccessful bidders will have their deposits returned to them within 3 business days of notification that they are an unsuccessful bidder.

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

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

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

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

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

James Skelton
Gerbsman Partners
(949) 466-7303
jim@gerbsmanpartners.com

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Gerbsman Partners – The Advantages of a “Date-Certain M&A Process” over an “Assignment for the Benefit of Creditors – ABC”

Posted in Uncategorized, tagged , , , on February 12, 2015| Leave a Comment »

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The Advantages of a “Date-Certain M&A Process” over an “Assignment for the Benefit of Creditors – ABC”
Apart from a formal bankruptcy (Chapter 7 or Chapter 11) there are two basic approaches to maximizing enterprise value for under-performing and/or under-capitalized technology, life science, medical device and solar companies and their Intellectual Property: a “Date-Certain M&A Process” and an assignment for the benefit of creditors (ABC).

Both of these processes have significant advantages over a formal bankruptcy in terms of speed, cost and flexibility. Gerbsman Partners’ experience in utilizing a “Date Certain M&A Process” has resulted in numerous transactions that have maximized value anywhere from 2-4 times what a normal M&A process would have generated for distressed asset(s). With a “Date-Certain M&A Process”, the company’s Board of Directors hires a crisis management/ private investment banking firm (“advisor”) to wind down business operations in an orderly fashion and maximize value of the IP and tangible assets.

The advisor works with the board and corporate management to:

1.  Focus on the control, preservation and forecasting of CASH.
2.  Develop a strategy/action plan and presentation to maximize value of the assets. Including drafting sales materials, preparing information due diligence war-room, assembling a list of all possible interested buyers for the IP and assets of the company and identifying and retaining key employees on a go-forward basis.
3.  Stabilize and provide leadership, motivation and morale to all employees,
4.  Communicate with the Board of Directors, senior management, senior lender, creditors, vendors and all stakeholders in interest.
The company’s attorney prepares very simple “as is, where is” asset-sale documents. (“as is, where is- no reps or warranties” agreements is very important as the Board of Directors, Officers and Investors typically do not want any additional exposure on the deal). The advisor then contacts and follows-up systematically with all potentially interested parties (to include customers, competitors, strategic partners, vendors and a proprietary distribution list of equity investors) and coordinates their interactions with company personnel, including arranging on-site visits.

Typical terms for a “Date Certain M&A” asset sale include no representations and warranties, a sales date typically three to four weeks from the point that sale materials are ready for distribution (based on available CASH), a significant cash deposit in the $150,000 range to bid and a strong preference for cash consideration and the ability to close the deal in 7 business days. Date Certain M&A terms can be varied to suit needs unique to a given situation or corporation. For example, the Board of Directors may choose not to accept any bid or to allow parties to re-bid if there are multiple competitive bids and/or to accept an early bid.

The typical workflow timeline, from hiring an advisor to transaction close and receipt of consideration is four to six weeks, although such timing may be extended if circumstances warrant. Once the consideration is received, the restructuring/insolvency attorney then distributes the consideration to creditors and shareholders (if there is sufficient consideration to satisfy creditors) and takes all necessary steps to wind down the remaining corporate shell, typically with the CFO, including issuing W-2 and 1099 forms, filing final tax returns, shutting down a 401K program and dissolving the corporation etc.

The advantages of this approach include the following:

Speed – The entire process for a “Date Certain M&A Process” can be concluded in 3 to 6 weeks. Creditors and investors receive their money quickly. The negative public relations impact on investors and board members of a drawn-out process is eliminated. If circumstances require, this timeline can be reduced to as little as two weeks, although a highly abbreviated response time will often impact the final value received during the asset auction.

Reduced Cash Requirements – Given the Date Certain M&A Process compressed turnaround time, there is a significantly reduced requirement for investors to provide cash to support the company during such a process.

Value Maximized – A company in wind-down mode is a rapidly depreciating asset, with management, technical team, customer and creditor relations increasingly strained by fear, uncertainty and doubt. A quick process minimizes this strain and preserves enterprise value. In addition, the fact that an auction will occur on a specified date usually brings all truly interested and qualified parties to the table and quickly flushes out the tire-kickers. In our experience, this process tends to maximize the final value received.

Cost – Advisor fees consist of a retainer plus an agreed percentage of the sale proceeds. Legal fees are also minimized by the extremely simple deal terms. Fees, therefore, do not consume the entire value received for corporate assets.

Control – At all times, the Board of Directors retains complete control over the process. For example, the board of directors can modify the auction terms or even discontinue the auction at any point, thus preserving all options for as long as possible.

Public Relations – As the sale process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all sales terms kept confidential. Thus, for investors, the company can be listed in their portfolio as sold, not as having gone out of business.

Clean Exit – As the sale process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all sales terms kept confidential. Thus, for investors, the company can be listed in their portfolio as sold, not as having gone out of business.

To this end the insolvency counsel then takes the lead on all orderly shutdown items.

In an Assignment for the Benefit of Creditors (ABC), the company (assignor) enters into a contract whereby it transfers all rights, titles, interests, custody and control of all assets to an independent third-party trustee (assignee). The Assignee acts as a fiduciary for the creditors by liquidating all assets and then distributing the proceeds to the creditors. We feel that an ABC is most appropriate in a situation with one or more highly contentious creditors, as it tends to insulate a board of directors from the process. Nevertheless, we have found that most creditors are rational and will support a quick process designed to maximize the value that they receive. A good advisor will manage relationships with creditors and can often successfully convince them that a non-ABC process is more to their advantage. Apart from its one advantage of insulating the board of directors from the process, an ABC has a number of significant disadvantages, including:

Longer Time to Cash – Creditors and investors will not receive proceeds for at least 7 months (more quickly than in a bankruptcy but far slower than with a “date-certain” auction).

Higher Cost – Ultimately, ABCs tend to be more expensive than a “Date Certain M&A Process”. It is not uncommon for the entire value received from the sale of company assets to be consumed by fees and/or a transaction for maximizing value may not be consummated in a timely fashion.

Loss of Control – Once the assets are assigned to the independent third-party trustee, the board of directors has no further control over the process. It cannot modify the process in any way or discontinue the process. Thus, it is not possible to explore multiple options in parallel.

Higher Public Relations Profile – The longer time frame for the ABC process and the more formal (and public) legal nature of an ABC make it more difficult to put a positive spin on the final outcome.

Messy Exit – Most independent third-party trustees do not perform the services of cleanly shutting down the remaining corporate shell. Thus, investors must either pay another party to do this job or leave it undone, resulting in increased liability.

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 88 technology, medical device, life science, fuel cell and solar companies and their Intellectual Property and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, 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 San Francisco, New York, Virginia/Washington DC, Boston, Europe and Israel.

 

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February, 2015 Bidding Process for Date Certain M&A Palyon Medical Corp., its Assets and Intellectual Property

Posted in Uncategorized, tagged , , , , on February 2, 2015| Leave a Comment »

The Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of Palyon Medical Corp.

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

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

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

Prior to the bid date of March 6, 2015., I would encourage all interested parties to have their counsel speak with Maggie Wong, Esq. of Goodwin Procter counsel to Palyon. She is available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA. 415 733 6071 – mwong@goodwinprocter.com

The Bidding Process for Interested Buyers

Interested and qualified parties will be expected to sign a nondisclosure agreement (attached hereto as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence “war room” documentation (the “Due Diligence Access”). Each interested party, as a consequence of the Due Diligence Access granted to it, shall be deemed to acknowledge and represent (i) that it is bound by the bidding procedures described herein; (ii) that it has an opportunity to inspect and examine the Palyon Medical Corp. Assets and to review all pertinent documents and information with respect thereto; (iii) that it is not relying upon any written or oral statements, representations, or warranties of Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and Gerbsman Partners (and their respective, staff, agents, or attorneys) do not make any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the Palyon Medical Corp. Assets. Sealed bids must be submitted so that it is actually received by Gerbsman Partners no later than Friday, March 6, 2015 at 3:00 p.m. Central Daylight Time (the “Bid Deadline”) at Palyon Medical Corp.s’ office, located at 28432 Constellation Road, Santa Clarita CA . Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Palyon Medical Corp., Inc.). 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 the unsuccessful bidder.

Palyon Medical Corp. reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all of the assets from sale. Interested parties should understand that it is expected that the highest and best bid submitted will be chosen as the winning bidder and bidders may not have the opportunity to improve their bids after submission. Palyon Medical Corp. will require the successful bidder to close within a 7 day period. Any or all of the assets of Palyon Medical Corp. 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 Palyon Medical Corp. Assets shall be the sole responsibility of the successful bidder and shall be paid to Palyon Medical Corp. at the closing of each transaction.

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

Steven R. Gerbsman Gerbsman Partners

(415) 456-0628

steve@gerbsmanpartners.com

Kenneth Hardesty Gerbsman Partners

(408) 591-7528

ken@gerbsmanpartners.com

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