ShoulderRx Investor Deck

ShoulderRx™ Investor

Presentation

www.ShoulderRx.net

Every year 11.5 million1 people are treated for shoulder injuries,

yet the products available for resistive shoulder exercise are

very limited

ShoulderRx | Investor Presentation 2016 2

1 SOURCE: Department of Research & Scientific Affairs, American Academy of Orthopaedic Surgeons. Rosemont, IL; AAOS; November 2013. Physician Visits: Reason for Visit ‐ Based on data

from the National Ambulatory Medical Care Survey, 2000‐2010; National Center for Health Statistics.

The Shoulder Situation Most flexible joint in the body

Extremely vulnerable for injury

Ranked #2 in musculoskeletal disease/injuries 1

Annually 11.5 million people seek treatment 2

4.1 million doctor visits for rotator cuff problems every year 3

1.2 million ER visits for shoulder problems every year 4

Shoulder injuries among workers are costly, requiring average of 21 days for employee to return to work 5

Limited portable, affordable, resistive exercise/rehab devices available


1 U.S. Department of Health and Human Services; Centers for Disease Control and Prevention; National Center for Health Statistics. 2 Department of Research & Scientific Affairs, American Academy of Orthopaedic Surgeons. Rosemont, IL; AAOS; November 2013. Physician Visits: Reason for Visit ‐ Based on data from the National Ambulatory Medical Care Survey, 2000‐2010; National Center for Health Statistics. 3 American Academy of Orthopaedic Surgeons 4 Centers for Disease Control and Prevention (CDC)/National Center for Health Statistics (NCHS), National Hospital Ambulatory Medical Care Survey. National Hospital Ambulatory Medical Care Survey 5 American Congress of Rehabilitation Medicine, Bureau of Labor Statistics

Shoulder Injuries

Causes:

• Repetitive sports

• Aging/degenerative diseases

• Deformities

• Traumatic events

• Sports-related injuries

• Repetitive manual labor

• Physical activities or jobs that involve excessive, repetitive, overhead motion

• Dislocation

• Separation

• Rotator cuff disease

• Rotator cuff tear

• Frozen shoulder

• Fracture

• Arthritis

• Tendinitis

• Bursitis

Most common

problems:


A $29.6 billion industry with limited products for shoulder rehab/exercise


ShoulderRx

Portable, affordable, resistive exercise/rehab device that improves patient compliance and promotes better outcomes.

• Stabilizes patient’s arm during

exercise • Prevents incorrect positioning • Isolates the muscle groups • Provides exceptionally smooth,

adjustable, bi-directional hydraulic resistance

• Adjustable resistance, ROM and elevation settings


ShoulderRx Key Benefits

Improves Patient Compliance

• Portable • Easy-to-use • Enables at-home rehab/exercise • Affordable – manufacture device in plastic

Promotes Better Outcomes

• Stabilizes arm to minimize involvement of non-shoulder muscle groups • Prevents incorrect positioning • Exceptionally smooth, adjustable, bi-directional resistance using

hydraulic pressure • Controls motion and loading

Demonstrable ROI (P/T Clinics)

• Solid, reliable product • Replaceable parts available for purchase • Patients can use this device for at-home therapy • PT clinics are using the same ShoulderRx device daily for 8+ years

Demonstrable ROI (Patient/Consumer)

• Pays for itself in savings • Average consumer out-of-pocket spending for one P/T session is $120 • At-home rehab/exercise for chronic injuries • Injury prevention


ShoulderRx: Different & Defensible Best solution for injury-free, resistive shoulder exercise/rehab

Controls motion & loading

Patented

Trademarked

Concept proven: Product based on clinical study results

MVP validated through focus groups and clinical trials

Product currently used at 7 PT/rehab facilities

Solid product testimonials

Demonstrated ROI


Industry Trends U.S. outpatient rehab is a $29.6 billion industry with projected annual growth rate of 7% through 2022 1

Global therapy equipment market size is expected to reach $24.7 billion by 2022 2

Growth in PT employment – 36% increase from 2012 to 2022, much faster than the average for all occupations

3

Increased use of at-home rehab products for convenience, cost savings & better outcomes

Consumerism in healthcare

Outcomes-based reimbursement models


1 IBIS World, Harris Williams & Co., Physical Therapy Market Overview, Feb 2014 2 Report published by Transparency Market Research “Home Rehabilitation Products and Services Market - Global Industry Analysis, Size, Share, Growth,Trends and Forecast, 2015-23 3 U.S. Jobs/Labor data

Trends Fueling Demand in Orthopedic Products Market

• Aging population

• Active baby boomers

• Increasing incidence of osteoporosis and arthritis

• Sedentary/obesity contributes to greater incidence of injuries

• Rise in sports injuries

• E-commerce and online retail

• Nearly nine out of 10 Americans now have health insurance


Market Opportunity

Total Addressable Market (TAM) Size

Businesses:

Physical Therapy Clinics 142,631

Hospitals 5,627

In-Patient Rehab Facilities 1,165

Physical Therapy Schools 228

Universities w/Sports Programs 3,026

2-Year Colleges w/sports programs 1,700

Professional athletes 13,700

Consumers:

Patients seeking treatment for shoulder pain every year 11,500,000


Source: ReferenceUSA Research Database, March 2016

Sales Projection


$0

$5

$10

$15

$20

$25

$30

1-year 2-year 3-year 4-year 5-year

Mill

ion

s

5-Year Sales Projection

B2B Sales

Consumer Sales

Sales Projection Detail


Technology & Partnerships Enable Rapid Scale

• Distributors

• Resellers

• Vendors

• Direct sales team

• Online sales/e-commerce website


Timeline

2016 Q2/Q3

Secure funding

2016 Q4 thru 2017

Vet/redesign device in plastic, setup manufacturing, production and

distribution

Launch e-commerce website

2016 Q4

Hire key business development executive to

establish lead generating

partnerships with distributors, vendors

Develop sales/marketing

strategy

2017 Q2/Q3

Setup operations/ customer service for

online sales

Strong focus on sales/marketing

initiatives


Funds Needed to take ShoulderRx to the Next Level

Re-design, vetting, tooling and manufacturing of the device (plastic) for a unit cost of $200-250

$300,000

First production run (1,000 devices) $200,000

Marketing/Sales $150,000

Setup inventory/distribution, operations and launch e-commerce website

$150,000

$800,000


Seed Round

• Pre-money valuation: $2 million

• Seed investment: $800,000 for 29%

• Option pool: 15%


Leadership Team

Partners

Strong engineering background with 50+ years combined experience in industrial design, manufacturing and product engineering

Strong knowledge of fabrication, materials and processes

Expertise in overseas production and manufacturing

Expertise in business, product development and strategic planning

Medical Advisor

• Fellow of the American Physical Therapy Association & American College of Sports Medicine

• 40 years experience as a Physical Therapist with extensive rehabilitation publications

• Appointed to the Statewide Health Coordinating Council


Contacts

Gene Protas, Managing Partner Email: [email protected]

Phone: 281.455.5527

Mona Frisbie, Consultant Email: [email protected]

Phone: 857.571.0292


Documents

ShoulderRx Investor Deck