7KHUDSHXWLF $QWLERGLHV 7RS 7KUHH ,QWHOOHFWXDO 3URSHUW\\ ,VVXHV
7KHUDSHXWLF DQWLERGLHV KDYH EHFRPH ELJ EXVLQHVV 7ZHQW\\ RQH DQWLERGLHV DUH QRZ DSSURYHG E\\ WKH )'$ IRU
PDUNHWLQJ DQG DQQXDO VDOHV KDYH UHDFKHG ZHOO SDVW WKH ELOOLRQ GROODU PDUN &RPSDQLHV RSHUDWLQJ LQ WKLV
VSDFH PXVW SD\\ FDUHIXO DWWHQWLRQ WR LQWHOOHFWXDO SURSHUW\\ LVVXHV ZKLFK FDQ GUDPDWLFDOO\\ DIIHFW SRWHQWLDO
GHYHORSPHQW DQG SURILWDELOLW\\ 7KH 7RS 7KUHH ,3 LVVXHV DUH IUHHGRP WR RSHUDWH SDWHQW OLIHF\\FOH
PDQDJHPHQW DQG WKH FKDQJLQJ OHJDO ODQGVFDSH
)UHHGRP WR 2SHUDWH
$ SDWHQW GRHV QRW JUDQW WKH SDWHQW KROGHU WKH DIILUPDWLYH ULJKW WR SUDFWLFH WKH SDWHQWHG WHFKQRORJ\\ ± D SDWHQW
FRQYH\\V RQO\\ WKH ULJKW WR H[FOXGH RWKHUV IURP SUDFWLFLQJ WKDW WHFKQRORJ\\ ,W LV D UHDO SRVVLELOLW\\ WKDW LQ PDNLQJ
XVLQJ RU VHOOLQJ SDWHQWHG WHFKQRORJ\\ FRPSDQLHV PD\\ XQZLWWLQJO\\ LQIULQJH D VHSDUDWH SDWHQW RI D WKLUG SDUW\\
,Q IDFW WKH WUHPHQGRXV JURZWK LQ WKH WKHUDSHXWLF DQWLERG\\ PDUNHW KDV FUHDWHG D PLQHILHOG RI WKLUG SDUW\\
SDWHQWV ZKLFK PXVW EH FDUHIXOO\\ QDYLJDWHG DV D FRPSDQ\\ VHHNV WR FRPPHUFLDOL]H LWV SURSULHWDU\\ DQWLERG\\
WHFKQRORJLHV
,I D FRPSDQ\\ SURFHHGV ZLWK FRPPHUFLDOL]LQJ LWV RZQ DQWLERG\\ WHFKQRORJ\\ LQ EOLQG GLVUHJDUG WR RU HYHQ
LJQRUDQFH RI SRWHQWLDOO\\ GRPLQDWLQJ WKLUG SDUW\\ SDWHQWV WKDW FRPSDQ\\ PD\\ ZLQG XS LQ WKH XQHQYLDEOH SRVLWLRQ
RI EHLQJ IRUFHG WR DFFHSW RQHURXV WKLUG SDUW\\ OLFHQVHV RU EHLQJ NHSW RII PDUNHW RQ WKH HYH RI FRPPHUFLDO
ODXQFK
$YRLG RU PLQLPL]H WKH OLNHOLKRRG RI WKLV VFHQDULR E\\ FRQGXFWLQJ DQ DSSURSULDWH IUHHGRP WR RSHUDWH VHDUFK RI
WKLUG SDUW\\ SDWHQWV HDUO\\ LQ WKH GHYHORSPHQW SURFHVV &ULWLFDO IRU DQ\\ DQWLERG\\ FRPSDQ\\ UHJDUGOHVV RI VL]H
PDQ\\ YHQWXUH FDSLWDOLVWV QRZ YLHZ IUHHGRP WR RSHUDWH DV LPSRUWDQW DV D VWURQJ SDWHQW SRUWIROLR ZKHQ
DVVHVVLQJ WKH IXWXUH RI DQ HDUO\\ VWDJH FRPSDQ\\
,W LV IDU EHWWHU WR DGGUHVV ZKDW KDV EHHQ FDOOHG WKH PRQRFORQDO PD]H HDUO\\ RQ ZLWK D SURSHU IUHHGRP WR
RSHUDWH DQDO\\VLV LQ KDQG WR JXLGH GHFLVLRQV WKDQ WR EOLQGO\\ PRYH IRUZDUG DQG UXQ WKH ULVN ODWHU RI EHLQJ VKXW
GRZQ RU KDYLQJ WR DFFHSW RQHURXV OLFHQVHV GXH WR WKLUG SDUW\\ SDWHQW LVVXHV
3DWHQW /LIH &\\FOH 0DQDJHPHQW
0DQ\\ RI WKH WKHUDSHXWLF DQWLERGLHV ODXQFKHG LQ UHFHQW \\HDUV DUH WKH UHVXOW RI JURXQGEUHDNLQJ WHFKQRORJLHV
ILUVW GHYHORSHG D GHFDGH RU PRUH DJR $QWLERG\\ KXPDQL]DWLRQ WHFKQLTXHV WKH SKDJH GLVSOD\\ WHFKQRORJLHV
DQG WKH WHFKQRORJ\\ IRU SURGXFLQJ IXOO\\ KXPDQ DQWLERGLHV LQ PLFH ZHUH DOO FULWLFDO WR PDNLQJ WKHUDSHXWLF
DQWLERGLHV WKH PXOWLELOOLRQ GROODU EXVLQHVV LW LV WRGD\\
+RZHYHU DV WKH XVH RI WKHVH WHFKQRORJLHV EHFRPHV PRUH FRPPRQ DQG WKHLU EURDG DSSOLFDELOLW\\ EHFRPHV
LQFUHDVLQJO\\ DSSDUHQW WKH\\ DUH QR ORQJHU FRQVLGHUHG JURXQGEUHDNLQJ ± WKHLU XVH EHFRPHV PRUH RI DQ
LQGXVWU\\ QRUP &RQVHTXHQWO\\ WKH DUJXPHQW IRU SDWHQWDELOLW\\ RI WKH SURGXFWV RI WKHVH WHFKQRORJLHV KDV
EHFRPH PRUH GLIILFXOW ,Q D VHQVH FRPSDQLHV WKDW GHYHORS WKHVH WHFKQRORJLHV FDQ EH WKH YLFWLP RI WKHLU RZQ
VXFFHVV
6WHUQH .HVVOHU *ROGVWHLQ )R[ 3 / / & 1HZ <RUN $YHQXH 1: :DVKLQJWRQ '& ZZZ VNJI FRP

&RPSDQLHV FDQ DGGUHVV WKLV E\\ DGRSWLQJ D ZHOO SODQQHG ILOLQJ VWUDWHJ\\ WKDW VHHNV WR WLPH WKH ILOLQJV RI QHZ
DSSOLFDWLRQV VR DV WR PLQLPL]H WKH WKUHDW SRVHG E\\ WKHLU RZQ SULRU SDWHQWV ZKLOH DW WKH VDPH WLPH PD[LPL]LQJ
SDWHQW WHUP IRU SRWHQWLDOO\\ EORFNEXVWHU SURGXFWV &RPSDQLHV VKRXOG DOVR FRQWLQXH WR LQQRYDWH GXULQJ WKH
SURGXFW GHYHORSPHQW DQG FOLQLFDO WULDO SKDVHV ,QVLJKWV ZKLFK ZHUH QRW DSSDUHQW HDUO\\ RQ FDQ RIWHQ UHVXOW LQ
SDWHQWV WR QRYHO SKDUPDFHXWLFDO IRUPXODWLRQV GRVDJH UHJLPHQV PHWKRGV RI DGPLQLVWUDWLRQ FRPELQDWLRQ
WKHUDSLHV HWF WKDW DGG WR WKH SDWHQW SURWHFWLRQ IRU WKH FRUH DQWLERG\\ DQG H[WHQG WKH SDWHQW SURWHFWLRQ FORVHU
WR WKH FRPPHUFLDO OLIH RI WKH WKHUDSHXWLF SURGXFW %\\ FUDIWLQJ D FDUHIXO SDWHQW OLIH F\\FOH PDQDJHPHQW VWUDWHJ\\
FRPSDQLHV FDQ FRQWLQXH WR REWDLQ SDWHQWV WR QHZ LQQRYDWLRQV VXUURXQGLQJ D YDOXDEOH DQWLERG\\ SURGXFW
&KDQJLQJ /HJDO /DQGVFDSH
7KH OHJDO ODQGVFDSH LQ ZKLFK DQWLERG\\ SDWHQWV DUH SURFXUHG DQG HQIRUFHG LV FRQVWDQWO\\ EHLQJ UHVKDSHG E\\
&RQJUHVV DQG WKH FRXUWV ,Q SDUWLFXODU VHYHUDO UHFHQW GHFLVLRQV E\\ WKH 8 6 6XSUHPH &RXUW PD\\ DIIHFW WKH
SDWHQWDELOLW\\ RI UHFRPELQDQW DQWLERGLHV DV ZHOO DV WKH YHU\\ ULJKW RI SDWHQW KROGHUV WR HIIHFWLYHO\\ OLFHQVH WKHLU
WHFKQRORJLHV RU WR H[FOXGH RWKHUV IURP SUDFWLFLQJ WKHP 7KHVH LQFOXGH
x .65 Y 7HOHIOH[ ± ,Q WKLV FDVH WKH 8 6 6XSUHPH &RXUW FODULILHG WKH VWDQGDUG IRU GHWHUPLQLQJ
ZKHQ DQ LQYHQWLRQ LV QRQREYLRXV 8QGHU WKH QHZ VWDQGDUG D SDWHQW H[DPLQHU PD\\ XWLOL]H D
UHDVRQDEOH GHJUHH RI FRPPRQ VHQVH LQ DSSO\\LQJ ZKDW LV ZHOO NQRZQ LQ WKH DUW LQVWHDG RI D ULJLG WHVW
0RVW UHOHYDQW WR WKH UHFRPELQDQW DQWLERG\\ LQGXVWU\\ DQ LQYHQWLRQ PD\\ EH FRQVLGHUHG REYLRXV LI LW LV WKH
PHUH UHVXOW RI DSSO\\LQJ D NQRZQ WHFKQLTXH WR D NQRZQ VWDUWLQJ PDWHULDO UHDG\\ IRU LPSURYHPHQW WR \\LHOG
SUHGLFWDEOH UHVXOWV ,W LV FXUUHQWO\\ XQFOHDU KRZ WKH .65 GHFLVLRQ ZLOO LPSDFW WKH SDWHQWDELOLW\\ RI QRYHO
KXPDQL]HG $EV SURGXFHG IURP PXULQH DQWLERGLHV DFFRUGLQJ WR NQRZQ KXPDQL]DWLRQ PHWKRGV
x H%D\\ ,QF Y 0HUF([FKDQJH ± &RQFHUQLQJ XVLQJ SDWHQWV WR SUHYHQW RWKHUV IURP HQWHULQJ WKH
PDUNHWSODFH WKH 6XSUHPH &RXUW DSSOLHG DQ HTXLWDEOH EDODQFLQJ WHVW IRU GHWHUPLQLQJ ZKHQ LQMXQFWLRQV
DUH DSSURSULDWH LQ WKLV GHFLVLRQ 6XEVHTXHQW ORZHU FRXUW GHFLVLRQV KDYH JHQHUDOO\\ HVWDEOLVKHG
WKDW LQIULQJHUV LQ GLUHFW FRPSHWLWLRQ ZLWK WKH SDWHQWHH XSRQ HQWU\\ LQWR WKH PDUNHWSODFH DUH PRUH OLNHO\\
WR EH HQMRLQHG WKDW DUH LQIULQJHUV ZKR DUH VXHG E\\ D QRQ SUDFWLFLQJ SDWHQWHH 7KH GHFLVLRQV KDYH DOVR
HVWDEOLVKHG WKDW SXEOLF LQWHUHVW FRQFHUQV DUH GHHPHG UHOHYDQW E\\ FRXUWV ZKHQ GHFLGLQJ WKH LQMXQFWLRQ
LVVXH LQ FDVHV LPSDFWLQJ WKH SXEOLF KHDOWK
x 0HG,PPXQH Y *HQHQWHFK ± ,Q WKLV FDVH WKH 6XSUHPH &RXUW KHOG WKDW D OLFHQVHH ZKR KDV QRW
EUHDFKHG WKH OLFHQVLQJ DJUHHPHQW QRQHWKHOHVV KDV VWDQGLQJ WR EULQJ D GHFODUDWRU\\ MXGJPHQW DFWLRQ D
ODZVXLW EURXJKW E\\ D SRWHQWLDO GHIHQGDQW VHHNLQJ D GHFODUDWLRQ WKDW D SDWHQW LV LQYDOLG DQG RU QRW
LQIULQJHG DJDLQVW WKH SDWHQWHH SURYLGHG WKDW DQ DFWXDO FRQWURYHUV\\ RWKHUZLVH H[LVWV EHWZHHQ WKH
SDUWLHV /DWHU WKDW \\HDU WKH &RXUW RI $SSHDOV IRU WKH )HGHUDO &LUFXLW DSSOLHG WKH 0HG,PPXQH VWDQGDUG
WR WKH SUH DJUHHPHQW OLFHQVLQJ QHJRWLDWLRQ SURFHVV LQ 6DQ'LVN &RUS Y 670LFURHOHFWURQLFV ,QF
ZKHUH D SRWHQWLDO OLFHQVHH ZDV GHHPHG WR KDYH VWDQGLQJ WR EULQJ D GHFODUDWRU\\ MXGJPHQW DFWLRQ LQ D
VLWXDWLRQ ZKHUH WKH SDWHQWHH KDG SUHVHQWHG D GHWDLOHG LQIULQJHPHQW DQDO\\VLV GXULQJ PHHWLQJV HYHQ
WKRXJK WKH SDWHQWHH KDG SURYLGHG DVVXUDQFHV WKDW LW KDG QR LQWHQW WR ILOH D VXLW IRU SDWHQW LQIULQJHPHQW
'XH WR WKHVH ORRVHQHG VWDQGDUGV FRPSDQLHV QRZ PXVW ZDON D ILQH OLQH LQ WKHLU QHJRWLDWLRQV ZLWK
SRWHQWLDO LQIULQJHUV
6WHUQH .HVVOHU *ROGVWHLQ )R[ 3 / / & 1HZ <RUN $YHQXH 1: :DVKLQJWRQ '& ZZZ VNJI FRP
‹ $OO ULJKWV UHVHUYHG