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Good Afternoon
The objective of this email is to qualify any interest on your company may have in utilizing the services of Gerbsman Partners to help maximize and monetize value of Intellectual Property which the company would like to sell or license to others.
Gerbsman Partners has observed that some medical device and life science companies have developed or acquired through acquisition Intellectual Property, that are not being fully utilized and can generate considerable value.
Given such situations, the Gerbsman Partners team is available to discuss and develop plans and strategies that can lead to the goal of monetizing and maximizing value of this IP.
Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property, as well as maximizing value for Intellectual Property Patents & Processes.  Since 2001, Gerbsman Partners has been involved in maximizing value for 103 technology, medical device, life science, solar, fuel cell, cyber security, consumer and digital marketing companies and their Intellectual Property and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A Transactions.
Gerbsman Partners has offices and strategic alliances in San Francisco, New York, McLean, VA/Washington DC, Orange County, Boston, Europe and Israel.
I look forward to speaking with you.

Best regards

Steve Gerbsman
Medial Device

Cardiovascular, Vascular, Endoscopy, Breast Imaging

  • Cardiomind Inc. – Stent delivery platform.
  • OmniSonics Medical Technologies Inc. – Vascular disease IP.
  • InnerPulse Inc. – Cardiac rhythm management (CRM) medical device company.
  • Myocor Inc. – Developing innovative cardiac reshaping devices to treat functional mitral regurgitation (FMR) and left ventricular (LV) dysfunction, both of which are significant in the progression of congestive heart failure (CHF).
  • NDO Surgical, Inc. – Flexible endoscopy technologies that enable surgical procedures through the body’s natural openings.
  • Viacor Inc. – Cardiac implant device for the treatment of functional mitral regurgitation.
  • XTENT Inc. – Customizable drug eluting stent systems for the treatment of cardiovascular disease.
  • GluMetrics, Inc. – Glucose monitoring medical device company
  • NeoGraft Technologies, Inc. – Acquired Vascular Patents from Kips Bay Medical
  • Palmaz Scientific, Inc. – Medical technology company
  • InterValve, Inc. – Medical devices for structural heart market
  • Gamma Medica – first fully digital, dual headed Molecular Breast Imaging (“MBI”) system

Spine

  • Applied Spine Technologies Inc. – Screw based dynamic stabilization system validated with Class 1 clinical data
  • AxioMed Spine, Corp. – Developed Freedom technology, with the goal of restoring spinal function to patients by adhering to the natural biomechanics of the spine.

Respiratory

  • Emphasis Medical Inc. – Endobronchial valves for the treatment of heterogeneous emphysema.
  • Uptake Medical, Inc. –  developing innovative, therapeutic bronchoscopic devices to treat advanced heterogeneous emphysema and lung cancer.

Orthopedics

  • NovaLign Orthopedic Inc. – Long bone fracture, intramedullary nail technology.

Opthomology

  • Optobionics – Retinal degeneration.
  • Refractec, Inc. – Radiofrequency (RF) device called ViewPoint CK System, used to perform NearVisionSM CK (Conductive Keratoplasty) treatment

Obesity

  • Satiety Inc. – Obesity product
Osteoperosis
     •   Tarsa Therapeutics –   Oral formulation contains recombinant salmon calcitonin – treatment pf postmenopausal osteoporosis

Life Science

  • Pluristem, Inc. – Stem cell research – Israel company
  • Igenica Biotherapeutics, Inc.. – harnessing the natural tumor microenvironment to deliver a pipeline of high-impact antibody-based cancer therapeutics
  • Pegasus Biologics Inc. – Developed and is commercializing a revolutionary bioscaffold comprised of highly organized collagen, sourced from equine pericardium that encourages the healing process by addressing the demands of a challenging biological environment.
  • Radiant Medical, Inc. – Endovascular therapeutic cooling.
  • Valentis, Inc. – Biotechnology company with small molecule, antibody, protein, gene and manufacturing assets.
  • Relypsa, Inc. – Acquisition of BioPharmaceutical Patents and Intellectual Property

 

 

 

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Advantages of ‘Date-Certain M&A Process over Standard M&A’

Every venture capital investor hopes that all his investment will succeed. The reality is, however, that a large percentage of venture investments eventually are shut down.

In the extreme they end in bankruptcy or assignment to creditors. The majority falls into the category of the “living dead.” Such companies are not complete failures, but their prospects do not justify continued investment, yet they are rarely shut down quickly.

Once reality has been recognized, most investors engage investment bankers to sell their investment off through prevailing M&A processes. Unfortunately, seldom with good results.

REASON #1

The main reason for that sad result is a fundamental misunderstanding of buyer psychology. In general, buyers act quickly and pay the highest price only by force of competitive pressure.

Potential buyers of the highest probability are those already familiar with the company for sale, such as competitors, existing investors customers and vendors. Once a sales process starts the seller is very much a diminishing asset. Both financially and organizationally.  Unless compelled to act, potential buyers simply start to draw out the process, submit a low-ball offer when the seller runs out of cash, or try to pick up key employees and customers at no cost.

REASON #2

The second reason is usually a misunderstanding of the psychology and methods of investment bankers.

Most investment bankers do best at selling “hot” companies. Companies whose value is perceived by buyers to be increasing quickly over time, and where there are multiple bidders.

They tend to be more motivated and work harder on such cases because transaction sizes –and resulting commissions– are larger and surrounding publicity can bring in new assignments, among others. They also tend to be more effective in maximizing value in such situations by using time to their advantage, pitting buyers against each other and setting very high expectations.

In a situation where time is not your friend, the actions of standard investment banking practices often make a bad situation much worse. Such actions include assigning less experience B-Teams to smaller transaction size cases, “playing out the process” which works against the seller, and pitting multiple players against each other which can drive away potential buyers who often know far more about the seller than does the banker.

 

THE GERBSMAN PARTNERS ‘DATE-CERTAIN’ M&A PROCESS

The most effective solution in situations where time is not on your side is a Date-Certain Merger and Acquisition Process.

Under this proprietary 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 to maximize the value of their intellectual properties and tangible assets. The Advisor works closely with board and corporate management to:

  • Focus on Control, Preservation and Forecasting of CASH
  • Develop a Strategy/Action Plan and Presentation to Maximize Value of Assets.
  • Plans to include Sales Materials, Due Diligence access. a list of all possible Interested Buyers for Intellectual Properties and Assets and Identify and Retain Key Employees on a go-forward basis.
  • Stabilize and provide Leadership, Motivation and Moral to all Employees.
  • Communicate with the Board of Directors, Senior Management, Senior Lender, Creditors, Vendors and all other Stakeholders in Interest.

THE PROCESS:

The company attorney prepares a simple “As-Is/Where –Is” asset sale documents. This document is very important and includes a “No-Reps or Warrantee” Agreement, as the board, officers and invertors typically do not want any additional exposure on a deal.

The advisor then follows up systematically with ALL potentially interested parties and coordinates their interactions with company personnel, including on-site visits.

Typical terms for a Date-Certain M&A asset sale exclude representations and warranties and include a sales date –typically four to six weeks – from the point of readying sales materials for distribution, a refundable CASH deposit in the range of $200,000, a strong preference for cash consideration and with the ability to close a deal in seven business days.

Date-Certain M&A terms can be varied to suit needs unique to given situations. For instance, the board may choose not to accept any bids, or to allow re-bids if there are multiple competitive bids, and/or allow early bids.

The typical workflow timeline from advisor hiring to transaction close and receipt of consideration is four to six weeks. Such timelines may be extended as circumstances warrant. Upon receipt of considerations, the restructuring/insolvency attorney then distributes funds to creditors and shareholders (if there is sufficient consideration to satisfy creditors), and takes all needed steps to wind down the remaining corporate shell. Typically in coordination with the CFO.

PROCESS ADVANTAGES:

Speed:   – The entire Date-Certain M&A Process can typically be concluded in 4 to 6 Weeks. Creditors and investors receive their money quickly. A negative PR impact on investors and board members related to a drawn out process is eliminated. Where required, such timelines can be reduced to as little as two to three weeks, however severely compressing the process often impacts the final value received during asset auction.

Reduced Cash Requirements:  – Owing to the Date-Certain M&A process’ compressed turn-around time, there is a significantly reduced need for any additional investor cash to support the company during the process.

Maximized Value:  – A quick and effective process during wind-down mode minimizes strain and rapid asset depreciation and thereby preserves enterprise value. The fact that an auction will occur on a certain date typically brings truly interested and qualified parties to the table. In our considerable experience, this process strongly aids in maximizing the final value received.

Cost:  – Advisory fees consist of a retainer and a performance fee, which is a percentage of the sales proceeds.

Control:  – At all time during the process, the board of directors retains complete control. For instance, it can modify the auction terms, or discontinue the auction at any point, thereby preserving all options for as long as possible.

Public Relations:  – As the entire sales process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all terms kept confidential. Accordingly investors can list the company in their portfolios as sold vs. having gone out of business.

A Clean Exit:  – Upon closing of the auction, considerations received are distributed and the advisor, under the leadership of the insolvency counsel, then takes all remaining steps to effect an orderly shut-down of the remaining corporate entity.

 

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 103 companies in a wide and diverse spectrum of industries, ranging from technology, life science, medical device, digital marketing, consumer to cyber security, to name only a few.

Since inception in 1980, Gerbsman Partners has successfully restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations, and has been involved in over $2.3 billion of financings, restructuring and M&A transactions.

 

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

 

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

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

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

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

 

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

Gerbsman Partners was the “innovator” in creating strategies to terminate or restructure prohibitive real estate leases and senior and sub-debt obligations.To date, we have terminated or restructured $810 million of such obligations for private and public companies, and which has allowed them to return to financial viability.

 

Accounts/Trade Payable Obligations

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

 

Software and Technology-related Licenses

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

 

About Gerbsman Partners

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

 

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

 

Steven R. Gerbsman
Principal
Gerbsman Partners

steve@gerbsmanpartners.com
http://www.gerbsmanpartners.com

BLOG of Intellectual Capital

http://blog.gerbsmanpartners.com

Skype: thegerbs

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San Francisco March, 2017

Gerbsman Partners – Maximizing Enterprise Value

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property, as well as maximizing value for Intellectual Property Patents. Since 2001, Gerbsman Partners has been involved in maximizing value for 103 technology, medical device, life science, solar, fuel cell, cyber security, consumer and digital marketing companies and their Intellectual Property and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M & A Transaction

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

Technology – IP

Software

  • Emergent Game Technologies, Inc. – Licensed and supported 3D/game software.
  • Capital Thinking – Enterprise Risk Management (ERM) platform, a credit and risk management software solution for the financial services industry.
  • Cesura – Web and on demand business software.
  • Conformia Software Inc. – Software solutions for highly regulated process industries – Life Science.
  • deNovis – Enterprise softwa re for government health and health insurance industry.
  • Aperion Inc. – Software.
  • Gentiae Inc. – Real-time fully automated processing of cardiac safety input and core lab operations. The system offers a comprehensive, real time web portal for sponsor and site access.
  • Banquet – Interactive sports entertainment.
  • ID Engines Inc. – Role-based access control (RBAC) across enterprise networks.
  • InDplay Inc. – Online, B2B video content distribution (monetization) platform, deployed on enterprise-quality software components, served in the SaaS (software-as-a-service) model.
  • Metreo Inc. – Pricing software for manufacturers and distributors.
  • Neohapsis Inc. – IT management services platform. Zone4Play – Interactive game technology.
  • Roots Web, Inc. – Geneology software.
  • StreamSearch, Inc. – Multimedia aggregator that has created a unique solution for indexing, locating, promoting, and distributing rich media on the Internet.
  • Technion University – Technology patents
  • Teranode Corporation – Business intelligence and lab automation solutions for the Life Science market.
  • USA Democracy, Inc. – Direct, verifiable, credible communications between elected representatives and their constituents through its non-partisan legislative-based website.
  • Utility.com, Inc. – Multi-utility eCommerce/eCRM technology, Web-based energy management technology.
  • Vcommerce, Inc. – Developed, deployed, and operated fully integrated, end-to-end supply chain execution systems and direct fulfillment infrastructure.
  • Intelectron, Inc. – Commercial lighting technology.
  • Skunk Technologies – Java based software
  • Bell & Howell – Information Intellectual Property/Patents

Food and Beverage Industry

  • Vigilistics, Inc. – Manufacturing analytic software

Telecom

  • Dialpad, Inc. – Web-to-phone service.
  • Simpler Networks, Inc./Hercules Technology Growth Capital – Telco software – a matrix switch platform that sits within the Telco’s central office (CO) or street cabinets. Developed to allow for universal access to any service, the system’s protocol-transparent design allows it to be placed in front of any existing or future access gear that delivers services over the local loop

Storage

  • Cornice Inc. – Storage and flash controllers.
  • PhaseMetrics Inc. – Storage systems manufacturer.
  • Plasmon, Inc. – Data archival storage technology

Networking/Optical Networking

  • CipherMax, Inc. – Storage networking.
  • Private Networks, Inc. – Broadband multicast delivery system utilizing digital satellite technology. The technology has universal applicability to many industries for distribution of high-band data and video.
  • Teak Technologies Inc. – Internet switching and gateway networking products.
  • Zeus Communications, Inc. – Hardware architecture of 10 Gbps IPSec VPN and firewall in a single board.
  • Optivia, Inc & Hercules Technology Growth Capital – Optical transport systems.
  • Princeton Lightwave, Inc. – Optical networking technology
  • T-Networks, Inc. – Optical networking components.
  • Transparent Networks, Inc. – Wavelength Selective Switch, a high performance large scale Photonic cross-connect functional prototype, detailed design and simulation validation of a Light Path Exchange with integrated DWDM, an HDTV display mirror array high level design and simulation, proprietary and unique MEMS design and validation engineering tools.
  • Network Photonics, Inc.
  • Cambridge NanoTech, Inc. – Materials Science company that developed high Performance turnkey equipment for Atomic Layer Deposition (“ALD”).

Mobile

  • eBiz mobility – Mobile business payment
  • YPS Software – ASP and software vendor for the PC and mobile phone industries, Mobile Entertainment Centre.
  • Teleflip – Mobile messaging.

Media/Advertising/Internet

  • Active Response Group Inc. – On line marketing company.
  • Akimbo Inc. – Monitizing on line media.
  • Competition Accessories, Inc. – Online direct marketing.
  • Gallery Player Inc. – Provider and distributor of high-value, rights managed high definition imagery for high definition televisions.
  • MeMedia Inc. – Online advertising solutions provider and ad network that delivers contextually and behaviorally targeted advertisements across a multi-modal network of websites and desktop applications.
  • MyWire Inc. – Paid content and advertising.
  • NebuAd, Inc. – Online advertising model. Next-generation digital media technology and solutions.
  • Syncapse, Inc. – Provider of technology-enabled social performance management services for global enterprise clients with multiple B2C brands.
  • Optify, Inc. – Software-as-a-Service (SaaS) provider of digital marketing suites company, its Assets and Intellectual Property.

Holographic & Biometric Technology – Laser Manufacturer

  • Aprilis, Inc./Dow Corning – Holographic Data Storage Drives and Biometric Security
  • Raydiance, Inc. – Manufacturer of precision solutions laser technology

Security

  • NeoScale Inc. – Storage encryption and key management solution for organizations securing information stored on tape and disk media.
  • Oviso Inc. – Semi conductor manufacturing equipment.
  • SciCortex, Inc. – Manufacturer of high performance computers.

Medical Device

Cardiovascular, Vascular, Endoscopy, Breast Imaging

  • Cardiomind Inc. – Stent delivery platform.
  • OmniSonics Medical Technologies Inc. – Vascular disease IP.
  • InnerPulse Inc. – Cardiac rhythm management (CRM) medical device company.
  • Myocor Inc. – Developing innovative cardiac reshaping devices to treat functional mitral regurgitation (FMR) and left ventricular (LV) dysfunction, both of which are significant in the progression of congestive heart failure (CHF).
  • NDO Surgical, Inc. – Flexible endoscopy technologies that enable surgical procedures through the body’s natural openings.
  • Viacor Inc. – Cardiac implant device for the treatment of functional mitral regurgitation.
  • XTENT Inc. – Customizable drug eluting stent systems for the treatment of cardiovascular disease.
  • GluMetrics, Inc. – Glucose monitoring medical device company
  • NeoGraft Technologies, Inc. – Acquired Vascular Patents from Kips Bay Medical
  • Palmaz Scientific, Inc. – Medical technology company
  • InterValve, Inc. – Medical devices for structural heart market
  • Gamma Medica – first fully digital, dual headed Molecular Breast Imaging (“MBI”) system

Spine

  • Applied Spine Technologies Inc. – Screw based dynamic stabilization system validated with Class 1 clinical data
  • AxioMed Spine, Corp. – Developed Freedom technology, with the goal of restoring spinal function to patients by adhering to the natural biomechanics of the spine.

Respiratory

  • Emphasis Medical Inc. – Endobronchial valves for the treatment of heterogeneous emphysema.
  • Uptake Medical, Inc. –  developing innovative, therapeutic bronchoscopic devices to treat advanced heterogeneous emphysema and lung cancer.

Orthopedics

  • NovaLign Orthopedic Inc. – Long bone fracture, intramedullary nail technology.

Opthomology

  • Optobionics – Retinal degeneration.
  • Refractec, Inc. – Radiofrequency (RF) device called ViewPoint CK System, used to perform NearVisionSM CK (Conductive Keratoplasty) treatment

Obesity

  • Satiety Inc. – Obesity product
Osteoperosis
     •   Tarsa Therapeutics –   Oral formulation contains recombinant salmon calcitonin – treatment pf postmenopausal osteoporosis

Life Science

  • Pluristem, Inc. – Stem cell research – Israel company
  • Igenica Biotherapeutics, Inc.. – harnessing the natural tumor microenvironment to deliver a pipeline of high-impact antibody-based cancer therapeutics
  • Pegasus Biologics Inc. – Developed and is commercializing a revolutionary bioscaffold comprised of highly organized collagen, sourced from equine pericardium that encourages the healing process by addressing the demands of a challenging biological environment.
  • Radiant Medical, Inc. – Endovascular therapeutic cooling.
  • Valentis, Inc. – Biotechnology company with small molecule, antibody, protein, gene and manufacturing assets.
  • Relypsa, Inc. – Acquisition of BioPharmaceutical Patents and Intellectual Property

Energy – Solar & Fuel Cell

  • Nanosolar
  • AQT Solar
  • SVTC Solar
  • Clear Edge Power, LLC – sold to Doosan in Korea
Consumer – Retail
 
      •  Bambeco, Inc. – manufacturer and distributer of sustainable and socially responsible home décor and furnishings in the United States
 

Steven R. Gerbsman
Principal
Gerbsman Partners
steve@gerbsmanpartners.com
http://www.gerbsmanpartners.com
 

BLOG of Intellectual Capital 
Skype: thegerbs

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Advantages of ‘Date-Certain M&A Process over Standard M&A’ – Gerbsman Partners

Every venture capital investor hopes that all his investment will succeed. The reality is, however, that a large percentage of venture investments eventually are shut down.

In the extreme they end in bankruptcy or assignment to creditors. The majority falls into the category of the “living dead.” Such companies are not complete failures, but their prospects do not justify continued investment, yet they are rarely shut down quickly.

Once reality has been recognized, most investors engage investment bankers to sell their investment off through prevailing M&A processes. Unfortunately, seldom with good results.

 

REASON #1

The main reason for that sad result is a fundamental misunderstanding of buyer psychology. In general, buyers act quickly and pay the highest price only by force of competitive pressure.

Potential buyers of the highest probability are those already familiar with the company for sale, such as competitors, existing investors customers and vendors. Once a sales process starts the seller is very much a diminishing asset. Both financially and organizationally.  Unless compelled to act, potential buyers simply start to draw out the process, submit a low-ball offer when the seller runs out of cash, or try to pick up key employees and customers at no cost.

 

REASON #2

The second reason is usually a misunderstanding of the psychology and methods of investment bankers.

Most investment bankers do best at selling “hot” companies. Companies whose value is perceived by buyers to be increasing quickly over time, and where there are multiple bidders.

They tend to be more motivated and work harder on such cases because transaction sizes –and resulting commissions– are larger and surrounding publicity can bring in new assignments, among others. They also tend to be more effective in maximizing value in such situations by using time to their advantage, pitting buyers against each other and setting very high expectations.

In a situation where time is not your friend, the actions of standard investment banking practices often make a bad situation much worse. Such actions include assigning less experience B-Teams to smaller transaction size cases, “playing out the process” which works against the seller, and pitting multiple players against each other which can drive away potential buyers who often know far more about the seller than does the banker.

 

THE GERBSMAN PARTNERS ‘DATE-CERTAIN’ M&A PROCESS

The most effective solution in situations where time is not on your side is a Date-Certain Merger and Acquisition Process.

Under this proprietary 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 to maximize the value of their intellectual properties and tangible assets. The Advisor works closely with board and corporate management to:

  • Focus on Control, Preservation and Forecasting of CASH
  • Develop a Strategy/Action Plan and Presentation to Maximize Value of Assets.
  • Plans to include Sales Materials, Due Diligence access. a list of all possible Interested Buyers for Intellectual Properties and Assets and Identify and Retain Key Employees on a go-forward basis.
  • Stabilize and provide Leadership, Motivation and Moral to all Employees.
  • Communicate with the Board of Directors, Senior Management, Senior Lender, Creditors, Vendors and all other Stakeholders in Interest.

 

THE PROCESS:

The company attorney prepares a simple “As-Is/Where –Is” asset sale documents. This document is very important and includes a “No-Reps or Warrantee” Agreement, as the board, officers and invertors typically do not want any additional exposure on a deal.

The advisor then follows up systematically with ALL potentially interested parties and coordinates their interactions with company personnel, including on-site visits.

Typical terms for a Date-Certain M&A asset sale exclude representations and warranties and include a sales date –typically four to six weeks – from the point of readying sales materials for distribution, a refundable CASH deposit in the range of $200,000, a strong preference for cash consideration and with the ability to close a deal in seven business days.

Date-Certain M&A terms can be varied to suit needs unique to given situations. For instance, the board may choose not to accept any bids, or to allow re-bids if there are multiple competitive bids, and/or allow early bids.

The typical workflow timeline from advisor hiring to transaction close and receipt of consideration is four to six weeks. Such timelines may be extended as circumstances warrant. Upon receipt of considerations, the restructuring/insolvency attorney then distributes funds to creditors and shareholders (if there is sufficient consideration to satisfy creditors), and takes all needed steps to wind down the remaining corporate shell. Typically in coordination with the CFO.

 

PROCESS ADVANTAGES:

Speed:   – The entire Date-Certain M&A Process can typically be concluded in 4 to 6 Weeks. Creditors and investors receive their money quickly. A negative PR impact on investors and board members related to a drawn out process is eliminated. Where required, such timelines can be reduced to as little as two to three weeks, however severely compressing the process often impacts the final value received during asset auction.

Reduced Cash Requirements:  – Owing to the Date-Certain M&A process’ compressed turn-around time, there is a significantly reduced need for any additional investor cash to support the company during the process.

Maximized Value:  – A quick and effective process during wind-down mode minimizes strain and rapid asset depreciation and thereby preserves enterprise value. The fact that an auction will occur on a certain date typically brings truly interested and qualified parties to the table. In our considerable experience, this process strongly aids in maximizing the final value received.

Cost:  – Advisory fees consist of a retainer and a performance fee, which is a percentage of the sales proceeds.

Control:  – At all time during the process, the board of directors retains complete control. For instance, it can modify the auction terms, or discontinue the auction at any point, thereby preserving all options for as long as possible.

Public Relations:  – As the entire sales process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all terms kept confidential. Accordingly investors can list the company in their portfolios as sold vs. having gone out of business.

A Clean Exit:  – Upon closing of the auction, considerations received are distributed and the advisor, under the leadership of the insolvency counsel, then takes all remaining steps to effect an orderly shut-down of the remaining corporate entity.

 

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 102 companies in a wide and diverse spectrum of industries, ranging from technology, life science, medical device, digital marketing, consumer to cyber security, to name only a few.

Since inception in 1980, Gerbsman Partners has successfully restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations, and has been involved in over $2.3 billion of financings, restructuring and M&A transactions.

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

 

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Good afternoon

Jim Gilligan, Ken Hardesty and I would like to thank you for your continued interest in the Tarsa assets and IP.

As the bid date for the assets and IP of Tarsa is on Tuesday, January 23, 2018 (see Bidding Process below), I have attached:

  1. Anabbreviated list of the due diligence documentation contained in the Tarsa Virtual Data Room “ VDR”. Given the advanced stage of the Tarsa assets and the completed NDA review by the FDA, the documents contained in the VDR are both extensive and complete.  The attached TOC lists the directories in the VDR each of which has a full complement of documents to support TBRIA and the Tarsa Opportunity.  All documents will be available during the due diligence process for interested parties, subject to an NDA.
  2. A draft Asset Purchase Agreement “APA” and list of Tarsa Assets. Prior to the bid date of January 23, 2018, I would encourage all interested parties to have their counsel speak with William Whelan, Esq. of Mintz Levin.   Bill will be available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA.  Bill’s office number is 617 348-1869 wtwhelan@mintz.com
  3.  Refundable wire transfer informationis below.  This is required for all interested buyers.

Any and all the assets of Tarsa 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 Tarsa (http://tarsatherapeutics.com) to solicit interest for the acquisition of part or substantially all of Tarsa’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Tarsa 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 Tarsa’s Assets has been supplied by Tarsa. 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 Tarsa 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.

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

Any sale of the Tarsa 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 Tarsa and Gerbsman Partners. Without limiting the generality of the foregoing, Tarsa and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Tarsa 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 Tarsa 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 Tarsa, 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 Tarsa Assets. Each sealed bid must be submitted so that it is received by Gerbsman Partners no later than Tuesday – January 23, 2018 at 5:00pm Eastern Standard Time (the “Bid Deadline”) at Tarsa’s offices, located at 1628 JFK Blvd, # 1400, Philadelphia, PA 19103. 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. 

Tarsa 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.  

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

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

Steven R. Gerbsman                                                  

Gerbsman Partners                                                    

steve@gerbsmanpartners.com                  

 

Kenneth Hardesty

Gerbsman Partners

ken@gerbsmanpartners.com

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

 

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

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

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

 

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

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

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

 

Accounts/Trade Payable Obligations

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

 

Software and Technology-related Licenses

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

 

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 102 companies in a wide and diverse spectrum of industries. In the process, GP has successfully restructured/terminated over $810 million of real estate executor contracts and equipment lease/sub-debt obligations, and has assisted in over $2.3 billion of financings, restructurings and M&A transactions.

 

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

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