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S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
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
2S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Disruptive Technology Focused, IP Strategy Enabled
We start from the end and work backwards: Can this be a $1 billion company? How can we help it get there?
Perform Rigorous Screening Process
Conduct Expert Technical Diligence
Develop Effective Business Strategy
Align IP Strategy to Business
Design Financing Strategy
Select Investors & Execute Transaction
Proactively Connect Company & Investors
Bolster InvestorCommunications
We take an end-to-end approach to positioning, financing, and monetizing disruptive technology companies.
Evaluate Disruptive Technologies
Build Leadership Position
Complete Transaction
Support Post-Transaction
3S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Our End-to-End Process in Action
“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
Found start-up with new combustion technology
Validated technology with industry experts
Determined suitability for public venture banking
Advised on patent / business strategy
Arranged $3M early stage private financing
Helped recruit board and management
Honed communication of complex technology story
Conducted US / Europe investor roadshow
Executed successful IPO, raising $13.8MM
Continuing to introduce to investors after IPO
Providing research coverage to Wall Street
Consulting on IR / PR matters
NASDAQ: CLIR
Evaluate Disruptive Technologies
Build Leadership Position
Complete Transaction
Support Post-Transaction
4S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Our Integrated Teams
Pre-IPO Financings
IPOs
Follow-On Financings
Invention Discovery
IP Strategy Design
Patent Filing Execution
Research
Equity Sales & Trading
Post-Financing Marketing
Public Venture Banking IP Development Services
MDB Capital Group
Capital Markets
We leverage cross-functional skill sets to support our end-to-end process.
5S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Public Venture Banking
Public Venture Banking IP Development Services Capital Markets
We have taken six companies public through our Public Venture Banking process.
Four of these have traded at market values over $1 billion.
6S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Public Venture Banking Key Investment Criteria
Large Market Potential
Unique Technology
Early Validation
Visible Inflection Point
Fair Valuation
Target markets provide > $1 billion opportunities
Can create a dominant IP strategy around the technology
Industry thought leaders believe the technology is feasible
Commercialization timeline is short and credible
Provides good risk / reward for investors and company
Our mission is to position and finance disruptive technology companies.
Public Venture Banking IP Development Services Capital Markets
7S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Benefits of Our Public Venture Banking Approach
We view an IPO as an opportunity to launch a company.Traditional venture capital firms view an IPO
as a way of cashing out.
Public Venture Banking IP Development Services Capital Markets
Traditional Venture Capital MDB Public Venture Banking
Valuation Process
Adversarial: VCs aim to depress valuation in future rounds, to maximize ownership %
Expensive: VCs control cap table in future rounds with anti-dilution rights
Narrow: VC boards often focused on one industry, can miss platform opportunities
Limited: VCs are just beginning to under-stand impact of patent strategies
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
Long-TermCost of Capital
Board Focus
Understanding of IP
8S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Recruit and form world-class management team and board
Simplify capital structure and eliminate debt
Create path to industry domination with IP strategy
Simply complex technology for high-quality value investors
Set forth roadmap for intellec-tual property dominance
Articulate plan to maximize valuation during development
Finance with common stock to attract long-term investors
Find institutions who believe in company’s long term vision
Solicit marquee investors that can add validation
Strengthen Business Design Messaging Execute Financing
Our Public Venture Banking Process
A successful public financing is a process, not an event.
Public Venture Banking IP Development Services Capital Markets
9S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
A dominant IP strategy can grow a small company with disruptive technology
to a $1 billion enterprise value.
IP Development Services
Public Venture Banking IP Development Services Capital Markets
10S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Dominant IP Strategies
Foundational
Sizable
Rapidly Scalable
Never Ending
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
Our mission is to create dominant IP portfolios that compel large companies to partner with or acquire our clients.
Public Venture Banking IP Development Services Capital Markets
11S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Current Disjointed Patent Development Process
Inventors have engineer-ing expertise, but may be siloed off from the rest of the company
Managers have market expertise, but may be distracted by managing day-to-day operations
IP counsel has patent expertise, but is often a third party that does not understand business goals or engineering
Developing a dominant IP strategy requires cooperation from market, engineering and patent experts.
Public Venture Banking IP Development Services Capital Markets
12S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
The IPDS Difference
Our dedicated engineering team enables rapid scaling of large portfolios
Our investment banking knowledge keeps business strategy at the forefront
PatentVest,® our proprietary patent database, provides unique insights into IP landscapes
We bring together diverse skillsets to develop dominant IP strategies hand-in-hand with the business.
Public Venture Banking IP Development Services Capital Markets
13S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Intellectual Property Development Services Process
Work with company & experts to deeply understand business opportunity
Develop fundamental understanding of technological differentiators
Analyze IP landscape to discover areas in which company can be dominant
Develop IP strategy and innovation plan with inventors & management
Extract ew patents from inventions that have not yet been protected
Generate new potential inventions in lockstep with IP strategy
Draft patent applications with input from inventors, management & attorneys
Continuously fine tune IP strategy to generate new inventions
Protect against commodiza-tion and copying by fast followers
Discover Design Execute
We understand that IP strategy must follow business strategy.
Public Venture Banking IP Development Services Capital Markets
14S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
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
MDB’s PatentVest®
MDB’s proprietary PatentVest® database enables IPDS to offer exceptional value.
Public Venture Banking IP Development Services Capital Markets
15S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Capital MarketsResearch 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.
Public Venture Banking IP Development Services Capital Markets
16S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Key Activities: Research
• 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
Research Equity Sales & Trading Post Financing Marketing
We keep the market updated on a company’s progress against milestones.
Public Venture Banking IP Development Services Capital Markets
17S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Key Activities: Equity Sales & Trading
• 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
Research Equity Sales & Trading Post Financing Marketing
We provide liquidity to an inherently illiquid asset class.
Public Venture Banking IP Development Services Capital Markets
18S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Key Activities: 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
Research Equity Sales & Trading Post Financing Marketing
We communicate a client company’s message early and often, to keep it fresh in investor’s minds.
Public Venture Banking IP Development Services Capital Markets
19S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Summary
20S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Key Takeaways
Discover companies
with truly innovative
solutions to large
market problems
Develop business and
IP strategies to com-
mercialize and protect
those solutions
Partner with high-
quality investors who
believe in the compa-
ny’s long term vision
Provide post-financing
support by providing
the market with infor-
mation and liquidity
MDB understands how to maximize the value of disruptive technology companies.
“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
Evaluate Disruptive Technologies
Build Leadership Position
Complete Transaction
Support Post-Transaction
21S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
AppendixMDB History
The MDB TeamCase Studies
Recent Transactions
22S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
19971997/032004 2005/08200820092010
MDB History
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 and 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 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
23S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Christopher MarlettChief Executive Officer & Co-Founder
Anthony DiGiandomenicoHead of Investment Banking & Co-Founder
Robert CliffordHead of Capital Markets
Gary SchumanChief Financial Officer & Chief Compliance Officer
Daniel Nagy, CFAHead of Fixed Income Research & Trading
Sarah BarneyGeneral Counsel
MDB Team: Executive Management
24S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
MDB Team: Public Venture Banking
Anthony DiGiandomenicoHead of Investment Banking
Cary HurwitzManaging Director
Daniel LandryManaging Director
Robert LevandeSr. Managing Director
Jeff SunManaging Director
Amy WangManaging Director
25S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Adam HoliberDirector of Business Development, IPDS
Oscar ChowProject Supervisor
Ramon EyzaguirreIntellectual Property Analyst
Alejandro MarinIntellectual Property Analyst
Ivan MonteroIntellectual Property Analyst
Yessica MoralesIntellectual Property Analyst
Javier PenalbaIntellectual Property Analyst
Veralia SanchezIntellectual Property Analyst
MDB Team: IP Development Services
Erin-Michael GillChief Intellectual Property Officer
Jose AlgabaProject Supervisor
Alenka BendanaIntellectual Property Analyst
Jacqueline BermudezIntellectual Property Analyst
Alejandro BorgeIntellectual Property Analyst
Marcos CajinaIntellectual Property Analyst
Alejandro DelgadilloIntellectual Property Analyst
Laura EspinozaIntellectual Property Analyst
26S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
MDB Team: Capital Markets
Robert CliffordHead of Capital Markets
George BrandonManaging Director
Kevin CotterManaging Director
Todd ResslerVP, Equity Sales & Trading
Michael CullenEquity Sales & Trading
Alex ZapantaEquity Sales & Trading
Donald MontenegroRoadshow Coordinator
Rodrigo PallaisRoadshow Coordinator
27S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
MDB Team: Research
Ankur DesaiDirector of Investment Research
David ByrneChief Software Architect – PatentVest
Scarlett HookerResearch Associate
Ana JimenezResearch Associate
28S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Case Study: Medivation
Results:
MDB Delivered:
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 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.
Market value increased from $10MM to over $400MM in less than 24 months, and now has a market cap over $3.6B.
NASDAQ: MDVN
29S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Case Study: VirnetX
Results:
MDB Delivered:
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 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.
Market capitalization reached market value of over $200MM less than 24 months from founding, and is now over $1.2B.
NASDAQ: VHC
30S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Case Study: UniPixel Displays, Inc.
Results:
MDB Delivered:
Challenge:
Uni-Pixel, Inc. is a production stage company delivering superior perfor-mance engineered films to the touch screen, flexible electronics, and light-ing 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 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.
Maintained stable market value during pre-revenue development phase
NASDAQ: UNXL
31S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Case Study: Parametric Sound Corporation
Results:
MDB Delivered:
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 NAS-DAQ 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.
Market valuation doubled less than 4 months after financing.
NASDAQ: PAMT
32S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Results:
MDB Delivered:
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 posi-tion company for successful IPO.
• Raised $3M in private funding at early stage of company.
• Advised company on patent and business strategy in the 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.
Market valuation more than doubled within weeks of initial publicoffering; company was recently featured in Forbes.
Case Study: ClearSign Combustion Corporation
NASDAQ: CLIR
33S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
Headquarters
401 Wilshire Boulevard
Suite 1020
Santa Monica, CA 90401
310.526.5000
New York
1350 Avenue of the Americas
2nd Floor
New York, NY 10019
310.526.5000
Managua
Embajada de Mexico,
una cuadra arriba,
a la esquina, casa #100
Managua, Nicaragua
310.526.5000
The IP Investment Bank
Member FINRA/SIPC
S E E I N G V A L U E O T H E R S D O N O T . C R E A T I N G V A L U E O T H E R S C A N N O T .
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