mokmedical thermal ablation

7/29/2019 Mokmedical Thermal Ablation

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6665 Busch Blvd, Columbus, OH 43229

MOKMEDICALre-inventin thermal ablation

MEDICAL DEVICE OPPORTUNITY

I have created an improved method for ablation therapy.! This device is applicable to allprocedures that use thermal ablation in a medical procedure.! There are five proceduresthat involve insertion of a device into the body without an incision.! Additionalprocedures using ablation are done requiring surgical incisions.! I will initially focuson Endometrial ablation and Barrett's Esophagus

Endometrial Ablation

Endometrial ablation is a medical procedure that is used to remove (ablate) or destroythe endometrial lining of a woman's uterus. This technique is most often employed forwomen who suffer from excessive or prolonged bleeding during their menstrual cycle butcan not or do not wish to undergo a hysterectomy.

The procedure is most commonly done on an outpatient basis. Uterine ablation iscontraindicated in patients who may want to get pregnant.

A number of competing procedures are available.

The HTA System uses a small telescope-like device called a hysteroscope which is insertedinto the uterus through the cervix, to help doctors safely confirm proper probe placementand to see the area they are treating. This device circulates heated saline which burnsthe lining of the uterus. This procedure will stop, or significantly decrease, menstrualbleeding. 68% of patients who have undergone this procedure reported a satisfactorydecrease in menstrual flow.


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An alternative is the Thermachoice III balloon that is filled with heated fluid to

destroy the uterine lining. The fluid is safely contained in a flexible andnon-allergenic material that conforms to most uterine shapes and sizes with no reductionof efficacy. 81% of patients report returning to normal levels of menstrual bleeding orlower.

With the Novasure system a mesh is introduced into the cavity and the lining is destroyedby applying electrical energy to the mesh that will thermally damage the adjacentendometrium. 78% have a successful reduction in bleeding down to normal levels.

Older methods utilize hysteroscopy to insert instruments into the uterus to destroy thelining under vision using laser or electrical current in a small loop. Another system

introduces a radiofrequency rod that emits energy to destroy the uterine lining.

The proposed method is very similar to Novasure, excepting that EACH POINT on the mesh isindividually powered and measured to provide an improved result.

The procedure is done while the patient is either under local anesthesia, or, ifnecessary, general or spinal anesthesia. The recovery period can be from one day up to 2weeks.

After the procedure, the endometrium heals by scarring, reducing or removing thepossibility of future uterine bleeding. The patient may develop amenorrhea, howeverhormonal functioning will remain unaffected. It is still possible to become pregnantafter having this procedure. Some type of birth control method must be used after havingendometrial ablation.

Approximately 90% of women who undergo this procedure will have reduced menstrualbleeding. Of those, approximately 45% will stop having periods altogether. However, asecond procedure or a hysterectomy will be required in approximately 22% of cases.

Although uncommon, the procedure can have serious complications including:

!! * Perforation of the uterus!! * Burns to the uterus (beyond the endometrial lining)!! * Pulmonary edema or embolism!! * Bowel BurnThese complications are likely to be reduced with the method I am proposing.


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Endometrial Ablation

Endometrial ablation is a procedure to

permanently remove a thin tissue layer of the

lining of the uterus to stop or reduce excessive

or abnormal bleeding in women for whom

childbearing is complete. The lining of the uterus

is called the endometrium. In some cases,

endometrial ablation may be an alternative to

hysterectomy.

The Menstrual Cycle

With each menstrual cycle, the endometrium

prepares itself to nourish a fetus as increased

levels of estrogen and progesterone help to

thicken its walls. If fertilization does not occur,

the endometrium, coupled with blood and

mucus from the vagina and cervix (the lower,

narrow part of the uterus located between the

bladder and the rectum) make up the menstrual

flow (also called menses) that leaves the body

through the vagina. After menopause,

menstruation stops and a woman should not

have any bleeding.

Reasons for the Procedure

Menorrhagia is a condition in which a woman

has extremely heavy menstrual periods or

bleeding between periods. Also cal led

dysfunctional uterine bleeding, menorrhagia is

characterized by heavy and prolonged

menstrual bleeding. In some cases, bleeding

may be so severe and relentless that daily

activities become interrupted and anemia

develops.

Multiplexed HeaterResectoscope


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Barret's Esophagus

Barrett's esophagus refers to an abnormal change (metaplasia) in the cells of the lowerend of the esophagus thought to be caused by damage from chronic acid exposure, or refluxesophagitis.! The normal lining of the esophagus (squamous epithelium) is replaced by anintestinal-type lining (columnar epithelium).

Barrett's esophagus is found in 5-15% of patients who seek medical care for heartburn(gastroesophageal reflux disease, GERD), although a large subgroup of patients withBarrett's esophagus do not have symptoms. It is considered to be a premalignant conditionbecause it is associated with an increased risk of esophageal cancer (more specifically,adenocarcinoma) of about 0.5% per patient-year. Diagnosis of Barrett's esophagus requires

endoscopy (more specifically, esophagogastroduodenoscopy, a procedure in which a smalltube with a camera at the top is used to look at the esophagus, stomach and first part ofthe bowels) and biopsy (taking small tissue samples which are analysed using microscopy).

The progression from Barrett's esophagus to esophageal cancer is divided intonon-dysplastic changes, low-grade and high-grade dysplasia (abnormal cell maturationassociated with a risk of progression to cancer) and frank carcinoma. In high-gradedysplasia, the risk of developing cancer might be at 10% per patient-year or greater.

The risk of malignancy is highest in the U.S. in Caucasian men > 50 years of age with > 5years of symptoms. It is unusual for African-American men to develop adenocarcinoma ofthe esophagus, the cancer associated with Barrett's. Current recommendations includeroutine endoscopy and biopsy (looking for dysplastic changes). If two endoscopies andbiopsy sessions performed within 12 months are negative for dysplasia then surveillancecan be performed every 3 years while the underlying reflux is controlled with proton pumpinhibitor drugs in combination with measures to prevent reflux. For patients found tohave low grade or high grade dysplasia close observation and repeat endoscopy andbiopsies are indicated and the patient should be followed closely by a gastroenterologist.

Proton pump inhibitor drugs have not yet been proven to prevent esophageal cancer. Lasertreatment is used in severe dysplasia, while overt malignancy may require surgery,radiation therapy, or systemic chemotherapy. Additionally, a recent 5-yearrandom-controlled trial has shown that photodynamic therapy using photofrin isstatistically more effective in eliminating dysplastic growth areas than sole use of aproton pump inhibitor.! There is presently no reliable way to determine which patientswith Barrett's esophagus will go on to develop esophageal cancer, although a recent studyfound that the detection of three different genetic abnormalities were associated with asmuch as a 79% chance of developing cancer in 6 years.


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Short segment Barrett's esophagus The short segment of

Barrett's esophagus is seen here as a strip or "tongue" ofred lining surrounded by normal pinkish-white squamous

lining. There is a small island of Barrett's esophagus,

surrounded by normal squamous lining, next to the tongue

of Barrett's esophagus.

Short segment Barrett's esophagus

The squamocolumnar junction, where the Barrett's

esophagus joins the normal squamous esophagus, is a

great distance from the bottom of the esophagus due to

the long segment of Barrett's esophagus.

Long segment Barrett's esophagus

Barrett's esophagus is marked by the presence of

columnar epithelia in the lower esophagus, replacing the

normal squamous cell epithelium. These columnar cells

increase the risk of adenocarcinoma.

Ablation of the columnar epithelia has recently been proven

effective treatment for Barretts esophagus based upon

research completed Summer 2009 at the Mayo Clinic.


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In May 2008 the Mayo Clinic reported that the HALO ablation system from BARRX Medical,

Inc., was effective in treating Barrett's esophagus.! This is a non-surgical endoscopictreatment involving radio-frequency ablation.! The results were published inGastrointestinal Endoscopy.

My proposed method of ablation is an improvement over the BARRX Medical device.

Surgical treatments include endoscopic mucosal resection (EMR) which has also beenevaluated as a management technique. Additionally an operation known as a Nissenfundoplication can reduce the reflux of acid from the stomach into the esophagus.

In a variety of studies, non-steroidal anti-inflammatory drugs (NSAIDS), like aspirin,

have shown evidence of preventing esophageal cancer in Barrett's esophagus patients.However, none of these studies have been randomized, placebo controlled trials, which areconsidered the gold standard for evaluating a medical intervention. In addition, the bestdose of NSAIDs for cancer prevention is not yet known.

According to the Center for Disease Control a majority of women complain of heavybleeding and as many as 1 in 5 may be recommended for some sort of treatment.! Also, 1 in10 Americans suffer heartburn, the initial indicator of Barret's Esophagus.

Over 60,000 procedures of each type are completed each year, and they cost beetween$17,000 and $23,000 each.

An improved treatment method not involving surgery can reduce costs by 20% or more and soa value of $2,000 to $3,000 per disposable heating device is easily supported.

120,000 procedures x $3,000 = $360,000,000 per year.

Costs of the disposable device is less than 10% of the value of the device.! Value of thecompany assuming a $300 million EBITDA and 12x valuation is $3.6 billion.! This rate ofsales will likely be achieved within 5 years of approvals.! Break even will likely occurwithin 24 months.

A portion of profits will develop other ablation procedures using the same generalapproach to increase sales.

PROPOSED MEDICAL INVESTMENT:

I agree with Phil when he said my earlier offer was too rich.! I have spoken with the TSXfolks and have adjusted valuation up from $2 million at this point to $5 million.!


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Despite the lower shares this valuation for the investors will actually pay dividends to

them because it will reflect a stronger price as we enter the IPO.

So, I am selling 8 shares at $125,000 each - which will result in 2.5% ownership of amedical device company to be formed (MokMedical Corporation) I will assign all IP relatedto this device and I will then build a prototype over the next 3 months and organize anIPO on the TSX and raise $2.5 million to $5.0 million by selling an additional 20% whichwill dilute everyone accordingly.

This IPO will allow me to organize pre-clinical efforts which when completed by Summer2010 will allow me to sell an additional $7.5 million to $15.0 million as I enterclinical phase 1 trials.

Each of the three phases will allow me to raise additional money.! Once final approvalsare obtained for these two procedures, I will then market the devices and build sales to

the levels indicated, which will build value to the levels indicated.

Angel: (conceptual)$125,000 - 2.5% shares - MokMedical! - $5,000,000 valuation8 units $1,000,000

IPO: (preclinical)20% public shares - $3,000,000 - $15,000,000 valuation

Angel investors 2.5% diluted to 2.0% while valuation increases up to 3x - so each$125,000 unit is worth $300,000 with IPO of $15 million, which will occur within 90 days.

Investors may sell up to 20% of their shares at this time, to reclaim $60,000 in thisexample with a reduction to 1.6%.

ROUND 2: (clinical - phase 1)20% public shares - $45,000,000 valuation

Angel investors 2.0% is reduced to 1.6% here.! Those who took advantage of the cash outoption at IPO see their 1.6% reduced to 1.28% Value of the original $125,000 is in thisexample;


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!!!POSSIBLE VALUES AT EACH ROUND OF FINANCING - BASED ON EXAMPLEABOVE

!!!!!!!" ANGEL!!" IPO " " IPO" " ROUND 2!" ROUND 2 " " " CASH" " VALUE" CASH" " VALUE!!!CASE 1: $125,000"" $0" " $ 300,000" $0" " $ 720,000!!!CASE 2: $125,000!!" $0" " $ 300,000" $144,000" $ 576,000!!!CASE 3: $125,000!" $60,000!" $ 240,000!!!" $0!!!!!!" $ 576,000!!!CASE 4: $125,000!" $60,000!" $ 240,000!" $115,200!!!!"$ 460,800!!!AFTER ROUND 2: (six months)!!!!!!!!" CASH!!!" STOCK!!!" NET!!!CASE 1:!" ($125,000)!" $720,000!" $595,000!!!CASE 2:!!" $ 19,000!" $576,000!" $595,000!!!CASE 3:!" ($ 65,000)!" $576,000!" $511,000!!!CASE 4:!!" $ 50,200!" $460,800!" $511,000


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Toronto StockExchange

TSX VentuExchange

Leadership in Life Sciences

Number of Life Sciences Issuers Listed 52 74 126

Quoted Market Value (C$ billions) $0.392 $ 9.6 $10.0

New Life Sciences Listings 2 - 2

Equity Capital Raised (C$ billions)* $0.026 $0.143 $0.169

Volume Traded (billions of shares) 0.536 1.4 2.0

Value Traded (C$ billions) $0.080 $3.0 $3.0

Number of Trades (millions) 0.040 1.2 1.2

Markets at a Glance First Half 2009

TSX Venture Exchange

*Includes Supplementary Financings

Toronto Stock Exchange TSXV and TSX

Access to Capital for Companies at VariousStages of Growth

The Canadian investment community supports earlyto late stage companies, with IPOs ranging from

$10 million to $150 million plus.

Trading and Investing Depth

Vibrant retail investor base

Strong equity culture almost half of Canadians own shares Institutional investor base that understands life sciences Rules facilitate both small and large financings and private

placements

TMX Group - Advancing Life Sciences

TMX Groups equity exchanges, Toronto Stock Exchange and TSX Venture Exchange, provide access to equity capital that is essentialfor growth-oriented life sciences companies anywhere in the world.

TMX Group offers cost efficient markets for small- to mid-size life sciences financings. Renowned for its consistently high standardsand innovative product offerings, Toronto Stock Exchange (Canadas senior equities marketplace) provides life sciences companieswith a dynamic market to access North American and global capital.

TSX Venture Exchange provides early-stage life science companies with the opportunity to gain a solid foothold in the public capitalmarkets, as well as the potential to work towards a graduation to Toronto Stock Exchange.

Be a part of it. Benefit from liquidity, visibility for transactions, analyst coverage, specialized indices, and listing requirementsspecifically tailored to life sciences companies.

Financing Growth Companies

Public Equity

Private Equity

CapitalRequired

Stage of Company Growth

Concept Pre-Clinical Phase 1 Phase 2 Phase 3

Toronto Stock Exchange | TSX Venture Exchange | Montral Exchange | Natural Gas Exchange | Montral Climate Exchange | Boston Options Exchange

Canadian Derivatives Clearing Corporation | TMX Datalinx | Equicom | PC Bond | Shorcan


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SHOP AREA

(production support)

LABORATORY AREA

DEMO

AREA



STORAGE

QC

SALES

QC

SALES SALES

RAW

MATERIALS

PRIMARY

PRODUCTION

SHIPPING

RECEIVING

SALES

MOKMEDICAL


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The manufacture of plastic film for products such as shopping

bags is achieved using a blown film line that I use here.

This process is a regular extrusion process up until the die. The

die is an upright cylinder with a circular opening similar to a pipe

die. The diameter is a few millimeters in diameter and blow to

more than three centimeters across. The molten plastic is pulled

from the die. Changing the speed changes the gauge (wall

thickness) of the film. Around the die sits an air-ring. The air-ring

cools the film as it travels. In the center of the die is an air outlet

from which compressed air is forced into the center of the

extruded circular profile, creating a bubble. This expands the

extruded circular cross section by some ratio (a multiple of the

die diameter). This ratio, called the blow-up ratio can be just a

few percent to more than 200 percent of the original diameter.

The film is then pressed on to bare wires, molded into shape,and heat sealed into finished multiplexed heater units.

The multiplexer is created by co-extruding many blown films

nested inside one another. A wire coating process is used to

create a heater array. Here arrays of bare wires are jacketed by

plastic by pulling the wires through the blown film which is then

shaped by a mold into the desired shape and sealed at one end.

This is a form of pressure tooling since intimate contact and

adhesion are required of the polymer used. Bare wires are

wound along each layer in a spiral pattern. One set is wound

with a left-handed turn another set with a right-handed turn.

When the spirals are placed atop one another they form a co-

incident array that shorts electricity through a heating element

co-extruded with the other layers. Connections are crimped,

soldered and molded in place to a multiplexer ring.

Blown Film Line

Co-extruded Parts

Left Hand Spiral

Right Hand Spiral

Co-incident Array

Multiplexer Ring

Element Detail

mokmedical thermal ablation

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