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TES MOBILE
         1




          Development, creation and
        international launch of a line
                   of medical devices
  to treat sensorineural hearing loss
                         and tinnitus
SUMMARY

 Project aim: Development, certification and international market
  launch of a line of medical devices and a procedure to treat
  sensorineural hearing loss and tinnitus.
 Essence of the innovation: Implementing unique patented
  technology for selective transcranial electric stimulation of the brains
  protective mechanisms with an impulse current combined with
  acoustic influence by tonal signals.
 To be created during project realization: Professional and
  individual device versions; the latter will be in the form of a mobile
  application (for download and periodic update) and a special headset
  connected to users mobile platform (smartphone or tablet PC).
 Project budget (24 months): $ 1 335K
 Looking for: Partners for product promotion.


                                     2
MEDICAL PROBLEM
 About 10 % of the worlds population suffer from hearing disorders
 In 2015 the number of patients will reach 700 million and there will be
  900 million patients in 2020
 85-90 % of patients have sensorineural hearing loss and 50 % have
  tinnitus
 This equals 30 million patients in the US, 80 million in Europe
  and 13 million in Russia
 Hearing loss and tinnitus have no specific treatment at present!




                                     3
THE SOLUTION
                         Audioselective Transcranial Electric Stimulation




             Audio stimuli of variable                                    Transcranial Electric
             frequency and intensity                                          Stimulation

         The biophysical basis is the proven positive impact of re-education in the
                        treatment of acoustic neuronal disorders




                                                           Professional
Individual




                                                4
PROTOTYPE AND RESULTS
Prototype device  TRANSAIR-07.
Course  10-15 procedures, every other day.
Results:
 Hearing improved in 89 % of patients with
  acute/sudden hearing loss and in 67 %
  of those with chronic hearing loss (regardless of
  etiology)
 Tinnitus stops or becomes milder in 91 % of patients
 Tonal hearing thresholds are stably decreased by 10-
  35 dB
 Percentage of patients with improved hearing    ATES effects on subjective tinnitus
         in acute and chronic SNHL
                                                                   9%
                                                         36%                     55%

                                            5


                                                            Tinnitus stopped
                                                            Tinnitus decreased in intensity
                                                            Tinnitus remained unchanged
COMPETITIVE TECHNOLOGIES
   Traditional drug and                  Tinnitus Retaining
                                                                               Cochlear implants
     physical therapy                      Therapy (TRT)




                                                                          These implants consist
Histamine-like                       Use of special hearing devices       of wearable (external) and
medicines, retroauricular procaine   combined with white noise            implanted (inner) parts. The costs
blocks, laser therapy, stimulation   generator. Widely used in the        of an operation start from USD
with fluctuating current, quantum    West, with a sales volume (therapy   30,000. The market has topped
hemotherapy, plasmapheresis, ho      courses) in 2011 exceeding USD 87    USD 960 million and will reach
meopathic medicines, etc.            million.                             USD 2.3 billion in 2017. The USA
                                                                          accounts for 40 % of the market.
                                         Does not treat the                    Invasive hearing
 Aimed to inhibit disease
                                      disease, but teaches the              restoration applicable
 progression, not to treat
                                              patient                       in severe hearing loss
            it
                                            to ignore it                             only

                                                     6
BUSINESS MODEL:
                  Individual ATES




                                             purchase
recommendation




                               4P
                                          Insurance
                                          coverage




         Purchase of SW
            updates                 fee



                          7
BUSINESS MODEL:
            Professional ATES




                                       Equipment
                                           and
service                               consumables
                                      at wholesale
                                          price
                                                     sale




                 Equipment and
              consumables at market
                     price


                       8
MARKET AND SALES
   The market for hearing aids grows by 10-15 % a year, to reach USD 26.2
    billion in 2017*

   USA, Europe, Canada, and Japan account for 80 % of sales. Within the last 5
    years, the mobile device market in the US tripled (from USD 2.7 billion to
    9.6 billion); 15 million devices were sold**

   Sales volume in 6yr. (est.)  $ 21,6M
                     1.4 %        0.1 %                                 仂亟舒亢舒 亳仆亟亳于亳亟舒仍仆 丐亅弌 (弍亠亰coverage)
                                                                         Sales of individual ATES (without insurance
                                                                        舒仂于仂亞仂 仗仂从亳)
                                                                         Sales of individual ATES (with insurance coverage)
                                                                        仂亟舒亢舒 亳仆亟亳于亳亟舒仍仆 丐亅弌 (仂
                                                                        舒仂于仄 仗仂从亳亠仄)
                                       23.1 %                           亠舒仍亳亰舒亳 仗仂亠亳仂仆舒仍仆 丐亅弌
                                                                         Sales of professional ATES
             34.4 %
                                                                        仂仄亳亳  仍亞亳 仗仂 仍亠亠仆亳 弌丐 亳
                                                                         Fees per services in SNHL and tinnitus treatment
                                                                        亳仆仆亳舒
                                                                        仂亟舒亢舒 仂弍仆仂于仍亠仆亳亶 for individual ATES
                                                                         Sales of software updates  亟仍
                                     37.0 %
                                                                        亳仆亟亳于亳亟舒仍仆仂亞仂 丐亅弌
         3.9 %                                                          仂亟舒亢舒 舒仂亟仆 仄舒亠亳舒仍仂于 亟仍
                                                                         Sales of consumables for professional ATES
                                                                        仗仂亠亳仂仆舒仍仆仂亞仂 丐亅弌
      * - Audiological Devices - Global Strategic Business Report
      ** - HIMSS Analytics

                                                                    9
THE TEAM
Alexander Malygin  CEO, co-founder, Candidate of Technical Science, MBA,
20 years of business experience. He headed the organization of serial production,
certification and technical testing of TRANSAIR and DOKTOR TES devices, participated
in creating a sales and service network for the device. During his job, more than 5,000
and over 40,000 TRANSAIR and DOKTOR TES devices respectively have been sold and
10 regional agencies have been founded.

Prof. Valeriy Lebedev  Research Director, MD, co-founder, member of the Russian
Academy of Natural Sciences. He discovered TES effects on protective systems in the
brain of animals and humans. The author of 98 articles and 115 theses on TES therapy.
An      Honored       Science      Worker       of    the     Russian      Federation
and Head of Applied Neurophysiology at the I.M. Sechenov Saint Petersburg Society of
Physiologists, Biochemists and Pharmacologists.

Anna Belimova  physical therapist and audiologist, Candidate of Medicine,
10 years of experience in SNHL treatment. She has personally performed all clinical
trials, arranged and partly performed instrumental testing, carried out ATES procedures
in SNHL patients, and studied changes in hearing after ATES.

Dmitry Tseitlin  Business Development Director, MD, Candidate of Medicine,
20 years of experience in international marketing and technology commercialization in
Russia, Israel and Germany. Business Coach at the Skolkovo Industrial Park.

                                   10

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  • 1. TES MOBILE 1 Development, creation and international launch of a line of medical devices to treat sensorineural hearing loss and tinnitus
  • 2. SUMMARY Project aim: Development, certification and international market launch of a line of medical devices and a procedure to treat sensorineural hearing loss and tinnitus. Essence of the innovation: Implementing unique patented technology for selective transcranial electric stimulation of the brains protective mechanisms with an impulse current combined with acoustic influence by tonal signals. To be created during project realization: Professional and individual device versions; the latter will be in the form of a mobile application (for download and periodic update) and a special headset connected to users mobile platform (smartphone or tablet PC). Project budget (24 months): $ 1 335K Looking for: Partners for product promotion. 2
  • 3. MEDICAL PROBLEM About 10 % of the worlds population suffer from hearing disorders In 2015 the number of patients will reach 700 million and there will be 900 million patients in 2020 85-90 % of patients have sensorineural hearing loss and 50 % have tinnitus This equals 30 million patients in the US, 80 million in Europe and 13 million in Russia Hearing loss and tinnitus have no specific treatment at present! 3
  • 4. THE SOLUTION Audioselective Transcranial Electric Stimulation Audio stimuli of variable Transcranial Electric frequency and intensity Stimulation The biophysical basis is the proven positive impact of re-education in the treatment of acoustic neuronal disorders Professional Individual 4
  • 5. PROTOTYPE AND RESULTS Prototype device TRANSAIR-07. Course 10-15 procedures, every other day. Results: Hearing improved in 89 % of patients with acute/sudden hearing loss and in 67 % of those with chronic hearing loss (regardless of etiology) Tinnitus stops or becomes milder in 91 % of patients Tonal hearing thresholds are stably decreased by 10- 35 dB Percentage of patients with improved hearing ATES effects on subjective tinnitus in acute and chronic SNHL 9% 36% 55% 5 Tinnitus stopped Tinnitus decreased in intensity Tinnitus remained unchanged
  • 6. COMPETITIVE TECHNOLOGIES Traditional drug and Tinnitus Retaining Cochlear implants physical therapy Therapy (TRT) These implants consist Histamine-like Use of special hearing devices of wearable (external) and medicines, retroauricular procaine combined with white noise implanted (inner) parts. The costs blocks, laser therapy, stimulation generator. Widely used in the of an operation start from USD with fluctuating current, quantum West, with a sales volume (therapy 30,000. The market has topped hemotherapy, plasmapheresis, ho courses) in 2011 exceeding USD 87 USD 960 million and will reach meopathic medicines, etc. million. USD 2.3 billion in 2017. The USA accounts for 40 % of the market. Does not treat the Invasive hearing Aimed to inhibit disease disease, but teaches the restoration applicable progression, not to treat patient in severe hearing loss it to ignore it only 6
  • 7. BUSINESS MODEL: Individual ATES purchase recommendation 4P Insurance coverage Purchase of SW updates fee 7
  • 8. BUSINESS MODEL: Professional ATES Equipment and service consumables at wholesale price sale Equipment and consumables at market price 8
  • 9. MARKET AND SALES The market for hearing aids grows by 10-15 % a year, to reach USD 26.2 billion in 2017* USA, Europe, Canada, and Japan account for 80 % of sales. Within the last 5 years, the mobile device market in the US tripled (from USD 2.7 billion to 9.6 billion); 15 million devices were sold** Sales volume in 6yr. (est.) $ 21,6M 1.4 % 0.1 % 仂亟舒亢舒 亳仆亟亳于亳亟舒仍仆 丐亅弌 (弍亠亰coverage) Sales of individual ATES (without insurance 舒仂于仂亞仂 仗仂从亳) Sales of individual ATES (with insurance coverage) 仂亟舒亢舒 亳仆亟亳于亳亟舒仍仆 丐亅弌 (仂 舒仂于仄 仗仂从亳亠仄) 23.1 % 亠舒仍亳亰舒亳 仗仂亠亳仂仆舒仍仆 丐亅弌 Sales of professional ATES 34.4 % 仂仄亳亳 仍亞亳 仗仂 仍亠亠仆亳 弌丐 亳 Fees per services in SNHL and tinnitus treatment 亳仆仆亳舒 仂亟舒亢舒 仂弍仆仂于仍亠仆亳亶 for individual ATES Sales of software updates 亟仍 37.0 % 亳仆亟亳于亳亟舒仍仆仂亞仂 丐亅弌 3.9 % 仂亟舒亢舒 舒仂亟仆 仄舒亠亳舒仍仂于 亟仍 Sales of consumables for professional ATES 仗仂亠亳仂仆舒仍仆仂亞仂 丐亅弌 * - Audiological Devices - Global Strategic Business Report ** - HIMSS Analytics 9
  • 10. THE TEAM Alexander Malygin CEO, co-founder, Candidate of Technical Science, MBA, 20 years of business experience. He headed the organization of serial production, certification and technical testing of TRANSAIR and DOKTOR TES devices, participated in creating a sales and service network for the device. During his job, more than 5,000 and over 40,000 TRANSAIR and DOKTOR TES devices respectively have been sold and 10 regional agencies have been founded. Prof. Valeriy Lebedev Research Director, MD, co-founder, member of the Russian Academy of Natural Sciences. He discovered TES effects on protective systems in the brain of animals and humans. The author of 98 articles and 115 theses on TES therapy. An Honored Science Worker of the Russian Federation and Head of Applied Neurophysiology at the I.M. Sechenov Saint Petersburg Society of Physiologists, Biochemists and Pharmacologists. Anna Belimova physical therapist and audiologist, Candidate of Medicine, 10 years of experience in SNHL treatment. She has personally performed all clinical trials, arranged and partly performed instrumental testing, carried out ATES procedures in SNHL patients, and studied changes in hearing after ATES. Dmitry Tseitlin Business Development Director, MD, Candidate of Medicine, 20 years of experience in international marketing and technology commercialization in Russia, Israel and Germany. Business Coach at the Skolkovo Industrial Park. 10