DSTC Proposal

Mission Vision Values
Our Noble Sales Purpose
We help our customers save time and lives.
Our Mission
To effectively serve all of the specialized and diverse needs of the medical
community, while conducting ourselves with honesty and integrity. We
dedicate ourselves to our customers, our suppliers and to one another, with
one common goal in mind: To effectively distribute products and services to
the healthcare community.
Our Vision
Our vision is to be the premier regional distributor to the healthcare industry in

the market segments we serve. We will achieve this goal through an ongoing
commitment to innovation, quality and service. A balance of leadership and
teamwork will serve as our foundation.
Our Commitment
To provide seasoned account representatives and ongoing support.

To offer quality products, service and training.
To build partnerships of value for the present and future.
To possess a broad working knowledge of all facets of this industry.
To encourage high standards and loyalty in all relationships.
To exceed your expectations.
Our Team
Each member of the MMS team is focused on providing our customers with
exceptional service. The MMS culture of accountability results in constant,
measurable performance improvement which is communicated to and shared
with our customers.
Our experienced and professional team of over 470 employees includes 90

professional account managers, 40 customer service and support
representatives and over 150 warehousing and distribution associates.
Our Markets
Our corporate headquarters is located in St. Louis, Missouri. MMS has a
regional office in New Rochelle, New York and eleven distribution centers in
Arizona, Connecticut, Georgia, Guam, Illinois, Kansas, Louisiana, Missouri,
New Jersey, North Carolina and Texas.
MMS is one of the few healthcare distributors with market segment

professionals serving multiple healthcare provider channels. MMS works with
all healthcare providers and provides supplies and supply chain efficiencies to
doctors offices, hospitals, nursing homes, rehabilitation centers, specialty care
centers, hospices as well as to both homecare dealers and directly to patients
at home. Each of the healthcare markets we supply is backed by an
experienced team who knows both the needs and requirements of that
particular segment.
Our government division serves all CONUS and International Federally

Funded Facilities.
In addition, MMS leverages our logistics expertise to provide redistribution

services. Our goal is to manage the cost of healthcare by reducing the overall
supply chain costs for multiple manufactures and distributors.
Our Difference
MMS differentiates ourselves from our competitors with the quality of our team
and our proven ability to define and implement customized supply chain
solutions: we fit our solutions to our customers, not our customers to our
solutions.
Our Products
MMSs long term relationships with the leading suppliers of medical supplies
and equipment allows us to offer a broad range of high quality products
allowing our customers to access exactly what they need. MMS stocks more
than 40,000 SKUs from more than 1,200 manufacturers and our experienced
sales support team will assist in locating even hard to find items.
Mission
Cape Medical Supply improves the lives of those we serve through the
compassionate, responsive delivery of healthcare solutions.
Vision
The Vision of Cape Medical Supply is to be the first choice for home medical
equipment and respiratory care in the communities we serve. We deliver on our vision
by striving for excellence every day, and constantly seeking to improve the services
we offer.
Values
Compassion and Gratitude: Caring for the needs of others powers our journey. In
turn, we value what service teaches us about ourselves and about how we relate to
others.
Honesty and Integrity: Character is the essence of who weve become and is the
driving force in who we are, both individually and collectively.
Hard Work: Serving the needs of others is our reason for being. Our customers ask a
lot of us, so we ask even more of ourselves.
Cooperation and Collaboration: We are a community and we serve a community.

Nothing we do stands alone; everything depends on cooperation and collaboration.
Respect and Trust: All our interactions demonstrate the respect we have for others.
Mutual respect and trust are at the core of all our relationships as well as the
foundation of our reputation.
Work Ethics and Personal Responsibility: Every staff member is responsible for
playing a vital role in the success of our company and the positive experience of our
patients. There is harmony between our responsibility to ourselves, our jobs, our
customers, and our co-workers.
Products
Bioring SA addresses the surgical repair techniques which are implemented in open
heart surgery. This business is based on a patented product owned by the company,
which is the Kalangos Biodegradable Ring cardiac implant.
The Bioring biodegradable valvular heart ring (Kalangos mitral or tricuspid ring) has
been developed and designed to diminish or reinforce the valvular orifices of the
heart. The ring allows a normal growth of the valve in newborn and babies, avoiding
stenosis and multiple surgical procedures.
The ring is dimensioned to the size and natural geometry of the valve, and it is
manufactured with a specially designed biodegradable polymer called polydioxanone.
Once implanted, through the regular absorption of the ring inside the endomyocardiac
tissue by simple hydrolysis, the body creates (by reaction) a scar along the ring,
characterized by fibrotic tissue presenting an improved resistance to elongation. Once
the ring has been completely biodegraded, the rigidity of the fibrotic tissue of the scar
is maintaining the valvular orifice at the desired dimension.
As the residual scar is made of the proper biologic tissues of the patient, there is no
predisposition to infection, and furthermore, the scar is able to grow normally during
the growth process of the newborn.
The Kalangos mitral ring is available in 11 dimensions, covering all phases of

development and all adult sizes. The Kalangos tricuspid ring is also available in 11
dimensions. Sizers have been designed to help the surgeon surgeon to choose the right
ring dimension.
3.1 Product Description
As of June 2001, Bioring SA has 44 products to sell:
Kalangos Mitral Biodegradable Ring: sizes 16, 18, 20, 22, 24, 26, 28, 30, 32,
34, 36.
Kalangos Mitral Sizers: model size 16, 18, 20, 22, 24, 26, 28, 30, 32, 24, 36.
Kalangos Tricuspid Biodegradable Ring: sizes 16, 18, 20, 22, 24, 26, 28, 30,
32, 34, 36.
Kalangos Tricuspid Sizers: model size 16, 18, 20, 22, 24, 26, 28, 30, 32, 34, 36.
3.2 Competitive Comparison
There are already existing heart rings on the market: Duran, Carpentier, Puig-Masada,
Cosgrove, but none of them produce a biodegradable ring. The major benefits of
Kalangos rings when compared to existing products available on the market are:
Avoiding multiple surgical procedures (newborn and babies).

Lowering the risk of local infection.
And moreover, the ring is attached to a suture-needle system which makes the surgical
procedure easier and faster.
3.3 Sales Literature
Bioring advertisements and sales literature are under development.
Bioring is registered on the Web page of the Chambre Vaudoise du Commerce et de

l'Industrie. The company intends to have its own presenting page on the Web once the
products have been CE marked.
3.4 Sourcing
Bioring SA manufactures its own products, using its in-house development process.
The raw materials are provided by a major chemical supplier, which delivers to
Bioring SA a customized polymer.
An injection molding press has been specially designed and installed to inject the
polymer into the proprietary molds.
All operations, including the packaging of the final product, are done in a controlled
environment: class 100 clean room.
The list of suppliers is considered as proprietary information, which is not disclosed

here.
3.5 Technology
Bioring Kalangos biodegradable rings have been internationally protected by patent.

A Swiss patent application has been filed in 1997, followed by a worldwide PCT
application filed in 2000. Copies are available.
A trademark application is in progress.
3.6 Future Products
The Kalangos biodegradable rings have ben developed following a market need and
demand in pediatric surgery. Moreover the present existing rings are subject to very
restrictive applications in neonate surgery in USA. This is due to the used material. As
a result of this situation, a collaboration between a Swiss cardiac surgeon and a Swiss
biomedical engineer led to the creation of Bioring SA. Together, they conceived a new
concept which opens new perspectives in the field of cardiovascular surgery. This
concept was tested as a prototype, and the achieved results motivated the partners to
create the company in order to patent, develop, manufacture and commercialize the
new cardiac implant. The long term strategy at five years is to penetrate 35% of the
newborn market (40,000) and 10% of the adult market (200,000). All together, this
means around 35,000 biodegradable rings implanted per year.
The development of the biodegradable polymer may meet other very promising
applications in the fields of cardiac and vascular surgery. We are presently in the
process of writing the extension of the initial patent and testing the very first
prototypes of new implants. No information can be given at this stage.
Financial Plan
Our Start-up requirements for cash, inventory, expenses and assets will see us through
the first year, as we hire our contracted sales representatives and secure increasing
market share. Even with our conservative estimates, based on market research and the
industry knowledge of the the founders, we will far surpass the break-even point from
the first month of sales. This financial advantage is largely a result of the deferred
salaries of the principals, who will take salaries starting in the second year based
on the success of the business (projections below).
Our commission structure for contracted sales representatives, along with our
shipping methods, means that our variable costs always exceed our fixed costs - we
have low overhead, and are investing in low-risk face-to-face sales time to generate
profits. Rent, travel for the founders, and payroll for our part-time office manager are
the largest operating expenses. With a qualified medical biller, we should collect
quickly on reimbursements, and maintain a positive cash balance throughout.
We will repay the initial loan within three years, at 10% interest. If sales go better than
projected, we may pay it off sooner. We do not expect future rounds of investment or
loans, since the business will be self-sustaining by the end of year one. By the end of
the third year, Zenergy will have a respectable net worth.
Start-up Funding
As mentioned previously, we plan to personally invest to cover portion of the initial

start-up costs for the business. For the first year, our requirements will be met as
follows:
Private funding from Aktum, Finkelstein, and Acropolis.

An SBA Micro-Loan.
Cash generated from ongoing operations beginning in months
three through six.
We will seek credit terms of 60 days from our suppliers until we build up sufficient
cash flow to be able to accept net 30 terms.
Start-up Funding
Start-up Expenses to Fund $3,305

Start-up Assets to Fund $12,275
Total Funding Required $15,580
Assets
Non-cash Assets from Start-up $2,775
Cash Requirements from Start-up $9,500
Additional Cash Raised $0
Cash Balance on Starting Date $9,500
Total Assets $12,275
Liabilities and Capital
Liabilities
Current Borrowing $5,000
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $5,000
Capital
Planned Investment
Owner $10,580
Investor $0
Additional Investment Requirement $0
Total Planned Investment $10,580
Loss at Start-up (Start-up Expenses) ($3,305)

Total Capital $7,275
Total Capital and Liabilities $12,275

Total Funding $15,580
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Important Assumptions
We are assuming the following key points:
1. We will submit our application to CMS by March 7 and receive a

Medicare provider number in 60 days.
2. We will successfully recruit field clinical sales reps per our
schedule to reach seven reps by December 2005 with the first
reps coming on line to begin selling in May.
3. We will be able to successfully leverage our corporate account
relationships to drive business for the field sales force.
4. We will successfully secure supplier agreements
with X Industries and Y Corporation with favorable credit terms
(60 days) at the outset; and with availability of product
samples, marketing materials, and token inventory at no cost
or a nominal cost.
5. We will be able to routinely receive reimbursement from the
DMERCs in 30-45 days.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
Break-even Analysis
The following table and chart show our break-even point in the first year, when the
three VPs are deferring compensation. With a low monthly fixed cost and variable
costs (including commission and shipping), we need to sell per month the
amount calculated below to break even. Market research and previous experience
assures us that we will easily surpass the break-even point even in our first month of
sales.
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Break-even Analysis
Monthly Revenue Break-even $3,312
Assumptions:
Average Percent Variable Cost 25%
Estimated Monthly Fixed Cost $2,497
Projected Profit and Loss
Notes on Profit and Loss statement for year one:

Non-inventory Costs of Goods Sold are tracked at the top of the
table. These are variable costs, such as commission and
shipping.
Low payroll expense in the first year- all reps will be contract
employees paid straight commission, no expenses or benefits.
The managers will not take a salary in the first year, but will
take salaries in the second and third years dependent upon
first year performance and profits. The only personnel in year
one is our part-time office manager.
Marketing and promotion expenses will include website
management; creation and printing of custom "program
overview" flyers for corporate accounts to distribute to
member facilities, mailers to go to facilities in a reps major
MSA, and any other sales collateral that must be developed.
Rent assumes $450 per month lease.
Telecommunications of $200 per month assumes primary
phone line with call forwarding and answering machine
capabilities, tied-in to a receptionist, with a number listed
under our business name in directory assistance; DSL internet
line; phone card for long-distance calling.
General Liability insurance assumes $30 per month to cover
the place of business.
Legal expenses include drafting of initial start-up documents
and contracts, with minimal additional work on a monthly
basis.
Accounting assumes $20 per hour and seven hours per month
to close the books, handle commissions, etc.
Stationery and office supplies includes business cards and
stationery, files, miscellaneous supplies, etc.
Travel - left unbudgeted at this time.
Equipment assumes $1,000 purchase up-front during start-up
phase.
Other - unanticipated expenses.
Note: 10% of profits will be allocated to repay initial cash
investments by Acropolis, Finkelstein, and Aktum at 5% simple
interest. 10% of profits will be paid to Finkelstein and Acropolis
to cover corporate overhead costs.
Notes on Years two and three growth assumptions:

Increase stationery and office supplies (.52%),
telecommunications (.52%), marketing (.65%), legal
(.26%) and accounting (.39%) as a consistent % of sales.
10% per year increase in rent associated with need for more
services and facility related growth.
20% per year growth in liability insurance.
Equipment lease expense doubles each year associated with
rapid sales growth and expansion.
10% per year growth in miscellaneous expenses.
Travel grows to $15,000 in year two and $25,000 in year three
for increased recruitment, management, and corporate
account sales calls.
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Pro Forma Profit and Loss

Sales $458,374 $1,670,845 $3,408,228
Direct Cost of Sales $112,840 $454,930 $834,900
Shipping/Handling $22,919 $83,542 $170,411
Medicare Part B Billing $16,043 $66,834 $136,329
Uncollectible Accounts Reserve $91,675 $334,169 $681,646
Sales Commission $73,340 $267,335 $545,316
Total Cost of Sales $316,816 $1,206,810 $2,368,603
Gross Margin $141,558 $464,035 $1,039,625

Gross Margin % 30.88% 27.77% 30.50%
Expenses
Payroll $6,720 $243,720 $264,960
Marketing/Promotion $3,000 $10,860 $22,153
Depreciation $0 $0 $0
Rent $5,400 $5,940 $6,534
Telecommunications $2,400 $8,688 $17,723
General Liability Insurance $360 $432 $518
Legal Expenses $1,200 $4,344 $8,861
Accounting Expenses $1,800 $6,516 $13,292
Stationery and Office Supplies $2,400 $8,688 $17,723
Travel $5,000 $15,000 $25,000
Office Equipment $480 $960 $1,920
Payroll Taxes $0 $0 $0
Other $1,200 $1,320 $1,452
Total Operating Expenses $29,960 $306,468 $380,136
Profit Before Interest and Taxes $111,598 $157,567 $659,489

EBITDA $111,598 $157,567 $659,489
Interest Expense $418 $9,653 $17,685
Taxes Incurred $33,354 $44,374 $192,541
Net Profit $77,826 $103,540 $449,263

Net Profit/Sales 16.98% 6.20% 13.18%
Projected Cash Flow
Because of the relatively quick ramp-up process for sales people, and our relatively
low start-up expenses, we believe we can start generating very positive cash flow
within the first year. This is all contingent on achieving our expense targets for rent,
insurance and other "fixed" items, plus contracting and training new sales reps per our
plan and achieving successful reimbursement cycles from the DMERCs.
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Pro Forma Cash Flow

Cash Received
Cash from Operations
Cash Sales $22,919 $83,542 $170,411
Cash from Receivables $326,558 $1,299,253 $2,825,063
Subtotal Cash from Operations $349,477 $1,382,796 $2,995,474
Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $200,000 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $349,477 $1,582,796 $2,995,474
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations

Cash Spending $6,720 $243,720 $264,960
Bill Payments $327,576 $1,333,044 $2,647,144
Subtotal Spent on Operations $334,296 $1,576,764 $2,912,104
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current
$1,650 $1,650 $1,700
Borrowing
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal
$0 $12,000 $24,000
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $335,946 $1,590,414 $2,937,804
Net Cash Flow $13,531 ($7,619) $57,670

Cash Balance $23,031 $15,412 $73,082

Projected Balance Sheet
The Balance Sheet reflects the fact that many of our Assets will be tied up in Accounts
Receivable; billing correctly and promptly, and following up on unpaid
reimbursement claims, will be critical to the Cash balance. The Starting Balances are
the requirements from the Start-up table and the Start-up Funding. By the end of the
first year, we will increase the net worth of the business handsomely. Net Worth will
continue to rise dramatically as we secure a higher market share and continue to
contain costs.
Pro Forma Balance Sheet

Assets
Current Assets
Cash $23,031 $15,412 $73,082
Accounts Receivable $108,897 $396,946 $809,700
Inventory $19,695 $79,403 $145,723
Other Current Assets $275 $275 $275
Total Current Assets $151,898 $492,036 $1,028,780
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $151,898 $492,036 $1,028,780
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $63,447 $113,695 $226,876
Current Borrowing $3,350 $1,700 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $66,797 $115,395 $226,876
Long-term Liabilities $0 $188,000 $164,000

Total Liabilities $66,797 $303,395 $390,876
Paid-in Capital $10,580 $10,580 $10,580

Retained Earnings ($3,305) $74,521 $178,061
Earnings $77,826 $103,540 $449,263
Total Capital $85,101 $188,641 $637,904
Total Liabilities and Capital $151,898 $492,036 $1,028,780
Net Worth $85,101 $188,641 $637,904
Business Ratios
Our comparison industry is Medical Equipment and Supplies, SIC Code 5047.03.
Because we are a start-up, our sales growth rates will be much higher than the
industry, especially given that we are competing in a small niche with fragmented
competition. We have constructed our operation to keep start-up capital requirements
to a minimum, building much of our expense into our variable cost structure (sales
compensation, reimbursement/collections,) or farming it out (legal, accounting).
Because we do not have a retail storefront or extensive distribution facilities, our fixed
overhead costs are extremely low. None of our three managing executives are on the
payroll in the first year, and our sales team will be contract reps on straight
commission. We have farmed out all legal, accounting, and reimbursement/collections
to outside services to keep overhead and risk to a minimum.
As a result, we will have extremely favorable margins, SG&A, and current/quick

ratios compared to industry standards.
Ratio Analysis
Industry
Profile
Sales Growth n.a. 264.52% 103.98% 4.75%
Percent of Total Assets

Accounts Receivable 71.69% 80.67% 78.70% 29.09%
Inventory 12.97% 16.14% 14.16% 37.55%
Other Current Assets 0.18% 0.06% 0.03% 20.32%
Total Current Assets 100.00% 100.00% 100.00% 86.96%
Long-term Assets 0.00% 0.00% 0.00% 13.04%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 43.97% 23.45% 22.05% 42.28%

Long-term Liabilities 0.00% 38.21% 15.94% 10.98%
Total Liabilities 43.97% 61.66% 37.99% 53.26%
Net Worth 56.03% 38.34% 62.01% 46.74%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 30.88% 27.77% 30.50% 30.41%
Selling, General & Administrative
13.90% 21.58% 17.32% 15.33%
Expenses
Advertising Expenses 0.00% 0.00% 0.00% 1.03%
Profit Before Interest and Taxes 24.35% 9.43% 19.35% 2.74%
Main Ratios
Current 2.27 4.26 4.53 1.86
Quick 1.98 3.58 3.89 0.84
Total Debt to Total Assets 43.97% 61.66% 37.99% 57.79%
Pre-tax Return on Net Worth 130.64% 78.41% 100.61% 5.85%
Pre-tax Return on Assets 73.19% 30.06% 62.38% 13.87%
Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 16.98% 6.20% 13.18% n.a
Return on Equity 91.45% 54.89% 70.43% n.a
Activity Ratios
Accounts Receivable Turnover 4.00 4.00 4.00 n.a
Collection Days 42 58 68 n.a
Inventory Turnover 11.65 9.18 7.42 n.a
Accounts Payable Turnover 6.16 12.17 12.17 n.a
Payment Days 27 23 23 n.a
Total Asset Turnover 3.02 3.40 3.31 n.a
Debt Ratios
Debt to Net Worth 0.78 1.61 0.61 n.a
Current Liab. to Liab. 1.00 0.38 0.58 n.a
Liquidity Ratios
Net Working Capital $85,101 $376,641 $801,904 n.a
Interest Coverage 267.30 16.32 37.29 n.a
Additional Ratios
Assets to Sales 0.33 0.29 0.30 n.a
Current Debt/Total Assets 44% 23% 22% n.a
Acid Test 0.35 0.14 0.32 n.a
Sales/Net Worth 5.39 8.86 5.34 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Executive Summary
This business plan has been developed to present our company to prospective supplier
partners, employers, and investors. Zenergy Medical Industries is a start-up
company focused initially on distribution of leading brands of therapeutic systems for
use by residents of Homecare and Assisted Living facilities at risk of complications
from X disease. After establishing a market presence with this product niche, we will
expand to offer other products related to further treating and managing complications
of the disease.
The market is currently served poorly and inconsistently by a patchwork of local

pharmacies and distributors. We will offer a regional, and ultimately national, network
of clinical sales professionals, which will make us the partner of choice for large,
geographically diverse Homecare and Assisted Living (A.L.) chains, and will make us
attractive to potential supplier partners.
Market Potential
The two major market opportunities are "at risk" residents with the disease in
Homecare and Assisted Living. There are an estimated 345,784 Homecare at risk
residents, with a potential $59.6 million revenue, and an estimated 66,671 Assisted
Living at risk residents, with a potential for $17.6 million in revenue.
Competitive Advantage
The product technology is available to all players in this market. We will differentiate
ourselves by adding value through our distribution strategy and channels, and our
comprehensive product lines and programs that make working with us incredibly easy.
We are uniquely positioned to gain market share in this segment due to our corporate
account relationships, our ability to build a regional (ultimately national) field clinical
sales team quickly, and our ability to create compelling marketing programs. The
competition is largely smaller, more local distributors and pharmacists who are not
approaching this market in a sophisticated or coordinated way.
Strategy
1. Using relationships with decision makers at major homecare chains to gain

unique access to sell into their facilities. This will allow us to provide "pre-
qualified" sales opportunities to our field-based clinical sales team.
2. Effectively building a strong national clinical sales team capable of building
strong relationships with clinical decision makers at the facility level.
3. Creating marketing strategies and tactics to position ourselves as leaders in
providing clinical product solutions to help facilities manage the complications
of disease.
4. Gaining distribution relationships with a unique combination of top suppliers to
build a comprehensive line of product solutions for managing the complications
of the disease. We will create an effective channel of distribution that will
be indispensable to suppliers as a cost effective way for them to penetrate the
post-acute market.
We will utilize the therapeutic system offering as the means to gain entrance into the
market and build our organization. Then we will add complimentary products for
managing complications of the disease, followed by other products related to
managing complications of heart disease and aging.
Financial Summary
The owners will invest personal savings in the business. We are seeking an additional
short-term (3 year) loans, to supplement initial cash flows from sales for the first year.
We anticipate a first year net profit. This should grow substantialy by year three. By
the end of year three, Zenergy Medical Industries will have a very respectable net
worth.
Objectives
To achieve the sales growth targets by month six and by end of year one.
Aggressive gains in market share and average monthly revenues in year two.
To grow the contracted sales team to seven field clinical sales reps by month
eight and to 25 field clinical sales reps by year three.
To achieve net profit in year one, increasing in year two, by containing costs
and meeting sales goals.
To begin paying Vice Presidents a regular salary starting in year two.
To maintain 90 day customer satisfaction survey results (% who would

definitely repurchase and definitely recommend us) at 98% or higher.
Mission
We provide post-acute-care facilities with product solutions to help manage

complications of X disease. We take pride in helping to alleviate patient suffering
associated with these conditions.
Keys to Success
1. We offer a comprehensive line of innovative, top quality products.

2. We provided unequaled clinical support on a regional (national) level to post
acute facilities.
3. We have close relationships with key decision makers in top post acute chains,
and with key administrators and clinicians at the facility level.
4. We do an exceptional job of articulating the value of our products and
solutions.We position ourselves in a clear, powerful, and memorable way in the
marketplace.
5. We have an organization with a unique spirit that makes people eager to join us
or do business with us. Once people join us, they can't imagine working
anywhere else.
Company Summary
Zenergy Medical Industries will be seen by post-acute-care providers as THE source
for product solutions to manage the complications of X disease.
We are a start-up company that will initially distribute a full line of disease therapies
and medications, followed by additional complimentary products that fit with our
strategy. Zenergy Medical Industries' headquarters will be in Charleston, S.C.
Our source of differentiation will be in our distribution and marketing strategies. We

will leverage our corporate account relationships and create marketing programs to
drive demand for our products solutions at the corporate level. We will establish a
unique network of clinical sales professionals, first in the Southeast, then nationwide,
who will then build relationships at the facility level by providing value-added service
and expertise to caregivers.
Regulatory Issues
As distributors, our only relevant compliance issues are to stay in compliance with
CMS's supplier standards as regulated by the DMERCs and to stay in compliance with
HIPAA regulations regarding patient data.
Company Ownership
Zenergy Medical Industries is a division of Finkelstein and Acropolis, LLC., which is
equally owned by Acropolis, Finkelstein, and Aktum.
Capital for start-up costs will be provided out of private funds from Acropolis,
Finkelstein, and Aktum. Zenergy Medical Industries will also seek an SBA Micro-
Loan to supplement the private funding provided by the three managing executives.
Start-up Summary
The key elements in the start-up plan for the company are:
Create the strategic business plan.

Establish a corporate identity and positioning strategy.
Establish a location and place of doing business.
Obtain a Medicare provider number.
Build a field clinical sales organization focused initially on the
Southern U.S.
Define key business processes for ordering, billing,
reimbursement, record keeping, customer satisfaction tracking,
etc.
Build relationships with key decision makers in targeted
Homecare and Assisted Living chains.
Costs of raising capital through private placement.
More specifically, start-up requirements include the following:
Legal fees to draw up employment agreements and various

company legal documents.
Office supplies and stationery to purchase business cards and
stationery with the new company's information; this is also
intended to cover basic office supplies (pens, paper,
calculators, files, etc.)
Initial cost to obtain appropriate general liability insurance
policy of $300K on our facility.
Rent (1 month rent and 1 month deposit @ $450 per month).
Office equipment lease - computer, printer/copier/scanner/fax
machine.
Telecommunications - Cost of DSL internet connection, phone
line listed under company name in directory assistance;
purchase of phone.
Accounting - For 7-8 hours to get our bookkeeping processes in
place (accounts payable to suppliers, lessors, etc., accounts
receivable from Medicare and patient co-pay, commission
payout system, basic journal entry system for recording orders,
collections, etc.
Surety bond - per National Supplier Clearinghouse Customer
Service Group, this requirement has been waived (verified with
Kimberly on 2/8/05, and Bonnie on 2/9/05).
Marketing Materials - Purchase desktop brochure software and
brochure quality paper, secure marketing materials from
manufacturers, create a basic website, license use of any
research articles, and create our own flyers and brochures for
corporate account use, facility use, and use to recruit sales
people.
Other - Unanticipated expenses.
Start-up assets - Working capital; product inventory; office
furniture (file cabinet, desk, book shelf).
Need actual charts?
business plan.
Start-up
Requirements
Start-up Expenses
Legal $500
Stationery and Office Supplies $250
Liability Insurance $60
Rent $900
Office Equipment Leases $125
Telecommunications $320
Accounting $150
Surety Bond $0
Marketing Materials $500
Travel $0
Other $500
Total Start-up Expenses $3,305
Start-up Assets
Cash Required $9,500
Start-up Inventory $2,500
Other Current Assets $275
Long-term Assets $0
Total Assets $12,275
Total Requirements $15,580
Management Summary
Zenergy Medical Industries is being founded by three individuals with a combined
50+ years of healthcare sales and marketing experience.
Mitch Finkelstein:
More than 20 years of clinical sales and technical service specializing in disease care
prevention and treatment across the healthcare continuum. Served as Area VP of Sales
at A Company for the Homecare market, managing 70+ clinical sales people
across six regions in the eastern U.S. Earned Regional Director of the year honors in
XXXX and President's Council honors in XXXXX. Went on to serve as VP of Sales
and Marketing for the B Company, a start-up electronic documentation software
provider focused on outpatient facilities, before joining C Company as Director of
Corporate Accounts.
Yanni Acropolis, RN:

Over 20 years of experience in nursing and clinical sales, specializing in disease care
prevention and treatment in the post-acute marketplace. Over six years of experience
in post-acute corporate account sales and GPO sales. Yanni was consistently a top
performer with ISS and then A Company, which was rated a top healthcare salesforce
in the U.S. in a best practices study commissioned by Selling Power Magazine and
earned their 1995 World Class Sales Award. Yanni also served as Director of
Corporate Accounts at D Company, and most recently served as Executive Director
for Corporate Accounts at C Company, a leader in documentation, charting, and
training systems for the post-acute marketplace. Yanni received his RN from XXXX
in XXXX and his B.S. from XXXX in XXXX.
Ekim Aktum, MBA:
Over 15 years of experience in the healthcare marketplace in sales, marketing, product
development, and business unit leadership across all segments of the healthcare
continuum. During his 11 years at A Company, he lead a start up capital equipment
business unit in the Homecare market for five years. Served as VP of Sales and
Marketing at E Company, a leader in exam lights, tables and equipment management
systems before taking the role as Senior VP of Sales and Marketing at C Company.
Ekim has a B.S. in Business from XXXXX and an MBA in Marketing from XXXXX.
Personnel Plan
The three founding management team members will be our sole employees during the
start-up phase until we go live at the beginning of May. They will not take a salary
until the second year, because they will be under a profit sharing agreement.
Starting May 1 we will add one sales rep per month starting on the first of each month
in May, June, August, September, October, November, and December. We will
continue contracting more representatives in 2006 to reach 15 salespeople by mid-
year, and then 25 by mid-year 2007. Our sales team members will be contract
employees paid straight commission, with no expenses reimbursed or benefits. As
contracted labor, their commissions are listed with other non-inventory costs of sales
in the Profit and Loss.
Our sales team will be recruited from our network of contacts within the arena of
post-acute-care clinical salespeople.
Beginning in September of 2005, we will hire a part-time office manager from a temp
agency at $12 per hour for 20 hours per week. This will move to 30 hours per week in
year two and 40 hours per week in year three.
Personnel Plan
VP of Marketing and General Manager $0 $75,000 $80,000
VP of Corporate Account Sales $0 $75,000 $80,000
VP of Field Clinical Sales $0 $75,000 $80,000
Office Manager $6,720 $18,720 $24,960
Total People 4 4 4
Total Payroll $6,720 $243,720 $264,960

Market Analysis Summary
Our primary customers are elderly residents living in homecare or post-acute care
facilities and at risk for complications from X disease. These residents can be divided
into two major markets: homecare residents, and assisted living residents, and they fit
in one of three broad payor classifications for the costs of their stay: Medicare, Private
Pay, or Medicaid.
A profile of the homecare market today:
1. There are 16,121 facilities with 1,683,068 patients.

2. Average utilization rate is 85.6%, which translates to an
average of 1,440,768 patients.
3. Disease prevalence is estimated at 18% in the general
population of people over the age of 60. One Medicare survey
estimated the prevalence within homecare at 24%. In the
overall population it is generally estimated that diagnosed
cases of the disease represent only about 70% of the true total
number of these patients in the country, so these are probably
conservative numbers.
4. About 12% of residents are covered by Medicare, another 20%
by private sources (family, personal assets, private insurance,
managed care); the remaining 68% are covered under
Medicaid.
5. 60-70% of these patients suffer from related symptoms, which
places them at higher risk for complications (ulcers, other
problems, etc.).
6. 15-25% of these patients will suffer from complications during
their lifetime.
7. 86,000 surgeries occur per year; an estimated 50% of these
are considered preventable. The cost of managing these
complications has been estimated at anywhere from $2000-
$13,500 per year and up to $27,000 overall for the two years
following surgery.
Based on these statistics, the market size is estimated as follows:

Homecare "At Risk" Segment -
total # of Homecare residents 1,440,768
X Homecare disease prevalence rate 24%
# of these patients in payor category 345,784
X % with related symptoms 65%
# of at risk these patients in
224,760
Homecare market
X reimbursement per year $264.04
$59,345,
Homecare Revenue potential
524
A profile of the Assisted Living market today:
1. There are 32,886 facilities with 987,000 beds.

2. Average occupancy rate is 80%, which translates to an average
of 789,000 residents.
3. Disease prevalence is estimated at 18% in the general
population of people over the age of 60. One Assisted
Living survey estimated the prevalence within Assisted Living
facilities at 13%. In the overall population it is generally
estimated that diagnosed cases of disease represent only
about 70% of the true total number of these patients in the
country, so these are probably conservative numbers.
4. About 91% of residents are covered private sources (family,
personal assets, private insurance, managed care); the
remaining 9% are covered under Medicaid.
5. 60-70% of these patients suffer from related symptoms, which
places them at higher risk for complications.
6. 15-25% of these patients will suffer from complications during
their lifetime.
7. 86,000 surgeries occur per year; an estimated 50% of these
are considered preventable. The cost of managing these
complications has been estimated at anywhere from $2000-
$13,500 per year and up to $27,000 overall for the two years
following surgery.
Based on these statistics, the market size is estimated as follows:

AL "At Risk" Segment -
total # of AL residents 789,000
X AL disease prevalence rate 13%
# of these patients in payor category 102,570
# of at risk these patients in AL
66,671
market
$17,603,67
AL Revenue potential
8
Elderly and diseased growth projections:
Between 2002 and 2020 it is projected that the overall population with the disease will
grow 44% driven by increased heart disease, an aging population, and above average
growth in segments of the population considered most at risk (African American and
Hispanic).
The Homecare and AL markets will continue to grow due to continued growth in the
elderly population (65+), which is projected by the Census Bureau to grow from 34.7
million in 2000 to 53.2 million by 2020, a total increase of 53%.
During that same period, the total number of elderly patients with the disease is
projected to grow from 4.6 million to 10.6 million, a total increase of 130%.
All of these dynamics will drive demand for products to manage complications of
disease.
Market Segmentation
Our three highest priority target markets will be:
1. "At risk" residents in Homecare chains.

2. "At risk" residents in AL chains.
With Homecare and AL chains, we can leverage our relationships at the corporate
office level to more efficiently gain access to the member facilities.
Homecare - top 50 chains -

total # of Homecare residents 375,000
X disease prevalence rate 24%
# of these patients in Homecare top 50
90,000
chains
# of at risk patients in Homecare
58,500
top 50 chains
$15,446,
Homecare Revenue potential
340
Assisted Living - top 30 chains -
total # of AL residents 167,700
X disease prevalence rate 13%
# of these patients in AL top 30 chains 21,801
# of at risk patients in AL top 30
14,171
chains
$3,741,61
Assisted Living Revenue potential
8
Need actual charts?
business plan.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential
Growth CAGR
Customers
LTC at risk 2% 224,760 229,255 233,840 238,517 243,287 2.00%
AL at risk 4% 66,671 69,338 72,112 74,996 77,996 4.00%
Total 2.47% 291,431 298,593 305,952 313,513 321,283 2.47%
Target Market Segment Strategy
Geographically, we will focus on facilities located in the Southern U.S. that fit
within our two top priority segments.
Our model will be to leverage our relationships with these chains to get easier and
faster access at the facility level for our field clinical sales team. This should allow us
to achieve economies in marketing, promotions, and sales costs, and should allow our
field sales team to be more efficient in working only with highly qualified facilities.
The Southern U.S. DMERC Region C will be our geographic focus because the
prevalence rates for the disease tend to be higher in the Southern U.S. (5 of the top 10
states, ranked in order of prevalence rates, are in the Southern U.S.) and there tends to
be a high number of chain facilities located in this region.
We will begin by targeting Homecare and A.L. chains with the majority of their
facilities located in Tennessee, North Carolina, South Carolina, Alabama, Georgia,
and Florida in year one, then we will expand further into Virginia, Louisiana,
Mississippi, Oklahoma, and Texas in years two and three. In years three and four we
will expand across the country into other DMERC regions to create a national
presence. Of course, our field reps will also call on non-chain accounts within their
territories where opportunities arise, but our strategic focus will be on trying to
leverage corporate account relationships to open doors at the facility level for the field
reps.
Demographic trends indicate that the larger African American and Hispanic
populations in this region will cause prevalence rates to continue to grow at above
average rates over the next 20 years.
Industry Analysis
Our industry is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies

(DMEPOS), focusing on the elder care markets.
The elder care market will be impacted by conflicting sets of dynamics. Consumer
preference, payor desire for lower costs, and advances in pharmaceuticals, non-
invasive surgery, assistive devices, telemedicine, and remote monitoring will continue
to allow more elderly patients to be cared for in their homes. However, the continued
growth in the elderly population and continued increase in heart disease, disease,
Alzheimer's, and associated disease states will force an older and sicker resident
population into institutional settings due to the intensity of care required to manage
these disease states.
The net effect is difficult to predict, but it would appear likely that Homecare census
will remain flat or experience slight growth (1-3% per year), while Assisted Living
will likely continue to experience slightly stronger growth (3-5% per year).
HIDA estimates that the Durable Medical Equipment (DME) market's revenue has
grown 4-5% per year from 2002-2004; while total national spending on Elder care
grew approximately 5% per year during that period. HIDA also estimated that total
distributed medical product sales from 2001-2003 grew approximately 5% per year.
These revenue growth rates may decelerate somewhat over the next several years as
the industry struggles to find ways to control costs, so we conservatively estimate that
growth rates in the DME institutional elder care market will probably be in the 3% per
year range.
Competition and Buying Patterns
The market is currently served inconsistently and, in some areas poorly, by a variety
of players including pharmacies, DME manufacturers, rehab facilities and therapists,
and local dealers/distributors who lack a national presence, a clear marketing strategy,
and the ability to leverage corporate chain relationships. Their field sales team mainly
functions as order takers, going out and visiting facilities, targeting only residents they
believe are covered under Medicare part B or an equivalent private pay coverage, then
submitting orders for these residents.
Our growth will not come entirely from overall market growth, but also from taking
market share away from our competitors. The market is very fragmented; CMS
estimates that 95% of DMEs generate less than $350,000 per year in annual billings
and 99% generate less than $5 million. We will grow in part due to the underlying
trends specific to growth in disease prevalence, but also by consolidating a
fragmented market by creating a regional (then a national) clinical sales channel that
provides a source of competitive advantage.
One study in 1995 indicated that utilization of the Medicare therapeutic disease
benefit was extremely low and could be boosted substantially via the use of a
coordinated marketing approach. We believe that the combination of market dynamics
along with our sales and marketing approach should allow us to grow revenue in this
market rapidly over the next three years.
Currently, residents may elect to purchase therapeutic disease systems for several
different reasons:
1. A medical exam may prompt the resident's physician to

prescribe therapeutic systems.
2. A local DME, dealer, or distributor may recommend therapeutic
systems for a resident with Medicare coverage.
3. The resident may be prompted to purchase therapeutic
systems after receiving a direct mail piece, viewing a television
advertisement, viewing a brochure, or through word-of-mouth.
4. A disease-related complication may prompt them to purchase
therapeutic systems.
Currently, no one effectively approaches this market on a regional or national level

with the type of strategy that we have outlined in this plan.
Strategy and Implementation Summary

The key element in our strategy is to market to Homecare and Assisted
Living corporate account chains in the Southeast, where we are likely to see the
highest level of arthritic residents covered under Medicare Part B. We will create a
program that offers a solution to improve disease care at no cost and minimal time
commitment to the corporate office or the individual facilities.
To do this we will leverage our corporate account relationships to open the door, and
use our marketing expertise to build a compelling program. This will allow our field
sales team to be much more efficient in prospecting, improving their "hit ratio" on
each facility visit.
We will grow to seven experienced clinical reps in year one, and expand to 25 by year
three. We will be unique in that we will have a large scale team of contracted clinical
pros in the field, making us attractive to chains who can use us as their one source for
products supporting the complications of X disease. At the same time we will develop
streamlined internal processes to maximize cash flow through fast reimbursement, and
we will develop supplier relationships with manufacturers of other products that are a
good strategic fit.
The therapeutic system product line will be our initial entry into this market, then we
will leverage the market presence this gives us to expand to other complimentary
products for managing complications of the disease.
Competitive Edge
Through our combined 50 years of healthcare industry sales and marketing

experience, we have built industry relationships and networks that we will leverage to
build our business. Our competitive edge lies in four major areas:
1. Our relationships with decision makers at homecare chains.

2. Our ability to effectively build a strong national clinical sales
team.
3. Our ability to build a comprehensive long-range marketing
strategy and create a compelling therapeutic system program.
4. Our ability to secure distribution relationships with a unique
combination of leading suppliers by creating a very effective
channel of distribution that will make us indispensible.
To develop good business strategies, perform a SWOT analysis of your business. It's easy with
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Marketing Strategy
As mentioned previously, our primary market is residents of homecare agencies and

post-acute care facilities who are covered and considered to be highly at risk
for complications. Initially, we will focus on serving these patients in facilities that are
part of Homecare or Assisted Living chains in the Southern U.S.
Our success is dependent on building a strong field clinical sales team that can build
relationships at the facility level, successfully leveraging of national account
relationships, and effectively marketing the value proposition that our therapeutic
system program can offer to both the resident and the facility.
We will utilize the therapeutic system offering as the means to gain entrance into the
market and build our organization. Then we will add complimentary products for
managing complications of the disease, followed by other products related to
managing complications of heart disease and aging.
Our key to marketing success will be to effectively manage the building of our brand
platform in the market place, which will consist of the following elements:
1. Brand Vision - our envisioned future of the brand is to be THE

national source for product solutions to manage the
complications of X disease in the elderly.
2. Brand Attributes - Partners, problem solvers, fast on our feet,
flexible and easy to work with.
3. Brand Essence - the shared soul of the brand, the spark of
which is present in every experience a customer has with our
products, will be "Problem Solving" and "Compassionate." This
will be the core of our organization, driving the type of people
we hire and the type of behavior we expect.
4. Brand Image - the outside world's overall perception of our
organization will be that we are clinical pros who are
alleviating the complications of X disease in the elderly.
5. Brand Promise - our concise statement of what we do, why
we do it, and why customers should do business with us will
be, "To alleviate pain and suffering in patients with X disease."
6. Positioning Statement - Our positioning statement is: "For
Homecare Providers who want solutions to manage the
complications of X disease in their residents, we offer a unique
portfolio of product solutions and clinical support that allows
providers to alleviate resident suffering. This
provides caregivers with peace of mind and a sense of pride
and satisfaction. Unlike our competitors, we focus first on
understanding the needs of caregivers to residents, then we
scour the market to find the most innovative products, and
deliver them with a team of compassionate clinical
professionals".
Image
Our company name will be Zenergy Medical Industries. This reflects the passion and
problem solving that are to be the essence of our brand. Our tagline will be more
specific to our initial focus on disease related products:
Zenergy Medical Industries: "Alleviating the pain of disease."
Our logo and color scheme will be finalized by our "go live date" of May 7th.
The communications strategy we will use in year 1 to build our brand platform will
include the following items:
1. Website - featuring product line information, research,

testimonials, cost benefit analysis, frequently asked questions,
and medicare reimbursement information. This website will be
used as a tool for both our sales team and our customers.
2. Presentations, brochures and mailers geared to the facility
level (ideally, distributed by the corporate office as part of an
initiative to prevent complications of disease) explaining the
benefits of our product as part of a comprehensive care plan.
3. Presentations and brochures geared to the corporate account
decision maker explaining the benefits of our program in terms
of positive outcomes, reduced cost from complications, and
reduced risk of lawsuits or negative survey events.
4. A presentation and recruiting brochure geared to prospective
sales people that emphasizes the benefits of joining our
organization.
5. Training materials that help every employee deliver our brand
message in a consistent manner.
Message Matrices
These six elements described above combine to create our brand platform, from which
we can develop our marketing message to our target segments. The key questions to
answer in our marketing message will be, for each key segment:
1. Who is the key decision maker or influencer?

2. What do they want or need? What problem do they need to
solve?
3. What do we offer to satisfy the need or solve the problem?
4. What are the key messages - benefits (emotional or tangible)
of our offering?
5. What are the proof points, success stories, research, to support
our key messages?
We will use these questions to develop four specific tactical level message matrices
for our target market segments - primarily Homecare chains at the corporate level,
Assisted Living chains at the corporate level, and Homecare and Assisted Living
facilities. We will also develop a similar message matrix for our prospective
employees. These message matrices will be used as templates/guidelines in
developing sales and marketing pieces for these specific market segments. They will
ensure continuity between our brand vision and the tactical marketing communication
efforts we undertake on a daily basis.
Message Matrix for Homecare Chain Corporate Offices:
Key Decision
VP of Procurement, VP of Clinical, VP of Risk
Maker or
Management
Influencer
Ways to reduce risk; improve outcomes and quality of
What do they
life for arthritic residents at no cost to the facility and
need?
with minimal effort on their part
Products at no cost to them that help reduce risk of
What do we complications and surgery in arthritic residents.
offer? Program for care that is easy for them to adopt.
Management of the entire process.
What are the
Improved outcomes, improved quality of life, and
tangible
reduced costs (complications) in arthritic residents.
benefits?
They create a reputation as a "Center of Excellence".
What are the
They feel like innovators and shrewd business people.
emotional
They have a sense of pride and satisfaction, and gain
benefits?
piece of mind.
Proof, Research articles, testimonials, manufacturer success
research, stories.
success
stories
Message Matrix for Homecare Facilities:
Key Decision
DON, Administrator, Resident, Family members,
Maker or
Physicians
Influencer
Greater comfort, and prevention of disease related
complications. Reduced risk of ulcers, infections, and
What do
surgeries. Reduced costs (complications) and improved
they need?
outcomes and quality of life. Compliance with
Corporate mandated programs.
A clear, simple program of care; an easy buying
What do we process with the assessment, ordering, and fitting of
offer? systems managed by us with no cost, hassles, or
excessive paperwork for the facility.
What are the Greater resident satisfaction; improved comfort and
tangible outcomes; reduced complications (cost) and risk of
benefits? adverse complications
Happier residents and family. Peace of mind. A sense of
What are the
satisfaction and pride from being proactive caregivers.
emotional
A sense that they provide something special that
benefits?
residents could not get at other facilities.
Proof,
research, Research articles, testimonials, manufacturer success
success stories.
stories
Message Matrix for Internal Organizational Team:
Key
Decision
Field based clinical sales representatives; receptionists
Maker or
improved
What do Good income potential, flexible hours with good family
they need? vs. career balance; freedom to be entrepreneurs; the
ability to "make a difference" in improved and in
providing input to shape the direction of the company;
the desire to belong to a great organization and get in
on the ground floor.
Flexible hours and independence. A good compensation
What do we plan; a great organization with a growing product line;
offer? the opportunity to make a difference in improved and in
shaping an organization from the ground floor.
What are A nice income with flexible hours. Long range potential
the tangible as part of a growing organization. The opportunity to
benefits? gain clinical sales experience.
What are To feel valued and valuable. To make a difference in
the organization and in their company. To love their job and
emotional company. to make a nice income without sacrificing
benefits? family life/personal life.
Proof,
research, Research articles, testimonials, manufacturer success
success stories.
stories
Sales Strategy
Sales Strategy:
Our sales strategy will be to call on Homecare and Assisted Living chains doing
business in the Southeast to educate them on the benefits of a Therapeutic System
program. We will seek to gain their support in allowing our field clinicians to visit
their facilities to meet with residents that are at risk for complications of X disease.
We will be uniquely positioned to gain market share within our target segments
because of our:
National account relationships which will open the door to pre-

qualified sales opportunities at the facility level
Large-scale field clinical sales presence, which will provide
comprehensive coverage of facilities across the entire
Southeast, and eventually the entire country.
Powerful compelling marketing programs that will present a
compelling cost-benefit story for chains, facilities, and
residents.
We will seek to do a comprehensive assessment of all at-risk residents in a facility,
then we will utilize different sales strategies based on their payor status, which will fit
into one of the following classifications:
1. Medicare part B will reimburse for the product. This is an easy

sell because Medicare part B will reimburse for 80% of the cost
of the product.
2. Private insurance will reimburse for the product. This may
require gaining a contract with the private insurer in order to
qualify for reimbursement.
3. The resident or their family must be willing to pay for the
product. This will require demonstrating to the resident and/or
family members the benefits of enhanced comfort and safety,
and reduced risk of complications by using our product (which
can cost thousands of dollars) compared to $264 per year for
therapeutic systems (as part of an overall program of care).
4. The facility is willing to pay for the product out of the per diem
reimbursement they receive for the resident from either
Medicare, Medicaid, private insurance, or other private
sources. This will require demonstrating the value to the facility
in reduced risk, enhanced resident comfort, and potential
savings of costs associated with complications that can run to
$2,000-13,500 per year for two years.
Pricing:
Medicare reimbursement for standard systems is set at $264.04 per year, with 80%
covered by Medicare part B and the remaining 20% being a co-pay that is the
responsibility of the resident.
Our compensation plan will be a straight 16% commission paid when we receive
reimbursement for delivered product. We anticipate 30-45 day payment cycles from
Medicare. We will utilize an experienced Medicare part B biller to ensure correct
submissions to Medicare and help us maximize cash flow by shortening
reimbursement cycles and maximizing collection of 20% copay amounts. We plan
to coordinate the order, reimbursement and other record keeping processes out of a
central office located initially in Charleston, SC.
Sales Forecast
Our sales in year one are calculated using the following assumptions:
Seven reps are hired, in May, June, August, September,
October, November, and December
For the first 12 months each rep is in their territory, it is
assumed they will generate increasing unit volume each
month. The rate of increase in unit sales slows in later months
because more time is devoted to servicing the clients who
were sold earlier in the year, leaving less available time to
drive new unit volume. Units per rep tops out at a max
capacity of 50 units per rep per month.
Net sales are calculated using the average sales price of
$211.32, which is 80% of the total sales which are based on
the $264.04 Medicare approved rate.
Our direct costs in year one are calculated using the following assumptions:
$65 per unit cost.

Shipping is estimated at 5% of total sales.
Medicare part B billing is estimated at $9.50 per unit, which is
the "intermediate" service package from our planned part B
billing service.
Commissions are estimated at 20% of net sales.
Our sales in year two are calculated using the following assumptions:
Seven reps hired in year one following the 12 month ramp up

to max monthly capacity of 50 units.
Eight new reps hired follow the 12 month ramp up.
Our direct costs in year two are calculated using the following assumptions:
$67 per unit cost.

billing service.
Our sales in year three are calculated using the following assumptions:
Fifteen reps hired in years one and two following the 12 month
ramp up to max monthly capacity of 50 units.
Ten new reps hired follow the 12 month ramp up.
Our direct costs in year three are calculated using the following assumptions:
$69 per unit cost.

billing service.
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Sales Forecast
Sales
Therapy System $458,374 $1,670,845 $3,408,228
Other $0 $0 $0
Total Sales $458,374 $1,670,845 $3,408,228
Direct Cost of Sales Year 1 Year 2 Year 3

Inventory Used $112,840 $454,930 $834,900
Other $0 $0 $0
Subtotal Direct Cost of Sales $112,840 $454,930 $834,900
Recruitment and Training
Recruitment:
We will focus on contracting with clinicians (LPN, RN, OT, PT, or RT) with two or
more years of sales or customer service experience, who desire part-time or flexible
work schedules and are willing to work under contract employee status. They will
have minimum call activity requirements of three to five calls per week, and we
anticipate that the average revenue generated per year will be approximately $120,000
for someone working 15-20 hours per week and meeting the minimum sales call
guidelines. Over time we will add additional products related to supporting the
complications of X disease. Mitch Finkelstein has been involved in clinical salesforce
management and recruiting for 15+ years in this area, and Yanni Acropolis has 15+
years of clinical sales experience in the Southeast as well. We plan to leverage our
relationships in the clinical sales arena to recruit top caliber sales reps, focusing first
in the Southeast. Our goal in year one will be to fill at least seven positions by
December 1st in the following territories:
Tennessee - Chattanooga, Knoxville, Memphis, Nashville

North Carolina - Charlotte, Raleigh, Greensboro,
South Carolina - Charleston
Florida - Miami, Tampa, Orlando, Jacksonville
Georgia - Atlanta
The remaining unfilled territories will be filled early in year two, and we also begin to
look at the following markets for years two and three to reach at least 25 territories by
early in year three.
Alabama - Birmingham
Texas - Dallas, San Antonio, Houston
Mississippi - Jackson, Gulfport
Louisiana - Baton Rouge, New Orleans
Oklahoma - Tulsa, Oklahoma City
Arkansas - Little Rock, Fort Smith
Virginia - Richmond, Norfolk
Training:
The product is straightforward and limited in scope (initially), and we will be hiring
clinicians with experience in the post-acute marketplace who are generally familiar
with Medicare reimbursement, so we anticipate the ramp-up time to full productivity
to be brief (30-60 days). Training will be provided in the following areas:
A review of the company strategy, their job expectations, and

our internal processes for ordering, billing, collecting,
commissions, record keeping, etc. (one-half day required)
Product-related training from the manufacturer (one day
required)
Reimbursement-related training from the appropriate DMERC
Region C ombudsman (one-half to full day required)
A review of the basics of disease care, ideally conducted by a
qualified physicians (one-half to full day required)
Sales Process
Sales Process at Facility Level:
1. Qualified Medicare residents must have an disease diagnosis.

2. Resident must have one of the following conditions:
o [Proprietary and Confidential Information Removed.]
3. Resident must be currently being treated under a
comprehensive disease care plan by a physician. The patients
medical records must reflect the need for the care.
4. To place an order, the sales rep must submit:
1. A statement of certifying physician for therapeutic
systems form reviewed and signed by the M.D. or D.O.
overseeing the disease treatment plan.
2. A signed prescription form from the prescribing physician
(M.D., or D.O.).
3. An order for the systems signed and dated by the
physician.
4. A completed Medicare claim form (HCFA 1500).
2. To be successfully reimbursed under Medicare part B requires
all the documentation above, plus demonstrated evidence of
attempts to collect the 20% co-pay, proof of delivery
documentation, and an electronically filed HCFA 1500 form
including the prescribing physician's name and UPIN number.
3. Medicare part B will pay 80% towards the allowable
reimbursement on one system (HCPCS code L3500). The
resident pays the remaining 20%. Medicare will reimburse for
one new system every year. The DMERC REgion C
reimbursement for this is $264.04, of which $211.32 will be
billed to Medicare and the remainder is billed to the resident.
Typical reimbursement time is estimated at 30-60 days.
4. For Private Pay, or Medicaid residents, we must gain a
commitment either from a) the resident's private insurer, b)
the resident or their family, or c) the facility to reimburse for
this product, by explaining the cost/benefit proposition of
investing $264 in therapeutic systems to help avoid the risk of
complications or surgery which can cost $2,000 - $13,500 to
treat per incident over a two year period.
We plan to contract with an experienced part B biller who will, for a flat charge per
every six line items on an order, handle the electronic claims submission, and the
billing and collection of co-pay amounts. This will minimize the time our field sales
people spend chasing paperwork, and allow them to maximize their time spent
building relationships, selling, and providing extraordinary service.
Milestones
Notes relating to some of the key milestones:
1. Determine cash needs and draw up partnership:

o We estimate $15,580 will be required to fund start-up and
initial operations. Finkelstein, Acropolis, and Aktum plan
to contribute equally to fund these cash needs and
Finkelstein will create a partnership agreement with a
plan for financially accounting for the investment capital.
2. Find part B biller and sign agreement: this biller will be
our EDI filer as well.
3. Rent facility:
o Sign lease agreement with target of 3 months
guaranteed, 90 day out clause, out clause if
provider number delayed or we move operations out of
state.
o Secure computer, printer, DSL line, phone and phone line,
answering system as back-up to forward calls the
receptionist misses, secure filing system, office furniture,
signage with company name and hours of operation.
4. Sign supply contracts with Lotus Industries and Sutra
Corp.: must show that we can order product directly on credit
terms (not COD) and receive immediately, reducing need for
inventory.
5. Get inventory and samples: enough to demonstrate the
range of products offered. Create starter kits for reps with
product samples, name tags, lab coats, a heat gun, and DPM
training.
6. Get liability insurance: we will see if landlord's policy covers
us adequately (we will need a copy of the entire policy with the
specific verbiage showing we are covered under their facility
insurance for at least $300K).
7. Create forms, checklist, processes:
o Forms - certificate of necessity, prescription, product
order form with patient info, proof of delivery, CMS
reimbursement form.
o Checklist - an easy to follow list of things the rep must
cover (paperwork, reviewing Medicare reimbursement
and the resident's co-pay, warranty, etc.)
o Processes - flow chart the order, reimbursement, and
complaint processes with electronic tracking sheets.
8. Review with Yanni's wife: make sure the forms make sense
and we haven't missed anything.
9. Train receptionist: she needs to know how to handle calls or
in-person inquiries, and be properly coached for the initial site
inspection and what to do if there is a random inspection later.
10. Create audit/QA process: define process for auditing
field Medicare claims to ensure only legitimate claims are
being processed.
11. Create sales recruitment packet:
o Hiring profile and job description.
o Compensation plan and employment contract.
o Territories defined with listings of accounts.
o Recruitment brochure and PowerPoint presentation. This
will include a letter, press release, and corporate
marketing brochure.
12. Receive provider number: this is estimated to take 60
days if we have everything right the first time.
13. Begin recruiting reps: identify top priority territories
and begin to network.
14. Seven reps contracted: goal is to hire one by the first
of the month in April, May, June, August, September, October,
November.
15. Sales training program (to be done in the first 30
days):
o Product training by the manufacturers.
o Reimbursement training by the ombudsman.
o Order process training by the management team.
o Company orientation from the management team.
o Basics of anatomy, pathology, and therapeutic system
fitting from MD consultants in each major market.
16. Identify corporate account targets: determine which
key chains have the biggest presence in our initial seven
territories.
17. First Marketing pieces:
o Mailers to be distributed by the corporate accounts to the
member facilities.
o Mailers directly to other facilities in the initial seven
territories.
o Brochures for use by facilities or corporate offices.

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Mission Vision Values

Our Noble Sales Purpose

We help our customers save time and lives.

Our vision is to be the premier regional distributor to the healthcare industry in

To provide seasoned account representatives and ongoing support.

Our experienced and professional team of over 470 employees includes 90

MMS is one of the few healthcare distributors with market segment

Our government division serves all CONUS and International Federally

In addition, MMS leverages our logistics expertise to provide redistribution

Cooperation and Collaboration: We are a community and we serve a community.

The Kalangos mitral ring is available in 11 dimensions, covering all phases of

3.1 Product Description

As of June 2001, Bioring SA has 44 products to sell:

3.2 Competitive Comparison

Avoiding multiple surgical procedures (newborn and babies).

Bioring advertisements and sales literature are under development.

Bioring is registered on the Web page of the Chambre Vaudoise du Commerce et de

The list of suppliers is considered as proprietary information, which is not disclosed

Bioring Kalangos biodegradable rings have been internationally protected by patent.

A trademark application is in progress.

3.6 Future Products

As mentioned previously, we plan to personally invest to cover portion of the initial

Private funding from Aktum, Finkelstein, and Acropolis.

Start-up Expenses to Fund $3,305

Liabilities and Capital

Loss at Start-up (Start-up Expenses) ($3,305)

Total Capital and Liabilities $12,275

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We are assuming the following key points:

1. We will submit our application to CMS by March 7 and receive a

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Monthly Revenue Break-even $3,312

Projected Profit and Loss

Notes on Profit and Loss statement for year one:

Notes on Years two and three growth assumptions:

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Pro Forma Profit and Loss

Gross Margin $141,558 $464,035 $1,039,625

Total Operating Expenses $29,960 $306,468 $380,136

Profit Before Interest and Taxes $111,598 $157,567 $659,489

Net Profit $77,826 $103,540 $449,263

Projected Cash Flow

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Pro Forma Cash Flow

Additional Cash Received

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Additional Cash Spent

Net Cash Flow $13,531 ($7,619) $57,670

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Pro Forma Balance Sheet

Liabilities and Capital Year 1 Year 2 Year 3

Long-term Liabilities $0 $188,000 $164,000

Paid-in Capital $10,580 $10,580 $10,580