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
