Revolutionizing image-guidance with cost-effective, easy-to-use technology

Confidential 1

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Using  so#ware  to  create  a  cost  effec.ve  device  which  enables  more  doctors  to  do  more  procedures  in  more  

places,  faster  

Clinical Need: Ultrasound Guidance for Many Uses:

•  Needle Biopsies, Ablations, Central Vein Placements and Peripheral Nerve Blocks

•  Emergency Medicine •  Military Field Operations •  Remote Medical Access to Specialists

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The Problem? •  Learning to use Ultrasound is time-

consuming and difficult. •  Guidance devices are costly ($120K+) and

require dedicated hospital rooms. •  Guidance devices take a long time to

calibrate, increasing the time the doctor spends on the procedure.

•  Guidance devices require big changes to workflow and customary instruments

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The Solution: The Clear Guide One •  Easy-to-follow guidance: radiologists AND non-

radiologists can use it easily •  Affordable for even small clinics and centers at less

than 20% of the current equipment cost •  No calibration necessary: system “sees” needle,

saving time and preserving physician’s tool preferences, allowing more procedures to be completed by a doctor in a given time period

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Projected arrows assist needle guidance; as the needle is correctly oriented, the projection goes from “red” to “green”

Competition

•  Electromagnetic Trackers: e.g.Ultrasonix SonixGPS

•  Optical Trackers: e.g. AIM

•  Mechanical Guides: e.g. Civco

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Razor/Blade Monetization Strategy •  There is increasing adoption of image-guided surgical procedures,

which were granted their own CPT code for insurance reimbursements in 2002. Created incentives for hospitals to do procedures in-house whenever possible.

•  Clear Guide Medical will generate revenues from multiple streams: –  One-time revenue from sales of device –  Recurring revenue from annual software/maintenance

contracts –  Recurring revenue from sale of single-use sterile sleeves

and other disposables

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2 Current Procedural Terminology, 2012 Edition. American Medical Association.

Total Ultrasound Market

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Global Annual Unit Sales of New Ultrasound Systems

Total Annual Sales: 67,130 systems

MARKET FOR CG-1 SYSTEM SALES

 150,172    

 215,287    

 71,659    

 41,749    

 25,236      16,513      10,593    

Number  of    Exis.ng  Ultrasound  Machines  in  Market=~600,000  

US  

Europe  

Russia,  India,  China    

Asia  Pacific  and  ROW  

Middle  East,  Africa  

La?n  America  

Canada  

MARKET FOR CG-1 MAINTENANCE CONTRACTS

A conservative estimate is that ~25% of new ultrasound systems sold globally are used in image-guided interventions, representing ~17,000 new sales opportunities for the CG-1 system each year.

In addition, we can sell our guidance probe to hospitals having existing ultrasound machines, representing additional ~150,000 new sales opportunities for the CG-1 system.

Initial Target Addressable Market •  The liver is one of the most difficult organs

to biopsy, often times taking as many as 60 insertions of the biopsy needle.

•  Kidney biopsies are also difficult and often require many needle sticks to biopsy the correct lesion.

•  Between the two markets, there is a total of ~3.25 million biopsies and 700,000 cancers per year.

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Liver Intervention Market

Kidney Intervention Market

0

100,000

200,000

300,000

400,000

500,000

600,000

World   US   World   US  

Cancer   Biopsies  

Sales and Marketing Strategy •  First sales: OEM “super probe” for

Ultrasonix machines, and other Ultrasound manufacturers under Clear Guide brand.

•  Medium term strategy: manufacturing for all major ultrasound makers as part of their intervention suite product line under their name and with their distribution network.

•  Clear Guide will have both a dedicated Sales Force and an Active Reseller arrangement.

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Financial Projections: OEM with 2 Ultrasound Companies

•  Sharp increase in revenues and EBIT as number of machines begin doing procedures (e.g. as razor buyers start buying blades).

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$0.9   $0.2   $1.8  $7.2  

$33.0  

$0.9  $6.5  

$16.9  

$36.6  

$99.7  

$20  

$0  

$20  

$40  

$60  

$80  

$100  

$120  

2013   2014   2015   2016   2017  

Millions  

EBIT  

Revenues  

Expenses  

Market Penetration Assumptions in the Financial Projections: Clear Guide Device

Sales per Quarter relative to estimated 4,250 Potential Quarterly Sales of Ultrasound

Machines Used for Interventions

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4250  

15    29      51      71      76      91      106      117      165      172      192      208      380      480      580      680    0  

500  

1,000  

1,500  

2,000  

2,500  

3,000  

3,500  

4,000  

4,500  

1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16  

Device  Sales  per  Quarter  beginning  Q1  2014  

Funding Received •  3 different Phase I SBIRs =$500,000 •  2 different State of Maryland Grants=

$125,000 •  2 different sources of support from Johns

Hopkins University = $110,000 •  1 Angel Investment =$125,000 •  Currently Seeking Private Investment to

accelerate development

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IP Position •  IP: main enabling patent assigned to JHU

–  Core patents allowed for international patentability

–  Main enabling patent currently under prioritized examination (Track One) prosecution by Johns Hopkins University:

–  International Prosecution (US, Canada, EU, Japan, and Israel);

–  Clear Guide Medical has signed an exclusive license with JHU.

•  Founders have other issued patents in this patent family.

•  Clear Guide has filed its own patent on new embodiments.

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CGM Regulatory Path

•  Hired the FDA consultant who wrote software requirements for 510(k) when she worked at FDA.

•  “If we do a good job with the testing and 510(k) preparation, I think that 4-6 months for a device like yours is a fair projection for how long it would take to get a final decision once the 510(k) is submitted (I am assuming one round of question and answer).” Donna-Bea Tillman, Biologics Consulting Group

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Developmental Milestones to 510(k) and First Sales

•  By end of Q1 2013: New manufacturable hardware design focused on miniaturization and FDA; software migrated onto this platform

•  By end of Q1 2013: Animal testing •  By May 2013 FDA filing (no clinical trials necessary) •  By end of Nov 2013: FDA clearance of Gen-1 and

active pre-market demonstration and testing. •  By end of Q4 2013: Manufacturing setup and first

sales of Gen-1 •  By end of Q2 2014: FDA clinical trials on Gen-2 •  By end of Q4 2014: FDA clearance on Gen 2 •  By end of Q1 2015: First sales of Gen-2

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Investment Opportunity

($ in thousands) 2013 2014 2015 2016 2017 Annual revenue  $              888    $        6,495    $    16,949      $        36,600    $        99,675  Net Income (Loss)

 $          (890)    $          (211)    $        1,813    $              7,180      $        32,972  

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Raising Series A •  Up to $5M total

–  $2M from lead investor –  $3M available for 2nd close

•  Optional Series B Growth Round in 2-3 years

Use of Funds •  Engineering 25% •  Production 30% •  Sales & Mkt 35% •  G&A 10%

CGM Organization

Management Team •  Greg Hager, PhD, CEO

–  20 years in image guidance –  Two prior startups –  Chair of JHU Computer Science

•  Philipp Stolka, PhD, CTO –  6 years of engineering experience –  2 years project management

experience

•  Dorothee Heisenberg, PhD, COO

–  4 years banking JP Morgan Chase –  15 years teaching at JHU

Advisory Team •  Emad Boctor, PhD, JHU Radiology

–  10 years of experience in interventional ultrasound

–  One prior startup

•  Darius Burschka, PhD, Computer Science, Technical University of Munich

–  20 years of experience in computer vision

•  Jim Condon, MBA, Partner, TechCXO –  more than 25 years of broad based

experience in running existing companies, repairing troubled companies, and scaling start-ups.

•  Vernon Huang, MD, Anesthesiology –  20 years of practice as a Board Certified

Anesthesiologist –  Two prior startups

•  George Valliath, PhD, Founder, Pathlight Consulting –  electro-optics and LCD and projection display

technologies, supply chain/manufacturing experience

•  Cliff Weiss, MD, Interventional Radiology –  10 years of practice as a Board Certified

Radiologist 18

Key Takeaways: •  A pressing clinical need exists for easier to use, more cost-effective image-guidance

technology in many different areas of medicine.

•  The total market in anesthesia, emergency medicine and other specializations is enormous (millions of procedures per year); the immediate addressable market in biopsy and ablation is large and growing as cost of ultrasound machines come down.

•  The technology is here and has been vetted both scientifically and commercially.

–  Technology uses software to arbitrage down health care costs—significantly less expensive than any other systems in market.

–  Technology makes it possible for doctors from many different specialties to use it with minimal investment in training and skill acquisition.

•  The inventors have a strong track record for innovation and commercialization.

•  The FDA Regulatory Path is clearly defined and tractable in 4-6 months.

•  CONTACT US: info@clearguidemedical.com

•  www.clearguidemedical.com

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