Theralase Inc. Executive Summary 2013

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Theralase Technologies Inc., founded in 1995, designs, develops, manufactures and markets patented, superpulsed laser technology utilized in biostimulation and biodestruction applications. Theralase technology is safe and effective in treating pain, inflammation and for tissue regeneration of neural muscular skeletal conditions and wound healing. As well, these applications extend to the care of animals by veterinarians. Theralase is currently developing patented Photo Dynamic Compounds (PDCs) that are able to target and destroy cancers, bacteria and viruses when light activated by Theralase’s proprietary laser technology.

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Theralase Inc. Executive Summary 2013

  1. 1. CONFIDENTIAL Page 1Executive Summary – 2013CompanyTheralase Technologies Inc. (TSXV: TLT) designs, develops and manufactures patented, superpulsed lasertechnology used in a wide range of biostimulation and biodestruction clinical applications. The Theralasetechnology platform targets several diverse healthcare sectors:Theralase Technologies Inc. is focused on a two‐part strategy:1. Production, marketing and distribution of the Theralase Superpulsed Laser for sale to health carepractitioners that are dedicated to the treatment of chronic pain, sports injuries and wounds. In 4Q2013,launch the patented TLC‐2000 biofeedback laser system internationally to provide a quantum leap intherapeutic laser technology.2. Commercialization of patented cancer technology through preclinical research, human clinical trialsand regulatory approvals in the direct destruction of cancer.ScienceIn 1917, Albert Einstein first published the principle of Light Amplification by Stimulated Emission ofRadiation, or quite simply lasers. In June 1960, Theodoro H. Maiman constructed, using a ruby crystal, thefirst operational laser. In 1965, doctors Sinclair, Knoll and Mester pioneered the way for therapeuticlasers; lasers that do not cut or destroy tissue, but lasers that heal and have a therapeutic curative effecton tissue. Approximately 3,000 clinical studies worldwide have attested to the beneficial and curativeeffects of therapeutic lasers. In the last twenty years, therapeutic lasers have dramatically increased inpower and effectiveness and decreased in cost and size.Therapeutic laser therapy is a universal way of treating and healing tissue structures, such as: muscles,tendons, ligaments, joints, connective tissues, bones and skin. There are thousands of tissue conditionsthat therapeutic medical lasers can be applied to, such as: pain relief, muscular‐skeletal conditions, nerverehabilitation, wound healing, anti‐aging and addiction therapy.Biodestructive laser therapy uses proprietary laser technology to activate the Photo Dynamic key ofspecifically designed Photodynamic Compounds (PDCs) that have an affinity to certain tissue types andwhen light activated have the ability to destroy the target cell. There are thousands of potentialapplications of this technology including the destruction of: cancer, bacteria and viruses. Theralase has aworldwide exclusive patent to a platform of PDCs that are unique in that they are activated via a Type 1reaction that is independent of oxygen, an important characteristic, as solid core tumors (i.e. breast,bladder, lung, brain, prostate, et cetera) are hypoxic (low oxygen) in nature.
  2. 2. CONFIDENTIAL Page 2Products1) TLC‐1000 Biomedical Laser Platform (to be phased out by 2014)The TLC‐1000 therapeutic laser technology is a non‐invasive, superpulsed, dual wavelength, multiplediode laser system that has three specifically designed probes; a multiple probe used for neural muscularskeletal conditions, a dermatological probe used for facial and small area treatments and an acupunctureprobe used for stimulation of acupuncture and trigger points. The TLC‐1000 is FDA, Health Canada and CEapproved and is the current lead product in the Company’s US sales and marketing expansion. Inaddition, Theralase has product distributors in the Middle East and China.Theralase provides turnkey support on its technology, enabling customers to deliver safe, effective andprofitable rehabilitation treatments including customer service, clinical training, new applications,marketing and patient referrals.2) TLC‐2000 Biofeedback Laser Platform (Launch date: 4Q2013)The Theralase TLC‐2000 biofeedback laser system is a quantum leap forward in therapeutic lasertechnology. The TLC‐2000 is able to measure a patient’s optical profile in a matter of seconds and thendeliver a precise, clinical dosage of energy to their specific condition in a matter of minutes. Clinicallyeffective dosages specific to optical tissue profiles will be stored in a HIPAA compliant central databankand be available real time to all practitioners utilizing the TLC‐2000 therapeutic laser. The TLC‐2000 lasersystem is also a learning device that remembers the most clinically effective treatments performed bypractitioners and transmits this information to the central databank for the benefit of all users. Theralaseis currently commercializing the technology and plans to introduce the TLC‐2000 laser system to theinternational medical market in 4Q2013. Theralase in keeping with its mandate of world‐class customerservice will allow every Theralase customer, the ability to trade up to the new state of the art TLC‐2000laser system. In order to allow all laser practitioners a common tool to use in the delivery of precisiontherapeutic laser treatments, Theralase will allow purchasers of competitive products the ability to tradeup to the TLC‐2000, under certain terms and conditions.The TLC‐2000 will also be used to launch Theralase into a new business model, the recurring revenuemodel; whereby:Theralase will provide the technology, training, ongoing service and ongoing marketing / customerreferrals for a one time up‐front fee, plus a small portion of each treatment delivered. In this model,Theralase will partner with medical practitioners by lowering the up‐front cost of the equipment andparticipating in each treatment delivered by the practitioner. The equipment will be billed through theinternet; thus, allowing real time payments and control over non‐payment by practitioners.The Theralase TLC‐2000 biofeedback laser technology is patented in the United States, five Europeancountries and Canada.Theralase therapeutic laser systems are manufactured in an ISO‐13485 internationally certified medicalmanufacturing facility based in Toronto, Ontario, Canada.
  3. 3. CONFIDENTIAL Page 33) TLC‐3000 Photodynamic Compound (PDC) / Laser Technology PlatformThis technology involves the research and development of Photodynamic Compounds combined andactivated by proprietary biomedical lasers for the selective destruction of cancers, bacteria and viruses.The clinical applications of this technology may possibly have a significant impact on one of the mostdevastating diseases of our time.Theralase has successfully completed Milestone 1 – in‐vitro Analysis in the R&D of this technology andhas successfully destroyed brain, breast and colon cancer cell lines in an in‐vitro analysis in 2010.Theralase has successfully completed Milestone 2 – Small Animal in‐vivo preclinical analysis of the PDCtechnology, which commenced in 2011 and was successfully completed in 2012.In this phase, completedestruction of colon cancer in an orthotopic mouse model was achieved with the mice now living cancerfree for over 1 year post treatment.Theralase is currently pursuing Milestone 3a – Destruction of bladder cancer in an orthotopic animalmodel.Therapeutic MarketTherapeutic laser technology could potentially be used by over 1 million healthcare practitioners and 300million public consumers in the US and Canada in the next 5 years.The therapeutic laser market is extremely fragmented with no one company seen as the industry leader.All companies claim to have the best product in terms of efficacy, often without any scientific researchsupport. Theralase therapeutic lasers have been tested in gold standard blinded, randomised, controlledclinical studies and have proven unequivocally that the Theralase therapeutic laser system is clinically andstatistically effective in reducing pain and inflammation in a wide variety of patients. Many of Theralase’sclinical studies have been peer‐reviewed and accepted for publication in medical journals as well aspresented at international scientific conferences.Strategic Opportunity:Theralase plans to introduce a new business mode in therapeutic lasers, the recurring revenue model;whereby, Theralase will provide the technology, training, service and customer referrals, in exchange foran upfront fee and monthly usage fee. In this model, Theralase will partner with the medical practitionerby lowering the up‐front cost of the equipment and participating in each treatment delivered by thepractitioner. The equipment will be billed through the internet; thus allowing real time payments andcontrol over non‐payment by practitioners. Theralase expects to generate annual recurring revenue of$48 to $60 million per year within the next 5 years with 8,000 to 10,000 units in operation producing aminimum monthly revenue stream of $500 per month per laser. This financial model has beensuccessfully employed by many Fortune 500 companies, including: cell phone, photocopier, satellite andcable TV industries.
  4. 4. CONFIDENTIAL Page 4Cancer MarketBladder cancer has been chosen as Theralase’s principal cancer target for its lead PDC compound.Theralase PDCs have proved to be toxic to bladder cancer cells when light activated (100% kill rate) atvery low effective concentrations.$3.98 billion is spent annually for Bladder Cancer Treatment in the USA. There are 73,000 new cases andover 15,000 deaths in the US each year; worldwide 386,000 new bladder cancer cases occur annually.Bladder cancer is the most expensive cancer to treat with a recurrence rate of up to 80%. Standardtreatment has remained relatively unchanged with no new drugs approved since 1998.Strategic Opportunity:Completion of a FDA Phase 1/2a clinical study in bladder cancer within 3 years. Theralase would thenmove to sell all rights to the bladder cancer PDC technology to a pharmaceutical company for a milestonepayment of between $113 to $362 million, research and development costs and would include an annualroyalty stream of $50 to 60 million for 17 years.SalesTo roll‐out the TLC‐2000 Biofeedback Laser Platform, Theralase will implement a US and Canadian salesstrategy which focuses on establishing beach heads through physical locations in each of the 5 largest USstates and 2 largest Canadian provinces by population; California, New York, Illinois, Texas, Florida,Alberta and Ontario. A 1500 to 2000 square foot leased property will be secured in each of the majorcities of these territories and employ a full time receptionist, clinic manager, multidisciplinarypractitioners (revenue sharing basis) and a Territory Sales Manager (TSM). The clinic manager will beresponsible for clinic sales, while the TSM will be responsible for product sales. The property will providemultiple functions in one location; including: a multidisciplinary clinic used to generate brand awarenessand clinic sales to offset the overhead of the facility, provide a training and teaching location for newpractitioners, provide a service depot for product warranty exchanges and provide a sales location for theTSM to generate product sales and build a distribution network of sales professionals to sell theCompany’s products on a commission basis.These 7 TSM’s will be supported by the Company with:1) Affiliation with well‐known teaching hospitals, chiropractic, physical therapist and medical doctorteaching universities and colleges to provide high‐level clinical and testimonial support3) Regional and national sales and marketing programs focused on bringing healthcare practitioners tothe clinic to learn about the technology and become a “Theralase Certified Laser Center” in their area4) National and regional marketing to patients about the benefits of therapeutic laser technologyincluding a presence at major healthcare and industry conferences5) Seminar and Webinar series to present Theralase’s technology to healthcare practitioners
  5. 5. CONFIDENTIAL Page 5Key Employees and AdvisorsRoger Dumoulin‐White, P.Eng, President and CEOMr. Dumoulin‐White founded Theralase in 1995 and has over 25 years as a senior manager with privateand public companies. As an award‐winning entrepreneur, he has pioneered Low‐Level Laser Therapy foruse in treating pain, inflammation and for tissue regeneration of neural muscular skeletal conditions andwound healing. He is responsible for developing patented Photo Dynamic Compounds (PDCs) that areable to target and destroy cancers, bacteria and viruses when light activated by Theralase’s proprietarylaser technology.Kristina Hachey, CGA, CFOMs. Hachey has over 16 years of experience in finance and financings in public and private companies.Arkady Mandel, MD, Ph.D., D.Sc., Chief Scientific OfficerDr. Mandel has over 20 years of experience as a key founder of therapeutic uses of lasers in dermatologyand other areas of clinical medicine. He is an experienced executive manager of research anddevelopment teams dedicated to the field of biotechnology, drug development and photobiology. He haspublished over 100 original scientific papers to his name, combined with over 200 international patentsattributed to his research. He is an editor of many peer reviewed scientific and medical journals.Lothar Lilge, Ph.D., Professor in the Department of Medical Biophysics, University of Toronto, SeniorScientist at the Ontario Cancer Institute / Princess Margaret Cancer Centre / University Health NetworkDr. Lilges research is focused on photodynamic therapy (PDT), optical diagnostics, destruction of cancerand bacteria by light activated PDTs and the use of light as a microscopic tool for biomedical research. Hehas published over 30 original scientific papers and is an editor of peer reviewed scientific journals. Dr.Lilge is a much sought after speaker at many international medical and scientific conferences.Michael Jewett, MD, FRCSC, FACS, Professor of Surgery in the Division of Urology at the University ofToronto, a member of the Department of Surgical Oncology at Princess Margaret Cancer Centre and ofthe Division of Urology at the University Health Network. He is a member of Theralase’s Medical andScientific Advisory Board. Dr. Jewett is internationally known for his contributions in the fields of bladder,testis and kidney cancer fundamental and clinical research. He has been the Principal Investigator/Co‐Principal Investigator on over 60 Phase I‐Phase III clinical trials and the Lead Principal Investigator ofseveral Cooperative Group Trials. These clinical trials have primarily been focused on proving the safety,efficacy and clinical benefits of technology in the destruction of cancer, with the ultimate goal ofachieving FDA or Health Canada clinical approval. He is a recent Past‐President of the Canadian UrologyAssociation and a member of many urological and surgical oncology societies worldwide. Dr. Jewett haspublished over 175 original medical research papers.James Andrews, MD, Founding member of Andrews Sports Medicine and Orthopaedic Center inBirmingham, Alabama. He is also a founder of the American Sports Medicine Institute (ASMI) a non‐profitinstitute dedicated to injury prevention, education and research in orthopaedics and sports medicine. Heis a member of Theralase’s Medical and Scientific Advisory Board. Doctor Andrews is internationallyknown and recognized for his skills as an orthopaedic surgeon as well as his scientific and clinic researchcontributions in knee, shoulder and elbow injury prevention and treatment. Doctor Andrews is SeniorConsultant for the Washington Redskins Professional Football team and Medical Director for the TampaBay Rays Professional Baseball Team and the Ladies Professional Golf Association.

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