M A X I M I Z I N G T H E VA L U E O F D I S R U P T I V E T E C H N O L O G Y
The IP Investment Bank
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Disruptive Technology Focused, IP Strategy Enabled We take an end-to-end approach to positioning, financing, and monetizing disruptive technology companies. Evaluate Disruptive Technologies
Build Leadership Position
Complete Transaction
Support PostTransaction
Perform Rigorous Screening Process
Develop Effective Business Strategy
Design Financing Strategy
Proactively Connect Company & Investors
Conduct Expert Technical Diligence
Align IP Strategy to Business
Select Investors & Execute Transaction
Bolster Investor Communications
We start from the end and work backwards: Can this be a $1 billion company? How can we help it get there? S E E I N G
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Our End-to-End Process in Action
NASDAQ: CLIR
Evaluate Disruptive Technologies
Build Leadership Position
Complete Transaction
Support PostTransaction
Found start-up with new combustion technology
Advised on patent / business strategy
Honed communication of complex technology story
Continuing to introduce to investors after IPO
Validated technology with industry experts
Arranged $3M early stage private financing
Conducted US / Europe investor roadshow
Providing research coverage to Wall Street
Determined suitability for public venture banking
Helped recruit board and management
Executed successful IPO, raising $13.8MM
Consulting on IR / PR matters
“MDB Capital had both the vision to understand our innovations and the end-to-end process to help make that vision a reality.” Rick Rutkowski, ClearSign Combustion CEO
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Our Integrated Teams We leverage cross-functional skill sets to support our end-to-end process. MDB Capital Group
Public Venture Banking IP Development Services
Capital Markets
Pre-IPO Financings
Invention Discovery
Research
IPOs
IP Strategy Design
Equity Sales & Trading
Follow-On Financings
Patent Filing Execution
Post-Financing Marketing
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Public Venture Banking
IP Development Services
Capital Markets
Public Venture Banking We have taken six companies public through our Public Venture Banking process. Four of these have traded at market values over $1 billion.
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Public Venture Banking Key Investment Criteria Public Venture Banking
IP Development Services
Capital Markets
Our mission is to position and finance disruptive technology companies. Large Market Potential
Target markets provide > $1 billion opportunities
Unique Technology
Can create a dominant IP strategy around the technology
Early Validation
Industry thought leaders believe the technology is feasible
Visible Inflection Point
Provides good risk / reward for investors and company
Fair Valuation
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Commercialization timeline is short and credible
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Benefits of Our Public Venture Banking Approach Public Venture Banking
IP Development Services
Capital Markets
We view an IPO as an opportunity to launch a company. Traditional venture capital firms view an IPO as a way of cashing out.
Traditional Venture Capital
MDB Public Venture Banking
Adversarial: VCs aim to depress valuation in future rounds, to maximize ownership %
Valuation Process
Expensive: VCs control cap table in future rounds with anti-dilution rights
Long-Term Cost of Capital
Narrow: VC boards often focused on one industry, can miss platform opportunities
Board Focus
Limited: VCs are just beginning to understand impact of patent strategies
Understanding of IP
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Collaborative: Early public entry aligns MDB with company to maximize valuation Fair: MDB raises follow-on funds based on public valuation Broad: MDB finds diverse board / investors to identify new verticals Expansive: MDB has deep experience adding value with dominant IP strategies
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Our Public Venture Banking Process Public Venture Banking
IP Development Services
Capital Markets
A successful public financing is a process, not an event. Strengthen Business
Design Messaging
Execute Financing
Recruit and form world-class management team and board
Simplify complex technology for high-quality value investors
Finance with common stock to attract long-term investors
Simplify capital structure and eliminate debt
Set forth roadmap for intellectual property dominance
Find institutions who believe in company’s long term vision
Create path to industry domination with IP strategy
Articulate plan to maximize valuation during development
Solicit marquee investors that can add validation
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Public Venture Banking
IP Development Services
Capital Markets
IP Development Services A dominant IP strategy can grow a small company with disruptive technology to a $1 billion enterprise value.
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Dominant IP Strategies Public Venture Banking
IP Development Services
Capital Markets
Our mission is to create dominant IP portfolios that compel large companies to partner with or acquire our clients. Foundational Sizable Rapidly Scalable Never Ending
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Consider IP strategy from the outset of business planning Competitors can easily design around small portfolios Move quickly to strike while technology is truly disruptive Stay nimble by continuously capturing new innovations
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Current Disjointed Patent Development Process Public Venture Banking
IP Development Services
Capital Markets
Developing a dominant IP strategy requires cooperation from market, engineering and patent experts.
Managers have market expertise, but may be distracted by managing day-to-day operations
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Inventors have engineering expertise, but may be siloed off from the rest of the company
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IP counsel has patent expertise, but is often a third party that does not understand business goals or engineering
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The IPDS Difference Public Venture Banking
IP Development Services
Capital Markets
We bring together diverse skillsets to develop dominant IP strategies hand-in-hand with the business.
Our investment banking knowledge keeps business strategy at the forefront
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Our dedicated engineering team enables rapid scaling of large portfolios
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PatentVest,® our proprietary patent database, provides unique insights into IP landscapes
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Intellectual Property Development Services Process Public Venture Banking
IP Development Services
Capital Markets
We understand that IP strategy must follow business strategy. Discover
Design
Execute
Work with company & experts to deeply understand business opportunity
Develop IP strategy and innovation plan with inventors & management
Draft patent applications with input from inventors, management & attorneys
Develop fundamental understanding of technological differentiators
Extract new patents from inventions that have not yet been protected
Continuously fine tune IP strategy to generate new inventions
Analyze IP landscape to discover areas in which company can be dominant
Generate new potential inventions in lockstep with IP strategy
Protect against commoditization and copying by fast followers
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MDB’s PatentVest
®
Public Venture Banking
IP Development Services
Capital Markets
MDB’s proprietary PatentVest® database enables IPDS to offer exceptional value. Measures, scores, and ranks US patents by company and portfolio • Capable of identifying companies with hidden IP value • Able to produce patent landscapes to identify areas where innovation ROI will be highest Provides unique business intelligence • Parses data on over 4,000 public and private companies • Contains 4+ million US patent grants, and 2+ million US patent applications Supported by MDB Capital Group’s operations in Managua, Nicaragua • Over 20 highly qualified technical and legal support professionals • Over 75,000 man-hours invested
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Public Venture Banking
IP Development Services
Capital Markets
Capital Markets Research
Equity Sales & Trading
Post Financing Marketing
We provide ongoing after-market support for investors and companies to enhance liquidity on the path to achieving $1 billion valuations.
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Key Activities: Research Public Venture Banking
IP Development Services
Capital Markets
We keep the market updated on a company’s progress against milestones. Research
Equity Sales & Trading
Post Financing Marketing
• Disseminate information on less well-known disruptive technology companies to broaden investor awareness of the opportunity • Provide MDB perspective on how to best value disruptive technology companies • Traditional metrics such as revenues and earnings do not fully capture the value of a disruptive technology company • Disruptive technology companies increase in value when they achieve major milestones that reduce the risk of commercialization • The key underlying asset of a disruptive technology company is intellectual property
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Key Activities: Equity Sales & Trading Public Venture Banking
IP Development Services
Capital Markets
We provide liquidity to an inherently illiquid asset class. Research
Equity Sales & Trading
Post Financing Marketing
• Build and maintain relationships with leading institutional investors • Partner with research team to understand key business drivers of client companies, and communicate material findings to investors • Discover when investors are considering taking profits or building larger positions in a client company’s stock • Emphasize block transactions between large buyers and sellers to create liquidity and avoid large swings in a stock’s market price
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Key Activities: Post Financing Marketing Public Venture Banking
IP Development Services
Capital Markets
We communicate a client company’s message early and often, to keep it fresh in investor’s minds. Research
Equity Sales & Trading
Post Financing Marketing
• Partner with leading IR/PR firms to deliver a company’s message and news about its key milestone accomplishments • Maintain active dialogue between companies and investors who participated in the financing • Utilize MDB’s client relationships, annual Bright Lights Conference, and non-deal roadshows to help management teams reinforce existing investor relationships and develop new ones
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Summary
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Key Takeaways MDB understands how to maximize the value of disruptive technology companies. Evaluate Disruptive Technologies
Discover companies with truly innovative solutions to large market problems
Build Leadership Position
Develop business and IP strategies to commercialize and protect those solutions
Complete Transaction
Partner with highquality investors who believe in the company’s long term vision
Support PostTransaction
Provide post-financing support by providing the market with information and liquidity
“It takes a team… of insightful, experienced, and daring investment pros to come up with not just stock winners but great super-stock achievers… MDB has taken a number of companies from conception valued at almost zero to a market value of $1 billion or more” Forbes Magazine “An Inside Look Into Spotting and Nurturing Potentially Super Stock Achievers” July 20, 2012 S E E I N G
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Appendix MDB History The MDB Team Case Studies Recent Transactions
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MDB History
1997 1997/03 2004 2005/08 2008 2009 2010 S E E I N G
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Founded 1997 by Christopher Marlett and Anthony DiGiandomenico (5 total employees), focused on public venture Launched three technologies into the public markets via our public venture process that all reached $250MM in market value, with two reaching over $1B in market value
Began development of PatentVest Launched two more public companies via our public venture process, one exceeded $3B in market value and one exceeded $2B Started development of integrated platform to launch micro cap technology companies MDB discovers that companies with certain IP metrics significantly outperform market averages leading to decision to focus on disruptive technology 2010 Firm transformed into “The IP Investment Bank” and launched 1st Annual Bright Lights Conference to focus on companies with disruptive technology
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MDB Team: Executive Management Christopher Marlett Chief Executive Officer & Co-Founder
Anthony DiGiandomenico Co-Founder
Gary Schuman Chief Financial Officer & Chief Compliance Officer
Daniel Nagy, CFA Head of Fixed Income Research & Trading
Sarah Barney General Counsel
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MDB Team: Public Venture Banking Anthony DiGiandomenico
Carlos Herrera, Ph.D.
Co-Founder
Senior Investment Banking Analyst
Cameron Gray, Ph.D.
Edgardo Rayo, CFA
Managing Director
Senior Investment Banking Analyst
Robert Levande
Ivonne Bordas
Sr. Managing Director
Senior Investment Banking Analyst
Jeff Sun Managing Director
Amy Wang, Ph.D. Managing Director
Paul Bundschuh Managing Director
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MDB Team: IP Development Services Michael B. Chernoff
John Wootress
Raul Trujano
Chief Intellectual Property Officer
Director of IP Development
Patent Administrator
Jose Algaba
Oscar Chow
Apolinar Picado, Ph.D
Project Supervisor
Project Supervisor
Project Supervisor
Alenka Bendana
Guillermo Estrada
Maria Alejandra Ramos
Intellectual Property Analyst
Intellectual Property Analyst
Intellectual Property Analyst
Enrique Blandon
Ramon Eyzaguirre
Domingo Sandoval
Intellectual Property Analyst
Intellectual Property Analyst
Intellectual Property Analyst
Alejandro Borge
Milton Gomez
Giovanni Sacasa
Intellectual Property Analyst
Intellectual Property Analyst
Patent Proof Reader
Marco A. Cajina, PE
Horacio Lovo
Juan Carlos Soza
Intellectual Property Analyst
Intellectual Property Analyst
Intellectual Property Analyst
Manuel Castro
Karen Perez
Intellectual Property Analyst
Intellectual Property Analyst
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MDB Team: Capital Markets George Brandon Managing Director
Kevin Cotter Managing Director
Michael Cullen Equity Sales & Trading
Alex Zapanta Equity Sales & Trading
Rodrigo Pallais Roadshow Coordinator
Scarlett Hooker Compliance Associate
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Recent Financings
$10 Million
$17.5 Million
$36 Million
$8 Million
$18.6 Million
Pre-IPO Financing
Underwriting, Capital Raise
Initial Public Offering
Pre-IPO Financing
Initial Public Offering
June 2015
February 2015
November 2014
November 2014
June 2014
$27.6 Million
$17 Million
$7 Million
$10 Million
$5.5 Million
Initial Public Offering
Initial Public Offering
Pre-IPO Financing
Registered Direct Offering
Pre-IPO Financing
March 2014
November 2013
June 2013
February 2012
May 2014
$9.66 Million
$4.75 Million
$13.8 Million
$13.8 Million
$9.24 Million
Public Offering
Pre-IPO Financing
Secondary Offering
Initial Public Offering
Secondary Offering
February 2013
December 2012
June 2012
April 2012
March 2012
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Case Study: Resonant NASDAQ: RESN
Challenge:
Development stage company with a revolutionary new technology positioned to significantly improve the size, cost, and performance of RF analog filters for mobile devices. The company had developed an early prototype demonstrating its technology and had entered into a joint development agreement with a leading supplier of RF front-ends to mobile device OEMs. • Assisted in spinning out technology and patents from original owner •
MDB Delivered:
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and forming new company Assisted in recruiting key members of the team, including CEO and independent directors Assisted with patent development and strategy Advised on business and licensing strategy Provided $7.0 million in pre-IPO financing Executed an IPO to raise $18.6 million, including over allotment Listed on the NASDAQ Capital Market exchange
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Case Study: Ideal Power NASDAQ: IPWR
Challenge:
Development stage company with a revolutionary new technology that significantly improves the weight, size, cost, efficiency and reliability of electronic power converters. The company had received ARPA-E grants and had lean team of engineers pushing the company forward. • Recruited key members of the team, including the CEO and •
MDB Delivered:
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independent directors Built strong IP portfolio with MDB’s IP Development Services Advised on licensing strategy to commercialize PPSA technology Provided $5.0MM in pre-IPO financing Executed an IPO to raise $17.25MM including over allotment Listed on the NASDAQ Capital Market exchange
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Case Study: Energous NASDAQ: WATT
Challenge:
Development stage company enabling wireless charging of power electronics devices at distance with its disruptive WATTUP technology that surrounds and charges devices with three dimensional pockets of energy.
• Recruited CEO, Board of Directors • Designed patent strategy and built strong IP portfolio with MDB’s IP
MDB Delivered:
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Development Services Advised company on business strategy and vertical markets approach Provided $5.5MM in Pre-IPO financing Executed an IPO to raise $27.6MM including over allotment Listed on the NASDAQ Capital Market exchange
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Case Study: Medivation NASDAQ: MDVN
Challenge:
Start up company with three employees that had licensed technology for the treatment of Alzheimer’s disease. Company unsuccessful in raising material amount of capital to enter clinical trials.
• Repositioned company as a “virtual” pharmaceutical company
MDB Delivered:
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that creates value with promising compounds in a focused “capital light” strategy. • Successfully crafted and communicated unique company strategy. • Completed reverse merger with $14MM financing.
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Case Study: VirnetX NASDAQ: VHC
Challenge:
Commercialize and protect valuable patent portfolio to provide solutions for secure real-time communications such as instant messaging and voice over internet protocol.
• Identified source of unique IP, established working relationship with •
MDB Delivered:
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IP holder (SAIC) and negotiated IP licenses and assignments. Recruited CEO. Co-authored business plan. Co-founded private company. Arranged reverse merger into public company tied to $4.5MM financing.
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Case Study: UniPixel Displays, Inc. NASDAQ: UNXL
Challenge:
Uni-Pixel, Inc. is a production stage company delivering superior performance engineered films to the touch screen, flexible electronics, and lighting and display markets. Company was pre-revenue with 2 months cash and 3.1 million in convertible notes maturing in 2 months. • Advised company on recapitalization and restructuring of •
MDB Delivered:
• • •
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company equity and debt. Advised company on new strategy to focus on flexible touch screen technology. Lifted company from OTC.BB to NASDAQ Capital Markets. Executed financing to raise $17.25MM including over allotment Actively covering with research reports and introducing to investors post financing.
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Case Study: Parametric Sound Corporation NASDAQ: PAMT
Challenge:
Parametric Sound Corp. developing a unique directional sound technology but lacked IP and business strategy as reflected in market valuation.
• Advised company on recapitalization and uplisting from OTC to •
MDB Delivered:
• • •
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NASDAQ listing. Advised company on new strategy to focus on an IP licensing strategy in the multiple verticals in the audio industry. Served as intermediary between company and new executive chair to negotiate employment terms. Executed financing to raise $9.24MM. Actively covering with research coverage and introducing to investors post financing.
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Case Study: ClearSign Combustion Corporation NASDAQ: CLIR
Challenge:
Start up company with an inventor and two full-time employees that had developed unique combustion technology. Company needed startup capital to recruit team, conduct R&D, and file additional patents, and position company for successful IPO. • Raised $3M in private funding at early stage of company. • Advised company on patent and business strategy in the
MDB Delivered:
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combustion industry. • Advised and helped recruit board member and CTO for company. • Advised and organized due diligence call with panel of industry experts. • Executed successful IPO raising $13.8MM.
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Headquarters - Dallas
Santa Monica
New York
Managua
2425 Cedar Springs Road
401 Wilshire Boulevard
1350 Avenue of the Americas
Embajada de Mexico,
Dallas, Texas 75201
Suite 1020
2nd Floor
una cuadra arriba,
310.526.5000
Santa Monica, CA 90401
New York, NY 10019
a la esquina, casa #100
310.526.5000
310.526.5000
Managua, Nicaragua 310.526.5000
The IP Investment Bank
Member FINRA/SIPC
G SS EE EE II NN G
V V A A LL UU EE
OOT TH HE ER RS S D D O ON O N TO . T .
O T C R E A TC IR NE A G T IVNAG L VU AE L UOE T O H TE HRE SR S C CA ANN NN O T ..
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