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MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

MEDICAL DEVICE OPPORTUNITY

I have created an improved method for ablation therapy.! This device is applicable to all procedures that use thermal ablation in a medical procedure. ! There are five procedures that involve insertion of a device into the body without an incision.! Additional procedures using ablation are done requiring surgical incisions.! I will initially focus on Endometrial ablation and Barrett's Esophagus

focus on Endometrial ablation and Barrett's Esophagus Endometrial Ablation Endometrial ablation is a medical

Endometrial Ablation

Endometrial ablation is a medical procedure that is used to remove (ablate) or destroy the endometrial lining of a woman's uterus. This technique is most often employed for women who suffer from excessive or prolonged bleeding during their menstrual cycle but can not or do not wish to undergo a hysterectomy.

The procedure is most commonly done on an outpatient basis. Uterine ablation is contraindicated in patients who may want to get pregnant.

A number of competing procedures are available.

The HTA System uses a small telescope-like device called a hysteroscope which is inserted into the uterus through the cervix, to help doctors safely confirm proper probe placement and to see the area they are treating. This device circulates heated saline which burns the lining of the uterus. This procedure will stop, or significantly decrease, menstrual bleeding. 68% of patients who have undergone this procedure reported a satisfactory decrease in menstrual flow.

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

An alternative is the Thermachoice III balloon that is filled with heated fluid to destroy the uterine lining. The fluid is safely contained in a flexible and non-allergenic material that conforms to most uterine shapes and sizes with no reduction of efficacy. 81% of patients report returning to normal levels of menstrual bleeding or lower.

With the Novasure system a mesh is introduced into the cavity and the lining is destroyed by applying electrical energy to the mesh that will thermally damage the adjacent endometrium. 78% have a successful reduction in bleeding down to normal levels.

Older methods utilize hysteroscopy to insert instruments into the uterus to destroy the lining under vision using laser or electrical current in a small loop. Another system introduces a radiofrequency rod that emits energy to destroy the uterine lining.

The proposed method is very similar to Novasure, excepting that EACH POINT on the mesh is individually powered and measured to provide an improved result.

The procedure is done while the patient is either under local anesthesia, or, if necessary, general or spinal anesthesia. The recovery period can be from one day up to 2 weeks.

After the procedure, the endometrium heals by scarring, reducing or removing the possibility of future uterine bleeding. The patient may develop amenorrhea, however hormonal functioning will remain unaffected. It is still possible to become pregnant after having this procedure. Some type of birth control method must be used after having endometrial ablation.

Approximately 90% of women who undergo this procedure will have reduced menstrual bleeding. Of those, approximately 45% will stop having periods altogether. However, a second procedure or a hysterectomy will be required in approximately 22% of cases.

Although uncommon, the procedure can have serious complications including:

! ! * Perforation of the uterus

! ! * Burns to the uterus (beyond the endometrial lining)

! ! * Pulmonary edema or embolism

! ! * Bowel Burn

These complications are likely to be reduced with the method I am proposing.

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

thermal ablation 6665 Busch Blvd, Columbus, OH 43229 Multiplexed Heater Resectoscope Endometrial Ablation
Multiplexed Heater Resectoscope
Multiplexed Heater
Resectoscope

Endometrial Ablation

Endometrial ablation is a procedure to permanently remove a thin tissue layer of the lining of the uterus to stop or reduce excessive or abnormal bleeding in women for whom childbearing is complete. The lining of the uterus is called the endometrium. In some cases, endometrial ablation may be an alternative to hysterectomy.

The Menstrual Cycle

With each menstrual cycle, the endometrium prepares itself to nourish a fetus as increased levels of estrogen and progesterone help to thicken its walls. If fertilization does not occur, the endometrium, coupled with blood and mucus from the vagina and cervix (the lower, narrow part of the uterus located between the bladder and the rectum) make up the menstrual flow (also called menses) that leaves the body through the vagina. After menopause, menstruation stops and a woman should not have any bleeding.

Reasons for the Procedure

Menorrhagia is a condition in which a woman has extremely heavy menstrual periods or bleeding between periods. Also called dysfunctional uterine bleeding, menorrhagia is characterized by heavy and prolonged menstrual bleeding. In some cases, bleeding may be so severe and relentless that daily activities become interrupted and anemia develops.

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

Barret's Esophagus

Barrett's esophagus refers to an abnormal change (metaplasia) in the cells of the lower end of the esophagus thought to be caused by damage from chronic acid exposure, or reflux esophagitis. ! The normal lining of the esophagus (squamous epithelium) is replaced by an intestinal-type lining (columnar epithelium).

Barrett's esophagus is found in 5-15% of patients who seek medical care for heartburn (gastroesophageal reflux disease, GERD), although a large subgroup of patients with Barrett's esophagus do not have symptoms. It is considered to be a premalignant condition because it is associated with an increased risk of esophageal cancer (more specifically, adenocarcinoma) of about 0.5% per patient-year. Diagnosis of Barrett's esophagus requires endoscopy (more specifically, esophagogastroduodenoscopy, a procedure in which a small tube with a camera at the top is used to look at the esophagus, stomach and first part of the bowels) and biopsy (taking small tissue samples which are analysed using microscopy).

The progression from Barrett's esophagus to esophageal cancer is divided into non-dysplastic changes, low-grade and high-grade dysplasia (abnormal cell maturation associated with a risk of progression to cancer) and frank carcinoma. In high-grade dysplasia, the risk of developing cancer might be at 10% per patient-year or greater.

The risk of malignancy is highest in the U.S. in Caucasian men > 50 years of age with > 5 years of symptoms. It is unusual for African-American men to develop adenocarcinoma of the esophagus, the cancer associated with Barrett's. Current recommendations include routine endoscopy and biopsy (looking for dysplastic changes). If two endoscopies and biopsy sessions performed within 12 months are negative for dysplasia then surveillance can be performed every 3 years while the underlying reflux is controlled with proton pump inhibitor drugs in combination with measures to prevent reflux. For patients found to have low grade or high grade dysplasia close observation and repeat endoscopy and biopsies are indicated and the patient should be followed closely by a gastroenterologist.

Proton pump inhibitor drugs have not yet been proven to prevent esophageal cancer. Laser treatment is used in severe dysplasia, while overt malignancy may require surgery, radiation therapy, or systemic chemotherapy. Additionally, a recent 5-year random-controlled trial has shown that photodynamic therapy using photofrin is statistically more effective in eliminating dysplastic growth areas than sole use of a proton pump inhibitor.! There is presently no reliable way to determine which patients with Barrett's esophagus will go on to develop esophageal cancer, although a recent study found that the detection of three different genetic abnormalities were associated with as much as a 79% chance of developing cancer in 6 years.

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

Barrett's esophagus is marked by the presence of columnar epithelia in the lower esophagus, replacing the normal squamous cell epithelium. These columnar cells increase the risk of adenocarcinoma.

Ablation of the columnar epithelia has recently been proven effective treatment for Barrett’s esophagus based upon research completed Summer 2009 at the Mayo Clinic.

Short segment Barrett's esophagus

Short segment Barrett's esophagus The short segment of Barrett's esophagus is seen here as a strip or "tongue" of red lining surrounded by normal pinkish-white squamous lining. There is a small island of Barrett's esophagus, surrounded by normal squamous lining, next to the tongue of Barrett's esophagus.

lining, next to the tongue of Barrett's esophagus. Long segment Barrett's esophagus The squamocolumnar

Long segment Barrett's esophagus

The squamocolumnar junction, where the Barrett's esophagus joins the normal squamous esophagus, is a great distance from the bottom of the esophagus due to the long segment of Barrett's esophagus.

esophagus, is a great distance from the bottom of the esophagus due to the long segment

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

In May 2008 the Mayo Clinic reported that the HALO ablation system from BARRX Medical, Inc., was effective in treating Barrett's esophagus.! This is a non-surgical endoscopic treatment involving radio-frequency ablation.! The results were published in Gastrointestinal Endoscopy.

My proposed method of ablation is an improvement over the BARRX Medical device.

Surgical treatments include endoscopic mucosal resection (EMR) which has also been evaluated as a management technique. Additionally an operation known as a Nissen fundoplication can reduce the reflux of acid from the stomach into the esophagus.

In a variety of studies, non-steroidal anti-inflammatory drugs (NSAIDS), like aspirin, have shown evidence of preventing esophageal cancer in Barrett's esophagus patients. However, none of these studies have been randomized, placebo controlled trials, which are considered the gold standard for evaluating a medical intervention. In addition, the best dose of NSAIDs for cancer prevention is not yet known.

According to the Center for Disease Control a majority of women complain of heavy bleeding and as many as 1 in 5 may be recommended for some sort of treatment.! Also, 1 in 10 Americans suffer heartburn, the initial indicator of Barret's Esophagus.

Over 60,000 procedures of each type are completed each year, and they cost beetween $17,000 and $23,000 each.

An improved treatment method not involving surgery can reduce costs by 20% or more and so

a value of $2,000 to $3,000 per disposable heating device is easily supported.

120,000 procedures x $3,000 = $360,000,000 per year.

Costs of the disposable device is less than 10% of the value of the device. ! Value of the company assuming a $300 million EBITDA and 12x valuation is $3.6 billion.! This rate of sales will likely be achieved within 5 years of approvals. ! Break even will likely occur within 24 months.

A portion of profits will develop other ablation procedures using the same general approach to increase sales.

PROPOSED MEDICAL INVESTMENT:

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

Despite the lower shares this valuation for the investors will actually pay dividends to them because it will reflect a stronger price as we enter the IPO.

So, I am selling 8 shares at $125,000 each - which will result in 2.5% ownership of a medical device company to be formed (MokMedical Corporation) I will assign all IP related to this device and I will then build a prototype over the next 3 months and organize an IPO on the TSX and raise $2.5 million to $5.0 million by selling an additional 20% which will dilute everyone accordingly.

This IPO will allow me to organize pre-clinical efforts which when completed by Summer 2010 will allow me to sell an additional $7.5 million to $15.0 million as I enter clinical phase 1 trials.

Each of the three phases will allow me to raise additional money.! Once final approvals are obtained for these two procedures, I will then market the devices and build sales to

the levels indicated, which will build value to the levels indicated.

Angel: (conceptual) $125,000 - 2.5% shares - MokMedical! - $5,000,000 valuation 8 units $1,000,000

IPO: (preclinical) 20% public shares - $3,000,000 - $15,000,000 valuation

Angel investors 2.5% diluted to 2.0% while valuation increases up to 3x - so each $125,000 unit is worth $300,000 with IPO of $15 million, which will occur within 90 days.

Investors may sell up to 20% of their shares at this time, to reclaim $60,000 in this example with a reduction to 1.6%.

ROUND 2: (clinical - phase 1) 20% public shares - $45,000,000 valuation

Angel investors 2.0% is reduced to 1.6% here. ! Those who took advantage of the cash out option at IPO see their 1.6% reduced to 1.28% Value of the original $125,000 is in this example;

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

! ! ! POSSIBLE VALUES AT EACH ROUND OF FINANCING - BASED ON EXAMPLE ABOVE

! ! ! CASE 1: $125,000 ""

IPO "

CASH ""

$0 "

 

" VALUE" $ 300,000 "

IPO "

ROUND 2 !" CASH ""

$0 "

ROUND 2

VALUE

$ 720,000

! ! ! CASE 2: $125,000 ! ! "

$0 "

$ 300,000 "

$144,000 "

 

$ 576,000

! ! ! CASE 3: $125,000 ! "

! ! ! CASE 4: $125,000 ! "

$60,000 ! "

$60,000 ! "

$ 240,000 ! ! !" $ 240,000 ! "

! $115,200! ! ! ! " $ 460,800

$ 576,000

$0 !

! ! ! AFTER ROUND 2: (six months)

 

! CASH ! ! ! "

STOCK! ! !"

NET

! ! ! CASE 1: ! " ($125,000) ! "

$720,000 ! "

$595,000

! ! ! CASE 2: ! !" $ 19,000 ! "

$576,000 ! "

$595,000

! ! ! CASE 3: ! " ($ 65,000) ! "

$576,000 ! "

$511,000

! ! ! CASE 4: ! !" $ 50,200 ! "

$460,800 ! "

$511,000

Toronto Stock TSX Venture Exchange Exchange Leadership in Life Sciences TM X Group - Advancing
Toronto Stock TSX Venture Exchange Exchange Leadership in Life Sciences TM X Group - Advancing

Toronto Stock

TSX Venture

Exchange

Exchange

Leadership in Life Sciences

Venture Exchange Exchange Leadership in Life Sciences TM X Group - Advancing Life Sciences TMX Group’s

TM X Group - Advancing Life Sciences

TMX Group’s equity exchanges, Toronto Stock Exchange and TSX Venture Exchange, provide access to equity capital that is essential for grow th-oriented life sciences companies – any where in the world.

TMX Group of fers cost ef f icient markets for small- to mid-size life sciences f inancings. Renowned for its consistently high standards and innovative produc t of ferings, Toronto Stock Exchange (Canada’s senior equities marketplace) provides life sciences companies with a dynamic market to access Nor th American and global capital.

TSX Venture Exchange provides early-stage life science companies with the oppor tunity to gain a solid foothold in the public capital markets, as well as the potential to work towards a graduation to Toronto Stock Exchange.

Be a par t of it. Benef it from liquidity, visibility for transac tions, analyst coverage, specialized indices, and listing requirements specif ically tailored to life sciences companies.

A cce s s to C a p i ta l fo r Com p a n ies a t Va ri o u s S tages of G row t h

The Can ad i an i nve st m ent co mm unit y su pp or ts e a r ly to l ate s ta ge co m pan i e s, wi th I P Os ra ng i ng from $ 1 0 m il l i on to $ 1 50 m i ll i o n p lus.

Tra d i n g and I nves ti ng D ept h

Vi bra nt re ta il inve stor b ase

Strong equity culture – almost half of Canadians own shares

I ns ti tu t io n al investo r bas e t ha t u nd e r st an ds l i fe s c i e nce s

R u l es fa c i l itate b oth sm al l a nd la rge f in anc i n gs and p riva te pl acem e n ts

Marke t s at a Glance – Fir s t Half 2009

Financing Grow th Companies

Pu bli c Equit y Pr i va te E qui t y Conce pt
Pu bli c Equit y
Pr i va te E qui t y
Conce pt
P re - Clin ic al
P h ase 1
P h ase 2
P h a se 3
Cap it al Re qu i re d

Stage of Co m pany G row th

T S X V e n t u r e E x c h a n g e

To r o n t o S t o c k E x c h a n g e

T S X V a n d T S X

Number of Life Sciences Issuers Listed Quoted Market Value (C$ billions) New Life Sciences Listings Equity Capital Raised (C$ billions)*

52

74

126

$0.392

$ 9.6

$10.0

2

-

2

$0.026

$0.143

$0.169

Volume Traded (billions of shares) Value Traded (C$ billions) Number of Trades (millions)

0.536

1.4

2.0

$0.080

$3.0

$3.0

0.040

1.2

1.2

* I n c l u d e s S u p p l e m e n t a r y F i n a n c i n g s

Toronto Stock Exchange | TSX Venture Exchange | Montréal Exchange | Natural Gas Exchange | Montréal Climate Exchange | Boston Options Exchange Canadian Derivatives Clearing Corporation | TMX Datalinx | Equicom | PC Bond | Shorcan

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

MOKMEDICAL
MOKMEDICAL
STORAGE LABORATORY AREA DEMO AREA QC QC SALES SHOP AREA (production support) PRIMARY SALES SALES
STORAGE
LABORATORY AREA
DEMO
AREA
QC
QC
SALES
SHOP AREA
(production support)
PRIMARY
SALES
SALES
SALES
PRODUCTION
RAW
MATERIALS

SHIPPING

RECEIVING

QC SALES SHOP AREA (production support) PRIMARY SALES SALES SALES PRODUCTION RAW MATERIALS SHIPPING RECEIVING

MOKMEDICAL

re-inventing thermal ablation

6665 Busch Blvd, Columbus, OH 43229

The manufacture of plastic film for products such as shopping bags is achieved using a blown film line that I use here.

This process is a regular extrusion process up until the die. The die is an upright cylinder with a circular opening similar to a pipe die. The diameter is a few millimeters in diameter and blow to more than three centimeters across. The molten plastic is pulled from the die. Changing the speed changes the gauge (wall thickness) of the film. Around the die sits an air-ring. The air-ring cools the film as it travels. In the center of the die is an air outlet from which compressed air is forced into the center of the extruded circular profile, creating a bubble. This expands the extruded circular cross section by some ratio (a multiple of the die diameter). This ratio, called the “blow-up ratio” can be just a few percent to more than 200 percent of the original diameter. The film is then pressed on to bare wires, molded into shape, and heat sealed into finished multiplexed heater units.

The multiplexer is created by co-extruding many blown films nested inside one another. A wire coating process is used to create a heater array. Here arrays of bare wires are jacketed by plastic by pulling the wires through the blown film which is then shaped by a mold into the desired shape and sealed at one end. This is a form of pressure tooling since intimate contact and adhesion are required of the polymer used. Bare wires are wound along each layer in a spiral pattern. One set is wound with a left-handed turn another set with a right-handed turn. When the spirals are placed atop one another they form a co- incident array that shorts electricity through a heating element co-extruded with the other layers. Connections are crimped, soldered and molded in place to a multiplexer ring.

Left Hand Spiral Co-incident Array Element Detail Multiplexer Ring
Left Hand Spiral
Co-incident Array
Element Detail
Multiplexer Ring
Left Hand Spiral Co-incident Array Element Detail Multiplexer Ring Blown Film Line Co-extruded Parts Right Hand

Blown Film Line

Co-extruded Parts

Left Hand Spiral Co-incident Array Element Detail Multiplexer Ring Blown Film Line Co-extruded Parts Right Hand

Right Hand Spiral