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SnoreSounds Mobile Health Solution for a Global Diagnostic Dilemma

Michael J. Thomas Appian Medical Pty. Limited

+1.410.777.5251 | [email protected]

1 © 2014 Appian Medical Pty. Ltd. Proprietary & Confidential

Dilemma: Obstructive Sleep Apnea (OSA) Epidemic

• 100 million globally suffer from OSA

• 85% remain undiagnosed

• Untreated OSA causes or worsens other chronic, costly disorders: high blood pressure, diabetes

• OSA results from repeated airway collapse during sleep – can occur hundreds of time a night, reducing oxygen circulation in the blood

2 Proprietary & Confidential

Collapsed Airway Open Airway

× Need referral × Uncomfortable testing environment × Lengthy wait lists at some labs × $1,500-$3,000 per night × 25% test completion failure rates × Up to 40% false negative results

documented in studies × Not suitable for mass screening

× Require physician prescription × Most are uncomfortable × Often need additional training × Up to $750 per night × Optimum detection requires

multiple night testing × Completion rates unreliable

Need: Low Cost + In Home + Comfortable + Accurate

Dilemma: Efficient Detection of Therapy Candidates

Proprietary & Confidential 3

PSG In-lab Tests In Home Tests

The SnoreSounds Solution To A Diagnostic Dilemma


SnoreSounds

OSA Diagnosis

FDA 510k

Neural Network

Physician & Consumer Promotion

Clinical Validation &

Outcomes Study

Needed

Govt/payer incentivized to aid in Rx conversion to

OTC

• Appian has licensed a proven & protected method of diagnosing obstructive sleep apnea (OSA) via smartphone recording of snoring in the home

• University of Queensland (AU)

acoustic respiratory analysis: SnoreSounds technology

• SnoreSounds has the potential to replace lab-based PSG sleep apnea studies

• ~$7 BB spent annually on OSA diagnostic tests

Appian Strategic Vision & Mission

5

Appian is leading the way in the innovation of

mobile health (mHealth) technologies to solve the universal need for accessible, accurate, and affordable

detection of obstructive sleep apnea (OSA).

The Appian mission is to acquire, develop & market products that will help everyone determine their risk for OSA and need for treatment.

• A unique algorithm that diagnoses OSA from sound analysis

• Uses proprietary High Order Statistical (HOS) algorithms for acoustic analysis of snore characteristics caused by airway collapse.

• Software platform can be delivered by various means: smartphone apps, wearable sensors, medical or consumer devices

What is SnoreSounds?

Proprietary & Confidential 6 • A prototype app has been developed & tested by University of Queensland

SnoreSounds: Comfort & Ease of Use In Home

• SnoreSounds has no wires, no cuffs, no straps or head attachments.

• SnoreSounds preserves the natural sleep environment – no discomfort or disturbance

• Simple operation needs no special instruction - place the phone at bedside and activate the app.


Typical Home Sleep Test Equipment SnoreSounds Mobile App

Two developmental studies conducted by University of Queensland, Brisbane, Australia, have demonstrated the feasibility of a low-cost, unattended OSA detection test using acoustic monitoring & proprietary algorithms for analysis of snoring sounds.

• Both studies compared acoustic snore detection algorithm to PSG in sleep labs

Feature STUDY 1 STUDY 2

Subjects n=41 n = 86

Sensitivity 89% 93%

Specificity 92% 93%

AHI Threshold 10 15

Publication Karunajeewa et al, Physiol. Meas. 2011;

32: 83-97

Abeyratne et al, Physiol. Meas. 2013;

34: 99-121

• The SnoreSounds detection method & analytical algorithm (US Patent pending) has robust potential for OSA diagnosis in an unattended environment.

• Additional clinical studies are required to replicate & validate these results.

SnoreSounds Clinical Evidence


Goal: Replace Traditional Lab & Home Sleep Tests

9

Patient Needs Provider Needs Payer Needs

• Easy to use • No discomfort • Accurate results • Affordable

• Easy to order • Accurate • Immediate results • Reimbursement

• Cost efficient • Reduce PMPY cost • Validated test • Proven outcomes

Consumer strategy

• Social media • Online advertising • PR & mass media

Provider strategy

• Strategic partner sales force

• KOL Advocacy

Payer strategy

• Clinical evidence • Cost savings • Nat’l Acct force

SnoreSounds’ mHealth approach uniquely addresses patient, provider, and payer needs, making increased detection of patients-at-risk both efficient and economically feasible. With additional clinical studies driving advocacy, it has the potential to replace conventional PSG & HST studies for OSA diagnosis on a global scale.

Proprietary & Confidential

Dual Strategy Business Model

10

A simultaneous, two-prong business model will enable the company to grow substantial revenue from: 1) SnoreSounds app customers

• Distribute app directly to snoring consumers

• Record & analyze snoring to predict OSA • Charge in-app fee for MD report (to

EMR) for positive OSA patients • In-app purchases of additional services • Validated diagnostic app allows MD to

treat without further testing

SnoreSounds Smartphone App 1

Developed for iPhone & Android platforms

Dual Strategy Business Model

11

2) licensing the SnoreSounds algorithm access to other health, fitness & wellness partners.

• Therapy companies • Wearable fitness monitors • mHealth sensor leaders in

diabetes, cardio, respiratory • Disease management firms • Payers concerned about OSA

Universal Platform Integration 2

Licensing of application program interface (API)


SnoreSounds App Revenue Generation Model


$0

$20

$40

$60

$80

$100

$120

$140

2016 2017 2018 2019 2020

Strategic partnersWearable sensor licensingGov'tAdvertisingData/AnalyticsApp Purchase

In M

illio

ns o

f $$

Consumer Directed Diagnostics (CDD) Pipeline

13

Appian is developing a product pipeline to benefit all patients and physicians dealing with OSA. • A second medical app for use by physicians and parents to identify children at risk for OSA – a

growing problem in the USA, linked to ADHD, diabetes, and growing obesity.

o SnorScor app screens for moderate-to-severe OSA o Highly predictive & clinically validated

• Appian is actively seeking & evaluating complementary technologies to cement leadership in

the delivery of accessible, accurate & affordable OSA diagnosis and management

Global OSA

Diagnostic Market (100 M)

Adult Diagnosis

Needs Therapy

Effectiveness Measurement

Needs

Pediatric Diagnosis

Needs

CDD Needs

• Accessible • Accurate • Affordable

APP 01 SnoreSounds

APP 02 SnorScor

mHealth Momentum Will Benefit SnoreSounds

$0.4B $0.6B

$0.7B

Q1 2014

Rock Health reports that mHealth funding is off to a stellar start in 2014, with Q1 investments up 87% over record-setting 2013.

• Investment in digital health leads all other health sectors (software, biotech, medical devices)

Appian Product Strategy Fits mHealth Growth Path

Digital Health Future Development Directions: • Electronic health

records (EHR) • “Big Data” analytics • Digital devices • Wearable sensors • Comprehensive

platforms • Consumer health

tools

• Apple, Intel, Google & Samsung making major investments in consumer mHealth

• Industry analyst reports that global mHealth market will top $49 B by 2020

• 50% CAGR over next 6 years

Industry Dilemma Solution

Technology Companies

(Apple, Medtronic, Samsung, Google)

Payers & Disease Management

Sleep Therapy Companies

• Intense competition • Insatiable need for product

differentiation • Digital leadership • Customer acquisition

• High marketing costs • Low conversion • Titration & efficacy • Patient adherence • New patient pool

• Competitive differentiation • Enhance customer

experience • Increase mHealth presence • Gather relevant user data

• Qualified leads • Create brand preference • In-home convenience • Mass market screening • Test therapy effectiveness

Potential SnoreSounds Partnerships


• Efficient screening of population at risk • High testing costs • Low completion rates • Therapy adherence • Long term cost benefit

• Large scale risk assessment • Efficient cost per member • Valid diagnostic results • High completion rates with no false negatives • Access to big data

SnoreSounds Key Milestones Timeline

17

Seed Round $2 million

Public Round $5 million

Q2 2014 Q1 2015 Q4 2014 Q3 2014 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Develop commercial app version

Validation study program

Build core management team

Initiate market research & market preparation

FDA pre-submission mtg.

B2B partnership pitches

FDA submission

Outcomes study program

Beta test app & API

Marketing pre-launch

US launch

FDA clearance

Post-financing valuation = $26 MM


Pre-financing valuation $6 MM

Funding Needs

18

• Seed round funding of $2MM completed in Q2 2014

Develop commercial version of app Develop electronic medical records (EMR) interface Conduct app validation study program Initiate market research & preparation Operating capital

• Public round financing of $5MM in Q3 2014

Conduct outcomes study Complete app development Regulatory strategy – submit to FDA for OTC clearance Market pre-launch Business Development initiatives & partnership presentations Support US launch


Management Team

19

Michael J. Thomas Chairman, CEO, Founder

• Former CEO of iSonea Ltd (ASX:ISN), created $250MM shareholder value in a respiratory mobile health & medical device company

• CEO of Appian Partners LLC, a device & healthcare consulting firm • Former President & CEO of Sleep Solutions, a VC-backed medical device company &

pioneer in home sleep testing • Raised >$100 million in VC / public funding over 4 start ups • Former EVP Sales & Marketing for National Sleep Technologies, leading the acquisition

of 80 sleep labs (NST acquired by GE Medical) • Former VP Sales at Patient InfoSystems (NASDAQ:PATI) and instrumental in taking

company public • Pharmaceutical experience at Merck and GlaxoWellcome • Microbiology degree from Cornell University

Michael Cheney Chief Marketing Officer

• Former VP Marketing for iSonea Ltd, a respiratory mobile health & device company • Former VP Marketing & International Business Unit , Cyberonics Inc. • Former Marketing Officer, NovaSom Inc, a pioneer in OSA home sleep tests • 25 years in strategic marketing leadership roles in phama, biotech, device • Launched market leading/shaping brands for Wyeth, BASF/Knoll, Cyberonics

Jonathan Freudman, MD Medical Director

• Founder, Freudman Healthcare Consulting LLC with 25 years of healthcare experience • Medical Director, iSonea Ltd ; former Medical Director, Sleep Solutions Inc. • Pivotal role in Medicare National Coverage Decision for home sleep testing for OSA • Previously managed Medical Policy Dept. , Blue Shield of California & chaired P&T

Committee; served on national BCBSA Medical Policy Committee • 16 years in practice of internal medicine at Kaiser Permanente; dept. Chief of IM • Board Certified IM; FACP; grad. George Washington University School of Medicine


TBD Chief Technology Officer

• TBD

TBD VP Sales & Business Development

• TBD

• Obstructive sleep apnea (OSA) represents a significant, under-penetrated opportunity

in the US and global markets: 40MM undiagnosed in US, >100MM undiagnosed world-wide

• Advances in sleep testing technologies, both in lab and in home tests, have not met

the need for rapid, efficient, and cost-effective screening and diagnosis of OSA.

.

• Low cost + easy-to-use + rapidly scalable + high margin

• Successfully pioneered digital technology & OSA diagnostic testing to change medical practice.

Summary of SnoreSounds Opportunity


Massive Market

Unsolved Problem

Appian Solution

Proven Team

SnoreSounds Mobile Health Solution for a Global Diagnostic Dilemma

Michael J. Thomas Appian Medical Pty Limited

+1.410.777.5251 | [email protected]

21 © 2014 Appian Medical Pty. Ltd. Proprietary & Confidential

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