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 gp_nl_header-1 SALE OF PALMAZ SCIENTIFIC, INC.
Gerbsman Partners (www.gerbsmanpartners.com) has been retained by Palmaz Scientific, Inc. (www.palmazscientific.com) to solicit interest for the acquisition of all, or substantially all, the assets of Palmaz Scientific, Inc.

Headquartered in San Antonio, Texas, with Operations based in Fremont, California, Palmaz Scientific is a medical device company founded in 2008 with disruptive technology platform which will likely change the medical device industry by creating unique way of designing and developing medical implants.

Palmaz Scientific has raised two rounds of private equity financing to date totaling more than $40 million. Palmaz Scientific owes approximately $20 million to creditors, including approximately $12 to senior secured creditors.

On March 4, 2016, Palmaz Scientific, Inc. filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Western District of Texas, San Antonio Division. Palmaz Scientific intends to sell all or substantially all of its assets pursuant to 11 U.S.C. § 363. As part of that process, Palmaz Scientific intends to seek bankruptcy court approval for bidding and sale procedures related to the auction and sale of its assets. Palmaz Scientific anticipates having a stalking horse bidder in place shortly. It is anticipated that the bankruptcy court will approve bid procedures that will require a bidder to submit a cash deposit of $250,000 and otherwise qualify to bid by submitting financial information confirming such bidder’s ability to close on any sale. When the bankruptcy court has approved the bidding procedures, potential bidders will be provided a copy of same. In the interim potential bidders will only be able to access Palmaz Scientific’s data room by executing the non-disclosure agreement provided to each bidder by Gerbsman Partners.

Please see attached: (1) Exhibit A, NDA; (2) Fixed Asset Equipment Inventory Log; (3) PSI detail IP Portfolio; (4) Detail Sales Letter and Company Overview; (5) Detailed Company IP Summary

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 Palmaz Scientific Assets (defined below) has been supplied by Palmaz Scientific. 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 Palmaz Scientific, 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.

Palmaz Scientific, 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 Palmaz Scientific’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the Palmaz Scientific 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 Palmaz Scientific or Gerbsman Partners. Without limiting the generality of the foregoing, Palmaz Scientific and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Palmaz Scientific 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 Palmaz Scientific’s or Gerbsman Partners’ prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement attached hereto as Exhibit A.

PALMAZ SCIENTIFIC, INC.

Palmaz Scientific is a medical technology company promoting its knowhow to the medical device industry with an objective toward developing collaborative relationships that could provide revenue opportunities to the company for licensing, engineering services or funded development, as well as possible equipment sales, contract manufacturing or production of its own devices for sale. Through collaborative activities with highly respected medical device companies, Palmaz Scientific patented Physical Vapor Deposition (PVD) methods and processes have been independently tested and validated. Separately, Palmaz Scientific has completed a first-in-man study of its patented micro-groove technology in cooperation with a Fortune 500 medical device company. In addition, Palmaz Scientific could continue its own development efforts to innovate its methods and processes regarding Physical Vapor Deposition as well as to develop its own medical devices.

Palmaz Scientific believes its assets are attractive for a number of reasons:
1. A decade of research and development by Dr. Julio Palmaz and his team has led to important discoveries relevant to various implantable medical devices and that drive the Palmaz Scientific technology platform.
2. Extensive intellectual property portfolio. Palmaz Scientific has built a very extensive and in-depth intellectual property portfolio comprising 256 issued U.S. and international patents and 182 active U.S. and international pending patent filings in active review globally.
3. Multiple medical device applications. Palmaz Scientific’s intellectual property portfolio includes patents covering an array of other potential product applications such as: drug delivery devices, valves (cardiac and venous), grafts (e.g. Peripheral, arterio-venous, CABG), embolic protection devices, angioplasty balloons, occlusion devices, vascular stent and many others.
4. Palmaz Scientific Patented Physical Vapor Deposition (PVD) methods and processes allow for the design and manufacturing of for thin film, low profile, implantable devices with bio-metals of high purity and finely ordered structure.
5. Palmaz Scientific Patented Physical Vapor Deposition (PVD) methods and processes allow for design and manufacture of monolithic stents resulting in variable integrated strut geometry within a single stent.
6. Palmaz Scientific PVD technology platform allow for manufacturing of medical device with specifications not otherwise possible or available with current methods used in the market today.
7. Patented Physical Vapor Deposition methods and processes enable the development of superior devices in the neurovascular aneurysm market.
8. Taking advantage of the higher strength of our PVD alloys allows for very low profile stent prototypes to be used in patients with vascular disease in infra-popliteal vessels (i.e. Below the Knee, BTK) allowing for use of introducer sheaths smaller in diameter than any current stent systems. This would allow foot approach into BTK vessels with obvious advantages; no risk of groin or popliteal hemorrhage and no compromise to the supply vessels.
9. Patented Photolithography processes and methods for fabricating certain topographical patterns at the microscopic level of vascular implant that positively influence cell colonization, thus promoting site healing.
10.The Palmaz Scientific micro groove technology has the potential to make inroads into the stent market metal adluminal surface which would benefit from our micro groove technology to promote faster re-endothelialization and hence decrease the need for oral antiplatelet medication.
Palmaz Scientific Company Profile

Palmaz Scientific Inc. is a research and development company dedicated to the advancement of the technology and science of medical implants headquartered in San Antonio, Texas, with operations in Fremont, California. Many years of deliberate, systematic research have led to a deeper understanding of the interaction of structured materials with biological fluids and tissues. This has allowed Palmaz Scientific not only to delve into the current frontiers of implantable medical devices but into developing fields such as tissue engineering, artificial and semi-artificial organ replacement, and interactive implantable devices.

Palmaz Scientific has developed technologically advanced techniques to fabricate a new generation of super materials. These efforts were the result of systematically studying the limitations of current implantable materials and the application of new technologies, many of which had to be adapted from areas of science not commonly found in the medical arena like microelectronics, energy and aerospace science.

Palmaz Scientific could commercialize its portfolio of patents first, through licensing and technology arrangements, and second through joint ventures and technology sharing agreements. Palmaz Scientific could also decide to manufacture its own products.

Impact of Technology on the Medical Device Industry

The science underlying medical therapeutics is rapidly changing toward faster, more effective and safer methods to cope with the ever-increasing demand. Palmaz Scientific is uniquely positioned to participate significantly in this changing medical environment. Palmaz Scientific believes that devices in the near future will be made with non-conventional methods with the incorporation of advanced computer interfaced, beam and vacuum technologies. This will address the need to push the current limits of conventional technology posed by material and structural failure. Conventional materials such as medical tubing and reductive manufacturing techniques like laser and electrochemical polishing have currently reached their limits.
Space-age materials and techniques produced at Palmaz Scientific have yielded surprisingly low-profile structures with mechanical performance equal or better than larger, bulkier counterparts. This is the result of producing highly ordered materials with optimized crystalline structures, homogeneity and freedom from contaminants commonly present in natural materials. These advanced materials exhibit superior physical performance parameters and greater resistance to environmental degradation when functioning as implants. Also, their bulk and surface homogeneity promote uniform cellular response and predictability in tissue interaction that translates into superior clinical results.

By achieving a new level of control in the material-tissue interaction Palmaz Scientific was introduced to new technological possibilities such as advanced submicroscopic designs optimized for cellular receptor interaction, incorporation of microfluidics, bio-sensing and microelectronics. Developing fields such as tissue engineering, stem cell lines and 3D cell printing, are expected to necessitate structural platforms made by advanced technologies such as the ones being develop by Palmaz Scientific.

Palmaz Scientific is part of the new generation of manufacturing methods currently known as sub-microscopic and nanotechnologies. Conventional raw materials and serial manufacturing by hand-made reductive techniques, are fraught with structural variability, material defects and poor yields. Instead, highly automated, computer interfaced manufacturing will constitute the new generation of platform technologies likely to re-define the future of medical intervention.

Potential Game Changing Intellectual Property Portfolio

A decade of research has resulted in an intellectual property portfolio of 256 issued U.S. and international patents and 182 active U.S. and international pending patent applications primarily from the following important discoveries:

· Biometals of high purity and ordered structure can be fabricated using physical vapor deposition.

· Thin and thick film PVD-based metals can be used to produce low profile implantable devices.

· Topographical patterns at the microscopic level can positively influence cell colonization of prosthetic surfaces.

Based on a deep understanding of tissue and blood interactions with metal surfaces at the atomic and molecular levels, Palmaz Scientific designed and engineered nanotechnology processes using Physical Vapor Deposition (“PVD”) and innovative nanotechnology designs to produce thin film metals of thickness as small as 5 microns (i.e. The approximate size of one blood cell) and as thick as 260 microns. The PVD process deposits layers of atoms on a substrate to produce durable, high purity thin film metals that can be formed into low profile implantable medical devices (i.e. widths smaller than 75 microns). In addition, a proprietary patented metal surface micro design has been found to accelerate the healing process of these implantable medical devices. This approach to implantable medical device structure is believed to be unique and a potential game changing technology platform for the future of implantable medical devices.

The Palmaz Nanotechnology Platform may benefit many potential applications such as:
· Thin Film Covered Stents
· Monolithic Thin Film Stents
· Implantable Bioreactor Platforms for Cell Lines
· Cancer Drug Delivery
· Vascular Drug Delivery (Bare Stents, Covered Stents, Grafts, Balloons)
· Valves (Heart, Venous)
· Surgical and Endovascular Patches
· Microsurgical Components
· Grafts (Peripheral, A/V, CABG)
· EPDs (Embolic Protection Devices)
· Occlusion Devices
· Bare Metal Stents
· Angioplasty Balloons
· Wires, Sheaths, Delivery Systems
· Cosmetic and Orthopedic Implants
· Erectile Dysfunction Indications
· Optical Devices
Commercialization Opportunities

Palmaz Scientific’s extensive intellectual property portfolio is the foundation for a technology platform with many potential implantable medical devices, including stents that address coronary, peripheral and intracranial indications as well as implantable devices in orthopedic and cosmetic prosthetic specialties. We believe that it is possible that any of these technologies could be commercialized independently by us or via collaborative relationships including opportunities for licensing and engineering services as well as possible equipment sales and/or contract manufacturing.

Palmaz Scientific’s Assets

Palmaz Scientific has developed a portfolio of assets critical to the development and manufacture of its revolutionary technology platform. These assets fall into a variety of categories, including:

· Patents, Patent Applications and Trademarks
· Significant intellectual capital, know-how and expertise in the design and manufacture of medical device implants using Palmaz Scientific patented Physical Vapor Deposition processes and methods
· Design and quality assurance test equipment
· Fully-outfitted manufacturing equipment for the design and testing of medical device implants
· Clinical data from a first in human study evaluation microgroove technology.

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

The Board of Directors of Palmaz Scientific has decided to maximize the value of Palmaz Scientific Assets through an orderly liquidation sale, which might include the use of section 363 of Title 11 of the United States Code to incentivize purchasers to maximize the amount bid for such assets

Pending Litigation

Chapter 11 Bankruptcy cases of Palmaz Scientific, Inc., Case No. 16-50552, Advanced Bio Prosthetic Surfaces, Ltd., Case No. 16-50555, ABPS Management, LLC, Case No. 16-50556, and ABPS Venture One, LTD, Case No. 16-50554, all pending in the Western District of Texas, San Antonio Division.

Harriman v. Palmaz Scientific, Inc., et al.; 134th Judicial District, Dallas County, Texas, Cause No. DC-15-12314

1. Plaintiff Susan E. Harriman has sued defendants Palmaz Scientific, Inc., Julio Cesar Palmaz, Steven Brett Solomon, Gary Zimpelman, John Asel, John Does 1-20 and Jane Does 1-20.

2. Defendants Palmaz Scientific, Inc., Julio Cesar Palmaz, Steven Brett Solomon have filed counterclaims against Susan E. Harriman for (1) Tortious Interference with Existing Contracts, (2) Tortious Interference with Prospective and Continuing Business Relations, (3) Defamation, and (4) Business Disparagement.

3. Defendant (as Third Party Plaintiff) Palmaz Scientific, Inc. has filed third-party claims against Alan Chesler, Ehrenberg Chesler Interests, LLC, Ehrenberg Chesler Securities, Inc., and IMS Securities, Inc. for (1) Tortious Interference with Existing Contracts, (2) Tortious Interference with Prospective and Continuing Business Relations, (3) Defamation, and (4) Business Disparagement.

4. Defendants Julio Cesar Palmaz and Steven Brett Solomon have filed third-party claims against Alan Chesler, Ehrenberg Chesler Interests, LLC, Ehrenberg Chesler Securities, Inc., and IMS Securities, Inc. for (1) Tortious Interference with Prospective and Continuing Business Relations, (2) Defamation, and (3) Business Disparagement.

Ehrenberg, et al. v. Palmaz Scientific, Inc., et al. 162nd Judicial District, Dallas County, Texas, Cause No. DC-15-11994

1. Plaintiffs Mildred V. Ehrenberg, Richard Benedikt, M.D., Arie Salzman, M.D., and Plant Family Investments Ltd. have sued defendants Palmaz Scientific, Inc., Steven B. Solomon and Julio Palmaz, M.D.

Advanced Bio Prosthetics Surfaces Ltd., et al. v Akin Gump Strauss Hauer & Feld, Baker Botts, L.L.P., and Cecil Schenker; 225th District Court, Bexar County Texas, Cause No. 2014-CI-16776

1. Plaintiffs Advanced Bio Prosthetic Surfaces, Ltd. ABPS Venture One, Ltd. ABPS Management, L.L.C., Palmaz Scientific, Inc., and Dr. Julio Palmaz have sued Akin Gump Strauss Hauer & Feld, L.L.P. Baker Botts, L.L.P., and Cecil Schenker for breach of fiduciary duty, fraud, and conspiracy.

Palmaz Scientific, Inc. v. Susan E. Harriman, United States District Court, Western District of Texas, San Antonio Division, Case No. 5:15-cv-734

1. Plaintiff Palmaz Scientific, Inc. sued defendant Susan E. Harriman for (1) Tortious Interference with Existing Contracts, (2) Tortious Interference with Prospective and Continuing Business Relations, (3) Defamation, and (4) Business Disparagement.

2. This action was dismissed without prejudice on October 7, 2015 for lack of subject matter jurisdiction

Palmaz Scientific, Inc. Key Personnel

Scott Carpenter — Senior Director for Research & Development,
More than 25 years in medical device development. Experience in the development of surgical tools, vascular stents and orthopedic implants. Co-author of Nitinol technical publications and inventor on 100+ US and worldwide patents

Palmaz Scientific, Inc. Board of Directors
Dr. Eugene A. Sprague, Director

Over 40 years as an investigator in the area of cardiovascular research with emphasis on arterial pathophysiology and vascular device development and currently holds the position of Professor of Cardiology in the Department of Medicine at the University of Texas Health Science Center at San Antonio.

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 Palmaz Scientific 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 Palmaz Scientific, 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 Palmaz Scientific nor Gerbsman Partners (or their respective, staff, agents, or attorneys) makes any representations as to the accuracy or completeness of the same.

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

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

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

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