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Art of the Sale: Advice to Help You Win the Negotiation Game (and Land New Customers) Lou Imbriano CEO, TrinityOne, Inc

Posted in Uncategorized, tagged , , , on December 25, 2014| Leave a Comment »

Art of the Sale: Advice to Help You Win the Negotiation Game (and Land New Customers)

CEO, TrinityOne, Inc

You have to understand all the pieces of the sales puzzle–sales, negotiation and fulfillment–before you can learn how they fit together to create business success.
During my tenure in both radio and TV management, and as the chief marketing officer of a professional sports team, my roles encompassed not only creating and managing the sales and sponsorship plans, but also to serve as the lead negotiator for all those deals. The intention of these plans and the salespeople executing them was to get the prospect to a “yes” in doing a deal with their organization. Although that may seem like any salesperson’s obvious goal, it’s important to understand that a “yes” in a sales situation doesn’t always mean the deal is closed. In fact, the reality is a “yes” at the end of a sales process is just the beginning.The terms “sales” and “negotiation” are the rival siblings of the deal-making process, and they often don’t harmoniously coexist. For instance, when we “closed” the first naming-rights deal for a new stadium, the presumption was that our job was done. But we didn’t take into consideration the length of time and all the hurdles we’d face to actually get a signed document. The process took months, with an enormous amount of frustration and haggling that was often unproductive and irrelevant.When you’re part of a large organization, the extra work and time that’s spent on a deal can be masked by the number of employees in the organization. In your small business, however, long, drawn-out negotiations might be catastrophic: You don’t always have the depth to absorb the additional work and duration of a long negotiation. That’s why sales and negotiations, which are quite often viewed as two separate processes, need to work together to ensure efficient and effective resolve for the purpose of generating revenue.

Working as a Team

To help ensure that the pitfall of sales and negotiation doesn’t trip up your small business, make sure your company’s sales process isn’t just a separate department whose only goal is to get new business in the door. Instead, sales should be just the first step in an overall process of bringing in new business. The employees responsible for sales, negotiation and fulfillment all need to perform as a team to ensure you’re not saddled with gaps, confusion or inconsistency when a new deal’s been put on the books.

To make this happen, you should review your current organization, then put a process in place to ensure the company performs as a cohesive championship team rather than as a group of individual hotshots. When you approach a new business deal, make sure the three following areas are taken into consideration as a single process, not as separate functions.

1. Sales Steps and Communication

It’s helpful that the person responsible for bringing in the business isn’t just focused on the “ask” or the “close,” but also on all the information that needs to be gathered during the sales process that could help final negotiations and fulfillment. The business rep should be mindful of all the details that could affect other areas of the operation, then the pertinent details must be communicated to those taking over the relationship after the sale’s been completed. Sure, there is a sales process that has to take place to get revenue in the door . There are varying schools of thought on the proper mix of identifying prospects and performing research on potential customers, as well as different methods of outreach and engagement. But more important than specific sales process is how a small business engages and communicates with potential consumers.

To help you and your team get a prospect to say and keep saying “yes,” keep in mind what I call the “Three Gs to Gold”—gather, give, get—during the sales process:

Gather. Devise a cost-effective way to gather information about your customers and potential customers. Remember, current customers are also potential customers because you want to be growing the amount of money that customers are currently spending with you. Don’t focus solely on new business—focus on all business.

Take notes on your customers to make sure you understand what each customer truly wants, not just what you want to sell. To close a deal, you must not assume your product or service is the end all be all for your potential customers. We’re not living in a cookie-cutter world, so one size fits all is a terrible sales strategy. One way to do this is by using customer relationship management (CRM) software. Because there are a lot of products out there, you should be able to find an option that’s affordable for you. Salesforce is what I use, but Batchbook is another viable option, and Nimble uses its technology to feed in social data to your database. Whatever you do, find a solution that fits best with your company and use it religiously. I always tell my restaurateur friends that their waiters and waitresses should not only be taking orders—they should be taking notes.

Give. Once you know your customers, you can give them what they want and customize their experience to fit their needs and goals. But let me be clear: I’m not suggesting you change your products and services permanently to fit the needs of each of your customers. What I am suggesting is that you do what’s possible to customize the experience so your customers don’t want to go anywhere else. For instance, if you are selling a product such as pasta, I am not recommending you change your recipe to cater to one customer. But you should customize the experience so that customers do not want to go anywhere else. However, taking into consideration the restaurant advice provided above, by all means alter the meal to meet the customer’s wants . Your understanding of your customers’ needs and the relationships you develop with them may lead to a lifetime of sales as opposed to a single transaction. This second “G” will also greatly aid in the negotiation process and lead to a smoother back and forth to close a deal.

Get. Don’t just get your customers  to pay you—get their feedback, too. Once the sale is complete and you’ve provided your product or service, keep asking your customers questions so you’ll understand how to make your products and services better. The more feedback you receive, the better you’ll be at closing your customers again and again.

There are many ways to get this feedback—the key is not being afraid to ask. Companies such as Survey.com and SurveyMonkey can be helpful with broad-stroke questions and can even use social data to assist in verifying the validity of your customers’ answers. However, I’m partial to the “old-fashioned” way of doing things: personally asking your customers for feedback and insights regarding their experiences. Not only will asking them face to face or over the phone provide the data you need, but it will also assist in building relationships.

One last note: Don’t simply gather information so you can load each prospect’s profile with data. Instead, have your salespeople meet with the people who handle fulfillment to identify the data that can best assist them—this will help ensure that the nuances of the information aren’t missed. Having the information in your CRM system means the details will be readily available when it’s time to move on to the next stages of the process.

Just following steps to get one sale or your first sale is short sighted. For long-term sustainability, you must be concerned with the relationships you possess with customers and not just what they purchase from you. The Three Gs to Gold should guide you to make sure you are properly attending to the consumer to ensure not only one transactional sale, but, more importantly, a lifetime of sales.

2. Negotiation Preparation

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The more information that’s gathered during the sales process, the more efficient the negotiations are likely to be. The data should include details on the type of personalities that will be on the other side of the table, such as their negotiating style and personal information. Having a fix on the people involved in the negotiation process is sometimes more important to the details of the deal—understanding the egos at the table can be very helpful in getting a deal closed quickly. Prior to any prospecting, never mind negotiation, you must research potential clients and build profiles on them  to understand their makeup and characteristics. Understanding who they are will greatly aid in communicating with them to get to a closed deal. This will also help to break down barriers between the two sides. Often the animosity in a negotiation stems from not truly knowing the party on the other side of the table. The sales process and taking notes should complete any of the research done prior to the sale.

When I first started my company, TrinityOne, a three-employee operation at the onset, I lost a deal because I focused too much on the services we would provide instead of paying attention to the characteristics of the main person doing the negotiating for the other side. I was so sure we were the best option for this potential client, I lost sight of the fact that the ego on the other side of the table wasn’t negotiating for services; he was negotiating for superiority. He needed a win, beyond the logic of how the services would make his company better.  I wasn’t in tune with the personalities as deeply as I should have been. I probably could have closed the deal if I’d handled it the same way I did when I had the sports team’s brand behind me. But as a startup, I didn’t have the luxuries of a big brand, and I should have negotiated differently.

What I learned was that the services we provided were only one aspect of what the client wanted. Keep in mind these five negotiation nuggets to help you set the table for a more conducive and expedient way of getting the deal done:

  1. Understand the goals the client wants to accomplish in using your product or services.
  2. Know how the client wants to work with your company and the role you need to play.
  3. Have a full grasp on the “wins” of a client. (Remember, “wins” go well beyond company goals.)
  4. Be mindful of the client’s style and whose style in your group fits best.
  5. Don’t be afraid to say “no” when appropriate. It will lead to a deeper respect for you.

3. Meeting Expectations

Advancing from making the sale and negotiation to getting the signed contract and payment in a deal can be a satisfying experience . But the deal isn’t complete until customers receive what they  bargained for and, if you’re a great business, you go above and beyond what was expected. Understanding the process of fulfilling the deal and knowing that your company can actually get the job done are critical for business success. If you can do all that you say you can and exceed your customers’ expectations, it’s likely that you could not only recognize revenue from the closed deal, but also earn additional future revenue from the same company and from referrals.

Also, realize it’s those stated and implied expectations that need to be met, not just the list of fulfillment items on the agreement. It’s helpful to keep something in your “back pocket” to give to the client during the execution of the deal. Something of low cost or no cost is preferable so you don’t erode the margins of the deal.

When I was working for the sports team, we would take people down on the field pregame as an extra bonus. These on-field passes were not part of the deal and always made the clients feel extra special. You can likewise give something to a client that is not part of the deal, but makes them feel special.

Let’s go back to that restaurant example, but now, you’re the customer: Think about how you feel when you order a meal at a restaurant and it doesn’t meet your expectations. Perhaps the restaurant brought you the type of food you ordered, but it missed the point on how you wanted it prepared. You’re probably unlikely to return for another meal at that same restaurant or recommend it to a friend. But at the end of the meal, if you are given a complimentary drink or dessert, that extra special treatment may change how you feel, and you may be willing to look past small mistakes. Obviously, I am not endorsing mistakes, and am just trying to serve up the power of giving more than your customer bargained for.

Perfectly nailing this third area of the sales process is so important because there’s a ripple effect that starts with your performance. The ripples can either cause revenue growth or lead you to business destruction.

If you think fulfillment isn’t part of the sales process, you’re sadly mistaken. The sale continues way beyond the “yes” and is a fluid, living process for the entire existence of your business. Consider the process neverending if you want to generate consistent revenue and growth.

Lou Imbriano serves as managing partner of the Imbriano Group, a venture firm that provides intellectual capital and revenue building business strategies to organizations of all sizes. He also serves as president and CEO of TrinityOne, a sports marketing consultancy that works with organizations to turn around their marketing efforts and increase profitability. Imbriano was the vice president and chief marketing officer of the New England Patriots and Gillette Stadium for nine seasons and chief operating officer for the New England Revolution for three seasons.

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May 21 Update to ClearEdge Power, Inc. – Asset Purchase Agreement and Bid Procedures, subject to Court approval

Posted in Uncategorized, tagged , , , , , on May 21, 2014| Leave a Comment »

 

Sale of ClearEdge Power, Inc.

Further to Gerbsman Partners emails of May, 14, 2014 and May 1, 2014, regarding the sale of Assets and Intellectual Property of ClearEdge Power, Inc. (“ClearEdge”), ClearEdge and two of its subsidiaries (collectively, “ClearEdge Power”) filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code (“Bankruptcy Code”) in the United States Bankruptcy Court for Northern District of California, San Jose Division (such cases are jointly administered under Case No. 14-51955)

Gerbsman Partners – http://gerbsmanpartners.com – has been retained by ClearEdge (http://www.clearedgepower.com) to solicit interest for the acquisition of all or substantially all of ClearEdge’s assets, including its Intellectual Property in whole or in part (collectively, the “ClearEdge Assets”) and equipment, inventory and work-in-progress located at ClearEdge Power’s various facilities. Attached is a sales memorandum, patent list, fixed asset list and inventory list.

Please be advised that the ClearEdge Assets are being offered for sale pursuant Section 363 of the United States Bankruptcy Code. It is anticipated that the Bankruptcy Court will approve certain sale procedures within the next 30 days and sale procedures will set forth when and how bids, will be submitted, deposit requirements and if the bids are subject to overbids. Final Sale Procedures are subject to Court approval, which the ClearEdge expects in early June.

Outlined below is a summarization of the basic provisions of the Bidding Process being reviewed by the Court and a ClearEdge Asset Purchase Agreement to be submitted by all interested and qualified parties.

Please call Stephen O’Neill, Esq. 408 843 2719 oneill.stephen@dorsey.com and/or John WalsheMurray, Esq. 408 843 2718 murray.john@dorsey.com regarding legal questions.

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

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing 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, as the Fixed Asset, Inventory and Patent lists may not be accurate.

Gerbsman Partners, and their respective staff and agents, (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 ClearEdge Power’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the ClearEdge Power Assets will be made pursuant to the Bankruptcy Code and will require approval of the United States Bankruptcy Court. All sales will be “as-is,” “where-is,” and on a “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Gerbsman Partners. Without limiting the generality of the foregoing, Gerbsman Partners and their respective staff and agents, hereby expressly disclaim any and all implied warranties concerning the condition of the ClearEdge Power’s 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.

BID PROCEDURES

In the exercise of their good faith reasonable business judgment, ClearEdge Power, Inc., ClearEdge Power LLC and ClearEdge Power International Service LLC (collectively, the “Debtors”) have determined to solicit and complete a transaction (a “Transaction”) selling substantially all of the Debtors’ assets, in whole or in part (the “Purchased Assets”), subject to the approval of the United States Bankruptcy Court for the Northern District of California, San Jose Division, Courtroom 3070, 280 S. First Street, San Jose, CA 95113-3099 (the “Bankruptcy Court” or the ‘Court”) after an opportunity for Qualified Bidders (as defined below) to submit competing bids (“Competing Bid(s)” or ”Bid(s)”) at an auction (the “Auction”).

Subject to approval of the Bankruptcy Court, the procedures hereinafter set forth (the “Bid Procedures”) will govern the bidding and sale process. As provided below and in the Purchase Agreement (as defined below), the Bid Procedures will be incorporated into a binding order (the “Bid Procedures Order”) entered by the Bankruptcy Court.

Bidding Process

The Debtors will:

(a) Determine the steps to be completed, and the timing in respect of such steps, for the marketing and sale of the Purchased Assets[1];

(b) Determine whether any person is a Qualified Bidder (as defined below);

(c) Determine whether a Qualified Bidder has made a Qualified Bid (as defined below); and

(d) Negotiate any offer set forth in a Qualified Bid.

Participation Requirement

Unless otherwise ordered by the Bankruptcy Court, in order to participate in the bidding process, each person (a “Potential Bidder”) must first deliver to: TGI Financial, Inc. dba Gerbsman Partners (“Gerbsman” or “Gerbsman Partners”), Attn: Steven R. Gerbsman, email steve@gerbsmanpartners.com, tel.: 415 505-4991, an executed confidentiality agreement in form and substance reasonably acceptable to the Debtors.

Access To Due Diligence Materials

Upon a Potential Bidder’s satisfaction of the participation requirements described herein, such bidder will be deemed to be a “Qualified Bidder.” The Debtors shall afford each Qualified Bidder due diligence access to the Debtors’ assets and business, subject to competitive and other business concerns, which diligence may include access to the Debtors’ electronic data room, management presentations and site visits, and such other diligence as Potential Bidders may request and to which the Debtors, in their sole and absolute discretion, may agree; provided, however, that the Debtors shall have no obligation to provide due diligence access to any Qualified Bidder after the Bid Deadline (as defined below). The Debtors will coordinate efforts and provide all reasonable requests for additional information and due diligence access for Qualified Bidders. The Debtors will provide a form of proposed asset purchase agreement (a “Purchase Agreement”) to each Qualified Bidder.
The Debtors (and their respective staff, agents, attorneys or representatives) make no representation or warranty as to the information to be provided through the due diligence process or otherwise, except to the extent set forth in the Purchase Agreement with the Successful Bidder (as defined below). Each Qualified Bidder, as a consequence of the due diligence access granted to it, shall be deemed to acknowledge and represent (i) that it has had an opportunity to inspect and examine the Debtors’ assets and business and to review all pertinent documents and information with respect thereto; (ii) that it is not relying upon any written or oral statements, representations, or warranties of the Debtors or Gerbsman Partners, or their respective staff, agents, attorneys or representatives; and (iii) all such documents and reports have been provided solely for the convenience of the Qualified Bidder, and the Debtors and Gerbsman Partners (and their respective employees, agents, attorneys, representatives, consultants and financial advisors) do not make any representations as to the accuracy or completeness of the same.

Bid Deadline

The deadline for submitting bids by a Qualified Bidder is June 25, 2014, at 4:00 p.m. (Pacific Daylight Time) (the “Bid Deadline”). No later than the Bid Deadline, a Qualified Bidder that desires to make a bid to acquire the Purchased Assets (a “Bid”) shall deliver written copies of its Bid in both written and electronic format to: (1) counsel for the Debtors, Dorsey & Whitney LLP, 305 Lytton Avenue, Palo Alto, CA 94301, email: murray.john@dorsey.com (“Mr. Murray”); and (2) Gerbsman Partners, Attn: Steven R. Gerbsman, email steve@gerbsmanpartners.com.

Determination of Qualified Bid Status

In order to be eligible for consideration as a Qualified Bid (defined below), each Bid must satisfy each of the following conditions:

(a) Marked Purchase Agreement: A Bid must be accompanied by a black-lined version of the Purchase Agreement (including any schedules or disclosures that are a part thereof) showing the purchase price and any changes to the Purchase Agreement requested by the Bidder, including those related to the assumption and assignment of contracts and licenses, and other material terms such that the Debtors may determine how such Bid compares to the terms of the Purchase Agreement and Competing Bids.

(b) Assets: Bids may be submitted for all or part of the Purchased Assets. Bids must identify, with specificity, which Purchased Assets are included in such Bid.

(c) Combining Bids: The Debtors, in their sole and absolute discretion, may determine that the sum of bids for less than all of the Purchased Assets is collectively the best and highest bid for all of the Purchased Assets and, upon such determination, may combine such bids.

(d) Joint Bids: Prospective Qualified Bidders may submit a “joint competing bid” for the Purchased Assets; provided, however, that the identity of each bidder participating in such “joint bid” must be disclosed in the Bid, and such “joint bid” will be subject to section 363(n) of the Bankruptcy Code.

(e) Conditions/Contingencies: Except as provided in the Purchase Agreement, a Qualified Bid must not be subject to material conditions or contingencies to closing, including without limitation obtaining financing, internal approvals or further due diligence.

(f) Authorization: A Bid must include evidence of authorization and approval, subject to verification by the Debtors and Gerbsman, from such Qualified Bidder’s board of directors or governing body with respect to the submission, execution, delivery and closing.

(g) Good Faith Deposit: Each Qualified Bid shall be accompanied by a good faith cash deposit in the amount of $250,000 in the form of a wire transfer, certified check or other form acceptable to the Debtors in their sole and absolute discretion. Each good faith deposit will be deposited and held in the trust account of Dorsey & Whitney LLP, counsel to the Debtors (“Dorsey”). Requests for wire transfer instructions should be directed to Mr. Murray.

(h) Evidence Of Financial Ability To Perform: Each Bid must contain evidence satisfactory to the Debtors, in their sole and absolute discretion, that the bidder is reasonably likely (based upon financial wherewithal, availability of financing, experience and other considerations) to be able to timely consummate a Transaction if selected as the Successful Bidder, and must further provide adequate assurance of future performance of all contracts and leases to be assumed and assigned. Such evidence must include, without limitation, the Qualified Bidder’s most current audited and latest unaudited financial statements or, if the bidder is an entity formed for the purpose of making a bid, the current audited and latest unaudited financial statements of the equity holder(s) of the bidder or such other form of financial disclosure, and a guaranty from such equity holder(s).

(i) Bid Irrevocable/Back-up Bid: A Bid must provide that it is irrevocable until two (2) business days after the closing of the Sale. Each Qualified Bidder further agrees that its Bid, if not chosen as the Successful Bidder, shall serve, without modification, as a Back-up Bid (as defined below) or Alternate Back-up Bid (as defined below) as may be designated by the Debtors at the Sale Hearing, in the event the Successful Bidder fails to close as provided in the Purchase Agreement, as modified, if at all, and the Sale Order.

(j) A written statement agreeing to being contractually bound by all of the terms of these Bid Procedures.

After the Bid Deadline, the Debtors will immediately review all Bids and will notify any Qualified Bidder whose Bid does not meet the above requirements why such Bid is insufficient. All Bidders shall have until June 30, 2014 (the “Qualifying Bid Deadline”), to cure any deficiencies in their Bids in order to become Qualified Bids. A Bid received from a Qualified Bidder on or before the Qualifying Bid Deadline that meets the above requirements, in the Debtors’ sole and absolute judgment, will constitute a qualified bid (a “Qualified Bid”). No later than five (5) days before the Sale Hearingall Bidders shall be notified whether or not their Bids are Qualified Bids. In the event a Bid is determined not to be a Qualified Bid, such Bidder shall be refunded its good faith deposit within three (3) business days of that determination.

Selection of Stalking Horse Bid

At any time prior to the hearing before the Bankruptcy Court to conduct the Auction of the Purchased Assets (the “Sale Hearing”), the Debtors may, in their sole and absolute discretion, designate a Qualified Bid as the “Stalking Horse Bid” submitted by the “Stalking Horse Bidder” for the Purchased Assets who shall execute the Purchase Agreement, subject to any modifications as agreed upon by the Debtors (the “Stalking Horse Purchase Agreement”). Such designation may result in a modification of these Bid Procedures. Immediately upon any such designation, the Debtors shall provide notice to all Qualified Bidders of such designation and provide such bidders with the Stalking Horse Purchase Agreement and the revised Bid Procedures, if any.

In the event the Debtors do not designate a Stalking Horse Bidder, each Qualified Bid will be designated a Competing Bid (defined below). At the Auction, the Debtors will announce one or more Qualified Bids to be the highest and best bid (s) for the Purchased Assets, in whole or in part, and the Auction will be conducted in accordance with the procedures set forth below.

The Auction and Sale Hearing

The Debtors shall hold the Auction at the Sale Hearing at the Bankruptcy Court before the Honorable Charles Novack, United States Bankruptcy Judge, at which time the Debtors shall conduct the Auction for Qualified Bidders to submit Bids for the Purchased Assets (each, a “Competing Bid” submitted by a “Competing Bidder”).

The Debtors and their advisors will conduct the Auction. At the beginning of the Auction, the Debtors shall announce (a) the Stalking Horse Bid or, in the event that no Stalking Horse Bid has been designated, one or more of the Competing Bids as the highest and best Bid(s) for the Purchased Assets (the “Opening Bid(s)”), and (b) the manner in which the bidding will be conducted. Any disputes arising with respect to any aspect of the Auction will be resolved by the Debtors in their sole and absolute discretion.

All Qualified Bidders, including the Stalking Horse Bidder, if any, may submit further Competing Bids, along with a markup or a further markup of the Purchase Agreement. The Auction will be conducted in rounds. All bidders are required to bid in each round or they forfeit their right to participate in subsequent rounds. At any time, a bidder may request that the Debtors announce the then current highest and best bid. If requested, the Debtors shall use reasonable efforts to clarify any and all questions any Qualified Bidder may have regarding the Debtors’ announcement of the then current highest and best bid. Bidders will have no longer than ten minutes between bidding rounds. If a bidder is not present in time to submit a bid in the next round, that bidder forfeits its right to participate in subsequent rounds.

In the event that a Stalking Horse Bidder is designated, each Competing Bid made at the Auction for the Purchased Assets in a single Transaction following announcement of the Opening Bid or Bids must be, at a minimum, equal to the sum of (i) the Purchase Price (as defined in the Stalking Horse Purchase Agreement); (ii) $250,000 representing the Break-Up Fee (defined below); and (iii) $500,000.00.

Each Competing Bid thereafter must be in increments of no less than the greater of (a) 5% of the Purchase Price (or, in the instance no Stalking Horse Bid is designated, 5% of the Purchase Price of the best and highest bid(s) as determined and announced by the Debtors prior to the Auction, and (b) $250,000; provided, however, that the Debtors reserve the right, in their sole and absolute discretion, to modify the incremental bidding requirement at the Auction.
An overbid made by a Competing Bidder must remain open and binding on the Competing Bidder for (a) each round of bidding, and (b) for those Competing Bidders not selected as the Successful Bidder for purposes of serving as a Back-up Bid or Alternate Back-up Bid (as defined below).

All bids must be in cash.

The Debtors may, in their sole and absolute discretion, (a) determine which Qualified Bid, if any, is the highest and best bid for the Purchased Assets, and (b) reject at any time before the entry of the Sale Order any bid that is (i) inadequate or insufficient, (ii) not in conformity with the requirements of the Bankruptcy Code or the Bid Procedures, or (iii) contrary to the best interests of the Debtors, the bankruptcy estates, and creditors and interest holders thereof.

At the conclusion of the Auction, the Debtors shall announce the winner of the auction (the “Successful Bidder(s)”) and request that the Court enter the Sale Order reciting the same.
The Debtors may announce at any time prior to or during the Auction such modifications to the Bid Procedures that they, in their sole and absolute discretion, believe will better promote the goals of the auction process and are in the best interest of the bankruptcy estates.

The Debtors may, in their sole and absolute discretion, prior to or during the auction, postpone or terminate the auction and the sale process without selecting any Bid as the Successful Bid. Neither the Debtors, their bankruptcy estates, employees, agents, attorneys, representatives, consultants nor financial advisors shall have any liability to anyone if the Debtors postpone or terminate the auction and the sale process.

The Debtors may modify these Bid Procedures if they determine, in their sole and absolute discretion, such modifications to be in the best interest of the bankruptcy estates.

Bid Protections

In the event the Debtors designate a Stalking Horse Bidder and the Stalking Horse Bidder is not the Successful Bidder, the Debtors shall pay in consideration of its being the Stalking Horse Bidder and to reimburse it for its reasonable and necessary out of pocket expenses, including all professional fees, an amount up to $250,000 (the “Break-Up Fee”) in accordance with the terms and conditions set forth in the Purchase Agreement and as approved by the Bankruptcy Court. If the Stalking Horse Bidder submits an overbid it will not be entitled to the Break-Up Fee. No other bidder will be entitled to any expense reimbursement, break-up fee, termination or similar fee or payment. Such payments are conditioned on the close of a Transaction.

“As Is Where Is”

The sale of the Purchased Assets will all be on an “as is, where is” basis without representations or warranties of any kind or nature, except to the extent set forth in the purchase agreement(s) with the Successful Bidder(s). Except as may be set forth in such purchase agreement(s), the Purchased Assets are sold free and clear of any and all liens, claims, interests, encumbrances, restrictions, charges and encumbrances of any kind or nature to the fullest extent permissible under the Bankruptcy Code, with such liens, claims, interests, encumbrances, restrictions, charges, and encumbrances to attach to the net proceeds of sale in their order of priority.

Conclusion of the Auction, Determination of the Successful Bidder and Sale Hearing

At the conclusion of the bidding, the Debtors shall (1) determine the Successful Bidder(s) on the basis of, among other things: (a) the amount of the Qualified Bid(s), (b) the number, type and nature of any modifications to the Purchase Agreement, and the extent to which such modifications are likely to delay the closing of a sale of the Purchased Assets and the costs attendant thereto, (c) the likelihood of the bidder’s ability to close a Transaction and the timing thereof; and (d) the net value to the Debtors; and (2) submit the highest and best bid, determined in the Debtors’ sole and absolute discretion, (the “Successful Bid”) for approval by the Bankruptcy Court pursuant to Section 363 of the Bankruptcy Code. For avoidance of doubt, the Debtors, in their sole and absolute discretion, may select a combination of Qualified Bids for the Purchased Assets in multiple lots, in determining the Successful Bid(s).

Prior to the Debtors submitting a Successful Bid to the Bankruptcy Court for approval, such Successful Bidder shall present evidence to the Court establishing to the Court’s satisfaction such bidder’s provision of adequate assurance of future performance of executory contracts and unexpired leases to be assumed and assigned to such bidder.

Any Qualified Bidder that intends to request that the Bankruptcy Court make a finding under Bankruptcy Code Section 363(m) that such bidder’s purchase of the Purchased Assets or the assignment to it of an executory contract or unexpired lease is in good faith, shall, in advance of the Sale Hearing, file with the Court and serve on the Service Parties (as defined in Section 29-a of the Bid Procedures Motion), a written declaration of a competent witness demonstrating (a) the bidder’s good faith, and (b) the absence of fraud or collusion between the bidder and any other bidder, party or the Debtors or their representatives. The declaration must also disclose any facts material to the good faith determination, including:

(a) The bidder’s pre- and post-petition relationships with (i) any other bidder, (ii) the Debtors or the Debtors’ current or former officers, directors, agents or employees, and (iii) any of the Debtors’ major creditors or equity security holders;

(b) The bidder’s anticipated relationship after the sale with any of the Debtors’ current or former officers, directors, agents or employees;

(c) Whether any offers of employment or compensation have been or will be made to any of the Debtors’ current or former officers, directors, agents or employees; and

(d) Whether the bidder has paid or contemplates paying consideration in connection with the sale to any person other than the Debtors.

Prior to the conclusion of the Sale Hearing, the Debtors shall designate, in their sole and absolute discretion, the next highest and best bid to serve as the first back-up bid (the “Back-up Bid” of the “Back-up Bidder”), and one or more alternate back-up bids (each, an “Alternate Back-up Bid” of an “Alternate Back-up Bidder”), as applicable, for the Purchased Assets.

In the event the Successful Bid is approved, but not consummated by the closing date designated in the Stalking Horse Purchase Agreement (or such later date as the Debtors and the Successful Bidder shall mutually agree in writing), the Debtors will request that the next highest and best bid (i.e., the Back-up Bid), and the next highest and best bid to that bid (i.e., the first Alternate Back-up Bid), and so on, be approved without the necessity of further order of the Bankruptcy Court, and that such bidder be required to consummate the Transaction contemplated in its bid within seven (7) business days of being declared the Successful Bidder.

In the event a Successful Bid is not consummated, the Debtors shall notify each Back-Up Bidder and Alternate Back-up Bidder within one (1) day of such bidder’s designation as the new Successful Bidder, Back-up Bidder or next Alternate Back-up Bidder, as applicable.

The Debtors may, in their sole and absolute discretion, prior to or during the auction and sale process, postpone or terminate the auction and sale process without selecting any Bid as the Successful Bid. Neither the Debtors nor their bankruptcy estates, employees, agents, attorneys, representatives, consultants nor financial advisors shall have any liability to anyone if the Debtors postpone or terminate the auction and the sale process.

Treatment of Deposits

The good faith deposit of the Successful Bidder will be applied to the purchase price of such Transaction at the closing date of the Sale set forth in its Purchase Agreement.

The good faith deposit of each of the Back-up Bidders and Alternate Back-up Bidders will be held in held in Dorsey’s trust account until the earlier of five (5) business days after the close of the Transaction contemplated in the Successful Bid(s), and thereafter returned (with the interest earned thereon) to the Back-up Bidder and/or Alternate Back-up Bidder. The good faith deposits of any Bidder not selected as a Back-up Bidder or an Alternate Back-up Bidder will be held in Dorsey’s trust account until no later than two (2) business days after the Sale Hearing, and thereafter returned (with the interest earned thereon) to the respective bidders. If a Successful Bidder, Back-up Bidder, or Alternate Back-up Bidder, as applicable, fails to consummate an approved sale because of a breach or failure to perform on the part of such Bidder, the Debtors (a) shall retain the good faith deposit of such Bidder as liquidated damages resulting from the breach or failure to perform by such Bidder; and (b) be authorized, but not required, to consummate the Back-up Bid, or Alternate Back-up Bid, as applicable, without further notice or order of the Bankruptcy Court.

[1] Capitalized terms not otherwise defined herein will have the meanings ascribed to them in the Amended Motion for Order Approving Bid Procedures and Related Matters Re Sale of Certain Assets of Debtors (the “Bid Procedures Motion”)

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

Steven R. Gerbsman
Gerbsman Partners
(415) 505-4991
steve@gerbsmanpartners.com

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

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Update to the Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of GluMetrics, Inc.

Posted in "Date Certain M&A Process", Gerbsman Partners, Steven R. Gerbsman, tagged , , , , on February 10, 2014| Leave a Comment »

Update to the Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of GluMetrics, Inc. 
Further to Gerbsman Partners e-mail/sales letter of January, 30, 2014 and February 5, 2014 regarding the sale of certain assets of GluMetrics, Inc., I attach the draft legal documents  that we will be requesting of bidders for certain Assets and Intellectual Property of GluMetrics, Inc. and GluMetrics Fixed Asset List.  The GluMetrics Fixed Assets are in addition to the information supplied for the GluMetrics Intellectual Property and Assets outlined in the sales letter.  Any and all of the assets of GluMetrics, Inc. will be sold on an ‘as is, where is’ basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

I would also encourage all interested parties to have their counsel speak with Timothy O’Brien, Esq., or Bruce Feuchter, Esq. counsel to GluMetrics, Inc.

For additional information please contact:

 Timothy O’Brien  Esq, 949 725 4195            tobrien@sycr.com

Bruce Feuchter, Esq. 949 725 4061            feuchter@sycr.com

The key dates and terms include:

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 GluMetrics 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 GluMetrics Assets. Sealed bids must be submitted so that it is actually received by Gerbsman Partners no later than Friday, March 7, 2014 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at GluMetrics’ office, located at 15375 Barranca Pkwy, Suite I-111, Irvine, CA  92618.  Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $250,000 (payable to GluMetrics, Inc.).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

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

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

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

Steven R. Gerbsman
steve@gerbsmanpartners.com                         j

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Gerbsman Partners – Update to the Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of GluMetrics, Inc.

Posted in "Date Certain M&A Process", Gerbsman Partners, Steven R. Gerbsman, tagged , , , , on February 5, 2014| Leave a Comment »

Update to the Bidding Process, Procedures for the Sale of certain Assets and Intellectual Property of GluMetrics, Inc. 
Further to Gerbsman Partners e-mail/sales letter of January, 30, 2014 regarding the sale of certain assets of GluMetrics, Inc., I attach the GluMetrics Fixed Asset List and GluMetrics Company Briefing.  The GluMetrics Fixed Assets are in addition to the information supplied for the GluMetrics Intellectual Property and Assets outlined in the sales letter.  Any and all of the assets of GluMetrics, Inc. will be sold on an ‘as is, where is’ basis and will be subject to “The Bidding Process for Interested Buyers”, outlined below.

The key dates and terms include:

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 GluMetrics 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 GluMetrics Assets. Sealed bids must be submitted so that it is actually received by Gerbsman Partners no later than Friday, March 7, 2014 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at GluMetrics’ office, located at 15375 Barranca Pkwy, Suite I-111, Irvine, CA  92618.  Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $250,000 (payable to GluMetrics, Inc.).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

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

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

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

Steven R. Gerbsman
steve@gerbsmanpartners.com

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Gerbsman Partners – “Date Certain M&A” – Sale of GluMetrics, Inc., its Assets & Intellectual Property

Posted in "Date Certain M&A Process", Gerbsman Partners, Steven R. Gerbsman, Uncategorized, tagged , , , , on January 30, 2014| Leave a Comment »

SALE OF GLUMETRICS, INC.

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

Based in Irvine, CA, GluMetrics, Inc. is a glucose monitoring medical device company, founded in 2005 with a patented, optical fluorescence, continuous, non-consumptive, real-time glucose sensing technology with the potential to materially impact both the hospital-based and diabetic glucose monitoring markets.

The Company has raised in four (4) rounds of venture capital financing over $57M, from Versant Ventures, ATV (Advanced Technology Ventures), Kaiser Permanente Venture Group, New Leaf Partners and private investors.

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 GluMetrics’ Assets has been supplied by GluMetrics.  It has not been independently investigated or verified by Gerbsman Partners or its agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by GluMetrics, 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.

GluMetrics, 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 GluMetrics’ or Gerbsman Partners’ negligence or otherwise.

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

GluMetrics, Inc. is a medical technology company that has developed the patented GluCath® Intravascular Continuous Glucose Monitoring (IV-CGM) System (referred to as the“GluCath System”).  The system consists of (i) a fiber-optic based, single-use, disposable sensor that is inserted into either an artery or vein using standard vascular accesstechniques and (ii) a portable battery-powered monitor. The GluCath sensors leverage a proprietary chemistry which changes its fluorescence in proportion to the surrounding glucose concentration.

GluMetrics was focused initially on applying its proprietary technology to inpatient continuous glucose monitoring, a market that could exceed $1.4 billion globally, concentrating solelyon specific critically ill patient segments in the surgical, cardiac and medical Intensive Care Unit (ICU). Significant and successful clinical testing was completed using the first product embodiment in hospitalized, post surgical patients in the US and abroad. The impressive results of this data speak to a significantly de-risked core measurement engine. The Companybelieves that an additional $800 million of upside opportunities exist in the hospital by expanding from the initial core ICU market to general surgeries and the general ward.

With the first commercially viable non-enzymatic sensor technology, the Company also believes that it could exploit the existing outpatient continuous glucose monitoring marketconsisting of three million people with Type 1 diabetes and the need for improved sensor technologies to support safe and effective insulin pump therapy, including the elusive “closedloop” insulin delivery system. Healthy human volunteer studies in diabetics were also completed which helped further confirm the utility and performance of the measurement engine in subcutaneous placements.

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

Technology “De-risked” with Clinically Proven Success

GluMetrics has completed design, development and clinical testing of its continuous, real-time, non-consumptive, fluorescent glucose measurement technology, which included extensivein-vitro testing and design verification activities. The technology, successfully deployed in the hospital ICU setting, is easily inserted via an existing radial artery cannula, stable requiring only one calibration/day, with exceptional accuracy in the hypo- and euglycemic ranges.

The Technology is Applicable for Numerous Applications

The core chemistry, hydrogel and optical system are configurable for other applications, including CGM for the diabetic population. In addition, potential applications such as for bioreactors and other laboratory measurements are straightforward developments, based on the existing measurement engine.

The Intellectual Property Portfolio is Diverse and Impressive

Twenty-five (25) issued US Patients and Foreign Counterpatents cover the core technology with an additional Twenty-two (22) pending US or PCT patent applications, with Claims that are extremely broad and diverse covering both the intravascular and subcutaneous realms (see Appendix for details).

Well Documented, Repeatable Manufacturing and Quality Procedures

The GluMetrics dye-quencher chemistry, hydrogel and monitors have been manufactured under the Company’s Quality System. The processes incorporated have resulted in repeatable and reliable devices for the uses intended, and are thoroughly documented, including all product and raw materials specifications, manufacturing and inspection processes.

GluMetrics Company Profile and Funding History

GluMetrics, Inc. was incorporated on Jan. 1, 2005. Throughout the course of 2005, GluMetrics, Inc. raised just over $2.9M in series “A” and “AA” capital to fund recruitment, establish theOrange County, California headquarters and advance the development of the fundamental GluCath sensor chemistry.

In July 2006, GluMetrics purchased all assets, goodwill and intellectual property of TGC Research Ltd. from Diametrics Medical, Inc. (“Diametrics”).  All prior art, trade secrets andintellectual property (including seven issued patents still in force) relating to Diametrics’ previous fluorescence-based intravascular systems for blood constituent monitoring is nowexclusively owned by GluMetrics.  Following this transaction, TGC Research Ltd. became a wholly-owned subsidiary of GluMetrics, Inc.

Also in July 2006, the Company closed a $9M series “B” financing to further refine and validate the GluCath System in pre-clinical trials.  This series “B” round was co-led by VersantVentures (Newport Beach, CA) and Advanced Technology Ventures (Palo Alto, CA), with each firm participating at $4.5M.

In March 2008, GluMetrics secured a $3M venture debt financing through Silicon Valley Bank supporting operations through September/October of 2008.

In July 2008, the Company closed a $21M series “C” round financing to continue the development of the GluCath System and initiate clinical trials. This series “C” round was led by NewLeaf Venture Partners (Menlo Park, CA) with significant participation from series “B” investors.

In October 2010, GluMetrics secured $10M in bridge financing from existing investors to initiate clinical trials of an arterial sensor and support ongoing operations.

In March 2012, the Company secured $8M in new equity as part of a recapitalization.  These funds supported the expansion of clinical trials, including extended duration arterial andvenous deployments.

In January 2013, GluMetrics secured $5.6M in bridge financing from existing investors to complete its arterial and venous clinical trials through the second half of 2013.

Impact of Technology on the Market

The GluCath System is ideally positioned to become the clinician’s preferred solution to support glycemic measurement for both the in-hospital and diabetic markets for five primaryreasons:

1)      The GluMetrics fluorescent glucose sensing system is the first non-GOX sensor to be clinically validated in a meaningful multi-center trial with sub-10% MARD results.

2)      The ultimate flexibility and adaptability of the measurement engine will enable broad application across a diverse universe of clinical applications including hospital-based and diabetic patients.

3)      The GluCath sensor measures plasma glucose in flowing blood continuously and directly. Given the non-enzymatic method of measurement, the GluCath sensor is notsusceptible to the numerous interferences and limitations which have affected electrochemical sensors.

4)      The GluCath System is most accurate in the physiologic range where accuracy is paramount (i.e., in the euglycemic and hypoglycemic range).  Additionally, the GluCathSystem provides rapid user feedback on both directionality and rate of change.

5)      The GluCath monitor is configured in a portable, hand-held, battery powered format allowing for flexible and convenient monitoring across the continuum of care (i.e., Pre-op-OR-ICU-Step-Down-General Floor-Outpatient). The GluCath sensor is small enough to be inserted into the radial artery of the arm via a standard arterial catheter, while maintaining pressure monitoring and blood sampling capability.  The sensor can also be deployed directly into a vein using a splittable introducer, leaving only the sensorindwelling in the vessel. Alternatively, it is feasible to deploy the sensor through a central venous catheter or integrated into a novel vascular access device.

6)      The sensor physical size, optical path and chemistry are such that it can be configured for subcutaneous insertion and sensing

In contrast to the GluCath System, potentially competitive devices now known to be under development have significant disadvantages, including larger size, limited mobility, therequirement for unique flush/calibration solutions and greater user-complexity. Additionally, numerous physician interviews have described some of these competitive approaches asfundamentally lacking sufficient accuracy in the target range, algorithmically dropping points, missing glucose excursions, or being too slow to reflect changing blood glucose.

GluMetrics’ Assets

Scope Of GluMetrics’ Patent Coverage

In summary, GluMetrics has a strong patent portfolio, including 25 issued patents, 1 allowed and 21 pending patent applications, with priority in optical fiber-based equilibrium fluorescent glucose detection going back as early as December 2000, and patent terms extending past 2030.  Since licensing the core chemistry, GluMetrics has perfected its commercially valuable innovations in extensive patent filings.  Indeed, the GluMetrics’ patent portfolio creates a minefield for any competitor trying to commercialize an equilibrium, fluorescent glucose sensor, whether intravascular or subcutaneous, whether fluorescence lifetime or intensity, and whether critically ill or walking diabetic populations. (See Appendix for details)

In addition to the GluMetrics’ patent portfolio, the following are available:

·         Clinical and pre-clinical data

·         Design and test equipment used in the development and manufacture of the GluCath system

·         Product specifications, drawings, manufacturing, assembly and quality insurance documentation

·         Furniture, fixtures and tooling used to assemble and/or manufacture the system

·         Test procedures, reports and data supporting the system testing during design and development

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

The Sale of the GluMetrics Assets is being conducted pursuant to a Resolution of the Board of Directors of GluMetrics, Inc. for the liquidation and dissolution of the company which was approved by unanimous consent of the Board on January 23, 2014. GluMetrics expects the sale of the GluMetrics Assets to be completed without any further vote or action by GluMetrics’ stockholders.

GluMetrics, Inc. Key Personnel

William Markle, President and CEO

With a 30 year career in high-tech medical devices focusing on the Critical Care marketplace (Baxter, Edwards Life Sciences, American Hospital Supply), Mr. Markle has most recentlybeen a senior member of two well-funded and successful medical device start-up companies:  Tensys Medical and Masimo Corp.  Bringing an emphasis on understanding and definingkey customer requirements, operationally building and directing successful marketing, clinical support and direct sales teams, Mr. Markle has a strong record of both successful fund-raising and visionary leadership in multiple “customer-facing” disciplines.  A graduate of Duke University (BSME) and Pepperdine (MBA), Mr. Markle provides a current and real-worldperspective to the creation of shareholder value within the medical device sector.

Stuart L Gallant, VP, Product Development

Mr. Gallant has been in medical device development and management for over 41 years with extensive experience in the design, development and marketing of cardiovascular, patientmonitoring and vital signs devices and systems.  Initiating his career with Medtronic, he has subsequently been a successful medical device entrepreneur involved with creating,managing and developing four prior medical device start-ups, including significant experience with venture- capital financed enterprises, in senior management and Board positions.Coupled with his technical and management background and education (BSEE, MSBME, MBA), Mr. Gallant holds twenty US issued patents in medical devices and nationallyrecognized professional certifications in financial planning (CFP®, ChFC®).

Tricia Zubke, Controller

Ms. Zubke has over 20 years’ experience in accounting, human resources, information technology and all aspects of office management.  Prior to joining GluMetrics, Inc. in 2005, Ms. Zubke worked for a privately-held real estate development company and a recruiting firm specializing in human resources executives.  Ms. Zubke obtained a Bachelor’s degree in business management from Concordia University, Irvine and is a licensed California real estate broker.

GluMetrics, Inc. Outside Board of Directors

·         Mike Carusi, General Partner, Advanced Technology Ventures, Palo Alto,, CA

·         Charles Warden, Managing Director, Versant Ventures, Menlo Park, CA

·         Sam E. Brasch, Director, Kaiser Permanente Ventures, Oakland, CA

·         John Alexander, Santa Cruz, CA

·         Tom Berryman, Laguna Beach, CA

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 GluMetrics 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 GluMetrics, Inc., Gerbsman Partners, or their respective staff, agents, or attorneys; and (iv) all such documents and reports have been provided solely for the convenience of the interested party, and neither GluMetrics nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same.

Following an initial round of due diligence, interested parties will be invited to participate with a sealed bid, for the acquisition of the GluMetrics Assets.  Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than March 7, 2014 at 3:00 p.m. Eastern Standard Time (the “Bid Deadline”) at GluMetrics’ office, located at 15375 Barranca Pkwy, Suite I-111, Irvine, CA  92618.  Please also email steve@gerbsmanpartners.com with any bid.

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

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable.  All bids must be accompanied by a refundable deposit check in the amount of $250,000 (payable to GluMetrics, Inc.).  The winning bidder will be notified within 3 business days after the Bid Deadline.  Non-successful bidders will have their deposit returned to them.

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

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

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

Steven R. Gerbsman

(415) 456-0628

steve@gerbsmanpartners.com           

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