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Ryan Stewart R. Scott Blamey Jack Vu Ben Schlesinger Stuart Truax Definition Volatile Organic Compounds Health Effects Health Effects of VOCs •Dizziness •Headaches •Allergic Reaction •Nausea •Vomiting •Visual Disorders •Memory Loss •Irregular Heartbeat •Liver Damage •Kidney Damage •Anemia •Nervous System Damage •Leukemia •Death Contamination EXPLANATION Total concentration, in micrograms per liter No detection or less than 0.02 0.02 to less than 0.2 0.2 to less than 1 1 to less than 10 10 or greater Well Types Concentrations greater than MCLs Domestic Wells Concentrations below MCLs Public Wells 0 5 10 15 20 25 Detection Frequency (percent) MCL = Maximum Contamination Level 30 Sampling & Testing How are VOC’s currently tested? Core Technology CMOS-Based Sensor System Competitive Advantage Lab-on-a-Chip Advantages • Eliminates the sample collection process • Can be left in the water. • Can monitor the water continuously. • Huge savings over current methods. Core Technology Intellectual Property Protection Silicon Sensor • Patent Protection (Filing expected fall 2011) Read-Out Circuitry • Trade secret protection Sensor Enclosure • Patent Protection (Filing expected fall 2011) Management CEO Ryan Stewart Research Assistant Research Assistant CFO CBDO Marketing Assistant Year 2 CRO Stuart Truax COO R. Scott Blamey CCO Ben Schlesinger CLO Jack Vu Market 156,000 U.S. Public Water Systems (PWSs) 54,000 Community Water Systems 93% of Population Value Chain PCB and Packaging Assembly Private Wells 3rd Party Monitoring & Management Consumers Community Water Systems Semiconductor Fabrication Adoption Decision Maker Profile • • • • Flexibility in decision making Low risk tolerance Understaffed Mildly budget conscience Adoption Drivers • • • • • EPA mandated MCL’s State testing requirements Existing relationship Customer service Reliability Competition Competitive Leader Largest Competitor Hach Company Agilent Technologies, Inc. 1,100 Employees $144 Million Revenue 20,000 Employees $5.4 Billion Corporate Revenue Closest Competitor Analytic Systems International KESCO Product Features • Continuous VOC monitoring • 34” x 24” x 10” • 200 lbs. Price Advantage Production Cost per Unit Production Materials Silicon CMOS (i.e. die) Die-level Packaging PCB System Casing Other Electronics Labor Fab and Assembly $ $ $ $ $ $ $ TOTAL $ 32.65 0.60 10.00 10.00 1.00 1.00 0.05 10.00 PWS Savings, 3rd Party Profit Economic Value Created (10 Years) $70,000 Cumulative costs for GCMS $60,000 $50,000 $40,000 $30,000 Cumulative costs for EthoSense $20,000 Cost of Goods/Services $10,000 Profit $- GCMS Ethosense Value Created Forecasts Projected Revenue $30,000,000 $25,000,000 Net Present Value of 5 Years Cash Flow $20,000,000 $15,000,000 $7.5 Million $10,000,000 $5,000,000 Discounted at 30% $2012 2013 2014 2015 2016 Projected Cash Flows $32,000,000 Net Income $22,000,000 $12,000,000 Cumulative Net Income $2,000,000 $(8,000,000) 2011 2012 2013 2014 2015 2016 Risk Technical Risk Operational Risk Political Risk ISSUE Insufficient product life Inability to partner with 3rd party integrator Agency complacency STRATEGY Risk Mitigation Strategies Exploring new packaging methods Product prototype, pilot program Compliance Officer Summary VOC Contaminated Water Deadly VOC Water Contamination On the Rise Continuous Monitoring Necessary But Cost Prohibitive Increased EPA VOC Regulations Coming Soon EthoSense VOC Monitors Real-Time, Added Customer Value EthoSense VOC Sensor Technology Novel Patentable Technology Global Need Opportunity Ryan Stewart R. Scott Blamey Jack Vu Ben Schlesinger Stuart Truax