MAXIMIZING THE VALUE OF DISRUPTIVE TECHNOLOGY Firm Overview Deck.pdfof a disruptive technology...

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


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






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.


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.


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.



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.


Traditional Venture Capital MDB Public Venture Banking

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

Valuation Process

Long-TermCost of Capital

Board Focus

Understanding of IP


Recruit and form world-class management team and board

Simplify capital structure and eliminate debt

Create path to industry domination with IP strategy

Simplify 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.



A dominant IP strategy can grow a small company with disruptive technology

to a $1 billion enterprise value.

IP Development Services



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.



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.



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.



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 new 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 commoditiza-tion and copying by fast followers

Discover Design Execute

We understand that IP strategy must follow business strategy.



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.



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.



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.



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


We provide liquidity to an inherently illiquid asset class.



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


We communicate a client company’s message early and often, to keep it fresh in investor’s minds.



Summary


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






AppendixMDB History

The MDB TeamCase Studies

Recent Transactions


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 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


Christopher MarlettChief Executive Officer & Co-Founder

Anthony DiGiandomenicoCo-Founder

Gary SchumanChief Financial Officer & Chief Compliance Officer

Daniel Nagy, CFAHead of Fixed Income Research & Trading

Sarah BarneyGeneral Counsel

MDB Team: Executive Management


MDB Team: Public Venture Banking

Anthony DiGiandomenicoCo-Founder

Cameron Gray, Ph.D. Managing Director

Robert LevandeSr. Managing Director

Jeff SunManaging Director

Amy Wang, Ph.D.Managing Director

Paul BundschuhManaging Director

Carlos Herrera, Ph.D. Senior Investment Banking Analyst

Edgardo Rayo, CFASenior Investment Banking Analyst

Ivonne BordasSenior Investment Banking Analyst


MDB Team: IP Development Services

Michael B. ChernoffChief Intellectual Property Officer

Jose AlgabaProject Supervisor

John Wootress Director of IP Development

Oscar ChowProject Supervisor

Raul TrujanoPatent Administrator

Apolinar Picado, Ph.DProject Supervisor

Alenka BendanaIntellectual Property Analyst Enrique BlandonIntellectual Property Analyst

Alejandro BorgeIntellectual Property Analyst Marco A. Cajina, PEIntellectual Property Analyst

Manuel CastroIntellectual Property Analyst

Guillermo EstradaIntellectual Property Analyst

Ramon EyzaguirreIntellectual Property Analyst

Milton GomezIntellectual Property Analyst Horacio LovoIntellectual Property Analyst Karen PerezIntellectual Property Analyst

Maria Alejandra RamosIntellectual Property Analyst Domingo SandovalIntellectual Property Analyst Giovanni SacasaPatent Proof Reader Juan Carlos SozaIntellectual Property Analyst


MDB Team: Capital Markets

George BrandonManaging Director

Kevin CotterManaging Director

Michael CullenEquity Sales & Trading

Alex ZapantaEquity Sales & Trading

Rodrigo PallaisRoadshow Coordinator

Scarlett HookerCompliance Associate


Recent Financings

$18.6 Million

Initial Public Offering

June 2014

$5.5 Million

Pre-IPO Financing

May 2014

$9.24 Million

Secondary Offering

March 2012

$27.6 Million


March 2014

$9.66 Million

Public Offering

February 2013

$36 Million


November 2014

$7 Million

Pre-IPO Financing

June 2013

$13.8 Million

Secondary Offering

June 2012

$17 Million


November 2013

$4.75 Million

Pre-IPO Financing

December 2012

$8 Million

Pre-IPO Financing

November 2014

$10 Million

Registered Direct Offering

February 2012

$13.8 Million


April 2012

$17.5 Million

Underwriting, Capital Raise

February 2015

$10 Million

Pre-IPO Financing

June 2015


Case Study: Resonant

Development stage company with a revolutionary new technology posi-tioned 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 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

NASDAQ: RESN

MDB Delivered:

Challenge:

???


Case Study: Ideal Power

MDB Delivered:

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 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

NASDAQ: IPWR


Case Study: Energous

Development stage company enabling wireless charging of power elec-tronics 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

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

NASDAQ: WATT

MDB Delivered:

Challenge:


Case Study: Medivation

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.

NASDAQ: MDVN

MDB Delivered:

Challenge:


Case Study: VirnetX

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.

NASDAQ: VHC

MDB Delivered:

Challenge:


Case Study: Parametric Sound Corporation

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 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.

NASDAQ: PAMT

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 position 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.

Case Study: ClearSign Combustion Corporation

NASDAQ: CLIR

MDB Delivered:

Challenge:

36S 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 - Dallas

2425 Cedar Springs Road

Dallas, Texas 75201

310.526.5000

Santa Monica

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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