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Paul McDermott, CFO Candidate

Index and Topics

Summary Qualifications & Experience


High Technology
SEC
Investor Relations
IPO
M&A
International
Change Management

Sunday, February 24, 2013

Legent
FIRE / SVCW
Going Pubic (IPO)

Management Reporting
Control
Paul McDermott

Cont
2

Index and Topics cont.

Qualifications & Experience cont.

Firepond Accomplishments

Core

Sunday, February 24, 2013

values

Paul McDermott

Summary Qualifications

20+ Years of Experience

15+ Years in High Technology

SEC, IPO, M&A, International,


SOX

Big 4 CPA / MBA

Back to Index

Sunday, February 24, 2013

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High Technology
(in chronological order)

Back to Index

Sunday, February 24, 2013

Legent Corporation (LGNT)


Large publicly-held.
Supporting growth from $120M to $500M (Rev).

ServiceWare Technologies (SVCW)


Private start up.
Effecting growth from <$2M to $16M (Rev).
Positioned for IPO.

Firepond (FIRE)
Private to Public - IPO 2/00.
CEO Klaus Besier formerly CEO SAP America.
Left with break-even model and $45 Million cash
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High Technology
(in chronological order)

Network Intelligence Corporation

Private Venture Backed.


Substantial infrastructure build

Sonus Network
Large publicly-held
Substantial MW remediation work

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Sunday, February 24, 2013

10 MWs to start

1 Year Stock Option Review and Historical


Restatement
During normal quarters zero audit
adjustments
No infrastructure, no systems

Human Middleware & Spreadsheets


Paul McDermott

SEC

33 & 34 Securities Act filings


10-Q,

10-K, 8-K, 11-K


Proxy, Tender Offer
S-1, S-3, S-4, S-8

Successfully completed IPO

Back to Index

Sunday, February 24, 2013

Paul McDermott

Investor Relations

Investor "roadshow" presentations

Quarterly investor conference call

On-site meetings with potential and existing


shareholders as required

Knowledgeable of all relevant SEC rules

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Sunday, February 24, 2013

Reg FD, PSLR Act of 1995, etc.


Sarbanes Oxley
See SEC experience
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IPO

2 Offerings:

Firepond

ServiceWare Technologies

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Sunday, February 24, 2013

Successful completion in 2/00


Raised $115 Million
22x subscribed

Full banker diligence and S-1


Deal delayed in summer of 98
Paul McDermott

M&A

Participated in approximately 25
deals from evaluation and term
sheet to diligence and integration
of public and private entities.

Supported the sales of 3


enterprises to third parties.
cont

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M&A

Firepond
Brightware - private company

Signature Software - private company

Escrow structure resulted in 76% of the stock and


50% of the cash being returned to the company
Tied 100% of consideration to employee retention

Comprehensively evaluated 7 other opportunities


which did not conclude.

ServiceWare
Primarily interested in organic growth, however
evaluated m&a opportunities as required (3-4
deals).
cont

Sunday, February 24, 2013

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M&A

Legent

Performed diligence and integration on 9


acquisitions ranging from $3M to $450M
in valuation
Purchase and poolings

Public Accounting

Diligence and accounting for


approximately 5 deals

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Sunday, February 24, 2013

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International Experience

Back to Index

Sunday, February 24, 2013

Worked with business professionals across the


globe in establishing new entities or controlling
existing ones.

At Legent reviewed international operations


quarterly
UK, France, Germany, Australia, etc.
Consolidation was approximately 90 entities
in 15 currencies

Firepond and Sonus


Line manager over International
Controllers

Statutory filings, VAT, etc.


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Change Management:
Legent
Financial leadership and implementing change

Corporate Controller at Legent Corporation


(Fortune 2000)

Changes Implemented (some highlights)

Financial calendar
Closing and reporting on day 4
Automation of financial report distribution (literally
1,000 reports)

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Acquisition integration 3 significant deals within 3


months
Reengineered contract research process to burn off
50 day backlog (5 staff) in 3 days by 1 staff

Cont
Sunday, February 24, 2013

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Change Management:
Firepond and ServiceWare
Financial leadership and implementing change

Firepond changes

ServiceWare changes

Back to Index

Sunday, February 24, 2013

Relocated all G&A functions to Waltham MA from


Mankato MN including staff and key vendor
relationships
IPO (Private to Public company)
Executive sponsor Oracle ERP, Stock Option Self
support

From start-up to investment banker diligence


Huge strategy shift from Distributor to OEM model
with 97% price cut
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Change Management:
Get ready to go public (How to)
Financial leadership and implementing change
Manage it like a project
Begin with the end in mind
S-1 & banker diligence
Master to do list

Weekly meetings of progress


A goal
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Sunday, February 24, 2013

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Management Reporting

Fireponds Board of Directors package

Best in class
General Atlantic believed it was tied for
1st in their portfolio

New IBM board member agreed

Zero based forecast model used for realtime management planning

Know where youre at


End of quarter meetings

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Sunday, February 24, 2013

Target Zero day close


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Control

High Level Corporate Governance

Board of Directors
Audit

committee

Executive Team walking the talk


Finance Team

Day to Day:
Review and Approval functions
Business in the ordinary course

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Control

Business in the Ordinary Course

Assembly of best practices

Requires:

Back to Index

Sunday, February 24, 2013

ManifestoTM
Requires Executive Team discipline
Consistent communication

Good general management


Can not be an interrupt driven culture
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Firepond Accomplishments

Sunday, February 24, 2013

Capital Raising
Corporate and Strategy
M&A
Systems

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Firepond accomplishments
Capital Raising

IPO $115 Million

VC rounds:
$20 Million - equity
$6 Million debt with warrants

Back to Summary

Sunday, February 24, 2013

Revolving loc:

$7 Million
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Firepond accomplishments Strategy

Headquarters established in Waltham,


MA (from Mankato, MN).

Sunday, February 24, 2013

Relocated all G&A functions, staff and


key vendor relationships.

Transformation from a private custom


development model to a public software
company.

Support all other strategies


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Firepond accomplishments Strategy

2000-01 Economic slowdown

Reduced Companys expense run rate to


the break-even point cutting quarterly
expenses by 2/3rds:

Completed three reductions in force


cutting personnel by approximately 70%,
Negotiated termination of off-shore
development relationship
Sued for $11M, settled for $1M, which
was a $1M saving from existing contract

Back to Summary

Sunday, February 24, 2013

Re-priced all employee stock options, &


Re-negotiated office leases or down
sized facilities.
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Firepond accomplishments
M&A

During 2000 the Companys


strategy was to be an aggregator

2 acquisitions of private companies


Brightware
Signature

Back to Summary

Sunday, February 24, 2013

Software

Evaluation of approximately 20 (7
seriously) other business
combinations of public or private
companies.
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Firepond accomplishments
Systems development

Oracle ERP

For finance and human resources


Employee self-support (t&e, time)

Stock Options

SSB web site

Back to Summary
Back to Index

Sunday, February 24, 2013

integration with Firepond, transfer agent,


broker, bank, etc

Employee self-support

Telecomm Cisco phone system

Unified messaging
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Core Values - Summary

Competence

Do the right thing

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Integrity

Job Satisfaction

Excellence
Working with People who passionate
about what they are doing and creating
happy customers

Building
Humor

Family Values
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Core Values - Personal

Sunday, February 24, 2013

Married 18 years
3 Kids
Strong and grounded

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Motivators

Job Satisfaction
3 Future College bills

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Summary

Strong candidate for your position

Qualified and motivated

20 Years of Experience

Sunday, February 24, 2013

6 years public accounting; 14+ Corporate


SEC, M&A, International
Big 4 CPA / MBA
Public company CFO

Worked at the Board of Directors and Executive


Team level for the last 10 years

Would lead the finance and other g&a


staff to their goals.
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NIC Projects

Sunday, February 24, 2013

Business in the Ordinary Course


Contracts / Agreements
Policies / Practices
Business Clinic / Presentations
Systems
People

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NIC Contracts

Agreements - New:

Sales agreement (Purchase)


Maintenance agreement
Referral fee agreement
Demonstration agreement
Evaluation agreement
Independent contractor
Amnesty letter

Revised
EULA
Domestic and International Reseller agreement

Sunday, February 24, 2013

Terminated all agreements in force and replaced

Master Distributor agreement


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NIC Policies & Practices


Policies:

Re-wrote employee handbook

Contract Booking [what constitutes a binding


agreement]

Contracts negotiation and Special Terms

Installment sales program

Use of Credit applications

Use of NDA

Providing NIC Financial Statements

Sunday, February 24, 2013

Practices:

Start the evolution

Intolerance for scrap and rework


Reducing cycle times of tasks through policies and
pulling QC processes forward
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Eg. Expense report

NIC Presentations

Sunday, February 24, 2013

Manager Meetings
Adizes Organizational Behavior
Intellectual Property Summit
HR Practices Forum
Stock Options, Corporate Bonus
Contracts 4 Part Mini Series
Summer Seminar Series [Palooza]
IP
Employment
Financial Reporting
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NIC Systems

Onyx [CRM]

Revenue Cycle enhancements

Data base cleaning

Eliminate 4-5 redundant data entry points, automate


links, and remove bottle necks in processes
Eliminate work outside of system
Automate maintenance renewal process [Customer
Care primary driver]
Merging of duplicate customers, etc.
Input and Output Controls

MAS 90 [Financials]

Synchronize with Onyx [customer numbers]


Recast Chart of Accounts [as of 1-1-04]
ADP Payroll and HRIS
Transcentive stock option system

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NIC People

General
Integrated into sales organization
Move towards professional organization

HR / Operations
Transitioned out contracted staff New HR and
Office Manager
Terminated Office / Operations Manager

Finance
New Controller [CPA]

Legal

Sunday, February 24, 2013

Communication, etc.

Hired attorney
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NIC Projects
Priorities:
1.
Customers & Revenue
Current opportunities
RFPs
2.
Statutory deadlines
Tax, Payroll, Pay the rent,
utilities, etc.
3.
CEO
4.
All others
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