syncapse bankruptcy sales letter

8/22/2019 Syncapse Bankruptcy Sales Letter

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SAL E OF Syncapse Corp. I ntell ectual Property

Gerbsman Partners – http://gerbsmanpartners.com - has been retained by MNP Ltd., in its capacity as Court-appointed receiver (the “Receiver”) of the property, assets and undertakings of Syncapse Corp. (“Syncapse”, or the “Company”) (www.syncapse.com), to solicit interest for the acquisition of Syncapse’s intellectual property(the “Syncapse Assets”).

Headquartered in Toronto, Canada and with offices in New York City, London and India, Syncapse is a provider of technology-enabled social performance management services for global, enterprise clients with multiple B2C

brands.

In July 2012, the Company acquired the assets of Clickable, Inc., as well as its India subsidiary (together,“Clickable”), a leading search and social media ad tech company, with approximately $32 million raised. Thisadded a deep expertise in digital paid advertising, and a skilled, cost-effective R&D and support team based inGurgaon, India.

Syncapse derives revenue from 3 related lines of business: SaaS subscriptions, Ads and media solutions, andconsulting services.

____________________________

I MPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an

offer or a contract, nor does it purport to contain all information that may be required or

relevant to a recipient's evaluation of any transaction and recipients will be responsible

for conducting their own investigations and analysis.

The information contained in this memorandum relating to the Syncapse Assets has been

supplied by Syncapse. It has not been independently investigated or verified by the

Receiver, Gerbsman Partners, their agents or any other party.

Potential purchasers should not rely on any information contained in this memorandum

or provided by the Reciever, Syncapse or Gerbsman Partners (or their respective staff,

agents, and attorneys) in connection herewith, whether transmitted orally or in writing as

a statement, opinion, or representation of fact. Interested parties should satisfy

themselves through independent investigations as they or their legal and financial

advisors see fit.

The Receiver, Syncapse and Gerbsman Partners, and their respective staff, agents, and

attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy,

completeness and reasonableness of any information provided in connection herewith and(ii) do not accept liability for the information provided in connection herewith, including

information contained in this memorandum, whether that liability arises by reasons of

the Receiver’s, Syncapse’s or Gerbsman Partners' negligence or otherwise, except

liability that arises by reason of the Receiver’s gross negligence or willful misconduct.

Any sale of the Syncapse Assets will be made on an "as-is, where-is," and "with all

faults" basis, without any warranties, representations, or guarantees, either express or

implied, of any kind, nature, or type whatsoever from, or on behalf of the Receiver,



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Syncapse and Gerbsman Partners. Without limiting the generality of the foregoing, the

Receiver, Syncapse and Gerbsman Partners and their respective staff, agents, and

attorneys, hereby expressly disclaim any and all implied warranties concerning the

condition of the Syncapse Assets and any portions thereof, including, but not limited to,

environmental conditions, compliance with any government regulations or requirements,

the implied warranties of habitability, merchantability, or fitness for a particular

purpose.

Except as otherwise noted, this memorandum speaks as of the date hereof. The delivery

of this memorandum should not and does not create any implication that there has been

no change in the business and affairs of Syncapse since such date. Neither the Receiver,

Syncapse or Gerbsman Partners, or their respective staff, agents and attorneys,

undertakes any obligation to update any information contained herein.

This memorandum contains confidential information and is not to be supplied to any

person without the Receiver’s prior consent. This memorandum and the information

contained herein are subject to the non-disclosure agreement attached hereto as Exhibit

A.

SUMMARY OF HISTORICAL INFORMATION

Syncapse provided technology-enabled social performance management solutions for global, enterprise clientswith large brand portfolios. The Company operationalized and scaled social media efforts through its cloud-based,Syncapse Platform, a unified suite of on-demand tools and applications. Key elements of Syncapse’s Platforminclude: publishing & collaboration, social & search ad management technology, the SocialSYNC™ datamanagement store, and the extensible and customizable Syncapse Analytics Suite. Leveraging this proprietarytechnology, the Company also offered a robust set of consulting and data services designed to meet the complexrequirements required by global brands. Together, Syncapse’s capabilities enabled clients to build brand healthand drive incremental reach, frequency, and effectiveness with minimal marketing investment, while delivering aconsistent, coordinated customer experience across multiple social media outlets.

Syncapse offered enterprise brands a fully integrated, SaaS-based, social performance management solution whichcombines paid, earned, and owned media. Syncapse’s comprehensive, unified platform enabled marketers tomanage campaigns across all brands, geographies, and social media channels, and is the best solution to bridge thegap between marketing and IT requirements. Syncapse powered the world’s largest multinational corporationsincluding Anheuser Busch-InBev, Alticor Inc. (Amway), The Coca-Cola Company, Diageo PLC, JPMorganChase Bank, Johnson & Johnson Limited and L’Oreal Canada Inc..

Syncapse was headquartered in Toronto, Canada with an R&D and support center in Gurgaon, India, and officesin New York and London.

Target Market:

Syncapse was positioned to benefit from accelerating growth in marketing technology budgets and the continuing

migration of the social conversation to the C-suite. With the explosive adoption of social platforms like Facebook,Twitter, YouTube, and LinkedIn, social media has become one of the fastest growing segments of digitalmarketing today, with estimated market size expected to reach $16Bn by 20161. According to Altimeter Group,Global corporations are struggling to manage an average of 178 business-related social media accounts, along witha host of potential legal, compliance, and brand perception risks. Further, use of social media has transformedfrom simple marketing tactics to sophisticated enterprise-wide strategic initiatives, creating IT challengesinvolving data, analytics, content management, security, and consumer privacy protection. As a result, global

brands are accelerating growth of marketing technology budgets.

1 Forrester Group



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Recurring revenue model:

Syncapse generated revenue from three revenue streams: recurring subscription-based software licenses, supportand consulting services, a large percentage of which was typically retained and recurring and media andadvertising (self-serve and managed).

Customers:

Syncapse’s strong customer base included blue-chip customers such as Anheuser Busch-InBev, Alticor Inc.(Amway), The Coca-Cola Company, Diageo PLC, JPMorgan Chase Bank, Johnson & Johnson Limited andL’Oreal Canada Inc., among others.

In addition to its enterprise customer base, the company had approximately 100 small and medium business clientsthat use Syncapse Ads, either on a self-serve or managed services basis.

Proprietary, scalable technology platform that leverages the Company's industry-leading analytics

capabilities.

Syncapse had pursued a client-centric approach to build technology and infrastructure that accepts third-party dataintegration, created meaningful data visualization and analytics, and enabled efficient, collaborative, global

publishing. Following the acquisition of Clickable in July 2012, the Syncapse platform functioned across paid,owned, and earned media – mission-critical in today's social media marketplace. New platform enhancements alsohelped global marketers aggregate, normalize, and optimize social data and insights across media channels,

brands, and markets. Syncapse had 3 out of 4 Facebook Preferred Marketing Developer badges, and submitted for the 4th, which will put the Company in the elite position of being one of two developers with all four (joiningAdobe).

Intellectual Property

Syncapse generated a substantial body of intellectual property in the form of production software (source code,testing tools, APIs), trademarks, and know-how, including familiarity with all relevant social media platformAPIs. Details of the Company’s IP (patent filings, trademarks and software) are set out in Appendix B.

THE FOLLOWING FINANCIAL DATA IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.

PAST PERFORMANCE MAY NOT BE INDICATIVE OF FUTURE RESULTS. THIS INFORMATION

SHOULD NOT BE RELIED UPON TO MAKE FUTURE PERFORMANCE PROJECTIONS OF ANY

KIND.

Summary Financial – Revenue

ALL INFORMATION PROVIDED HEREIN RELATING TO THE OPERATIONS OF SYNCAPSE’S BUSINESS ANDTHE MARKET POSITIONS AS IT RELATES TO PERIODS ON OR PRIOR JULY 2013.

The reasons why Syncapse’s assets are attractive are:

Syncapse has historically experienced strong, underlying growth and has been the leader in the field of socialmedia technology and services for the past 5 years. However, recent working capital constraints and an overlyleveraged balance sheet have created the opportunity for the sale of the Syncapse Assets. The acquisition of the

FY2009

(audited)

FY2010

(audited)

FY2011

(audited)

FY2012

(audited)

8 months ended

June 30, 2013

(unaudited and

estimated)

Revenues

Professional fees 6,375$ 11,402$ 12,617$ 8,473$ 4,071$

Software licenses 92 397 2,181 3,111 1,538

Media 2,610 691 105 1,323 842

($000's)



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Syncapse Assets can enable the purchaser to realize significant short and long term value from exploitation of thesubject intellectual property.

Enterprise-Class Technology – Syncapse’s products were developed with direct input from some of theworld’s largest marketers, including The Coca-Cola Company (Syncapse Platform), Alticor Inc.(Amway) (Syncapse Franchise edition) and Anheuser-Busch InBev (Syncapse dashboard and analytics),and were running in production for these clients and more.

Low-cost, highly skilled R&D organization – Syncapse’s R&D and support, were centered in Gurgaon,India, which is a rapidly growing high-tech suburb of New Delhi. Previously with approximately 80employees, and an average annual salary cost of $27,000, Syncapse India was a cost-effective, scalableR&D and support centre. The team averaged 4.6 years of work experience, 28 years of age, 2 years of tenure with the company, with >50% of the product development team graduating from Tier 1 schools inIndia.

R&D Investment: Syncapse invested over $25 million in R&D, with Clickable having investedapproximately a further $11 million in R&D prior to its acquisition by Syncapse. This combined R&Dinvestment, of approximately $36 million, resulted in mature, production SaaS platforms, tools and testsuites that were the result of hundreds of man-years of software development.

Robust Growth: Syncapse’s revenue was historically heavily concentrated with RIM/Blackberry, whichaccounted for as much as 89% of the company’s revenue in 2009, but <10% in FY2013. As RIM reducedits marketing spending, due to its own market challenges, Syncapse had to backfill the decline in RIMrevenue with other enterprise clients. While top-line revenue growth appears flat and net income

performance has been volatile, the Company had underlying, year-over-year growth, ex-RIM, with theaddition of major enterprise clients during periods of significant investment in product development.

Attractive Industry – Digital advertising and marketing, and social media in particular, is growing at arapid rate, as companies continue to shift marketing budgets away from traditional media to new,consumer-direct relationships. With the explosive adoption of social platforms like Facebook, Twitter,YouTube, and LinkedIn, social media has become one of the fastest growing segments of digitalmarketing today, with estimated market size expected to reach $16Bn by 20162. According to Altimeter Group, Global corporations are struggling to manage an average of 178 business-related social mediaaccounts, along with a host of potential legal, compliance, and brand perception risks. Further, use of social media has transformed from simple marketing tactics to sophisticated enterprise-wide strategicinitiatives, creating IT challenges involving data, analytics, content management, security, and consumer

privacy protection. As a result, global brands are accelerating growth of marketing technology budgets.

Diversified Base of Customers – Syncapse’s customer base is comprised of some of the world’s largestB2C brand marketers across a range of industries. The list includes: Anheuser Busch-InBev, Alticor Inc.(Amway), The Coca-Cola Company, Diageo PLC, JPMorgan Chase Bank, Johnson & Johnson Limitedand L’Oreal Canada Inc., among others,

Excellent Relationships – Syncapse’s strength was predicated on strong relationships within and outsidethe social media industry. Syncapse achieved 3 out of 4 Facebook Preferred Marketing Developer certifications (only one company, Adobe, has achieved all 4), and had senior level relationships acrossFacebook, Twitter, LinkedIn, Google, and other major players in the social media space.

Opportunity for Future Growth – Opportunities for growth can be realized by fully exploiting theglobal nature of the client contracts that are in place (Master Services Agreements, SaaS PlatformLicensing Agreements) by taking advantage of the existing client base, and selling into local and regionalclient groups and new business development of the SaaS applications running in production.

2 Forrester Group



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Market Position: Syncapse was a significant enterprise-focused, social media company in a group thatincluded Adobe, Oracle and Salesforce, each of which had added similar capabilities via acquisition.While Syncapse was not the biggest of the group, it had the advantage of being one of the first entrantsinto this early-stage market, and an exceptionally strong reputation for providing a combination of socialmedia and data solutions to global enterprise clients.

Corporate Agreements in Place: The Company’s Master Services Agreements and/or SaaS License

Agreements are in place with the following companies: Anheuser-Busch InBev; Alticor (Amway);Diageo PLC; Goodyear Dunlop Tires Operations S.A.; Johnson & Johnson Limited; JP Morgan ChaseBank; L’Oreal Canada Inc.; Reckitts Benckiser Corporate Services Limited; The Coca-Cola Company,and several smaller entities.



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Management Team at Syncapse (

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or information purposes only):

ichael Scissons, Founder & CEO

erial entrepreneur, tech enthusiast and social media vetehairman, founder and CEO of Syncapse. Since itsyncapse has been firmly rooted in Michael's passio

nnovative and accessible technology. It is these beliefsichael to grow Syncapse internationally—spanning

urope and India—and to serve the world's largest globriter and sought after industry pundit, Michael regulany industry-leading sources including Bloomberg Wes

nd Fast Company.

n 2010, Michael was awarded Ernst & Young's prentrepreneur of the Year award. Before Syncapse, Micedia sales in Canada as Director of Facebook Media wit

etwork. He worked with pioneering brands to integranto Facebook starting in early 2006. Michael gr

niversity of Saskatchewan, where he debuted busoncepts he'd developed since the tender age of six.

arah Johnson, SVP Brand Partnerships and Managi

arah is a member of the Executive Team and leads thonsulting group. She has worked on the client and consusiness, having started her career in marketing at Mionsumer Healthcare, followed by a shift to consultiarketing firm. Sarah has been with Syncapse fro

upporting our major clients’ successful growth in sociell versed in the challenges associated with social m

anging from gaining internal buy-in to setting a cootrategy with regional flexibility and ultimately understauccess. Sarah is based in Toronto. Outside of the office,he globe in search of new adventures.

undeep Sahi, SVP Engineering and Managing Direct

undeep comes to Syncapse from Clickable with eevelopment and management experience, bringingnternet, security and distributed technologies. He has helechnical roles in large companies like Microsoft andike Talisma and eLiveBooks.

rior to his time at Clickable, Sundeep worked at Microsroducts including Biztalk Server and Distributed Applas responsible for services design and architecture.undeep has a Bachelor of Technology degree, with Hngineering, from Kurukshetra University, India.

red Rolff, CFO

s CFO, Fred is responsible for managing Syncapse’segal, IT and administration infrastructure, maximizincross all markets. Fred’s previous roles include Vice Pr t Tremor Media, Vice President and Controller at Theoth MeMedia Inc. and Sentigen Holding Corp. He alsoinancial Strategy for Rare Medium Group and Sccountant at KPMG, giving him a unique array of fi

an, Michael is thelaunch in 2007,

n for developingthat have enabledthe US, Canada,

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tigious Emergingael led Facebook

hin the Interpublice their marketingduated from theinesses based on

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esident of FinanceKnot, and CFO aterved as Director, pervising Senior ance, accounting,



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The Bidding Process for I nter

Interested and qualified par

(attached hereto as Attachme

intellectual capital teams a

Diligence Access"). Each inte

granted to it, shall be deemed

agrees to the bidding proced

inspect and examine the Sy

information with respect the

statements, representations,

Partners, or their respective

reports have been provided

Receiver, Syncapse and Ge

attorneys) do not make any r

or completeness of the same.

Following an initial round of

with a sealed bid, for the acq

must be submitted so that it i

2013 at 12:00pm Toronto Ti

300-111 Richmond Street [email protected]

requirements and consi

[email protected]

Any person or other entity

confirmation that they posses

must be accompanied by a re

(payable to the Receiver, in tr

advance (information will be

draft drawn on a Canadian b

days of the Bid Deadline. Thbidders will have their depo

that they are an unsuccessful

The Receiver is fr ee to con

(including, without limitation,

negotiating with prospective p

sale transaction without prior

sted Buyer

ies will be required to sign a Non-Disclos

t A) to have access to certain members of m

d the due diligence "war room" docum

ested party, as a consequence of the Due

to acknowledge and represent (i) that it ac

res described herein; (ii) that it has had an

capse Assets and to review all pertinent

reto; (iii) that it is not relying upon any

or warranties of the Receiver, Syncapse

taff, agents, or attorneys; and (iv) all such

olely for the convenience of the interested

bsman Partners (and their respective st

presentations and warranties whatsoever as

ue diligence, interested parties will be invite

isition of all or part of the Syncapse Assets.

s received by the Receiver no later than Fri

e (the "Bid Deadline") at the Receiver’s o

st , Toronto, ON CANADA M5H 2G4. Plith any bid. For additional informatio

derations, please contact Steve

.

making a bid must be prepared to provi

s the financial resources to complete the pur

undable deposit in the amount of 15% of t

st). The deposit must be wired to the Recei

rovided), or paid by certified cheque, mone

ank. The winning bidder will be notified w

deposit will be held in trust by the Receiveit returned to them within 3 business days

idder.

uct the sale process as it determines in its

terminating fur ther participation in the proce

ur chasers and enteri ng into an agreement

otice to you or any other person) and any pro

nd operating experience.

pplying the wealth of knowledge he has accumulated onsures that we maximize our investment in the Syaintain its world-class quality. Fred holds a Bachelor occounting from Villanova University and an MBAordham University.

re Agreement

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to such transaction may be changed at any time without prior notice to you or any other

per son. F or greater cert ain ty, the Receiver r eser ves the ri ght to, in its sole discretion, accept

or reject any bid, or withdraw any or all assets f rom sale. I nterested parties should

understand that it is expected that the highest and best bid submitted will likely be chosen as

the winn ing bidder and bidders may not have the opportunity to improve their bids after

submission.

The Receiver will require the successful bidder to close within 5 days after Court

approval of the transaction. The Syncapse Assets will be sold on an “as is, where is” basis,

with no representation or warranties whatsoever.

All sales, transfer, and recording taxes, stamp taxes, or other taxes, if any, relating to the

sale of the Syncapse Assets shall be the sole responsibility of the successful bidder and

shall be paid to the Receiver at the closing of any transaction.

For additional information, please see below and/or contact:

Steven R. Gerbsman Kenneth HardestyGerbsman Partners Gerbsman Partners

(415) 456-0628 (408) 591-7528

[email protected] [email protected]



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APPENDIX A: IP (Software & Trademarks

1) List of patentsa) International Application Number: PCT/CA2010/000858, filed 7 June 2010, “METHOD

AND SYSTEM FOR COUPLING DISPARATE NETWORKED SERVICES” (FILED inUS AND CANADA)

2) Trademarksa) SYNCAPSE b) SOCIALSYNCc) CLICKABLE

3) Supported Network APIs:a) Facebook

b) Twitter c) YouTubed) Google Ad Wordse) Bingf) Crimson Hexagong) Instagram

h) Nielsen China (for Renren and Sina Weibo data) - may just be a flat file receivedspecifically for ABI dashboard

4) Internal APIs Modules - custom codea) Syncapse Event Track (Conversion Tracking)

b) SERV APIc) Franchise Back-end APId) Analytics Suite APIe) Social URL APIf) Respond API

5) Custom Code Module Names and Descriptionsa) Publishing Platform:

i) Build - Tab hosting and content managementii) Manage - Creating, scheduling, and publishing content to social networksiii) Respond API - Pulling, analyzing, and storing social network contentiv) Social URL - URL shortening and tracking servicev) Franchise App (Module) - Franchise specific content management, Facebook

publishing, and pulling b) Shared Infrastructure:

i) Event Track - Tab event logging and JS/AS3 client librariesii) Serv - Central administration and storage of users, companies, permissions, workflow;

single sign-oniii) Syncapse REST Internal API: Media Svc, Reporting Svc, Core Svc, Media Repository

Svc, Streams Svc, Publishing Svc, Moderation Svc.

iv) Data pipeline / Service busc) Data platform:

i) Analytics Suite - Multi-platform aggregated reporting and customized reportingdashboards

d) Ads:i) MySQL datastore

6) Testing / QA Softwarea) Target Process: Feature/Defect Tracking

b) Jenkins: Continuous Integration



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c) jUnit and Selenium: Automated Testingd) Eclipse IDE and Eclipse Maven: code dev and testing librarye) Maven: build deploy and testing of Ads techf) Hudson: continuous integration tool

7) Development Languages Used (by component/area of system and team):a) Publishing Platform Front-end

i) Language: HTML, CSS, JavaScriptii) Operating System: Mac OS X

b) Serv (shared services)i) IDE: Intellijii) Backend Language: Scalaiii) Testing: ScalaTestiv) Virtual Machine: Oracle Java Virtual Machine

c) Manage/Build Developer i) IDE: Eclipse/Netbeansii) Backend Language: PHPiii) Testing: PHPUnitiv) Virtual Machine: Virtual Box/Vagrant

v) VM Operating System: Ubuntud) Analytics Developer

i) IDE: Tableau Report Designer, Pentaho ETL Designer ii) Operating System: Windows

e) Adsi) Virgo Web Server: Development testing container for deploying software

8) Technology licensed from 3rd partiesa) Alfresco CMS - COTS CMS used in the franchise edition for managing content

b) Amazon AWS - infrastructure as a service hosting provider (monthly payment)i) Specific technologies: Route 53, VPC, ELB, EC2, RDS, EBS, S3, Cloudformation,

Cloudwatch, SES

c) Budurl - SaaS component for URL shortening, click tracking, and analytics (monthly payment)d) Crimson Hexagon - SaaS component for blog/forum/news site monitoring for custom

dashboards (pass-thru cost to clients based on contracts)e) Flowplayer - COTS white label flash video player (unlimited domain lifetime license)f) Github - SaaS version control and source code hosting (monthly payment)g) Microsoft Active Directory - COTS directory service used for storing user access

permissions in Tableauh) Microsoft Windows Server - COTS Operating system used to run Tableaui) Pagerduty - SaaS SMS/voice notification service (monthly payment)

j) Pentaho & Python - COTS ETL toolk) Pingdom - SaaS website monitoring service (monthly payment)

l) Repustate - SaaS component for sentiment analysis (monthly payment)m) Tableau - COTS Report designer and reporting server n) Vertica - COTS column-oriented databaseo) Zencoder - SaaS component for video transcoding (monthly payment)

p) ZingCharts - COTS client-side chart generation library (one time purchase)q) JQuery & Jasper - Javascript UI languager) High charts - Javascript library used for data visualizations) Legal Box - UI framework t) Sonatype Nexus Open Source - Nexus repository manager for Maven



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u) Apache Hadoop: Distributed platform architecture based on map reducev) HBase - NoSQL datastorew) CAS jasig - SSO Toolx) MySQL - Ads transient data storey) MongoDB - Franchise App/Module datastore

9) Free Services

a) Bit.ly b) Recaptcha

syncapse bankruptcy sales letter

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