Quarterly Newsletter: June 2004

Why Shut the Door?
According to Reggie Greiner, former analyst for USB Warburg Strategic Investments, there are five (5) exit strategies:

• Sell the Company
• Shut the Doors
• Family Succession
• Employee Purchase
• IPO

Number one exit strategy - Shut the Doors.

Where is the real value?
A major consideration in assessing the economic value of an intangible asset is the ability of the owner of the property to enforce its rights against other parties. When the owner (or the licensee with the burden of enforcing the legal rights) has the resources and the will to maintain, monitor and enforce those rights, through litigation if necessary, the more valuable those ownership rights become. Broad proprietary rights held by an owner with sufficient resources to enforce those rights will maximize the value of the intangible asset.

Venture capital news continued…
According to the Washington Post, venture capital investments have declined steadily for six (6) years. The article relayed the story of Fred F Korangy, CEO of Logic Tree Corp., who visited more than 90 venture capitalists in the span of nine months, they all said no! He stopped looking for money. Logic Tree's telecom software, which allows users to search for information using voice or text commands, is not sexy enough, he was told. Venture investors also said he would not get funding because there is not a $1 billion market for the product.

New trends are emerging to help entrepreneurs escape the VC "rut". The latest trend is to spend your time generating customers and/or strategic alliances instead of chasing venture dollars. The more customers and alliances you form, the more cash you will have to continue operations and the less dependent you will be on a model for VC funding that frankly no longer exists.

The irony is that once you build your own successful model, the VC's will seek you out!

Biotechnology news - something's "fishy."
Everyone knows the problems created by decades of pollution to our oceans. Everyone is also cognizant of the health risks associated high levels of mercury in many types of fish. This has caused substantial debate over who is to blame, what to do, and who will do it! Commercial fishermen continue to struggle with restrictions on harvesting while the harvests that they do reap are polluted. Scientists now believe the most practical solution is to genetically engineer a fish to be high in fatty acids, resistant to poisons, such as mercury and which rapidly reproduces so our supply can be easily and quickly replenished.

Dow Jones - Who are they anyway?
In my presentations I include the following list of Dow Jones companies because it helps in understanding how the American economy has and continues to change and evolve. The Dow Jones Industrial Average was first conceived in 1896 and was comprised of 12 companies. The companies chosen were selected on the basis of reflecting the strength and direction in which our economy was heading at that time.

American Cotton Oil American Sugar American Tobacco Chicago Gas Distilling & Cattle Feeding General Electric

Laclede Gas National Lead North American Tennessee Coal & Iron U S Leather (preferred) U S Rubber

By comparing the evolution of the Dow components over time, we can understand the huge impact on society created by technological change.

Intellectual Property
There are three functions to understanding Intellectual Property: identification, analysis and valuation. In simpler terms we can help you to understand

• what you have,
• where it is located,
• if it offers distinct advantages and,
• what is it worth.

Patent Trivia
Merck & Co.s Patent covering the chemistry of the drug Fosamax, used for treating severe osteoporosis, has only one claim.

Support Services
We have developed a well defined network of Investment Bankers, Broker-Dealers, Strategic Alliance Specialists and existing companies actively seeking joint ventures. We are specialists in early stage technology analysis and valuation. We provide objective, third party evaluations of new discoveries and emerging technologies.

Call us anytime for assistance. (423) 929-0380

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