Background

• Introduced by 5 VCs who were co-investors
• Company participating in four markets in three areas around the world
• Company perpetually lost money and sales were declining
• Company revenues were deteriorating
• Considerable exposure in the US subsidiary regarding vendors
• Company had problems with revenue recognition
• Investors had lost faith in management and vice versa

Activities

• Provided interim President
• Designed reorganization plan that focused on the company’s core competencies, and determined non-core technologies that could be sold
• Lowered company burn rate by 60%
• Implemented CVIP model which resulted in the sale (involving licensing fees, OEM, and royalties) of technologies as follows:
  • Early stage technology based IP, sold to a $200-million industry leader in smart card technology;
  • Pre-prototype technology based IP, sold to the largest privately owned printing company in the world
• Negotiated dissolution with US subsidiary
• Resulting cash flow sustained company through the reorganization
• Remaining core business was sold to a listed company in Japan

Results

• Company continued, including 60 jobs
• First five tranches of obligation settled $1/$1
• Further tranches at $0.60/$1
• US parties settled and voided all pending litigation