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“Date Certain M&A” Uptake Medical, Inc. – its Assets and Intellectual Property – Gerbsman Partners

Posted in Uncategorized, tagged , , , , , , , , on June 7, 2016| Leave a Comment »

SALE OF UPTAKE MEDICAL, INC.

Gerbsman Partners has been retained by Uptake Medical, Inc. to solicit interest for the acquisition of all, or substantially all, Uptake Medical Corp’s (“Uptake”) assets.

Headquartered in Tustin, California,Uptake is a leader in developing bronchoscopic thermal ablation for the treatment of emphysema.

Please see attached the detail Uptake Sales Letter pdf, Exhibit A – Uptake NDA, Exhibit B – IP Summary and Uptake Medical Company Overview.

Uptake Medical Company Profile
Founded in 2005 in Seattle, Washington,Uptake is a private, revenue stage medical device company. Over the past 10 years, Uptake has raised approximately $75mm in equity and debt from blue-chip global private equity and venture capital investors including Affinity Capital, Arboretum Ventures, Crescent Group, GBS Venture Partners, Maverick, Onset Ventures and WRF Capital.

Uptake is a leader in developing innovative, therapeutic bronchoscopic devices to treat advanced heterogeneous emphysema and lung cancer.

Uptake’s InterVapor system is for patients whose lungs are hyperinflated due to emphysematous destruction. By targeting and ablating the most diseased lung segments, space is opened up for the healthier segments to expand and improve the overall lung function and quality of life.

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 Uptake Medical’s Assets has been supplied by Uptake. 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.

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 Uptake’s or Gerbsman Partners’ negligence or otherwise.

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

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

1. Uptake’s Intellectual Property, comprising 8 issued US patents, 7 pending US patent applications, 19 issued international patents and 9 international pending patent applications, and exclusive license of 23 patents and 14 applications, covers all aspects of steam ablation for lung volume reduction of emphysema and steam ablation of lung cancer tumors. IP includes method of action, treatment planning, and devices. Some of Uptake’s claims for novel steam ablation devices may apply to other ablation approaches elsewhere in the body.

2. The company’s InterVapor system is CE marked.

3. Uptake has a modest base of international business with 15-30 sites in various states of clinical activity.

4. Uptake has completed the multi-center, multi-national randomized study (STEP-UP) for the targeted, vapor ablation of the most diseased lung segments in patients suffering from emphysema. In addition, Uptake has 10 years of meaningful clinical science and validation of vapor ablation in emphysema.

5. The STEP-UP study 6 month manuscript has been published by The Lancet and the 12 month supplement is being submitted to The Lancet and is awaiting review.

6. Uptake has developed and begun positive initial human studies ablating lung cancer tumors.

7. InterVapor is the only therapy:

· Resulting in clinically meaningful improvement, while allowing for repeated patient improvement over time. This claim is based on the STEP-UP RCT results published in the Lancet RM March 2016. Clinically meaningful improvement (> 12% FEV1) in pulmonary function and quality of life.

· Without significant risk of life threatening pneumothorax or hemoptysis. Competitive therapies on the market use implants which create pneumothorax (a hole in the lung that can result in death from suffocation) and hemoptysis (excessive bleeding in the lungs that can result in death).

· That can effectively treat the entire population of patients with severe upper lobe emphysema. One competitor (valve implants) is only effective and recommended in patients with complete fissures, and the other competitor (coil implants) failed to show clinically meaningful improvement in pulmonary function and did not meet its primary endpoint.

8. Leading pulmonologists actively support and used InterVapor.

9. OPS procedure reimbursement codes have been established in Germany and applied for in Switzerland.

Impact of Technology on the Market

The positive impact of bronchoscopic volume reduction has attracted the attention of leading physicians worldwide. Patients with emphysema represent a large and growing market with an unmet clinical need. Accessing Uptake’s intellectual property is critical for any successful endeavor into this very attractive market. Publication of Uptake’s patient data sets has providedphysicians with a one-of-a kind look into how reshaping therapy compares to other, more traditional, high-risk valve and coil implant procedures. Commercialization of its products could provide high returns in this large and fast-growing market.
Uptake Medical’s Assets

Uptake has developed a portfolio of assets critical to the bronchoscopic treatment of emphysema with thermal ablation. These assets fall into a variety of categories, including:

· Patents, Patent Applications and Trademarks
· Prospective, Randomized Patient Data Set for Treating Heterogeneous Emphysema
· Generator and Disposable Product Inventory
· Manufacturing, Design and Calibration Equipment
· CE Mark for InterVapor
· Modest International Revenue
· Intellectual Capital and Expertise

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

Key Personnel

· King Nelson — President & CEO
· Robert Barry — Founder, Chief Tech Officer
· Krista Mann — Chief Financial Officer
· Carol Holt — VP, Clinical Marketing and Operations
· Erik Henne — VP, Lung Cancer

Uptake Medical, Inc. Board of Directors

· Carl Simpson, Chairman of the Board: – Los Altos Hills, CA

· Geoff Brooke, GBS Venture Partners – Melbourne, Australia

· David Singer, Maverick Capital – San Francisco, CA

· Rob Kuhling, Onset Ventures – Menlo Park, CA

· King Nelson, Uptake Medical – Tustin, 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 Uptake Medical 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 Uptake Medical Assets. Sealed bids must be submitted so that the bid is actually received by Gerbsman Partners no later than Friday, July 8, 2016, 3:00pm Pacific Standard Time (the “Bid Deadline”) at 1173 Warner Ave, Tustin, CA 92780 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 Uptake fixed asset list may not be complete and Bidders interested in the Uptake Medical Equipment must submit a separate bid for such assets. Be specific as to the assets desired.

Any person or other entity making a bid must be prepared to provide independent confirmation that they possess the financial resources to complete the purchase where applicable. All bids must be accompanied by a refundable deposit check in the amount of $200,000 (payable to Uptake Medical, 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. Uptake Medical reserves the right to, in its sole discretion, accept or reject any bid, or withdraw any or all assets from sale.

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

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

Dennis Sholl
(415) 377-1952
dennis@gerbsmanpartners.com

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5/31 Update to the Update Bidding Process for “Date Certain M&A”of Vigilistics, Inc., its Assets and Intellectual Property – APA and Wire Transfer information

Posted in Uncategorized, tagged , , , , on June 1, 2016| Leave a Comment »

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

Further to Gerbsman Partners Update on May 21, 2016, May 12, 2016 and sales letter of May 5, 2016, regarding the sale of certain assets of Vigilistics, Inc., (“Vigilistics”), I am attaching the Asset Purchase Agreement “APA” and Exhibit A NDA and outlining below the required wire transfer information for interested parties bidding on the assets and IP of Vigilistics.

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

Gerbsman Partnershas been retained by Vigilistics,Inc.  to solicit interest for the acquisition of all or substantially all of Vigilistics’s assets, including its Intellectual Property (“IP”), in whole or in part (collectively, the “Vigilistics Assets”).

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

Prior to the bid date of June 8, 2016, and after you receive the draft “APA” I would encourage all interested parties to have their counsel speak with Greg Newman at Vigilistics. He is available to discuss any questions or comments of a legal nature relating to the transactions contemplated by the APA. Greg is available at greg.newman@vigilistics.com and cell 949-233-7588.

The Wire Transfer information for the refundable deposit required with any bid is outlined below:

Bank: Wells Fargo
Account Name: Williams Law Firm (formerly Law Office of Kandy Williams) IOLTA Account
Firm Business Address: 7545 Irvine Center Drive, Suite 200, Irvine, CA 92618
Routing # 121000248
Account # 3495114252

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 Vigilistics’ Assets has been supplied by Vigilistics. 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.

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 Vigilistics’ or Gerbsman Partners’ negligence or otherwise.

Any sale of the Vigilistics’ 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 or behalf of Vigilistics and Gerbsman Partners. Without limiting the generality of the foregoing, Vigilistics and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Vigilistics 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 required to sign a nondisclosure agreement (attached as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence 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 Vigilistics’ 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, (v) 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 Vigilistics’ Assets. A sealed bid must be submitted so that it is actually received no later than June 8, 2016 at 3:00 p.m. Pacific Daylight Time (the “Bid Deadline”) at Vigilistics’ office: 65 Enterprise, Suite 300, Aliso Viejo CA 92656. Please also send your bid via email to steve@gerbsmanpartners.com.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of Vigilistics.

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 check in the amount of $100,000, payable to Vigilistics, Inc., and sent to a designated trust account. The winning bidder will be notified within three business days of the Bid Deadline. Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful Bidder.

Vigilistics 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.

Vigilistics will require the successful Bidder to close within seven days of notification. Any or all of the assets of Vigilistics 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 Vigilistics Assets shall be the sole responsibility of the successful bidder and shall be paid to Vigilistics at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

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

Kenneth Hardesty
408 591-7528
ken@gerbsmanpartners.com

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5/16 Update to the Bidding Process for “Date Certain M&A” of Vigilistics, Inc., its Assets and Intellectual Property

Posted in Uncategorized, tagged , , , , , on May 16, 2016| Leave a Comment »

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

Further to Gerbsman Partners sales letter of May 5, 2016, regarding the sale of certain assets of Vigilistics, Inc., (“Vigilistics”), I am attaching power point – “ Vigilistics Investor Overview”. Please review the “Important Legal Notice” below in that potential purchasers should not rely on any information contained in this power point or any information provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

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

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

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

Prior to the bid date of June 8, 2016 and after you receive the draft Asset Purchase Agreement “APA” I would encourage all interested parties to have their counsel speak with Greg Newman at Vigilistics. The APA will be sent out later in the week.

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 Vigilistics’ Assets has been supplied by Vigilistics. 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.

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 Vigilistics’ or Gerbsman Partners’ negligence or otherwise.

Any sale of the Vigilistics’ 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 or behalf of Vigilistics and Gerbsman Partners. Without limiting the generality of the foregoing, Vigilistics and Gerbsman Partners and their respective staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Vigilistics 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 required to sign a nondisclosure agreement (attached as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence 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 Vigilistics’ 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, (v) 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 Vigilistics’ Assets. A sealed bid must be submitted so that it is actually received no later than June 8, 2016 at 3:00 p.m. Pacific Daylight Time (the “Bid Deadline”) at Vigilistics’ office: 65 Enterprise, Suite 300, Aliso Viejo CA 92656. Please also send your bid via email to steve@gerbsmanpartners.com.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of Vigilistics.

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 check in the amount of $100,000, payable to Vigilistics, Inc., and sent to Kevin Berggren, Attorney at Law, Stradling, Yocca, Carlson & Rauth, P.C.,4365 Executive Drive, Suite 1500, San Diego, CA 92121. The deposit will be held in trust by Company’s counsel. The winning bidder will be notified within three business days of the Bid Deadline. Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful Bidder.

Vigilistics 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.

Vigilistics will require the successful Bidder to close within seven days of notification. Any or all of the assets of Vigilistics 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 Vigilistics Assets shall be the sole responsibility of the successful bidder and shall be paid to Vigilistics at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

Steven R. Gerbsman
steve@gerbsmanpartners.com

Kenneth Hardesty
ken@gerbsmanpartners.com

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Gerbsman Partners – Date-Certain M&A of Compliance and Process Manufacturing Analytics Company with World-Class Clients

Posted in Uncategorized, tagged , , , , , , , on May 5, 2016| Leave a Comment »

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Date-Certain M&A of Compliance and Process Manufacturing Analytics Company with World-Class Clients

Vigilisitcs, Inc., a leading manufacturing analytics software company, has retained Gerbsman Partners to solicit interest for the acquisition of all, or substantially all of, the Vigilsitics’ assets, including its intellectual property. Incorporated in 2005, Vigilistics is a privately held company located in California that provides compliance and data analytics solutions to the food processing industry. The business operates under a recurring revenue model, is generating revenue from some of the largest and most prominent food and beverage (F&B) processing companies in North America, including recent new wins of F&B Top 50 customers, and it is poised for expansion.

Vigilistics drives quality, profitability and sustainability for F&B processors, with affordable software solutions for monitoring, analyzing and reporting process operations.

Vigilistics’ FDA-validated software helps some of the largest food and beverage processors in the world — including Nestle, Kroger, Dean Foods, Leprino, and more — to drive quality, profitability and sustainability. With over 180 facilities in the United States, Vigilistics’ existing customers represent an opportunity of more than $15 million in annual revenue, which is just 1% of the total market

The sale is being conducted with the cooperation of Vigilistics. Vigilistics and its employees will be available to assist the purchasers with due diligence and assist with a prompt and efficient transition.

 

For additional information, please contact Gerbsman Partners for Vigilistics May 2016 pdf – detail sales letter, plus summary of 4 patents and NDA.

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

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 Vigilistics’ Assets has been supplied by Vigilistics. 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.

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 Vigilistics’ or Gerbsman Partners’ negligence or otherwise.

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

Incorporated in 2005, Vigilistics, Inc. is a privately held company located in southern California that has raised over $11 million in venture capital. Vigilistics is leading the ‘big data’ revolution in food and beverage processing, with patented software solutions that monitor, record and analyze the huge volumes of hard-to-reach process data, to deliver actionable real-time intelligence to managers.

Vigilistics’ FDA-validated software helps some of the largest food and beverage processors in the world — including Nestle, Kroger, Dean Foods, Leprino, and more — to operate more efficiently and effectively. With over 180 facilities in the United States, existing customers represent an opportunity of more than $15 million in annual revenue, which is just 1% of the total worldwide market.

Vigilistics’ assets are attractive for a number of reasons:

· Multi-billion-dollar market
· Four US patents issued
· FDA-validated software (FDA.gov link to letter)
· Product ‘portfolio’ on top of common platform, with modules for collection and analysis of process data from virtually every area of the manufacturing facility
· Privately held, venture backed company, over $8 million invested in technology
· Three complete solutions now generating revenue at eight world-class food and beverage customers, including Nestle, Alta Dena, Leprino, Kroger, and Rich Products Corp.
· Traceability solution (the ‘killer app’) currently in alpha testing
· SaaS recurring revenue model
· Generating revenue
· Opportunity for significant ‘organic growth’ and recurring revenue at existing customers: $8m – $12m annual (potential)
The Bidding Process for Interested Buyers

Interested and qualified parties will be required to sign a nondisclosure agreement (attached as Exhibit A) to have access to key members of the management and intellectual capital teams and the due diligence 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 Vigilistics’ 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, (v) 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 Vigilistics’ Assets. A sealed bid must be submitted so that it is actually received no later than June 8, 2016 at 3:00 p.m. Pacific Daylight Time (the “Bid Deadline”) at Vigilistics’ office: 65 Enterprise, Suite 300, Aliso Viejo CA 92656. Please also send your bid via email to steve@gerbsmanpartners.com.

Bids should identify those assets being tendered for in a specific and identifiable way. The attached fixed asset list may not be complete and Bidders interested in any fixed assets must submit a separate bid for such assets, be specific as to the assets and any sale of the fixed assets or Intellectual Property of Vigilistics.

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 check in the amount of $100,000, payable to Vigilistics, Inc., and sent to Kevin Berggren, Attorney at Law, Stradling, Yocca, Carlson & Rauth, P.C.,4365 Executive Drive, Suite 1500, San Diego, CA 92121. The deposit will be held in trust by Company’s counsel. The winning bidder will be notified within three business days of the Bid Deadline. Unsuccessful bidders will have their deposit returned to them within three business days of notification that they are an unsuccessful Bidder.

Vigilistics 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.

Vigilistics will require the successful Bidder to close within seven days of notification. Any or all of the assets of Vigilistics 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 Vigilistics Assets shall be the sole responsibility of the successful bidder and shall be paid to Vigilistics at the closing of each transaction.

For additional information, please do not contact the company directly, please contact:

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

Kenneth Hardesty
408 591-7528
ken@gerbsmanpartners.com

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

Posted in Uncategorized, tagged , , , , on April 14, 2016| Leave a Comment »

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San Francisco, April, 2016
The Advantages of a “Date-Certain M&A Process” over an “Assignment for the Benefit of Creditors – ABC”
Apart from a formal bankruptcy (Chapter 7 or Chapter 11) there are two basic approaches to maximizing enterprise value for under-performing and/or under-capitalized technology, life science, medical device and solar companies and their Intellectual Property: a “Date-Certain M&A Process” and an assignment for the benefit of creditors (ABC).

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

The advisor works with the board and corporate management to:

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

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

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

The advantages of a “Date Certain M&A” approach include the following:

Speed – The entire process for a “Date Certain M&A Process” can be concluded in 4 to 6 weeks. Creditors and investors receive their money quickly. The negative public relations impact on investors and board members of a drawn-out process is eliminated. If circumstances require, this timeline can be reduced to as little as two weeks, although a highly abbreviated response time will often impact the final value received during the asset auction.

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

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

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

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

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

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

To this end the insolvency counsel then takes the lead on all orderly shutdown items.
In an Assignment for the Benefit of Creditors (ABC):

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

  1. Longer Time to Cash – Creditors and investors will not receive proceeds for at least 7 months (more quickly than in a bankruptcy but far slower than with a “date-certain” auction).
  2. Higher Cost – Ultimately, ABCs tend to be more expensive than a date-certain© auction. It is not uncommon for the entire value received from the sale of company assets to be consumed by fees and/or a transaction for maximizing value may not be consummated in a timely fashion.
  3. Loss of Control – Once the assets are assigned to the independent third-party trustee, the board of directors has no further control over the process. It cannot modify the process in any way or discontinue the process. Thus, it is not possible to explore multiple options in parallel.
  4. Higher Public Relations Profile – The longer time frame for the ABC process and the more formal (and public) legal nature of an ABC make it more difficult to put a positive spin on the final outcome.
  5. Messy Exit – Most independent third-party trustees do not perform the services of cleanly shutting down the remaining corporate shell. Thus, investors must either pay another party to do this job or leave it undone, resulting in increased liability.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 91 technology, medical device, life science, cyber security, digital marketing and solar companies and their Intellectual Property and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in San Francisco, New York, Virginia/Washington DC, Boston, Europe and Israel.
Gerbsman Partners
Phone: +1.415.456.0628, Cell +1.415.505.4991
Email: Steve@GerbsmanPartners.com
Web: www.gerbsmanpartners.com
BLOG of Intellectual Capital: http://blog.gerbsmanpartners.com

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