1. April 14, 20041 STATag Milestones Presentation Daniel Tubbs Brian Easton Jason Sadler Latricia Simon Joseph Williams Francis Doligosa

2. April 14, 2004 2 The STATag Solutions for Real-Time Equipment Tracking

3. April 14, 20043 Problem Hospitals need to reduce costs to increase profitability – –From 1997 to 2001, spending on hospital care increased by $83.6 Billion 3 – –Hospital gross margins have declined annually every year since 1997 3 – –Wages & Benefits for nurses account for 36% of Hospital costs ($166.4 Billion) 3

4. April 14, 20044 Percent of Total Hospital Costs by Type of Expense Cost of Caring: Key Drivers of Growth in Spending on Hospital Care, PriceWaterhouseCoopers, February 19, 2003 (Appendix B)

5. April 14, 20045 The Cost of Inefficiency 35-60% of a nurse’s time is wasted on 5 –Searching for equipment –Clarifying orders –Entering redundant information Wasting $58 - $99 Billion annually 6

6. April 14, 20046 Solution The use of STATags will: Reduce man hours searching for needed equipment Lower operating costs –Save a real $1 for every $4 of efficiency gained 7 (Reduction of overtime, increased turnaround, etc.) Increase staff efficiency –Increase a nurse’s efficiency at least 10% 5

7. April 14, 20047 “Brilliant Idea” - Cindy Jimmerson, founder of reVIEW (Realizing Exceptional Value in Everyday Work), and National Lecturer on Hospital Efficiency

8. April 14, 20048 User Interface Views Default screen presents the user with a list of items that can be queried User selects item and selects ‘Query Nearest Device’ to locate that closest particular item An ‘Administrative Use’ button is also available for authorized personnel to make any necessary maintenance to the system

9. April 14, 20049 User Interface View Following query execution, a next screen presents a map of the facility and the location of the nearest queried item

10. April 14, 200410 STATag Network

11. April 14, 200411 Individual STATag

12. April 14, 200412 Software Interface (STATag – Server) General Specifications –All STATags have a unique ID –STATags transmit their location periodically or when queried –STATag location data is stored in the database by STATag ID –Software interface updates the database using SQL

13. April 14, 200413 User Interface Allows for fast lookups User selects type equipment to locate Query is sent to web server Web server retrieves the location of the closest piece of equipment of the selected type Position is displayed on a map for the user

14. April 14, 200414 Underlying Interface Abstraction Installation associates the equipment’s serial number and equipment type with the STATag’s unique ID Equipment type queries return all STATag IDs associated with the requested type Each STATag’s location is compared to the requester’s location Location of the closest STATag not in use is returned

15. April 14, 200415 Objective Create a Real-Time Equipment Tracking system using STATags that increases staff efficiency and allows hospitals to reduce operating costs

16. April 14, 200416 STATags will: Use “Dead Reckoning” to determine current location Use network security Self-discover & self-configure network Handle large quantities of equipment

17. April 14, 200417 STATags will (continued): Activate Alarms Store historical location and usage data Run without intervention for long periods – –Battery lasts 5-7 years – –Need calibration only when battery is changed

18. April 14, 200418 STATags will not: Prevent theft Collect or transmit personally identifiable health information (covered under HIPAA) Communicate further than 100 feet between STATags

19. April 14, 200419 Major Risks Interference with hospital monitoring equipment – –STATag transmits 1% the power of other safe wireless devices – –Most major Hospitals are implementing WiFi Conflicts with other 2.4 GHz networks – –802.15.4 has been designed for interoperability 802.15.4 and ZigBee are new standards and therefore there maybe unknown issues – –Hardware issues are being resolved by manufactures – –Software issues will be correctable by patching

20. April 14, 200420 Management Plan The management plan encapsulates the following: –Program management overview –Management structure –Project team –Project planning –Financial management –Management reviews

21. April 14, 200421 Team Distribution Project Lead / Computer Engineer Daniel Tubbs Manufacturing Director Francis Doligosa Inventory Manager Personnel Director Joseph Williams Installation Engineers Help Desk Coordinator Support Staff Development Staff Technical Writer Marketing & Web Development Jason Sadler Sales Manager Salesmen Graphics Designer R&D / QA Latricia Simon Computer Engineer Drafter Financial Director Brian Easton Office Manager Accounts Manager Accounts Receivable

22. April 14, 200422 Evaluation Plan Monitor milestones Track budget and schedule Monitor quality assurance Track customer impact and satisfaction Evaluate areas for improvements

23. April 14, 200423 Marketing Plan Target market: US Hospitals Installation cost: approximately $392,000 The hospital will recover the installation cost in only 7.5 months The hospital will save $6.1 Million over 10 years Sold via direct sales

24. April 14, 200424 Market Analysis Our target market is US hospitals: Hospitals: 5,794 2 Total Registered Beds: 975,962 2 Estimated mobile medical equipment in US: Approximately 10 Million 4 Potential future market: International hospitals

25. April 14, 200425 Market Analysis (continued) Hospital equipment is very expensive and highly mobile Equipment tracking is a large problem that causes: – –Time consuming equipment searches – –Unnecessary equipment purchases Locating equipment is one of the Top 10 most wasteful hospital activities 7

26. April 14, 200426 Hospital Savings

27. April 14, 200427 Funding Plan Phase 1 – $100,000 SBIR Phase 1 Grant Phase 2 – $750,000 SBIR Phase 2 Grant Phase 3 – $200,000 SBA Loan Break even point – August 15, 2006 Net Profit as of December 31, 2007 $76.4 Million

28. April 14, 200428 Balance Sheet: Phases 0-2

29. April 14, 200429 Balance Sheet: Phase 3

30. April 14, 200430 Major Milestones – Phase 0 3-May-04SBIR Grant Application 3-May-04SBIR Presentation

31. April 14, 200431 Deliverables - Phase 0 12-Jan-04Project Start 11-Feb-04Individual Project Presentation 17-Mar-04Feasibility Presentation 14-Apr-04Milestone Presentation 3-May-04Website Complete

32. April 14, 200432 Major Milestones – Phase 1 10-Sep-04Prototype Specifications (Draft) Complete 19-Nov-04Lab Prototype Built 25-Nov-04Lab Prototype Testing Complete 2-Dec-04Product Specification (final) Complete 10-Dec-04SBIR Phase 2 Application Submitted

33. April 14, 200433 Deliverables - Phase 1 8-Oct-04Parts Acquired 29-Oct-04Computer Interface Complete 1-Nov-04Dead Reckoning Module Complete 28-Oct-04802.15.4 Module Complete 18-Nov-04Software Interface Complete

34. April 14, 200434 Major Milestones – Phase 2 25-Feb-05SBA Loan Obtained 9-May-05Database Development Complete 11-Aug-05Web Interface Development Complete 28-Sep-05Integration Testing Complete 25-Feb-05Documentation Complete 26-Apr-05Design Finalized 3-Jan-06FCC Approval Received 10-Jan-06STATags ready for Real World Testing 2-May-06STATags Ready for Sale

35. April 14, 200435 Major Milestones – Phase 3 8-Aug-06Full Production 11-Jul-06Support Department Established 8-Aug-06Installation Engineers Trained 15-Aug-06Break Even Point

36. April 14, 200436 Project Budget Phase 1 $96,600 Phase 2 $836,000 Phase 3$3,431,600 Total$4,364,200

37. April 14, 200437 Budget by Year 2004 – $206,976Phases 0 & 1 Complete 2005 – $505,512Production Sample Complete, FCC Testing Complete 2006 – $1,599,104Phase 2 Complete, Full Production, Installed in 43 hospitals 2007 – $2,052,600Installed in 271 hospitals Total $4,364,192

38. April 14, 200438 Resources - Phase 1 Office Space 2600 Sq. Feet$7,200 Utilities$2,000 Telephone/Internet$1,600 Office Furniture$6,000 Electrical Eng. Equipment$2,500 Office Computers$8,000 Peachtree 2004$1,000 Network / Server$3,500 MS Visio / MS Project$3,000 Web Site Hosting $200 Prototype Parts$1,000 Total $36,000

39. April 14, 200439 Personnel - Phase 1 Francis Deligosa - Manufacturing Director$9,000 Daniel Tubbs - Team Manager / Computer Engineer$9,000 Joseph Williams - Personnel Manager$9,000 Latricia Simon - R & D Manager / QA Manager$9,000 Brian Easton - Finance Officer$9,000 Jason Sadler - Marketing Director$9,000 Drafter (plastic parts) $600 Computer Engineer$6,000 Total $60,600

40. April 14, 200440 Resources - Phase 2 Office Space 2600 Sq. Feet$30,600Car Rental $400 Utilities $8,500Telephone/Internet $6,800 Office Furniture $6,000Office Computers$12,000 Network / Server $6,000Development Software $8,000 Web Site Hosting $850Graphics Designer $1,600 Trade Show Booth Rental$30,000Trade Magazine Ad$55,000 Airfare to Tradeshow $4,000Hotel $1,000 Entertainment $1,000Test WWW Server $2,500 Test DB Server $2,500Test Workstations $3,000 Plastic Tooling$40,000Production Engineering$15,000 Test Run $5,000Error Reporting Software $5,000 FCC Approval Testing$20,000 Total $264,750

41. April 14, 200441 Personnel - Phase 2 Daniel Tubbs - Team Manager$68,000 Joseph Williams - Personnel manager$59,500 Brian Easton - Finance Manager$59,500 Latricia Simon - R&D Manager / QA Manager$59,500 Jason Sadler - Marketing Director$59,500 Francis Deligosa - Manufacturing Director$59,500 Office Manager$42,500 Lawyer$54,000 Software Engineer 2$76,500 Technical Writer $8,750 Installation Engineer$12,000 Network Engineer$12,000 Total $571,250

42. April 14, 200442 Resources - Phase 3 Office Space 6000 Sq. Feet $80,000 Utilities $20,000 Telephone/Internet $12,000 Office Furniture $10,000 Office Computers $20,000 Network / Server $10,000 Development Software $10,000 Web Site Hosting $1,000 Trade Show Booth Rental$120,000 Trade Magazine Ad $44,000 Airfare to Tradeshow $32,000 Car Rental $1,600 Hotel $8,000 Entertainment $8,000 Ticket Tracking Software $5,000 Retool Plastic Mold$320,000 Total$701,600

43. April 14, 200443 Personnel - Phase 3 Daniel Tubbs - Team Manager$100,000 Joseph Williams - Personnel manager $80,000 Latricia Simon - R&D Manager / QA Manager $80,000 Brian Easton - Finance Manager $80,000 Jason Sadler - Marketing Director $80,000 Francis Delegosa - Manufacturing Director $80,000 Office Manager $70,000 Accounts Manager $80,000 Accounts Receivable $70,000 Lead Installation Engineer$100,000 Installation Engineers (6)$540,000 Help Desk Coordinator $60,000 Tech Support (3)$150,000 Sales Manager$140,000 Salesmen (6) $720,000 Software Engineers 1 (3)$240,000 Inventory Manager $60,000 Total $2,730,000

44. April 14, 200444 References & Calculations 1 $462,221,560,000 2 x 57% 3 (all wages & Benefits) x 63% 3 (nurses wages & benefits) 2 2 Hospital Statistics, 2004 edition, American Hospital Association, as reported by the American Hospital Association website (Appendix B) 3 3 Cost of Caring: Key Drivers of Growth in Spending on Hospital Care, PriceWaterhouseCoopers, February 19, 2003 (Appendix C) 4 975,962 2 Beds x 10 Mobile Medical Devices per bed = 9.76 Million Mobile Medical Devices

45. April 14, 200445 References & Calculations 5 Cindy Jimmerson, April 7, 2004 6 $166 Billion (Nurse’s Salary and Benefits) 1 x 35% = $58 Billion $166 Billion (Nurse’s Salary and Benefits) 1 x 60% = $99 Billion $166 Billion (Nurse’s Salary and Benefits) 1 x 60% = $99 Billion 7 Murphy, Mark: Eliminating Wasteful Work in Hospitals Improves Margin, Quality, and Culture (Appendix D)

46. April 14, 200446 Questions?