Business Summary

2nd Quarter 2015

Rekovo is focused on the commercialization of innovative products for physical therapy and the in-home health care market. Our first product, Agile Art, is used for the physical rehabilitation of patients suffering from mobility restrictions caused by neurological disorders, traumatic brain injuries, and age related ailments.

The Physical Therapy Industry Outlook

3540

55

70

85 90

5 8 10 1220

25

2000 2010 2020 2030 2040 2050

65 and Older

85 and Older

Increasing Age of US Population in Millions

Elderly Falls2.3M

TBI2.5M

Stroke800k

Parkinson’s1M

Patients per year requiring physical therapy

The current demand for physical rehabilitation of patients who have suffered

a traumatic brain injury or have geriatric related balance issues is over 5 million

annual cases and well over $100B in direct costs; a number which is growing.

400

600

1150

1400

<65 65-74 75-85 85+

Annual hospitalized falls per 10,000 by age group

The arrival of the Baby-Boom generation has created an unparalleled urgency for understanding and expanding our national geriatric care. Within the next decade, the populations of 60+ year

olds in the US will more than double and the occurrence of neurological disabilities will dramatically increase with age.

The Challenge for the Therapist“One of the greatest challenges facing today's rehabilitation healthcare provider is the lack of compliance exhibited by some patients during and after their course of treatment.”1

1 physical-therapy.advanceweb.com

Lack of compliance creates poor outcome measures, dissatisfied patients and ultimately leading to decreasing rate of reimbursements.

At the center of meeting the growing demand is the physical therapist. However they are facing problems at an individual practice level:

lack of patient engagement and

shrinking profit margins.

A Solution…Agile Art generates engagement in patients by

allowing them to create impressionistic artwork while performing their prescribed therapy. Wireless sensors are attached to the patient and through their balance exercise, they can see the results of their movement.

Results of the session are tracked with several

outcome metrics, allowing a qualitative

assessment of progression. The

artwork itself can be shared with the patient’s

friends and family.

And because it qualifies as neurorehabilitation and biofeedback, by using Agile

Art the physical therapist can add additional billing codes for reimbursement.

Some comments from patients: Comments from therapists:

There are several ways in which Agile Art’s aids in

recovery and decreases the time in therapy:

Embedding the arts and gaming within standard therapy

improves patient engagement and adherence to exercise

prescriptions.

Integrating rehabilitation exercises with the creative process has

the potential to tap into implicit process, which has

consequences for inducing neural plasticity and improving

outcomes.

Patient and clinical treatment teams can actually track progress

of recovery via the created images (e.g. duration of task

performance, smoothness of movement range and speed of

motion).

Exploring the creative nature of personal movement in a

rehabilitation setting can potentially shift attention focus in

positive ways for people coping with recent, life-changing

injuries.

The ScienceAgile Arts is based on a multiyear study and over four years of clinical use in research patients.

Patients also move significantly more within their therapy sessions when using the feedback (longer duration, p<0.05)

0 5 10 15

with AgileArt

NormalTherapy

Hours for Equivalent Gains in Balance Function

‘I did that – do you see? I didn’t

think I could move that shoulder

at all but I just drew that.’

‘Can I do the computer thing again

tomorrow? I’ll get up early for it.’

‘I really feel like I need this – when

can I take it home to work with?’

Can I take a copy of my drawing

home to my daughter I can’t

believe I made this.’

‘I could really use this to work with

patients on quality of motion.’

‘My patients are going to love

this!’

‘Can I use it with my patients

now?’

‘That’s the longest I’ve seen my

patient practice in one sitting. And

they were more focused on their

performance than normal, too.’

The Revenue Model

HospitalsClinics

Home HealthcareUniversities

Skilled Nursing

Employ’s over 200,000 PT’s working in balance recovery

The pricing strategy is to create a low cost entrance into the market that is affordable for all potential users. Reoccurring billing is utilized, rather than a one-time sale, because it reflects the continual deployment of new product features based on user feedback over the life span of the software.

Monthly Subscription $20/therapist

The Agile Art product will be developed and priced as a Software-as-a-Service (SaaS) model with monthly reoccurring revenue.

The pricing also creates a very compelling offer to the therapist because cost recovery is increased over current

treatments using functional exercise or physical activity codes, thus paying for itself in only one session.

Phase One (next 12 months)

Sales to target the:

Elderly FallParkinson’s

Traumatic Brain InjurySpinal Cord Injury

Pediatric RehabilitationPediatric Development

5,000,000+ annual cases

Monthly Subscription $10/patient

Phase 2 is the development of a home version of the software for use as a heath and wellness tool.

Phase two

Sales to focus on patients with

PT Outpatient, Clinics, Hospital

Systems

Medical Supply

Skilled Nursing Facilities

In-Home Health Care

Agencies

Private Practice

Preventative Falls/Wellness

Centers

Novel Use (e.g. education)

Pa

rtn

ers

hip

s

Billing Agencies EHR/EMR Providers

Employing >100 PT >50 Managed Units Multi-Location Agencies

Primary Focus

Secondary Markets

Marketing Plan

Dir

ect

Sa

les

Inb

ou

nd

Agile Arts will be marketed with outbound sales to organizations that employ multiple physical therapists. Smaller organizations will be handled through inbound web channels and referral programs. Simultaneously, Rekovo will be exploring partnershipsfor access to already established distribution channels.

Company Products Price Description Advantage Disadvantage

Rekovo Agile Art$20/M per

license

SAAS product platform with

feedback hardware

Novel approach with proven efficacy that

engages the patient and is extremely portable and

affordable

New market player with

undeveloped sales channel

NeuroComBalance Master /

NeuroGame>$50,000

Full site balance installation with add-on games

Parent company, Natus, in market since 1984.

Focused on innovation

Very expensive, limited to facility

use

ReoGoReoGo Robot

>$85,000Full site balance installation for

upper extremities

Provides reporting and programmed therapy

Very expensive, limited to facility use and use case

Korebalance

Mobile/Kompact

$9,500-$17,000

Stability platform with computer

interface tracking

Cheaper than competitor products. Some products

are portable

Price may be prohibitive for in-

home care providers

Low TechBoso balls, beam, etc.

Between $100-$200

Various balance trainer tools

Inexpensive, portable, quick learning curve for

therapists

Longer recovery times and low

patient engagement

CompetitionSeveral solutions for improving mobility and recovering range of motion have existed in the market,

however, they tend to focus on expensive medical device installations and have limited use in the in-

home health care market or direct to consumer. Typical low cost treatments for balance and limb

recovery tend to not qualify for higher reimbursements and have much longer recover time.

The use of video games for neurorehabilitation has been

utilized primarily as DIY solution (i.e. Nintendo Wii

sports games) and by a few market players. No market competitor focuses on the primary research to create

interactive art that maximize the full potential of

treatment or offer a unique SAAS model and

administrative tools for the PT facility.

Financial Projections

Year 1 Year 2 Year 3 Year 4 Year 5

Income

Agile Arts 211,749 650,929 1,008,592 1,294,196 1,522,584

Home Version 110,246 1,823,686 4,942,941 8,720,747 12,768,974

Total Income 321,995 2,474,614 5,951,533 10,014,944 14,291,558

Customer Service 55,320 550,578 1,395,702 2,400,389 3,467,067

Billing Fees 9,660 74,238 178,546 300,448 428,747

Acquisition Cost 90,000 90,000 90,000 90,000 90,000

Setup Fees 79,770 378,345 580,035 741,105 869,880

Equipment 65,680 267,230 401,690 509,070 594,920

Royalty 16,100 123,731 297,577 500,747 714,578

Total Variable Costs 316,529 1,484,122 2,943,549 4,541,759 6,165,191

Gross Margin 5,466 990,492 3,007,984 5,473,184 8,126,367

Total Salary and Wages 150,870 853,025 1,190,910 1,703,964 2,070,835

Fixed Business Expenses 38,650 130,650 125,850 155,850 155,850

Total Expenses 189,520 983,675 1,316,760 1,859,814 2,226,685

EBIT -184,054 6,817 1,691,224 3,613,370 5,899,682

Sales AssumptionsAcquisition Cost per Therapist: $40Close Rate Warm Leads: 25%Monthly Clients per Therapist: 3Client Upsell: 25%

Customer Service per Month per Subscription: $2.55Merchant Fees 3%Royalty Fee: 5%Equipment Cost: $10Setup/Onboarding: $15

Monthly Fee: $19.95Home Version Dev. Time: 9 MonthsHome Version Fee: $9.95Annual Retention: 80%

Expense Assumptions

Revenue Assumptions

Team

LISE WORTHEN-CHAUDHARIScience

Lise is a research assistant professor of physicalmedicine and rehabilitation, and associatedirector of the Motion Analysis and Recoverylaboratory within Dodd Hall at The Ohio StateUniversity Wexner Medical Center. She receivedan MFA in Dance at Ohio State and an MS inKinesiology at the University of Massachusetts atAmherst. Worthen-Chaudhari has more than adecade of experience conducting clinical researchof central nervous system impairment andrecovery. It was during this research that Rekovoand Agile Art came to life. At Rekovo she stays ontop of all things research, product visioning, anddata collection.

ALEX PURTELLGrowth & Marketing

Alex has broad experience acrossnumerous startups. Specializing in allthings digital marketing, analytics, andproject management, he has workedclosely with over 20 startups and acted asprogram manager for a startup accelerator.Alex has founded his own company in therehab space and has worked for aninnovation consulting firm as well as acentral Ohio venture fund. At Rekovo hehelps to spread the word and capture theright kind of metrics to make our usershappy.

TODD WHITTINGTONCEO

Todd has over twenty years of experience inmarketing, executive management andproduct development. During that same timeperiod, he has been heavily involved in severalstartup businesses. A former aerospaceengineer, Todd has worked both as a designerof lean business processes and in rolesresponsible for retail marketing strategy andproduct development for a Fortune 500company. Most recently, he served as directorof a tech accelerator and as COO of a softwaredesign agency. At Rekovo he keeps eye on thenumbers, handles the day-to-day, and plans forthe road ahead.

Traction and Next StepsThe past six months have

focused on two major areas: product development and early

beta customer recruitment. Over 100 beta testers

committed, the largest is Baylor with over 300 outpatient

facilities in the state of Texas.

Beta customers have been recruited from a range of sectors from clinics and hospitals, private practice to in-home health care. The goals of the beta test are:

Refine the user experience in terms of onboarding and product education.

Update the current features and quality assurance test the software.

Determine the exact desirable outcome measures. Understand the buying process by sector and

organization size. Create future feature list.

May 15 July 15June 15 Aug 15 Oct 15Sept 15

Agile Arts V 0.9 Completed

Strap Design

Agile Arts V 1.0 Completed

Agile Arts Updated

Beta Tester Phase

Sales Phase 1

Custom Sensor Design

Provisional Patent Filing

Milestone Timeline In order to continue on the path toward sales creation, Rekovo is seeking a seed investment from accredited investors. For more information contact Todd.Whittington@Rekovo.comAnd for more product info: https://saltysage.wistia.com/medias/8qgc0r87h1