Cls Inc 09

Columbia Life Systems, Inc.

SmartBlender™

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Columbia Life Systems, Inc.Redefining the standards of respiratory care

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Making babies healthier…

one breath at a time.

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Dr. Jay Greenspan, Chief of Neonatology

Thomas Jefferson University Hospital

Philadelphia, PA

June 2007

“We (currently) have 1950’s medicine in the 21st century”

“It’s a little embarrassing that we don’t have a mechanized way”

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The SmartBlender™An adaptive controlled oxygen blender utilizing

novel, ‘smart’ technology

• Delivers continuous supplemental oxygen to newborn babies/patients in respiratory distress

Maintains baby’s blood-oxygen level, as assessed by a pulse oximeter, at a set range specified by a physician, continuously.

Components:Pulse OximeterOxygen BlenderComputer: Software/Algorithms

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SmartBlender™ Technology: Adaptive, Dynamic, Continuous, Accurate

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SmartBlender™ Value Proposition

The SB promotes automatic, adaptive and consistent maintenance of blood saturation which will reduce or eliminate development of acute and chronic health problems due to unregulated oxygen therapy.

• Pneumonia, bronchio-pulmonary displasia, retinopathy are just a few of the conditions that can result from inhalation of excessive oxygen amounts.

• Clinical study at Pennsylvania Hospital, Philadelphia, PA has indicated: the weaning of patients from oxygen sooner, which may reduce patient length of stay in NICU.

• Reduction in patient stay affects hospitals’ bottom line, therefore reducing costs, increasing profitability

• Neonatologists believe: SB promotes better lung health

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CLS: The right combination

Management believes the four most important advantages

of the SmartBlender™:

Clinical and therapeutic effectiveness

Strong receptivity from physicians

Clear path to product reimbursement

Reduced cost of treatment

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Columbia Life Systems, Inc.:

The journey: concept to clinical trial

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The process1985 Concept

Phospho-Energetics

1987 SmartBlender™ patent

Otsuka Electronics

1992 Ventilator patent

1998 Varian

NC Biotechnology Dr. Robert Black

1999 Mallinckrodt/Tyco

Ohmeda/Hill-Rom

2000 Hill-Rom/Air-Shields

Tri-Virix International

2003 Draeger Medical

2007 Respironics

SmartBlender™ additional patents

2009 Clinical trial at Cooper University Hospital

and beyond!

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Competitive position: Intellectual Property

First patent (#4,886,116) filed 1985

2nd and 3rd patents pending (38 claims)Solenoid system for oxygen controlDisplay and User InterfaceMethods (CPAP, long-term therapy, Heliox, sleep

apnea, weaning, newborn, adult)Alarm featuresApnea control

“Adaptive Controller for Automatic Ventilators” (patent #5,388,575) filed 1992 -SmartTap™

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Market: competitive landscape

Fixed concentration oxygen blenders, adjusted manually, are the industry standard

Four companies control lion’s share of market

No adaptive smart technology blenders are available in the hospital space

Bottom line: No competition at this time globally

CLS: preparing for market entry

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Pediatric and Adult SmartBlender™ Market Applications

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Pediatric NICUSmartBlender™ Market

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INFANT Potential: Primary NICU market niche

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Adult ICU SmartBlender™ Market

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ADULT Potential: Primary (US) ICU market niche

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SmartBlender™ Market Applications ADDITIONAL AREAS

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SB Market Revenue Projections:

Total Market US: $ 276MNICU & ICU

Additional market NICU WW: $ 63M9000 units @ 75% adoption

Additional Market Areas: ER, Post extubated, Transport, Recovery, TBD* COPD, Sickle Cell

Total Market Size: $339M ++

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SmartTap™ Ventilator market“Adaptive Controller for Automatic Ventilators”

(patent #5,388,575) filed 1992

Integration of SB ‘smart’ technology into active, mechanical ventilation (i.e. for intubation)

Worldwide market size is double the combined infant NICU and adult ICU markets: 100,000 + units

Priced similarly to SmartBlender™ SmartTap™ Projected revenue: $700M

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Moving forward to the

Marketplace

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Pathways to the Marketplace

A. B. Clinical trial

concurrent with product re-design

Submission of 510(k)

FDA clearance

Sale of CLS

Clinical trial concurrent with product re-design

Submission of 510(k)

FDA clearance

Manufacturing of SB for sales to US luminary hospitals

Sale of CLS

Regulatory: 510(k) pathway process to FDA clearance

1. IRB: Investigational Review Board approval 1.9.09 Cooper University Hospital, Camden, NJ

Utilization of Predicate device code approved via 510(k): MITI OptiSat

2. Clinical Trial: comprised of 40-60 patients at CUH for 90 days, commencing March 2009

3. 510(k) Application: submission for FDA clearance utilizing trial data

4. FDA clearance time frame: within 60 days of application submission

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SmartBlender™ Re-design Objectives

1.Replace computer board

2. Reduce weight and size by 50%

3. Improve industrial design: aesthetic andergonomic modifications

4.Reduce manufacturing cost from $1,800/unit to $860/unit

5.Submit enhanced design with trial data for FDA clearance

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Health and Market Information

US infant mortality increasing: ranked 180/222 countries - 42nd in the world with 6.30 deaths/thousand*

World infant mortality: 49.4 deaths/thousand* 42.64 deaths/thousand according to CIA World Fact Book

Number of premature births continues to rise: IVF procedures and multiple births are on the rise

Number of NICU beds continues to grow

National healthcare initiative: lower cost of treatment and increase standard of care *according to United Nations

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Market Receptivity: What are they saying?*

“concept is superb …great for RNs” “makes sense … would keep baby’s SATs in

medically desired range” “may improve outcomes … important to our practice

…purchase would be a high priority”

“we are not titrating O2 very well … could shorten hospital stay”

“we’re currently using 1950s medicine in the 21st century”

* excerpts from doctors and clinicians

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Market Pricing: What would they pay?

Dr. L $7K

Dr. LB $6-7K

Dr. B No opinion

Dr. EB $7-8K

Dr. W $5-6K

MEAN: $7, 000

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“This (SmartBlender) is a winner”

Augustine Legido MD, PhD, MBAChief of Neurology St. Christopher’s Hospital for ChildrenPhiladelphia, PA

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Columbia Life Systems: down to

business

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Who we areCorporate John Taube

President and Founder

Brad ColemanSoftware

Larry PopeEngineering

Lois Smart Regulatory

Linda D. RoccaMarketing

Medical Advisors

Vinod Bhutani, MD Professor, Stanford University Medical Center

Jay Greenspan, MD Department Chair, Newborn Pediatrics, Thomas Jefferson University Hospital

Pasquale Casale, MD Pediatric urology, Children’s Hospital of Philadelphia (CHOP)

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CLS, Inc. Pre-money valuation• Valuation of $1.5M

• Sale of $25K blocks

• Liabilities of $320K

• $1M investment gains 40% of CLS

• Management has made significant cash and human capital investment of $750K in getting the product poised for the final push to market

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Use of proceedsProject manager, 18 months $135K

Re-design $180K

Safety Testing $ 25K

Clinical Trial $ 25K

Regulatory Consulting $ 45K

Legal and Accounting $ 30K

Product Launch: device manufacturing $500K

Marketing/business development $ 60K

TOTAL: $1,000,000

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The End Game: Pathway to the

marketplace A. B.

Clinical trial concurrent with product re-design

Submission of 510(k)

FDA clearance

EXIT: Sale of CLS

Clinical trial concurrent with product re-design

Submission of 510(k)

FDA clearance

Manufacturing of SB for sales to US luminary hospitals

EXIT: Sale of CLS

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The Endgame: Early Exit…Sell to whom?

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Why invest in Columbia Life Systems, Inc.?

Business• Novel Intellectual property• Cutting edge technology: smart technology does not

exist in the marketplace today - NO COMPETITION

• Significant market pull from doctors and clinicians• Better medicine: may improve lung health in long run

which reduces healthcare costs• Reduces hospital expenditures: pilot studies reveal

the weaning of patients off oxygen sooner, saving hospitals hard dollars in NICU costs

• Early exit strategy: quick return on investment• Below market valuation• Excellent projected ROI based on expected valuation

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Why invest in Columbia Life Systems, Inc.?

Medicine• Leads respiratory care management into the 21st century

• Significant therapeutic receptivity from doctors and clinicians

• May increase respiratory health for patients in NICU/ICU: optimizes manner to dispense oxygen based on patient physiological demand

• Better medicine: may improve lung health in long run

• Pilot studies show weaning patients off of oxygen sooner; may expedite release from hospital/NICU earlier

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Columbia Life Systems SmartBlender™

Making babies healthier

one breath at a time.

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Columbia Life Systems:

Entering a new frontier inrespiratory care management

respir Thank you

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