Medical Software Business Plan

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Table of Contents
1.0 Executive Summary.....................................................................................................................1

1.1 Mission...........................................................................................................................................3
1.2 Objectives....................................................................................................................................3
Chart: Highlights...........................................................................................................................4
2.0 Company Summary......................................................................................................................4
2.1 Start-up Summary....................................................................................................................4
Table: Start-up...............................................................................................................................5
Chart: Start-up..............................................................................................................................5
Table: Start-up Funding..............................................................................................................6
2.2 Company Ownership................................................................................................................6
3.0 Products............................................................................................................................................7
4.0 Market Analysis Summary.........................................................................................................9
4.1 Market Segmentation............................................................................................................10
Table: Market Analysis..............................................................................................................11
Chart: Market Analysis (Pie)...................................................................................................11
4.2 Industry Analysis.....................................................................................................................12
4.2.1 Competition and Buying Patterns.............................................................................13
5.0 Strategy and Implementation Summary...........................................................................13
5.1 Competitive Edge....................................................................................................................13
5.2 Marketing Strategy.................................................................................................................14
5.3 Sales Strategy..........................................................................................................................15
5.3.1 Sales Forecast..................................................................................................................16
Table: Sales Forecast.............................................................................................................16
5.3.2 Pricing Model and Revenues.......................................................................................16
5.4 Intellectual Property Strategy............................................................................................17
5.5 Milestones..................................................................................................................................18
5.5.1 Year 2 and 3 Milestones................................................................................................19
5.5.2 Product Milestones..........................................................................................................20
5.5.3 Summary of Current Accounts...................................................................................21
6.0 Web Plan Summary....................................................................................................................22
6.1 Development Requirements................................................................................................22
7.0 Management Summary.............................................................................................................22
7.1 Personnel Plan..........................................................................................................................23
Table: Personnel..........................................................................................................................23
8.0 Financial Plan................................................................................................................................23
8.1 Break-even Analysis...............................................................................................................24
Chart: Break-even Analysis....................................................................................................24
Table: Break-even Analysis.....................................................................................................24
8.2 Important Assumptions........................................................................................................25
Table: General Assumptions...................................................................................................25
8.3 Projected Profit and Loss.....................................................................................................26
Chart: Profit Monthly.................................................................................................................26
Chart: Profit Yearly.....................................................................................................................27
Chart: Gross Margin Yearly.....................................................................................................27
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Table of Contents
Table: Profit and Loss................................................................................................................28

8.4 Projected Cash Flow...............................................................................................................29
Table: Cash Flow.........................................................................................................................29
Chart: Cash...................................................................................................................................30
8.5 Projected Balance Sheet......................................................................................................31
Table: Balance Sheet.................................................................................................................31
8.6 Financial Risks and Contingencies....................................................................................32
8.7 Business Ratios........................................................................................................................34
Table: Ratios.................................................................................................................................35
Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................6
Table: Balance Sheet...........................................................................................................................6
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AgaMatrix, Inc.
1.0 Executive Summary

Overview
AgaMatrix is a development stage venture based in Boston offering proprietary Digital Signal
Processing (DSP) technology that dramatically improves the functionality and performance of
biosensor devices. AgaMatrix's core DSP algorithms solve a number of immediate problems in
the medical devices market by significantly boosting the performance of biosensors without
costly specialized hardware and additional chemicals. Initially, AgaMatrix will sell to medical
device makers, specifically, home blood glucose monitors and hospital point-of-care blood
analyzers. AgaMatrix anticipates achieving positive cash flow by year three with future target
healthcare segments to include the large immunoassay and implantable biosensor sectors; as
well as other vertical industries that heavily rely on biosensors, such as the military chemical
agent detection, environmental air/water quality monitoring, and industrial processing sectors.
Problem Glucose Monitors Are Burdensome, Painful To Use
Many diabetic patients fail to use home blood glucose devices as prescribed because the
regimen is too burdensome or too physically painful. Four to seven times a day, a patient must
puncture his or her finger to draw blood onto a test strip for insertion into the glucose
biosensor. The average compliance rate for testing is less than 1.5 times a day, resulting in the
acceleration of complications caused by diabetes, such as blindness, stroke, and heart and
kidney failure. In fact, diabetes is the leading cause of blindness in individuals aged 20-74 and
better glucose monitoring compliance is the single biggest key to prevention. Device makers
have identified the physical pain of using existing devices as the root cause of non-compliance,
and they are seeking ways to reduce the sample size required by their devices. AgaMatrix
technology will enable less invasive drawing mechanisms to meet the overwhelming demand for
less painful alternatives.
Problems in the hospital blood analyzer market are more related to the lack of the
comprehensiveness and accuracy of the devices, which results in reduced adoption
levels. AgaMatrix's value proposition to this market is very clear: devices that are more
accurate and sensitive will stand a higher chance of being more readily adopted.
A Software Solution for a Hardware Problem
Historically, the biosensor device industry has attempted to overcome problems related to
accuracy, sensitivity, and robustness by enhancing the chemical (hardware) aspects of the
devices, such as the biological and chemical design of their sensors. By contrast, AgaMatrix is
pioneering a software approach based on digital signal processing (DSP) algorithms that has a
number of distinct practical advantages, including lower cost, easier/faster upgrade capability,
and complementarity with respect to a wide variety of chemistry/hardware-based biosensor
technologies.
AgaMatrix's solution, consisting of a suite of software modules, enables new functionality and
dramatically improves the performance of biosensor devices. Performance improvements
include the ability to leverage increases in signal-to-noise ratio to reduce blood sample
requirements. For the professional healthcare market, AgaMatrix offers the ability to improve
the overall accuracy and sensitivity of hospital point-of-care analyzers. Boosting accuracy
removes a major roadblock hindering widespread adoption of portable blood analyzers in place
of conventional laboratory equipment.
Software DSP solutions have been vital to the success of many other industries where physical
limitations would have impaired their growth. For example, in the 1980s, makers of CD players
relied on oversampling and error-correction algorithms to compensate for low quality hardware
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AgaMatrix, Inc.
filters and to overcome disk-skipping problems. AgaMatrix's algorithms provide analogous

solutions in the biosensor space.
Business Model Software Licensing and Royalty Fees from Device Makers
Initially, AgaMatrix will operate as a technology licensing company, deriving royalty revenue
streams based on device makers' consumables sales (i.e., disposable test strips and cartridges
used in the devices). Revenues will be acquired from the sale of the technology to home blood
glucose device makers, hospital point-of-care blood analyzer makers, and minimally invasive
and implantable blood glucose biosensor developers.
Therasense an Illustration of How Disruptable the Glucose Market Is
Just a few years ago, the blood glucose market was dominated by four major players (numbers
represent annual revenues from test strips): Roche ($1.27B), J & J ($1.09B), Bayer ($650M),
and Abbot ($450M). These companies have been around since the 1980's. Therasense (THER)
was founded in 1996, rolled out their first product in June 2000, and leveraged their key
differentiator (very similar to what AgaMatrix is offering): the ability to reduce blood sample
volume to make glucose testing less painful. In the span of less than two years since their
product roll-out, they have achieved $200 million in annual revenues, gone public, and now
have a market capitalization of over $800 million. Bottom line: this is a market that is very
open to new technological entrants, especially when they are able to reduce pain for the user.
Competitive Advantages
There are no direct competitors pursuing our highly unique and proprietary approach,
developed over the past seven years by our world-class scientific team. AgaMatrix technology
will be complementary to potential indirect competition from the in-house laboratories of major
medical device makers. The sustainable competitive advantages that AgaMatrix commands
include:
Superior software paradigm, complementary to chemical (hardware) advances in

biosensors.
Expertise developed over the course of seven years of biosensor research.
Monopolization of the scientific team responsible for the original paradigm innovation.
Development lead time of at least two years over potential competition.
Intellectual property strategy involving two core utility patents (filed) and three defensive
utility patents.
Customer Traction
We have approached two blood glucose monitor makers and one hospital point-of-care device
manufacturer as potential customer targets. There are over 20 other major potential target
companies we have not yet approached. The following is a summary of the current status of the
companies we have reached:
Strong interest to partner from two blood glucose monitor companies (discussions with
Presidents); details are confidential at this point, but we believe we will be able to close a
deal by June 2002.
Strong interest from a leading blood glucose monitor maker (J & J - discussions with
Director-level staff) and the leading hospital point-of-care device maker (i-STAT
discussions with Vice President and Director-level staff).
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AgaMatrix, Inc.
The Team
A current team composed of:
The three leading scientists pioneering the use of digital signal processing to improve
biosensor technology, with an aggregate of over 40 years of direct DSP/biosensor research
experience.
Entrepreneurs who have founded, built and run an enterprise software company.
An expanding board of veteran advisors made up of medical doctors who have healthcare
business experience.
An additional technical team of three committed to joining the company post-seed financing,
composed of engineers from MIT and Tufts, with technical management experience and an
aggregate of over 25 years of commercial engineering experience.
Financing
AgaMatrix has been self-funded by the principals of the company since its founding. The
company recently closed a seed round of $500K from a number of healthcare angel investors
and IncTANK, an early stage venture capital fund. A Series A round is expected in four to
five months of approximately $1 million.
The objectives of these rounds of funding are the completion of version 1.0 of the products and
the acquisition of at least one paying customer over a period of 13 months of operations. Given
the current state of customer traction and product development, we believe these milestones
are reasonable. The company expects to raise an institutional or another private round of about
$4 million by the end of year one to be cash flow positive. Current valuation drivers include:
A world-class scientific team consisting of Dr. Sridhar Iyengar (CTO), Dr. Justin Gooding, and
Dr. Ian Harding, the engineering team, and an aggressive business team with start-up and
management experience.
Technology applicable to a number of other vertical markets and protected by a rigorous IP
strategy.
External validation from existing relationships with potential customers and advancement to
final rounds in a number of national business plan competitions.
1.1 Mission
AgaMatrix develops solutions to power next-generation biological and chemical sensor systems.
The value that AgaMatrix delivers to this market is the ability to dramatically improve the
accuracy, sensitivity, and robustness of a range of different sensors for the purpose of making
medical diagnostic devices more effective. AgaMatrix's technology enables the development of
devices that will be essentially painless to patients and that will meet the demand for better
accuracy in medical diagnostics. It is committed to providing software solutions for a critical
hardware problem that affects millions of diabetic patients and hospital patients worldwide.
1.2 Objectives
Develop technology solutions that will increase the adoption and compliance rates of
diagnostic medical devices by improving the functionality and performance of biosensors,
specifically for home blood glucose monitors and hospital point-of-care blood analyzers.
Achieve positive cash flow by year three.
Reach $50 million in annual revenues by year four.
Expand into other industries that heavily rely on biosensors, including industrial processing,
environmental monitoring, and military sectors.
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AgaMatrix, Inc.
Chart: Highlights
2.0 Company Summary

AgaMatrix, Inc., which was incorporated in Delaware in 2001, is an early-stage venture offering
proprietary Digital Signal Processing (DSP) technology that dramatically improves the
functionality and performance of biosensor devices. AgaMatrix's core DSP algorithms solve a
number of immediate problems in the medical devices market by significantly boosting the
performance of biosensors without costly specialized hardware and additional chemicals.
Initially, the company will sell technology solutions to diagnostic medical device makers,
specifically, manufacturers of home blood glucose monitors and hospital point-of-care blood
analyzers. Future target healthcare segments include the immunoassay and implantable
biosensor sectors. Its headquarters are located in Cambridge, Massachusetts.
2.1 Start-up Summary
AgaMatrix's start-up costs amount to $4,900, which covers the initial expenses for opening the
first office. These costs include incorporation of the company, design of the company logo and
website, purchase of office and IT equipment, and other miscellaneous expenses. The start-up
costs are financed by direct owner investment. The assumptions are detailed in the following
table and illustration.
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AgaMatrix, Inc.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Rent
Expensed Equipment
Other
Total Start-up Expenses
$400
$200
$1,000
$1,000
$2,000
$300
$4,900
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets
$1,515,100
$0
$0
$1,515,100
Total Requirements
$1,520,000
Chart: Start-up
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AgaMatrix, Inc.
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$4,900
$1,515,100
$1,520,000
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$0
$1,515,100
$0
$1,515,100
$1,515,100
Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities
$0
$15,000
$5,000
$0
$20,000
Capital
Planned Investment
Seed Round Pre-Plan
Series A
Other
Additional Investment Requirement
Total Planned Investment
$500,000
$1,000,000
$0
$0
$1,500,000
Loss at Start-up (Start-up Expenses)

Total Capital
($4,900)
$1,495,100
Total Capital and Liabilities
$1,515,100
Total Funding
$1,520,000
2.2 Company Ownership

AgaMatrix is a privately-held Delaware corporation, subchapter C. It was created in 2001.
Sonny Vu and Sridhar Iyengar, the company's founders, own the majority of equity. Members of
the board of directors and advisors also hold minority stock positions. All employees of the
company are rewarded with stock compensation packages.
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AgaMatrix, Inc.
3.0 Products
AgaMatrix will develop a set of software products that provides critically needed diagnostic
functionality to current and next-generation medical biosensors. Optimized for computational
efficiency, they are designed to be easily incorporated into a number of leading biosensor
platforms. All products that we develop will be powered by our core DSP algorithms with certain
features configured and optimized for the relevant applications. Our algorithms will be delivered
in a format that is convenient and useful to our customers; as such, each AgaMatrix Product
Suite will consist of a core DSP engine supplemented with integration tools, application-specific
expansion modules, and professional services. Since our initial product focus is OEM technology,
we will work closely with our customers and partners in the development and deployment of our
products. The core DSP algorithms will be encoded as a platform technology in modular
components that can be rapidly configured as needed for various customers' applications.
Initially, we are marketing one product for the glucose biosensor market and one product for
the hospital POC market:
Suite Name: AccuMatrix
Target Customer: Smaller Home Glucose Biosensor Manufacturers

Why Needed: These customers need a method of suppressing interference from other
known chemicals in the blood (vitamin C, Tylenol, and uric acid) that can react at the
biosensor and give erroneous readings. They need to be able to suppress these
interferences without the use of chemical mediators or expensive membranes.
Suite Name: PosiMatrix
Target Customer: Hospital Point-of-Care Manufacturers

Why Needed: These customers need a method of alerting the user when unknown
chemicals in the blood interfere with the biosensor and give false positives. E.g., the FDA
regularly approves new anesthetic gases that are used in surgery; however, the POC makers
cannot keep up with these new "unknown" chemicals that may be present in the patient's
blood and can interfere with the device. For one POC maker, it is "medically imperative" for
them to avoid reporting false readings; thus, they need a method of identifying when the
reading is corrupted by unknown chemical interference so that they may indicate to the user
that the reading is not valid.
The core DSP algorithm engine contains all the needed functionality. Using a Configuration Tool,
we can rapidly integrate the appropriate Data Modules that are appropriate for the target
customer. These Modules contain a library of information that is needed to configure and
optimize the core algorithms for the chemicals that are relevant to the customer's device. Once
configured, the algorithms will be delivered in the appropriate software or ASIC-design version
for the target device and can be deployed with our Integration Tools by our Professional
Services Deployment Team or by the customer's engineering team. The basic components of
each AgaMatrix Suite will include the following:
Core Engine
Core DSP technology software and firmware code base will consist of a major portion of the
algorithms that AgaMatrix develops. These algorithms will be activated as needed for each
customer's requirements by the Configuration Tools.
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AgaMatrix, Inc.
Data Modules
These are libraries that contain empirical data needed to optimize the core DSP engine for the
detection of different chemicals in various operating environments. The Configuration Tools will
in part use the data from these Data Modules to customize the software for customers' various
products. We will initially offer the following 2 modules:
Blood Glucose Data Module: Library of empirical information of the standard chemicals
that are commonly encountered in blood glucose measurements. This data is used to
optimize the core algorithms for detection of glucose and suppression of common interfering
chemicals.
Point-of-Care Data Module(s): Library of empirical information of the standard chemicals
that are commonly encountered in various blood chemistry measurements routinely
performed by point-of-care devices. This data is used to optimize the core algorithms for
detection of each of the relevant chemicals and suppression of common interfering
chemicals.
As market and customer needs dictate, future offerings will include the following Modules:
Implantables Data Module: Library of empirical information on quantities that are

relevant to implantable glucose sensors. This data is used to optimize the core algorithms to
correct for sensor deterioration (fouling) effects and suppress signals from interfering
chemicals while boosting the signal from glucose.
Immunoassay Data Module(s): Library of empirical information of the standard
chemicals that are commonly encountered in relevant immunoassays. Immunoassay Data
Modules will be developed for each immunoassay that is of interest to the customer. This
data is used to optimize the core algorithms for detection of the relevant chemicals for the
given immunoassay.
Configuration Tools
Configuration tools are the front-end interface of the software. This set of tools will allow for the
rapid optimization and configuration of the core algorithms for various functionalities and
chemicals. These tools are used to select which Data Modules and algorithms are needed for
the customer's application and generate the end product, which can be delivered either as
software/firmware for the target device or be delivered in the form of an ASIC design.
Code Integration Tools
This set of tools facilitates the integration and customization of software and firmware code
base into customers' products. These tools may be used by our Professional Services
Deployment Team when integrating the product into the customers' end-device, or they may be
used by the customer's in-house engineering teams themselves. Initially, we will include:
Software Integration Tools: Tools that facilitate the integration of our technology onto
microprocessor-based devices.
Firmware Integration Tools: Tools that facilitate the integration of our technology onto
firmware-based devices.
Technology and Development Tutorials

These are in-depth, easy-to-use online tutorials consisting of scientific and engineering guides
to help quickly bring a development and integration team up to speed on AgaMatrix's DSP
technology. The tutorials will consist of code examples, customization, and integration tutorials.
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AgaMatrix, Inc.
Professional Support Services Package

A set of professional services, including software/firmware development and QA/QC testing,
designed to assist in supporting the use and maintenance of the AgaMatrix Product Suites for
customers and partners.
Based on initial discussions with potential customers, we believe that we can deliver our
product in a format that will be readily usable by their development and integration teams. We
will use established processes analogous to those used in the deployment of enterprise software
solutions where a Deployment Team will assist the customer in the integration of our product
into their devices, as indicated by the professional services component of our product offering.
4.0 Market Analysis Summary
Medical diagnostics has the greatest existing opportunity from an industry size perspective as
well as the degree of match between existing needs and AgaMatrix's technology capability. The
sub-segments in this market that the AgaMatrix product line is addressing in the short term
(within the next two to three years) are the large, high-margin consumer blood glucose monitor
market and the now quickly growing hospital point-of-care device market, i.e., customers are
makers of these devices. Even by a conservative estimate, the value proposed by AgaMatrix to
the glucose market alone would be enough to sustain a viable standalone venture. However,
given the minimal incremental effort that would be needed, we will deliver the product to both
sub-markets for the benefit of augmenting and diversifying our revenue streams.
The market that we are concerned with consists of advancing medical devices and technologies
that allow healthcare professionals and home users to acquire medical diagnostic data such as
blood glucose levels (e.g., for diabetics) and various other blood chemistry data (e.g., for
emergency care situations) instantly, easily, cheaply, and accurately without having to send
blood samples to centralized lab facilities which have longer turnaround times and are more
costly. The conclusion that this market should be the company's initial focus is substantiated by
the fact that it has all the relevant characteristics of a market we found to be desirable. These
characteristics are discussed below:
Large existing, robust, high-growth market.

Converging market forces sustaining industry growth.
Clear, immediate need for benefits provided by technology.
Technology delivered would be strongly positioned to participate in emerging trends.
In the medium and long term (three to four years from now), AgaMatrix aims to address needs
in the emerging electrochemical immunoassay and implantable biosensor markets.
The Home Blood Glucose Monitoring is the largest, immediately addressable market, over $4.1
billion in size today and growing 13% CAGR. Based on preliminary discussions with several
potential customers, AgaMatrix believes that a significant portion of this market can eventually
be captured. We expect device makers to pass on the modest costs of AgaMatrix's technology
through the high margins currently enjoyed by the consumable reagents (test strips) they sell.
While AgaMatrix technology does not directly improve the test strips themselves, potential
customers will incorporate the cost of such technology as part of the total solution cost;
development costs of their test devices are already paid for in this way. Diabetics generally are
not price sensitive to test strips since insurance usually covers the costs of the strips.
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AgaMatrix, Inc.
4.1 Market Segmentation

Home Blood Glucose Monitors
AgaMatrix will initially target home blood glucose monitoring device makers. One primary
dimension along which these device makers compete is the reduction of pain and discomfort
from testing that involves pricking fingers to extract blood. By improving device sensitivity,
AgaMatrix allows blood glucose device OEMs to reduce the required blood sample size enabling
the use of less painful blood extraction mechanisms, a major competitive advantage for such
devices according to customer surveys. In one foreseeable application, diabetics would be able
to painlessly extract a small amount of blood using automated AgaMatrix-enabled microneedles
to test blood glucose levels.
Hospital Point-of-Care Blood Analyzers
AgaMatrix will also initially target the hospital blood analyzer market ($300 million in 2001,
25% CAGR) by providing increased accuracy and increased types of tests for these devices.
Based on a bottom-up analysis of end user (physicians) and device maker surveys, we believe
market penetration for these players has been hindered by the relatively low accuracy (when
compared to tests done by centralized labs) and by the limited number of available tests.
Physicians are thus forced to wait several hours for results from blood sent to centralized labs,
and only use portable blood analyzers in acute emergency situations.
AgaMatrix solves the problem of low accuracy for portable hospital blood analyzers, allowing
physicians to use portable analyzers in more situations, thus increasing quality of care,
increasing patient turnover, and reducing hospital costs. Our technology could also help boost
the yield on current cartridge products, eliminate future cartridge production steps, and provide
a broader menu of tests on portable devices, delivering a suite of offerings comparable to
traditional large and expensive lab equipment analyzers.
Minimally Invasive and Implantable Glucose Monitors
Alternatives to finger-pricking devices currently include devices that continuously monitor blood
glucose levels. The problem with these and similar "minimally invasive" devices is that,
according to a report by Merrill Lynch, they are not sufficiently accurate (>30% error, outside
bounds of FDA-approved primary glucose monitoring devices) to be used for any purpose other
than a supplementary aid to traditional finger-pricking methods. Also, they cannot be used
continuously for an extended period of time. AgaMatrix's value proposition of dramatically
improving accuracy and usage duration is clear.
With almost all of the major players trying to develop an "artificial pancreas," commercializing
implantable glucose biosensors that can regulate an implanted insulin pump has been the Holy
Grail for the industry. The artificial pancreas allows diabetics to lead a near normal lifestyle
without the constant pain and inconvenience of finger pricking and insulin injections. One of the
key challenges in the development of implantable sensors is eliminating the use of toxic
chemicals currently needed to correct for cross-sensitivity effects that reduce the accuracy of
the sensor. AgaMatrix's technology minimizes these effects without having to use toxic
chemicals, thus eliminating a key barrier to the development of complete implantable glucose
monitoring and insulin pump systems. Such breakthroughs could lead to adoption of
implantable devices on the order of today's cardiac pacemaker. These large players have
expressed initial interest in using AgaMatrix's technology in these next-generation implantable
devices.
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AgaMatrix, Inc.
Electrochemical Immunoassays
Immunoassays are tests that measure biological and chemical species associated with the
body's immune system. Currently, the majority of immunoassays are performed via colorchanging tests strips (for simple non-critical applications like home pregnancy tests), or via
time-consuming laboratory procedures for more critical tests (like cardiac markers). In hospitals
and clinical labs alone, millions of these immunoassays are performed daily. These laboratory
assays are based on complicated optical and radioactive detection instrumentation. Leaders in
the industry are developing electrochemical immunoassays because electrochemical
technologies are generally recognized to be more cost effective, robust, and possibly faster than
optical methods given the fact that no complicated sample pre-treatment processes are needed.
One of the main challenges to commercializing this new technology is achieving the low
detection levels needed for such measurements. AgaMatrix's technology can be eventually
embedded in these devices to overcome the sensitivity issues that currently hinder their
commercialization.
Table: Market Analysis
Market Analysis
Potential Customers
Home Blood Glucose Monitors
Hospital Blood Analyzers
Implantable & Non-Invasive
Glucose Monitors
Immunoassays
Total
Year 1
Year 2
Year 3
Year 4
Year 5
13%
25%
25%
4,700
375
50
5,311
469
60
6,001
586
80
6,781
733
100
7,663
916
125
13.00%
25.02%
25.74%
5%
13.43%
500
5,625
525
6,365
551
7,218
579
8,193
608
9,312
5.01%
13.43%
Growth
CAGR
Chart: Market Analysis (Pie)
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AgaMatrix, Inc.
4.2 Industry Analysis

The medical diagnostics industry is prone to disruptions because of technological innovations.
We have found the following current industry needs are immediately addressable by AgaMatrix's
technology based on a survey of potential customers in the blood glucose and Hospital point-ofcare (POC) market:
End-User Motivation for Market
Need
Existing Market Need
Bottom Line Value of

Solution to Device Makers
Use of blood from less

painful areas.
Need to use smaller
blood samples to
enable new blood
acquisition methods.
Lack of treatment compliance because

diabetic patients are unwilling to use
the devices too physically painful to
use regularly.
Need for higher

accuracy for hospital
POC blood chemistry
analyzers.
Desire to use point-of-care devices

Device makers increase
instead of central labs for emergency
penetration in existing hospital
situations in order to instantly get lifemarkets.
critical diagnostic data.
Health professionals will often not use

Need for larger test
point-of-care devices unless all the
menus offered by POC
required tests are available in one
devices.
device/cartridge solution.
Sample size is a critical

dimension device makers
compete on. Solution provides
a competitive advantage.
A competitive advantage
increasing market share since
this is an end-user valued
differentiating feature.
Near future market needs prompted by emerging trends

We have also identified a number of needs for which AgaMatrix is aligned to be a major
technology provider. For the sake of conservatism and maintaining a focused company
positioning in the healthcare arena, we are not pursuing available applications in environmental
monitoring, industrial processing, and military biological/chemical warfare agent detection.
Instead, we consider our primary expansion markets to be other segments in the healthcare
market including the immunoassay and implantable/minimally invasive biosensor markets, with
some initial penetration into the latter in Y2 and Y3.
Emerging Trend
Motivation for Trend
Addressable Roadblocks
Development of minimallyinvasive and ultimately of

implantable glucose
biosensors.
Addresses compliance issues in

patients having difficulty using
current devices.
Enables the "artificial pancreas"
(measures glucose, injects
insulin).
Toxic chemicals required to

overcome interference issues
prevent implantation.
Sensor electrodes become
fouled and need regular
replacement.
Conversion of existing
immunoassays to
electrochemical biosensorbased immunoassays.
Eliminates time/equipment
intensive sample pre-treatment
steps.
Enables the typical benefits of
having tests on devices, e.g.,
POC data analytical
applications.
Biological elements are in trace

amounts too small to be
detected. Devices are not
sensitive enough.
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AgaMatrix, Inc.
4.2.1 Competition and Buying Patterns

Based on a prior art search and our cross-disciplinary technology expertise, we believe we are
the only solution provider of our kind to medical device manufacturers. However, AgaMatrix
indirectly competes against other biosensor-enhancing technologies. Rival technologies include
advances in physical designs such as improvements in chemical reagents used in these devices
and the integration of permselective membranes that are intended to materially filter out
interfering chemicals from contacting the sensor. We have identified the research efforts of the
following companies as potential competition due to their efforts to solve the same problems,
albeit through very different approaches.
5.0 Strategy and Implementation Summary
AgaMatrix's strategy will be built upon sustainable advantages from superior software
technology, in-house expertise, monopolization of a scientific team, and development lead time
over competitors. In addition, the company will deploy a strong intellectual property strategy
of defensive and offensive patents to create an IP minefield to make litigation for competitors
as costly as possible. Coupled with an aggressive marketing and sales strategy, AgaMatrix
is positioned to be the leading provider of technology that enables biosensor devices used in
medical and other life science applications.
5.1 Competitive Edge
Advantage #1: Superior and Complementary Software Paradigm
Potential indirect competition could lie within R&D departments of medical device OEMs who are
striving to create both incrementally higher-performing biosensors for existing products. The
R&D teams are also striving to make revolutionary advances which enable implantable
biosensors such as blood glucose monitors. However, based on secondary market research and
on first-hand conversations with potential customers/partners, the observed historical trend in
this industry has been to approach chemical problems with chemical experts. We believe that
our multi-disciplinary software approach fills a missing piece in the development of these
devices.
From a technological standpoint, our software-based solutions achieve the same goals of
interference suppression as rival chemical solutions; however, because we obviate the need for
these chemicals, most of which are toxic, products deployed with AgaMatrix technology will be
suited for in vivo applications, such as some minimally invasive and implantable glucose
monitors. Furthermore, our technology can simultaneously monitor multiple chemicals, both the
target analyte and any interfering chemicals, engendering low-cost multi-analyte sensors which
are not readily viable with current chemical-based sensor enhancements.
From a marketing standpoint, our products have the advantage of being software-based,
engendering many of the potential benefits that other software-based products traditionally
enjoy. One of the principle advantages that end users would have is the ability to upgrade the
software as new, better algorithms are developed, a benefit that cannot be as easily realized
with other physical and chemical technological advances. From a cost-saving standpoint, many
of the permselective membranes that are currently designed to be used in biosensor devices
are too expensive to be used in all applications. As such, our software solutions would provide a
cost benefit advantage to our customers.
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AgaMatrix, Inc.
Regardless of other traditional technology advances in sensor design, our DSP technologies will
ultimately prove to be complementary. Our noise-filtering algorithms will increase the signal-tonoise ratio enabling greater sensitivity and lowering detection limits. In many applications,
membrane filters are not fully effective; as such, our interference suppression algorithms can
compensate for the limitations of such membranes. Additionally, rival empirical improvements
cannot address other limitations of these devices, such as sensor deterioration, where our
technology may be applied to auto-correct for such sources of error.
Advantage #2: In-House Expertise
As is the case with chemical and life science research, one of the most resource-intensive
aspects of the development time lies in optimizing empirical protocols and avoiding unforeseen
pitfalls; most of the knowledge comes from "hands-on" experience, not only theoretical
background. Furthermore, expertise in multi-disciplinary areas as ours requires specialized
knowledge. AgaMatrix's scientific team has been involved in biosensor research for an
aggregate of over 40 years. The foundational research for our current technology was initiated
seven years ago, and our scientists have developed and optimized many of the techniques that
are vital to the continuing development and validation of AgaMatrix's products. To date, we
have developed the groundbreaking technology approach, the experimental protocols, the
validation mechanisms, and the core algorithms. Our extensive in-house expertise in working
on bridging biosensor systems and DSP technologies represents a significant barrier to any
potential competitor.
Advantage #3: Monopolization of Scientific Team
The technology that AgaMatrix is built upon has been inspired by research performed
throughout the past decade at the University of Cambridge. The original scientific team that
achieved these breakthroughs boasts inimitable credentials and has remained intact to form the
current AgaMatrix R&D team. In the ensuing years, AgaMatrix has developed new technologies
and is moving towards its commercialization. We believe that our virtual monopoly on the
intellectual resources that have been responsible for the technological advances that AgaMatrix
owns represents a significant competitive advantage over potential competitors. As is the case
with any empirical endeavor, much of the in-house expertise comes in the form of a close
working knowledge of the practical aspects of technology development. With the current R&D
team already experienced in the relevant technologies, and having worked together in the past,
much of this knowledge has already been acquired.
Advantage #4: Development Lead Time Over Potential Competition
In sharp contrast to the typical chemistry-based approach, AgaMatrix's technology is based
upon a multi-disciplinary core competency. Our competitive capabilities are derived from a
unique confluence of electrical engineering and life science disciplines, a roadblock for potential
competitors entrenched in traditional "wet chemistry" research paradigms.
5.2 Marketing Strategy
Presenting compelling value through superior technology
Because of AgaMatrix's revolutionary, proprietary technology, we are positioned to be the
market leader in biosensor enhancing solutions. AgaMatrix offers a novel approach that clearly
provides significant value to our customer and ultimately the end user. The AgaMatrix solution
delivers value in two ways: by improving the performance of their product against competing
products and by increasing customers' market share and revenue. Communicating this value to
the device manufacturers, as well as branding our technology to defend market share, is the
fundamental philosophy behind our marketing strategy.
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AgaMatrix, Inc.
Becoming a competitive standard

The core AgaMatrix technology is a unique approach to improving biosensors systems in a way
that substantially increases performance and adds value to the end user. In a competitive
marketplace, we will present our technology to medical device makers as an industry standard
that they must adopt to be able to compete. Examples of this kind of standard-setting
technology include the adoption of Windows platforms on PCs and auto-focus and red-eye
reduction capabilities on cameras. Specific selling points include elimination of crossinterference, improvement in accuracy, improvement in signal to noise ratio, improvement in
device robustness, reduction in sample requirements, and increase in market acceptance of
product. The value proposition will differ depending on the needs of each customer.
Marketing to end users by marketing the end product
AgaMatrix will market to end users through partnership with the device makers; to add value,
our technology must increase their bottom line profit. AgaMatrix can do this if end users
appreciate the advantages AgaMatrix enhancements bring and if they require our products for a
healthcare "standard of care." The desire for end users, such as doctors and patients, to use
the best and most effective technology for diagnosis and treatment of health problems will drive
demand for AgaMatrix-enabled devices. Therefore, AgaMatrix will develop a marketing plan with
our partners to increase the awareness of the clinical advantages of our devices. The
AgaMatrix-enabled label will become a moral imperative to clinicians in the same way that
advanced digital imaging technology is used by radiologists and cardiovascular specialists.
In summary, AgaMatrix will market both to the device makers we sell to and end customers,
who will drive demand. Because device makers are concerned about increasing their bottom
line through value-add to their products as well as through production cost reductions,
AgaMatrix will sell to them on the basis of value rather than on any other consumer-based
premise. End users, such as healthcare professionals and customers, demand standard of
care. Therefore, AgaMatrix will co-market its brand as a necessary technology for healthcare
diagnostics.
5.3 Sales Strategy
Phase 1: Sales to medical device manufacturer partners
In the first stage of bringing AgaMatrix technology to market, the company will approach and
partner with medical device manufacturers. Such partnerships have the added advantages of
product development that is supported by the partner's engineering, finance, marketing, and
management.
Phase 2: Becoming the "competitive standard"
With a base of customers who can vouch for the product value, AgaMatrix aims to become the
competitive standard that all players must adopt. Specific marketing tactics in this stage
include: increasing market awareness through trade shows (e.g., Medical Device Expo,
SensorExpo) and technical conferences, advertising in trade journals and publications (e.g.,
Sensor Magazine, Medical Device and Diagnostics Magazine), and retaining "Thought Leaders"
from industry and academia who will corroborate our claims.
Phase 3: Branding for mind share and market domination
AgaMatrix will brand its proprietary DSP technology to associate enhanced solutions with our
identity. A consistent, strong, and clearly defined brand will add yet another barrier to entry and
market penetration. Increased awareness of the advantages we deliver will give rise to
increased demand for the end product.
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AgaMatrix, Inc.
5.3.1 Sales Forecast

The sales forecast is based on a royalties pricing model. However, a revenue model based on
licensing fees is also described and provided for comparison purposes, below.
Charging on a royalty-based per-use fee, AgaMatrix will initially sell OEM technology solutions
to manufacturers of biosensor-based medical devices that will enhance their products'
performance. Because AgaMatrix technology is software-based and is optimized for minimal
hardware requirements, it can be easily integrated into existing sensor devices, boosting
functionality on a cost-effective basis. By embedding our technology within their devices, OEMs
will realize substantial gains (20% to over 100%) in performance dimensions such as accuracy,
sensitivity, and robustness. Technology OEM royalty-based business models are not new in this
business. Our ability to quickly provide performance upgrades in the form of easy-to-integrate
software/firmware updates provides a number of technical and sales advantages over the
existing development paradigm, which relies on "wet" chemistry approaches.
Table: Sales Forecast
Sales Forecast
Year 1
Year 2
Year 3
$256,000
$0
$256,000
$9,954,000
$0
$9,954,000
$44,816,000
$0
$44,816,000
Year 1
$37,500
$0
$37,500
Year 2
$1,500,000
$0
$1,500,000
Year 3
$6,270,000
$0
$6,270,000
Sales
Test Strip Royalties (000)
Other
Total Sales
Direct Cost of Sales
Other
Subtotal Direct Cost of Sales
5.3.2 Pricing Model and Revenues

The primary value proposition that AgaMatrix presents to medical device manufacturers is
increased revenues through increased market share from product advantages over other
competing devices and from premium pricing for increased functionality and performance of
their products. Because the new product offering from the manufacturer contains "best of"
technology and is in the healthcare space, they can charge a premium for their product, which
will translate into revenues to AgaMatrix. Another value proposition which a potential customer
(i-STAT) actually brought to our attention is that our technology could very likely reduce
production costs for them by allowing them to eliminate the need to use costly membranes in
their products.
The pricing for our product can be either "value-added" pricing on the price of the medical
device or based on device usage, depending on the revenue model used by our customers. In
the case of the blood glucose market, revenues are driven not by the device, but rather by
recurring revenues from consumable test strips. For example, the test strips that LifeScan sells
retail for approximately $0.70 each. These test strips are supposed to be used three to four
times a day, although the pain associated with testing has reduced compliance to about 1.5
tests per day per patient. AgaMatrix will share in the revenues this model generates. For
example, every time a test strip is analyzed by the device that LifeScan sells, AgaMatrix
technology will be utilized to provide a more accurate reading. Therefore, AgaMatrix will enter
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AgaMatrix, Inc.
into a royalty-based fee agreement with device manufacturers, such as those in glucose
monitoring, where consumables generate revenue. Preliminary conversations with Hypoguard
indicate a general willingness to this type of pricing model.
Another example of how our royalty will work could be through the partnership with Company
X. Company X manufactures and sells a point-of-care device for approximately $5,000. Test
cartridges are priced at around $3.40 each and can perform 5-6 different tests once. For
Company X, our product would solve an existing problem with the performance and reliability of
their cartridges. Cartridges would be priced approximately $4.00 - $5.00. Company X
manufactures these cartridges for $0.12-$0.16 each and should be amenable to sharing the
increased margins. For cases in which consumables are not used, premium pricing of about
+20% will be used depending on the added value that can be delivered to the end user. The
following table summarizes a conservative revenue forecast based on royalties.
Revenue
2003
2004
2005
2006
$256,432
$9,954,009
$44,816,452
$94,571,316
Implantable
$1,317,544
$2,879,816
$6,283,236
Hospital POC
$1,013,627
$7,066,014
$11,367,777
Blood Glucose
Total Royalty
Revenue
$256,432 $12,285,180 $54,762,282 $112,222,328
An alternative pricing model would be to charge an annual licensing fee for each device
enabling AgaMatrix technology. The value proposition to customers is the same: devices
enabled with AgaMatrix technology will be more accurate and therefore require smaller blood
samples and result in less pain, which will increase device and test strip sales. Pricing structures
and terms of the company's software modules and services will ultimately be determined by
negotiations with customers. The most likely scenario will be a hybrid pricing model of flat
licensing fees on devices and royalties on test strip sales. The following table summarizes a
conservative revenue forecast based on a licensing structure.
Revenue
Blood Glucose
2003
2004
$100,879 $3,894,857
2005
2006
$18,693,271
$41,016,225
Implantable
$1,317,544
$2,879,816
$6,283,236
Hospital POC
$278,540
$3,035,925
$6,223,663
Total Royalty
Revenue
$100,879 $5,490,941 $24,609,011 $53,523,124
5.4 Intellectual Property Strategy

With a fully developed IP strategy consisting of core utility patents (currently filed as provisional
applications) and defensive utility patents to be filed imminently, and based on our
technological leadership, we believe that it would be far more beneficial for potential customers
to purchase our technology than to develop it in-house.
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AgaMatrix, Inc.
5.5 Milestones
The following tables summarize the company's developmental goals (month-to-month for
Y1). Product Milestones are listed separately, below.
Phase 1
Months
Business Milestones
Operational Milestones
Secure 1st beta letter of intent with

one small blood glucose monitor
company
1-3
Set up HR and Finances

Systems; set up lab
Secure final beta agreement and terms
Determine short term partner targets
Phase 2
Months
Business Milestones
Marketing face overhauled
Move to larger office
Determine future product

requirements
2nd Research Scientist hired

Utility patent #1 filed; 2 more
Engineers hired
8
Soft launch; secure 2nd beta
agreement
Phase 3
Months
Business Milestones
10
Operational
Milestones
CEO and VP hired
11
Secure institutional funding commitment

for Year 2 and 3
12
Secure 2nd beta terms
13
Secure first (small) paying glucose

customer terms
Utility patent #2 filed
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AgaMatrix, Inc.
5.5.1 Year 2 and 3 Milestones

Year 2
Business Milestones
o Secure two major paying POC customers
o Secure another small paying glucose customer
o Secure one major glucose beta customer
o Move to larger office
o Hire 6 scientists, 8 engineers
o Hire product management and operations staff
Year 3 Milestones
Secure one major paying glucose customer

Secure one major implantable beta
Expand to other POC players
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AgaMatrix, Inc.
5.5.2 Product Milestones

The following table summarizes the product development vision. Future products will all contain
updated core DSP algorithm software, associated tools, and documentation of performance
results, ensuring that we maximally leverage our existing technology base as productization
evolves.
Quarter
Milestone
Customize AccuMatrix v1.0 for continued deployment onto other
glucose biosensor devices
Customize PosiMatrix v1.0 for continued deployment onto other
point-of-care devices
Y2; Q1
Begin development of VivoMatrix v1.0 for implantable glucose
biosensor makers
Improve algorithm functionality to address robustness & fouling
issues
Begin development of AccuMatrix v2.0
Improve algorithms to increase signal-to-noise ratio for higher
sensitivity
Y2; Q2
Begin development of PosiMatrix v2.0
Incorporate adaptive interference cancellation algorithms to autocorrect for unknown interferences
Y2; Q4 Deliver AccuMatrix v2.0, PosiMatrix v2.0
Y3; Q1 Begin development of PosiMatrix v3.0, AccuMatrix v3.0
Y3; Q4 Deliver VivoMatrix v1.0, PosiMatrix v3.0, AccuMatrix v3.0
Y4; Q4 Deliver AccuMatrix v2.0, PosiMatrix v2.0, VivoMatrix v2.0
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AgaMatrix, Inc.
5.5.3 Summary of Current Accounts

Potential
Customer or
OEM Partner
Current
Product Desired
Conversation Status
Company A
AccuMatrix
interference
suppression
Company B
Implantable
biosensor antifouling
Company C
Alerting of bad
readings
Company D
Not yet
determined
Monitoring of
multiple analytes
Had conversations with two

relevant Director-level people.
They have requested the blood
data.
Had conversations with their
VP of Sales and Business
Development.
We have identified at least one
product that they would want.
data.
They mentioned the possibility
of doing a short-term
consulting project for them for
$20K.
They have requested the blood data.
Company E
Had conversations with

Managing Director and a
Director of Research.
We have identified
what Company A wants and
they have started to ask about
prices.
data.
They have suggested a
schedule for closing the terms
of a partnership.
Had conversations with a

senior scientist.
He said that we would
"definitely" affect their bottom
line.
He asked about the price of the
technology.
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AgaMatrix, Inc.
6.0 Web Plan Summary

AgaMatrix's website will be a dynamic marketing tool for the company that serves the needs of
business development, sales, and recruiting. The company site will provide
information about AgaMatrix's products and services for target customers and potential
business partners, such as marketing collateral, technical white papers, and new product
updates. As the company grows, its recruiting needs can be addressed by posting career
opportunities and FAQs about the company. AgaMatrix.com will also communicate company
news to create and maintain positive public relations with the community and investors. The
goal will be to implement a functional and professionally designed website that can be adapted
to meet the company's growing needs.
6.1 Development Requirements
Creation of future versions of the AgaMatrix website will continue to be outsourced to Nathan
Bailey, a professional graphics designer with over 15 years of experience. The contractor will
work with the marketing department to conceptualize the company's logo and overall design. It
will be maintained in-house and major site redesigning will be made through a contractor.
7.0 Management Summary
The following are the current members of the AgaMatrix Team. Once a permanent CEO is on
board, Sonny will transfer to a Director of Product Management role.
Sonny Vu, Chief Executive Officer and Founder
Sonny brings management and entrepreneurial experience from having worked in several of
Microsoft's product groups and having launched and built FireSpout, an enterprise software
company. At Microsoft, he worked in a number of product development groups, including the
natural language group responsible for shipping linguistic technologies to over 16 applications in
22 languages. While at FireSpout, Sonny created the original technology vision, recruited the
technical teams, developed and managed the technology development and various operational
processes, and developed the intellectual property strategy. Originally a mathematician by
training, Sonny was a Ph.D. candidate at MIT prior to working in the software industry.
Dr. Sridhar Iyengar, Chief Technology Officer and Founder
With 10 years of research and engineering experience in DSP and mathematical modeling of
chemical systems, Sridhar drives and directs the implementation of AgaMatrix's technology
vision. He is the leading expert in the core DSP/electrochemistry interdisciplinary approach used
by AgaMatrix. Combining his background in electrical engineering and biological sciences,
Sridhar conceived and pioneered the concept of using a DSP approach to enhance biosensor
performance. His work in the years following his breakthrough Ph.D. research is the cornerstone
for AgaMatrix's intellectual property with two key patents filed under his name and another
three defensive patents to be filed during the summer of 2002. Sridhar obtained his Ph.D. from
the University of Cambridge as a Marshall Scholar.
Craig Bolon, Vice President of Engineering
With more than 35 years of management and technical experience in software and hardware
engineering, Craig is responsible for executing AgaMatrix's product development initiatives. He
brings his leadership experiences from being a hands-on development engineer, team leader,
general manager, engineering director, and entrepreneur. Craig has a proven track record of
delivering on-time, on-budget projects while working on commercial product development in
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AgaMatrix, Inc.
software and instrumentation for organizations such as Schlumberger, Polaroid, Betagen,

Exxon, and MIT. His commercial product development work has spanned the fields of molecular
biology, chemical analysis, electronic imaging, speech recognition, and mechanical design
software. Craig has invented key technologies and holds a number of software and hardware
patents. He holds a degree in particle physics from MIT.
Dr. Paul J. Kelly, Advisor
Paul is the founder and former CEO of Gemini Genomics plc, until its merger in 2001. A
physician who specialized in endocrinology, he has more than 25 years of experience in
medicine, and research in clinical and commercial settings. He has published extensively in over
90 publications, has an issued patent, and has held faculty appointments at the University of
New South Wales and St. Vincent's Hospital in Sydney, Australia. After launching Gemini
Genomics in Cambridge, England, Paul went on to list the company on NASDAQ, in the most
successful IPO of 2000 in the UK. He has served on national governmental advisory bodies, as
well as on the boards of public and private companies, and non-profit institutions. Paul
graduated in Medicine from the University of New South Wales, Sydney, and received his Doctor
of Medicine degree for his thesis in the genetics of osteoporosis also from the University of New
South Wales. He is a Fellow of the Australasian College of Physicians.
7.1 Personnel Plan
The personnel table assumes steady growth in employees over the next year. We expect head
count to reach 14 employees by end of year one. We are in the process of implementing a
strong benefits policy (with fully-paid medical, dental, and life insurance, plus a profit sharing
and 401K plan). Employees generally earn competitive salaries and receive generous equity
packages.
Table: Personnel
Personnel Plan
Year 1
Year 2
Year 3
Combined Payroll
Other
Total People
$780,750
$0
0
$4,181,056
$0
0
$6,013,186
$0
0
Total Payroll
$780,750
$4,181,056
$6,013,186
8.0 Financial Plan

The following subtopics highlight the financial plan for AgaMatrix.
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AgaMatrix, Inc.
8.1 Break-even Analysis

The break-even analysis demonstrates that AgaMatrix will have a sales level running
comfortably above break-even starting in year two. Depending on which pricing model is used either royalties, licensing, or both - average revenue could vary significantly, but the table
shows a fair estimate given our revenue projections.
The business will have very few fixed costs - most laboratory equipment can be leased, as will
the real estate for our offices. All costs are expected to be variable for modeling purposes,
giving the company flexibility to adapt as needs and environmental conditions may change.
Because AgaMatrix technology is software-based and is optimized for minimal hardware
requirements, it can be easily distributed and integrated into biosensor devices with advantages
of economies of scale. As volume increases, average variable costs will significantly decrease.
Chart: Break-even Analysis
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$583,407
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
15%
$497,947
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AgaMatrix, Inc.
8.2 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following
table. The key underlying assumptions are:
We assume a slow-growth economy, without major recession.

We assume of course that there are no unforeseen changes in technology to make our
products immediately obsolete.
We assume access to equity capital and financing sufficient to maintain our financial plan as
shown in the tables.
Financial projections are predicated upon targeting the life sciences vertical exclusively. Within
the life sciences market, blood glucose will drive the majority of revenue. However, the point-ofcare testing market will contribute modest revenue in the near term, accompanied by a
substantial contribution from the implantable market in the medium and long term.
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
Year 1
Year 2
Year 3
1
8.00%
10.00%
30.00%
0
2
8.00%
10.00%
30.00%
0
3
8.00%
10.00%
30.00%
0
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AgaMatrix, Inc.
8.3 Projected Profit and Loss

Gross and operating margins
Gross margins will be approximately 85% on the core product offering, which will be delivered
in the form of software. Such margins are typical in the software industry; we have not
modeled in support revenue streams for our products, assuming this will be handled entirely by
our OEM customers. In year one, we expect a loss, as we grow the business from a small base
by conserving cash. Beginning in year two (post-institutional funding), as we ramp up the
business more aggressively, operating expenses as a percent of revenue will fall as we hire a
critical mass of personnel for marketing, sales, and research and development. By the end of
the forecast horizon, operating margins will once again exceed 30%.
Profit potential and durability
AgaMatrix is expected to be net income positive beginning in its second full year of operations.
Profitability is expected to grow rapidly following year two, once the business is able to leverage
the investment from the year two ramp-up. AgaMatrix has the potential to be an enduring
standalone business, supported by a diversified revenue stream within the life sciences vertical
(blood glucose, point-of-care testing and minimally invasive/implantable devices), with the
opportunity to expand into other sub-segments in the healthcare sector and new verticals for
long-term growth.
Chart: Profit Monthly
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AgaMatrix, Inc.
Chart: Profit Yearly
Chart: Gross Margin Yearly
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AgaMatrix, Inc.
Table: Profit and Loss
Pro Forma Profit and Loss

Year 1
Year 2
Year 3
Sales
Other Production Expenses
Total Cost of Sales
$256,000
$37,500
$0
$37,500
$9,954,000
$1,500,000
$0
$1,500,000
$44,816,000
$6,270,000
$0
$6,270,000
Gross Margin
Gross Margin %
$218,500
85.35%
$8,454,000
84.93%
$38,546,000
86.01%
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other
$780,750
$4,915,400
$0
$0
$3,400
$44,000
$114,700
$117,113
$0
$4,181,056
$245,000
$0
$0
$6,300
$65,000
$120,000
$627,158
$0
$6,013,186
$450,000
$0
$0
$8,000
$80,000
$120,000
$901,978
$0
Total Operating Expenses
$5,975,363
$5,244,514
$7,573,164
Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred
($5,756,863)
($5,756,863)
$1,419
$0
$3,209,486
$3,209,486
$1,250
$962,471
$30,972,836
$30,972,836
$1,025
$9,291,543
Net Profit
Net Profit/Sales
($5,758,281)
-2249.33%
$2,245,765
22.56%
$21,680,268
48.38%
Expenses
Page 28
AgaMatrix, Inc.
8.4 Projected Cash Flow

The financial outlook is positive as the company rolls out and meets its milestones. After
financing, cash flow will be negative for year one. By year two, AgaMatrix expects to be cash
flow positive.
Table: Cash Flow
Pro Forma Cash Flow

Year 1
Year 2
Year 3
$256,000
$256,000
$9,954,000
$9,954,000
$44,816,000
$44,816,000
$0
$0
$0
$0
$0
$0
$4,075,000
$4,331,000
$0
$0
$0
$0
$0
$0
$0
$9,954,000
$0
$0
$0
$0
$0
$0
$0
$44,816,000
Year 1
Year 2
Year 3
$780,750
$4,812,657
$5,593,407
$4,181,056
$3,663,149
$7,844,205
$6,013,186
$16,005,119
$22,018,305
$0
$0
$0
$1,500
$0
$0
$0
$5,594,907
$0
$0
$0
$2,000
$0
$0
$0
$7,846,205
$0
$0
$0
$2,500
$0
$0
$0
$22,020,805
($1,263,907)
$251,193
$2,107,795
$2,358,989
$22,795,195
$25,154,184
Cash Received
Cash from Operations

Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance
Page 29
AgaMatrix, Inc.
Chart: Cash
Page 30
AgaMatrix, Inc.
8.5 Projected Balance Sheet

Our projected balance sheet shows an increase in net worth. The monthly projections for the
first year are in the appendix. Net worth is negative initially because the company does not
expect to secure its first paying customer until end of year one.
Table: Balance Sheet
Pro Forma Balance Sheet

Year 1
Year 2
Year 3
$251,193
$0
$251,193
$2,358,989
$0
$2,358,989
$25,154,184
$0
$25,154,184
$0
$0
$0
$251,193
$0
$0
$0
$2,358,989
$0
$0
$0
$25,154,184
Year 1
Year 2
Year 3
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$425,875
$0
$0
$425,875
$289,905
$0
$0
$289,905
$1,407,333
$0
$0
$1,407,333
Total Liabilities
$13,500
$439,375
$11,500
$301,405
$9,000
$1,416,333
$5,575,000
($4,900)
($5,758,281)
($188,181)
$251,193
$5,575,000
($5,763,181)
$2,245,765
$2,057,584
$2,358,989
$5,575,000
($3,517,416)
$21,680,268
$23,737,851
$25,154,184
($188,181)
$2,057,584
$23,737,851
Assets
Current Assets
Cash
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Current Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth
Page 31
AgaMatrix, Inc.
8.6 Financial Risks and Contingencies

We have identified several critical risks and assumptions that must be addressed to ensure
AgaMatrix's success.
Market Risks
Risk #1: Corporate R&D labs of our customers/partners may develop competing DSP-based
technologies to enhance their own electrochemical sensors based products.
See section 4 for a detailed discussion of competition and AgaMatrix's sustainable competitive
advantages.
Risk #2: Other technologies may be developed to improve sensor performance.
Other technology solutions designed to improve sensor performance have been generally
hardware-based introducing additional costs and at times toxic chemicals. For example, MEMSbased infrared sensors, being developed as an alternative to electrochemical sensors, are
expected to be much more costly despite increased performance. Similarly, mediators such as
ferrocene are used to deliver accurate readings, but are toxic and less effective than
AgaMatrix's solution. AgaMatrix software-based solution improves performance while being
cost effective and safe.
Risk #3: As a pioneer in electrochemical applications for DSP algorithms, AgaMatrix may not be
able to convince customers to adopt such a revolutionary solution.
Developers of blood glucose monitors and portable blood analyzers have never considered using
a software-based approach to solving their accuracy and cross-interference problems. There is
thus a psychological barrier that we believe can be overcome through a simple, concrete
demonstration of low-cost performance gains which we can provide.
Risk #4: There may not be enough computing power and memory on blood glucose monitoring
devices and portable blood analyzers to support AgaMatrix's software.
The algorithms have been optimized for computational speed and are designed for use on
devices with very little CPU resources. Initial customer feed back shows that AgaMatrix's
algorithms can be incorporated in next-generation ASICS designs for blood glucose monitoring
devices, as well as into current microprocessor-powered portable blood analyzers.
Risk #5: Implantable blood glucose sensors may be prolonged from the marketplace
indefinitely.
Although most blood glucose monitoring device companies are trying to develop implantable
sensors, other technical and marketing issues may prevent the eventual adoption of the
artificial pancreas. AgaMatrix's technology will accelerate the development of the artificial
pancreas by not requiring toxic mediators. However, AgaMatrix cannot solely depend on this
market's development, and has thus chosen to focus on existing markets to drive short to
medium term revenue.
Page 32
AgaMatrix, Inc.
Risk #6: AgaMatrix must prove out the technology on blood samples.
Despite a high confidence in the technology, we must still create experimental data sets created
from tests using actual blood samples. These data sets will be shown to customers as proof of
the technology's effectiveness. AgaMatrix is confident that after initial funding, lab space and
equipment can be quickly secured to produce these data sets.
Risk #7: AgaMatrix may face regulatory delays from FDA approval.
We will work with our customers to ensure that the technologies that are deployed into their
devices will incur minimal regulatory risks thereby complying with the FDA's less onerous
regulations for a "derivative device" (compared to the approval process for a completely new
device).
Risk #8: AgaMatrix needs to determine customer willingness to pay and secure concrete deals
with customers.
Several conversations with potential customers have already reached the level of discussing
potential pricing structures so we believe there is some genuine interest.
Risk #9: Each OEM customer will require a custom-built version of the AgaMatrix software.
The software suite will be designed to be a modular and scalable platform technology. We will
construct a set of configuration and integration tools designed to translate our core technology
into suitable deployment formats.
Risk #10: University of Cambridge may have claims to AgaMatrix's technologies.
The technology is based on 3rd generation algorithms that AgaMatrix alone has been
developing for two years. 1st and 2nd generation technologies were developed at the
University of Cambridge and validated the proof of concept of using a DSP approach to solving
many of the outstanding problems in biosensors. Our 3rd generation technology is
fundamentally different from the earlier technologies and has overcome a number of critical
limitations, on both the theoretical and empirical sides, that prevent commercialization.
AgaMatrix owns all rights to these 3rd generation technologies. The 1st and 2nd generation
technologies, while illustrative of the concept, do not pose any commercial threat due to
fundamental technological limitations
Financial Risks
Risk #1: Working Capital Management We expect to be running a significant working
capital deficit because of the time it will take to establish payment schedules (e.g. quarterly
royalties from partners) and receive payments from large OEM vendors while, as an early-stage
company, we will simultaneously have to make payments on our supplies on a short-term
basis. Managing the cash conversion cycle will be critical to ensuring liquidity and solvency.
Risk #2: Seasonal, Cyclical, or Highly Volatile Cash Flows at this time, we expect there
to be volatility in our cash flows based primarily on the new product introduction cycles of
major medical devices manufacturers. Therefore our revenue and cash flow streams will not be
smooth throughout the year, but will be stronger during times of new product introduction. By
Page 33
AgaMatrix, Inc.
targeting three different market segments early on (blood glucose, point-of-care, and
implantable devices) we aim to mitigate this risk.
Risk #3: Concentration of Customers The blood glucose market and portable blood
analyzer markets are dominated by an oligopoly of a handful of companies. It may be difficult
to diversify our customer base sufficiently to prevent large swings in our revenue and cash flow
based upon the actions of a small number of customers. To diminish this risk, we will initially
target smaller players who will move more quickly and provide us with greater leverage when
we go to negotiate with larger customers.
8.7 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 7373 or NAICS code 541512, Computer Systems
Design Services, are shown for comparison.
Page 34
AgaMatrix, Inc.
Table: Ratios
Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
n.a.
3788.28%
350.23%
16.45%

Long-term Assets
Total Assets
0.00%
100.00%
0.00%
100.00%
0.00%
100.00%
0.00%
100.00%
0.00%
100.00%
0.00%
100.00%
63.87%
94.15%
5.85%
100.00%
Current Liabilities
Total Liabilities
Net Worth
169.54%
5.37%
174.91%
-74.91%
12.29%
0.49%
12.78%
87.22%
5.59%
0.04%
5.63%
94.37%
33.55%
21.29%
54.84%
45.16%
100.00%
85.35%
1351.46%
8.98%
-2248.77%
100.00%
84.93%
57.96%
0.60%
32.24%
100.00%
86.01%
36.23%
0.27%
69.11%
100.00%
100.00%
77.82%
1.65%
0.36%
0.59
0.59
174.91%
3059.97%
-2292.37%
8.14
8.14
12.78%
155.92%
136.00%
17.87
17.87
5.63%
130.47%
123.13%
1.97
1.57
65.50%
0.53%
1.52%
Sales Growth
Percent of Total Assets
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Year 1
Year 2
Year 3
Net Profit Margin

Return on Equity
-2249.33%
0.00%
22.56%
109.15%
48.38%
91.33%
n.a
n.a
12.29
27
1.02
12.17
37
4.22
12.17
18
1.78
n.a
n.a
n.a
0.00
0.97
0.15
0.96
0.06
0.99
n.a
n.a
($174,681)
-4,057.70
$2,069,084
2,567.59
$23,746,851
30,217.40
n.a
n.a
0.98
170%
0.59
0.00
0.00
0.24
12%
8.14
4.84
0.00
0.56
6%
17.87
1.89
0.00
n.a
n.a
n.a
n.a
n.a
Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
Page 35
AgaMatrix, Inc.
Page 36
Appendix
Table: Sales Forecast
Sales Forecast
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$256,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$256,000
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$5,000
$1,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
Sales
Other
Total Sales
Other
Subtotal Direct Cost of Sales
0%
0%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$5,000
$1,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
Page 1
Appendix
Table: Personnel
Personnel Plan
Combined Payroll
Other
Total People
Total Payroll
0%
0%
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$36,583
$0
$43,250
$0
$47,000
$0
$47,000
$0
$54,500
$0
$57,417
$0
$76,250
$0
$76,250
$0
$76,250
$0
$88,750
$0
$88,750
$0
$88,750
$0
$36,583
$43,250
$47,000
$47,000
$54,500
$57,417
$76,250
$76,250
$76,250
$88,750
$88,750
$88,750
Page 2
Appendix
Table: General Assumptions
General Assumptions
Month 1
Plan Month
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
10
11
12
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
8.00%
Long-term Interest Rate
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Tax Rate
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
Current Interest Rate
Other
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss

Month 1
Sales
Other Production Expenses
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$256,000
$5,000
$1,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$5,000
$1,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
$1,500
$9,500
$1,500
$1,500
($5,000)
($1,500)
($1,500)
($1,500)
($1,500)
($9,500)
($1,500)
($1,500)
($1,500)
($9,500)
($1,500)
$254,500
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
99.41%
$36,583
$43,250
$47,000
$47,000
$54,500
$57,417
$76,250
$76,250
$76,250
$88,750
$88,750
$88,750
$407,150
$406,150
$406,150
$406,150
$406,150
$415,150
$406,650
$408,650
$408,650
$424,150
$410,200
$410,200
Depreciation
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Leased Equipment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$220
$240
$260
$260
$260
$260
$260
$320
$320
$320
$340
$340
Insurance
$2,400
$2,800
$3,200
$3,200
$3,200
$3,200
$3,200
$4,400
$4,400
$4,400
$4,800
$4,800
Rent
$8,535
$8,545
$8,555
$8,555
$8,555
$10,255
$10,255
$10,285
$10,285
$10,285
$10,295
$10,295
$5,487
$6,488
$7,050
$7,050
$8,175
$8,613
$11,438
$11,438
$11,438
$13,313
$13,313
$13,313
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$460,375
$467,473
$472,215
$472,215
$480,840
$494,895
$508,053
$511,343
$511,343
$541,218
$527,698
$527,698
($465,375)
($468,973)
($473,715)
($473,715)
($482,340)
($504,395)
($509,553)
($512,843)
($512,843)
($550,718)
($529,198)
($273,198)
EBITDA
($465,375)
($468,973)
($473,715)
($473,715)
($482,340)
($504,395)
($509,553)
($512,843)
($512,843)
($550,718)
($529,198)
($273,198)
$124
$123
$122
$121
$120
$119
$118
$117
$116
$115
$114
$113
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
($465,499)
($469,095)
($473,837)
($473,836)
($482,460)
($504,513)
($509,670)
($512,959)
($512,958)
($550,832)
($529,311)
($273,310)
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
-106.76%
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses
Payroll
Sales and Marketing and Other
Expenses
Utilities
Payroll Taxes
Other
Total Operating Expenses
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
15%
Page 4
Appendix
Page 5
Appendix
Table: Cash Flow
Pro Forma Cash Flow

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Cash Sales
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$256,000
Subtotal Cash from Operations
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$256,000
Cash Received
Cash from Operations
Additional Cash Received

Sales Tax, VAT, HST/GST Received
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Other Liabilities (interest-free)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Long-term Liabilities
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Sales of Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Sales of Long-term Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
New Investment Received
$4,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$75,000
$0
Subtotal Cash Received
$4,000,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$75,000
$256,000
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Expenditures
0.00%
Expenditures from Operations

Cash Spending
$36,583
$43,250
$47,000
$47,000
$54,500
$57,417
$76,250
$76,250
$76,250
$88,750
$88,750
$88,750
Bill Payments
$19,297
$428,814
$425,878
$426,837
$426,873
$428,598
$446,640
$433,530
$436,709
$437,554
$461,365
$440,561
Subtotal Spent on Operations
$55,880
$472,064
$472,878
$473,837
$481,373
$486,015
$522,890
$509,780
$512,959
$526,304
$550,115
$529,311
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Principal Repayment of Current Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Other Liabilities Principal Repayment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$125
$125
$125
$125
$125
$125
$125
$125
$125
$125
$125
$125
Purchase Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Purchase Long-term Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Dividends
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$56,005
$472,189
$473,003
$473,962
$481,498
$486,140
$523,015
$509,905
$513,084
$526,429
$550,240
$529,436
Additional Cash Spent
Long-term Liabilities Principal Repayment
Subtotal Cash Spent

Net Cash Flow
$3,943,995
($472,189)
($473,003)
($473,962)
($481,498)
($486,140)
($523,015)
($509,905)
($513,084)
($526,429)
($475,240)
($273,436)
Cash Balance
$5,459,095
$4,986,906
$4,513,902
$4,039,940
$3,558,442
$3,072,302
$2,549,287
$2,039,382
$1,526,298
$999,869
$524,629
$251,193
Page 6
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet

Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$1,515,100
$0
$1,515,100
$5,459,095
$0
$5,459,095
$4,986,906
$0
$4,986,906
$4,513,902
$0
$4,513,902
$4,039,940
$0
$4,039,940
$3,558,442
$0
$3,558,442
$3,072,302
$0
$3,072,302
$2,549,287
$0
$2,549,287
$2,039,382
$0
$2,039,382
$1,526,298
$0
$1,526,298
$999,869
$0
$999,869
$524,629
$0
$524,629
$251,193
$0
$251,193
$0
$0
$0
$1,515,100
$0
$0
$0
$5,459,095
$0
$0
$0
$4,986,906
$0
$0
$0
$4,513,902
$0
$0
$0
$4,039,940
$0
$0
$0
$3,558,442
$0
$0
$0
$3,072,302
$0
$0
$0
$2,549,287
$0
$0
$0
$2,039,382
$0
$0
$0
$1,526,298
$0
$0
$0
$999,869
$0
$0
$0
$524,629
$0
$0
$0
$251,193
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$5,000
$0
$0
$5,000
$414,619
$0
$0
$414,619
$411,651
$0
$0
$411,651
$412,609
$0
$0
$412,609
$412,608
$0
$0
$412,608
$413,694
$0
$0
$413,694
$432,193
$0
$0
$432,193
$418,973
$0
$0
$418,973
$422,152
$0
$0
$422,152
$422,151
$0
$0
$422,151
$446,679
$0
$0
$446,679
$425,876
$0
$0
$425,876
$425,875
$0
$0
$425,875
$15,000
$20,000
$14,875
$429,494
$14,750
$426,401
$14,625
$427,234
$14,500
$427,108
$14,375
$428,069
$14,250
$446,443
$14,125
$433,098
$14,000
$436,152
$13,875
$436,026
$13,750
$460,429
$13,625
$439,501
$13,500
$439,375
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$1,500,000
($4,900)
$0
$1,495,100
$1,515,100
$5,500,000
($4,900)
($465,499)
$5,029,601
$5,459,095
$5,500,000
($4,900)
($934,595)
$4,560,505
$4,986,906
$5,500,000
($4,900)
($1,408,432)
$4,086,668
$4,513,902
$5,500,000
($4,900)
($1,882,268)
$3,612,832
$4,039,940
$5,500,000
($4,900)
($2,364,727)
$3,130,373
$3,558,442
$5,500,000
($4,900)
($2,869,241)
$2,625,859
$3,072,302
$5,500,000
($4,900)
($3,378,911)
$2,116,189
$2,549,287
$5,500,000
($4,900)
($3,891,870)
$1,603,230
$2,039,382
$5,500,000
($4,900)
($4,404,828)
$1,090,272
$1,526,298
$5,500,000
($4,900)
($4,955,660)
$539,440
$999,869
$5,575,000
($4,900)
($5,484,971)
$85,129
$524,629
$5,575,000
($4,900)
($5,758,281)
($188,181)
$251,193
Net Worth
$1,495,100
$5,029,601
$4,560,505
$4,086,668
$3,612,832
$3,130,373
$2,625,859
$2,116,189
$1,603,230
$1,090,272
$539,440
$85,129
($188,181)
Assets
Starting Balances
Current Assets
Cash
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Total Liabilities
Page 7

Medical Software Business Plan

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Medical Software Business Plan

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Thanks for downloading a sample plan

For 20 dollars I ended up getting a quarter of a million dollars of

Palo Alto Software, Inc., 1995-2009 All rights reserved.

This is a business plan. It does not imply an offering of securities.

1.0 Executive Summary.....................................................................................................................1

Table: Profit and Loss................................................................................................................28

1.0 Executive Summary

filters and to overcome disk-skipping problems. AgaMatrix's algorithms provide analogous

Superior software paradigm, complementary to chemical (hardware) advances in

2.0 Company Summary

Table: Start-up Funding

Liabilities and Capital

Loss at Start-up (Start-up Expenses)

Total Capital and Liabilities

2.2 Company Ownership

Target Customer: Smaller Home Glucose Biosensor Manufacturers

Suite Name: PosiMatrix

Target Customer: Hospital Point-of-Care Manufacturers

Implantables Data Module: Library of empirical information on quantities that are

Technology and Development Tutorials

Professional Support Services Package

Large existing, robust, high-growth market.

4.1 Market Segmentation

Chart: Market Analysis (Pie)

4.2 Industry Analysis

Existing Market Need

Bottom Line Value of

Use of blood from less

Lack of treatment compliance because

Need for higher

Desire to use point-of-care devices

Health professionals will often not use

Sample size is a critical

Near future market needs prompted by emerging trends

Motivation for Trend

Development of minimallyinvasive and ultimately of

Addresses compliance issues in

Toxic chemicals required to

Biological elements are in trace

4.2.1 Competition and Buying Patterns

Becoming a competitive standard

5.3.1 Sales Forecast

5.3.2 Pricing Model and Revenues

$256,432 $12,285,180 $54,762,282 $112,222,328

$100,879 $5,490,941 $24,609,011 $53,523,124

5.4 Intellectual Property Strategy

Secure 1st beta letter of intent with

Set up HR and Finances

Secure final beta agreement and terms

Determine short term partner targets

Marketing face overhauled

Move to larger office

Determine future product

2nd Research Scientist hired

Secure institutional funding commitment

Secure 2nd beta terms

Secure first (small) paying glucose

Utility patent #2 filed

5.5.1 Year 2 and 3 Milestones

Secure one major paying glucose customer

5.5.2 Product Milestones

5.5.3 Summary of Current Accounts

Had conversations with two

They have requested the blood data.