solutions
modular flexible scalable simple
Craig Andrews
CTO
Fideris, Inc.
College Station, TX
Lynntech, Inc.
Success Story (In Progress)
Lynntech, Inc.
7607 Eastmark Drive
College Station, Texas
www.lynntech.com
Fideris, Inc.
3900 State Hwy. 6, South
College Station, Texas
www.fideris.com
Lynntech’s Company Mission
To establish Lynntech, Inc. by the year 2010 as the preeminent small
business
in
the
U.S.
for
the
development
and
commercialization of early stage, innovative technologies derived
from research and development activities at Lynntech as well as form
partnerships formed between Lynntech, major research universities,
and venture capital groups.
3
Company Profile
ƒ Status of Company: Privately owned Texas corporation incorporated
in 1987
ƒ Company Purpose: To
develop new technologies
and to commercialize
products and processes
derived from developed
technologies
Lynntech, Inc., Product Development Division
ƒ Strength of Company: Ability to transform cutting-edge science and
engineering into viable commercializable technologies
4
Company Profile, continued
ƒ Technology Development Funded By: The Federal Government
and industrial corporations
ƒ Funding Received From:
ƒ Commercialization Plan: Licensing, spin-offs, joint ventures, and
manufacturing/sales
5
Maintaining the Company Vision
ƒ Lynntech is a world-class technology
development and commercialization
company
– Environmental technologies
– Energy conversion and storage
– Coatings and materials science
– Bioengineering/Biomedical
Hydrogen generation and storage system for
use on-board an automobile
6
Lynntech, Inc. Annual Revenue
$16
$14
Annual Revenue in $MM
$12
$10
$8
$6
$4
$2
$1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
7
Total Cumulative U.S. Patents
100
90
80
Number of Patents
70
60
50
40
30
20
10
0
1995 1996 1997 1998 1999
2000 2001 2002 2003 2004
Year
8
Lynntech’s Capabilities for Technology
Development
ƒ Approximately 140 employees (111 FT & 29 PT) (32 Ph.D.’s)
ƒ Staffed with engineers, physicists, chemists, and machinists
ƒ Company is sub-divided into functional divisions:
– Technology Development (core technology areas)
– Product Development (pre-production prototypes)
– Machining and fabrication center (machined components with high tolerances)
ƒ In-House development activities are combined with outside support
(subcontractors, consultants)
9
Infection Control
In 2002, TSO3, Inc., licensed ozone gasrelated sterilization technology from
Lynntech. The 125 L - Ozone Sterilizer
developed by TSO3, Inc., is marketed to
hospital sterilization centers. This device
was approved for marketing by Health
Canada in May 2002 and received FDA
approval in September 2003. The
sterilizer is sold in the US through
Skytron.
10
Home Disinfection
In 2000, WaterPik Technologies,
Inc., licensed electrochemical ozone
generation
technology
from
Lynntech for use in certain
consumer and commercial products.
Waterpik launched the AQUIATM, a
household disinfection product that
was awarded the 2001 Best of Show
Award - New Products at the National
Hardware Show.
11
HyEnergy Systems, Inc.
HyEnergy Systems, Inc., was spun-off in June
2004
to
pursue
micro
fuel
cell
power
applications in portable electronic devices.
The company will incorporate Lynntech’s
proprietary FlatStackTM fuel cell technology
and
solid
chemical
hydride
hydrogen
generation technology into portable electronic
devices, such as, notebook computers. A PreSeries A $ 600,000 equity investment (“seed
round”) was made by StarTech Early Ventures.
20 W average (40 W peak) fuel
cell/battery hybrid power supply
12
Step ZeroLynntech Industries, Ltd. Created
In 2001, Lynntech, Inc., spun-off Lynntech Industries, Ltd., to manufacture
and sell a brand of testing equipment for fuel cell power sources that was
developed and patented by Lynntech, Inc. Lynntech Industries, Ltd., became
a world-wide leader in the emerging fuel cell test equipment market and had
$1.4 million in product revenues in 2003. The company’s products were sold
to customers in the US, Europe, and Asia.
13
A Successful Venture Capital Deal
In May 2004, Lynntech Industries, Ltd., secured $5.5 million in Series A
equity financing from Chrysalix Energy Limited Partnership (Vancouver,
BC), Braemar Energy Ventures (New York, NY), Altira (Denver, CO), and
Yellowstone Capital, Inc. (Houston, TX). The invested capital will be used to
expand product offerings, marketing and sales, and customer technical service
operations. The company was renamed Fideris, Inc.
14
Fideris has a Recognized Technology
Heritage
ƒ Strong electrochemical &
engineering background
ƒ Extensive knowledge of fuel cell
stack development & system
integration
ƒ Recognized as “industry pioneer” in
area of fuel cell test equipment for
more than a decade
ƒ We will not compete with our
customers
15
Fideris brought existing
customers
ƒ
Fuel Cell
Manufacturers
ƒ
Component Suppliers
ƒ
Fuel Cell Integrators
ƒ
Universities
ƒ
Research Centers
ƒ
Government Agencies
Partial list – more than 80 customers worldwide.
16
Fideris has a Global Presence
ƒ Offices
– College Station, TX –
Manufacturing & Service
– Lowell, MA –
Sales & Service
– Zurich, Switzerland – Sales &
Service
ƒ World-Class Staff
– 40 employees
17
History of our Equity Investment
ƒ Preparing a company for an equity investment is all consuming
ƒ A CEO was identified and brought on-board several months
before the investment
ƒ The CEO was tasked with finding the investors
ƒ Identify a VC exit strategies
ƒ Term sheets were exchanged and negotiated
ƒ A new “clean company” was formed: a.k.a., NewCo
ƒ NewCo issued and distributed stock
ƒ Lynntech exchanged IP, customer list, designs, momentum
ƒ VC purchased $6MM worth of stock
ƒ Remainder of stock held for employees
ƒ The clock is running in “dog years”
18
Summary Advice
ƒ Determine your acceptable level of Risk
19
Summary Advice
ƒ Determine your acceptable level of Risk
ƒ Timing can be everything. This is no time to discover the tide
has already gone out.
Not ready for prime time
Too late to reconsider
20
Summary Advice
ƒ Determine your acceptable level of Risk
ƒ Timing can be everything. This is no time to discover the tide
has already gone out.
ƒ You may be too close to
see the whole picture.
Step back.
21
Summary Advice
ƒ Determine your acceptable level of Risk
ƒ Timing can be everything. This is no time to discover the tide
has already gone out.
ƒ You may be too close to
see the whole picture.
Step back.
ƒ Clearly define your plan;
review it with others.
What makes sense to
you may make little
sense to others.
22
Summary Advice
ƒ Determine your acceptable level of Risk
ƒ Timing can be everything. This is no time to discover the tide
has already gone out.
ƒ You may be too close to see
the whole picture. Step
back.
ƒ Clearly define your plan.
What makes sense to you
may make little sense to
others.
ƒ Keep a clear vision of your
goal. Remember things
may be harder than they
look.
23
Summary Advice
ƒ Determine your acceptable level of Risk
ƒ Timing can be everything. This is no time to discover the tide
has already gone out.
ƒ You may be too close to see
the whole picture. Step
back.
ƒ Clearly define your plan.
What makes sense to you
may make little sense to
others.
ƒ Keep a clear vision of your
goal
ƒ Learn from the mistakes of
others
24
Are you Ready?
25