MAXIMIZING THE VALUE OF DISRUPTIVE TECHNOLOGY. The IP Investment Bank

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 S E E I N G V A L U E O T H E R S D O N O ...
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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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