INVESTMENTS Delmedica Investments Limited …delmedicainvestments.com/downloads/DMI_PPIM_o.pdfPage 2...

3 Philip Street, #18-00 Commerce Point

Singapore 048693

Tel :(65) 6415 3102

Fax :(65) 6415 3108

Website: www.delmedicainvestments.com

British Virgin Islands (635273)

Delmedica Investments Limited

Private Placement Information Memorandum

May 2009

I N V E S T M E N T S

1. DISCLAIMER This document does not constitute an open offer or invitation to the general public to subscribe for or purchase any securities and is issued in connection with the Stock Purchase Agreement executed by the Company May 2009. Directors of the Company accept responsibility for the contents of this document. This document has been issued on the condition that it must not be copied or given by any recipient to any other person other than a person authorised to conduct investment business under relevant local securities laws and regulations.

PRIVATE PLACEMENT INFORMATION MEMORANDUM

This document is important. If you are in any doubt about its contents you should consult your stockbroker, solicitor, accountant or other independent financial adviser authorised under relevant local securities laws and regulations. Investment in Delmedica Investments Limited, an unquoted company, is speculative and involves a high degree of risk as well as opportunity for reward. Your attention is drawn to the Risk Factors appearing on page 38.

This document contains information relating to the proposed Private Placement of Shares in Delmedica Investments Limited (the “Company” or “DMI”). To the best of the knowledge of the Directors of the Company the information contained in this document is in accordance with the facts and makes no omission likely to affect the import of such information. The Directors of the Company accept responsibility accordingly.

In subscribing, persons who acquire Shares in the Company under this Private Placement will be deemed to have requested performance on an execution only basis without advice (including advice as to whether the investment is suitable for any particular investor). This document is a Private Placement Information Memorandum issued by the Company and does not constitute a scheme or fund.

2. THE OFFER Delmedica Investments Limited

(Registered in British Virgin Islands No: 635273). Authorised Share Capital: 40,000,000

PRIVATE PLACEMENT OF UP TO 6,000,000 ORDINARY SHARES OF 1.00 and a maximum of 3.50. This is subject to change as the company value is enhanced by new technologies and/or strategic alliances being formed as well as certain milestones being achieved.

The subscription list opened in March 2009 and may be closed at any time thereafter or when the minimum subscription has been subscribed the subscription books of the company may close at any time without prior notice which is at the discretion of the company. The issue is not underwritten by the Directors.

An investment in the Company may not be suitable for all recipients of this document. A prospective investor should consider carefully whether an investment in the Company is suitable for him/her/it in the light of his/her/its personal circumstances and the financial resources available to him/her.

3. IMPORTANT NOTICE An investment in the Company involves a significant degree of risk and may not be suitable for all recipients of this confidential Private Placement Information Memorandum (“the Memorandum”). Prospective investors should consider carefully whether an investment in the Company is suitable for them in the light of their circumstances and the financial resources available to them. Your attention is drawn to the section entitled “Risk Factors” in Part Two of this Memorandum. This Memorandum is provided solely for the use of prospective investors in connection with evaluating the Placement of New Ordinary Shares in the Company.

This Memorandum does not constitute an offer to sell or the solicitation of an offer to buy any securities or an offer to sell or the solicitation of an offer to buy any securities in circumstances in which such offer or solicitation is unlawful. The distribution of the Memorandum and the sale of New Ordinary Shares in certain jurisdictions may be restricted by law. Persons into whose possession the Memorandum comes are required by the Company to inform themselves about and to observe any such restrictions.

The Company reserves the right to reject any offer to purchase New Ordinary Shares in whole or in part, for any reason. It also specifically reserves the right to determine or alter the Placement Price of New Ordinary Shares and/or the timing of the allotment of such New Ordinary Shares and/or the aggregate amount to be raised as set out in this Memorandum or otherwise. This Memorandum is personal to each recipient. Each recipient, by accepting delivery of this Memorandum, agrees to the foregoing.

In making an investment decision, investors must rely on their own examination of the Company and the terms of the Placement, including the merits and risks involved. Potential investors should inform themselves as to the possible tax consequences, the legal requirements and any foreign exchange restrictions or exchange control requirements which they may encounter under the laws of the countries of their citizenship, residence or domicile and which might be relevant to the subscription, holding or disposal of the New Ordinary Shares.

Neither the delivery of this Memorandum, nor the potential subsequent offer, sale or delivery of any New Ordinary Shares which the Company wishes to place pursuant to the Placement shall in any circumstances imply that the information contained herein concerning the Company is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Placement is correct at any time subsequent to the date indicated in the document containing the same.

No person is or has been authorised in connection with the Placement to give any information or make any representation other than as contained in this Memorandum and, if given or made, such information or representation may not be relied upon as having been authorised by the Company.

Neither this Memorandum nor the information contained in it nor any information or representations supplied or made in connection with the Placement shall form the basis of any contract.

Confidentiality

This Memorandum is submitted in connection with the Placement of the securities described herein and may not be reproduced or used for any other purpose. Each recipient of this Memorandum agrees that all the information contained herein is of a confidential nature, that he, she or it will treat such information in a confidential manner, and that he, she or it will not directly or indirectly, disclose or permit his, her or its agents or affiliates to disclose any such information without the prior written consent of the Company. If the recipient does not participate in this Placement, the recipient agrees to return this Memorandum, and any accompanying documentation, to the Company promptly.

Overseas Jurisdictions

The New Ordinary Shares to be issued by the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (“the Securities Act”), or under the securities laws of any state of the United States or under the relevant securities laws of Canada, Hong Kong, Japan or any other jurisdiction and they may not be offered, sold, taken up or delivered directly or indirectly, in or into the United States, Canada, Hong Kong, Japan or any other country, territory or jurisdiction where to do so may contravene local securities laws or regulations, except pursuant to an exemption from, or any transaction not subject to, the registration requirements of the Securities Act or the relevant laws and regulations or any other applicable securities laws and regulations in any jurisdiction. Accordingly, this Memorandum should not be mailed or otherwise distributed or sent in or into the United States, Canada, Hong Kong, Japan or any other jurisdiction where to do so would constitute a breach of any relevant legislation or regulation (unless the Company has confirmed that to do so would not be in breach of such relevant legislation or regulation).

With regard to overseas jurisdictions generally, no action has been taken by the Company, which would permit a Placement of New Ordinary Shares or the circulation or distribution of this Memorandum in any country or jurisdiction where action for that purpose is required by the Company. The distribution of this Memorandum in other jurisdictions may be restricted by law and therefore persons into whose possession this Memorandum comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdiction.

4. TABLE OF CONTENTS 1

5. MANAGEMENT, SECRETARY, ADDRESS, ADVISORS MANAGEMENT / DIRECTORS

Neil White – Director & CEO

Jaswinder Gill – Director

Mourad Mankarios – Non-Exec

Gunnar Helgason – Non-Exec

ADVISORS Professor Todor Popov

Professor Stephan Dunev

Tanya Kralimarkova

COMPANYSECRETARY / CUSTODIAN

East Peak Limited, 2308-9, 23rd Floor, Tower Two, Lippo Centre, Queensway, Hong Kong

Iyer Corporate Services Pte Ltd. 3 Philip Street, 18-00 Commerce Point, Singapore 048693

REGISTERED OFFICE 2nd Floor, Abbott Building, Road Town, Tortola, British Virgin Islands

CORRESPONDENCE ADDRESS

7 Temasek Boulevard, #06-01, Suntec Tower 1, Singapore 038987

Tel:(65) 6415 3102

Fax:(65) 6415 3108

SOLICITORS TO THE COMPANY

Tanner De Witt, 2308-9, 23rd Floor, Tower Two, Lippo Centre, Queensway, Hong Kong

Khattar Wong 80 raffles Place, UOB Plaza 25-01 Singapore 048624

AUDITORS /ACCOUNTANTS

Shanker Iyer Consultants Pte Ltd 3 Philip Street, 18-00 Commerce Point, Singapore 048693

Shanker Iyer & Co. 3 Philip Street, 18-00 Commerce Point, Singapore 048693

6. EXECUTIVE SUMMARY

6.1 Delmedica Investments Limited Delmedica Investments Limited (“DMI”) was

established in June 2006 to invest specifically in new biotechnology companies and technologies where the expertise of the directors and our scientific advisors could be brought to bear to generate a sustainable competitive advantage.

Utilising the experience of our advisors and directors we have identified an exciting new-patented technology, to aid the early diagnosis and treatment of Asthma and also many upper respiratory tract infections (such as Tuberculosis, Pneumonia, and “Flu Type Infections”, e.g. SARS, Bird Flu, Swine Flu, etc.) as well as metabolic conditions, called the Exhaled Breath Temperature (“EBT”) device or “X-HALO”.

DMI has appointed Mourad Mankarios (ex-Managing Director and CEO of Philips Electronics Singapore) to the board as a non-executive director. Mr. Mankarios brings years of experience at the top level of an internationally operating Fortune 500 company to bear upon DMI. His expertise in strategic management of technology-based companies together with his broad network of contacts will be of great assistance to the growth of DMI.

The X-HALO was assigned into DMI in September 2006 from the Inventors Professor Todor Popov and Professor Stephan Dunev. DMI will provide the necessary funding required over the next period enabling commercialisation of this new, unique and exciting technology. Development work has been completed.

Philips Electronics Singapore (Research and Design) under contract with DMI, conducted extensive research and design to produce the award winning X-HALO. (http://www.design.philips.com/about/design/designnews/pressreleases/biggesthealthcarewinner.page)

DMI estimate that the Total Available Market (“TAM”) for this device for the Asthma market segment alone is of the order of USD 15 billion, whilst the Service Available section of this Market (“SAM”) is conservatively estimated to be USD 5 billion in 2008/9 growing to USD 6.5 billion by 2012.

Currently DMI is carrying out clinical studies globally to quantify the advantages of the device further with leading scientists. The results of this work will be published in top medical journals and be presented at international symposia during 2009. A summary of all completed on-going and planned studies is available on request.

The X-HALO was launched at the European Respiratory Society meeting in Berlin in October 2008. Initially the target market is research scientists and specialist physicians, upon the completion of ISO13485 then X-HALO will be poised for distribution to the mass market, Q4 2009.

DMI has also identified a second device that is currently undergoing stringent due diligence and if the outcome is positive this device will be added to the DMI product portfolio.

DMI is undergoing ISO 13485 using TUV Sud. This will complete during the summer of 2009, registrations will then be received, for Class II medical devices under Food and Drug Administration (“FDA”) in the U.S. and Conformity mark (“CE mark”) in the E.U., by the end of the 3rd Quarter 2009.

DMI has distributors who wish to distribute X-HALO to medical professionals and institutions in 14 countries initially, this will commence post CE mark and FDA approval.

A professional marketing company, Monopoly Design Limited, has been appointed to DMI and all related MARCOM materials will be launched as CE mark and FDA approval is received.

DMI Investments will actively seek exciting innovative companies that meet our funding requirements. It will utilise funds raised by investments and the retained profits after dividend payments to make further strategic investments. Ideally targeting companies that can eventually seek listing on one of the recognised stock exchanges or who are willing to allow DMI Investments to acquire the technologies.

6.2 Fortune Apex Development Limited Fortune Apex Developments Limited (“FAD”) represents, for the astute investor, an opportunity to acquire a significant equity stake in a structured and well-developed Biotechnology Company.

Investment of 3.8 million in FAD via Delmedica Investments Limited (“DMI”) for up to (depending on placement price) 6 million shares.

FAD and Strategic BioSciences (“SBS”) will become, via its patented, novel and innovative drug delivery technology, the market leader in the application of drugs via mucous membranes e.g. nasal administration, throat, lungs etc.

A high level of interest has been generated with a number of large Pharmaceutical companies with global distribution that will lead to a number of lucrative evaluation and licensing agreements within the next 12 months.

The first evaluation agreement (USD 325,000), together with a binding Memorandum of Understanding (“MOU”), have led to the first license agreement with Sinol USA (www.sinolusa.com). The license fee of 1.5 million USD was converted to equity in Sinol USA s 22% issued equity. The licensed product, Sinol-M, was launched March 2009, its line extensions have been formulated and planned.

A Scientific Advisory Board has been appointed with respected representatives in the disciplines of Asthma, Allergology and Immunology. These high profile scientists are invaluable to ensure awareness and acceptance of the technology by global pharmaceutical companies.

Our Joint Venture Company (“JV”), Strategic Pharmaceutical Company LLC (“SPC”), was formed to promote the technology under the brand “Strategic Biosciences” (“SBS”). This brand manages all sales and marketing activities of the technology, a significant third party endorsement. This is undergoing restructure and capitalisation to facilitate a full, recognised corporate board (see news release SBS, Jan 16th 2009).

By the end June 2009 agreements will be signed between FAD and SrxA to assign the IP to SBS to allow full corporate development of SBS. FAD will control, before significant investment, a minimum of 60% of SBS, under the CB 67%.

Out -licensing is also being facilitated by Technology Catalyst International (http://www.technology-catalysts.com) – one of the Global leaders in successfully licensing new and innovative medical technologies.

Appointments to the board of SBS will be made during 2009, with industry-recognised executives to drive the company to RTO / IPO. Currently candidates are being interviewed for these key positions and recruitment executives will be appointed.

Further significant funds will be raised by SBS of up to USD 20 million, FAD will invest up to USD 4 million under a Convertible Bond into SBS to enable initial appointments, covering expenses and develop licensing until investment. A number of funds have expressed interest in this second stage funding.

7. BIOTECHNOLOGY INVESTMENTS Delmedica Investments has made strategic investments

into a very exciting Biotechnology company that is at a very advanced stage of development called Fortune Apex Development Limited.

This company has developed a unique, patented drug delivery platform using MucoAdhesive Technology. Details on this company and its technology can be viewed at the company web site www.fortuneapex.com.

Co-operation agreement. Investment into FAD is by way of a co-operation agreement between FAD and DMI (06 June 2006 Amended 29 May 2008), investors in DMI receive an equal number of shares issued in FAD, upon the signing of a suitable acceptance letter.

Further Investments will be made by DMI in due course.

8. KEY PERSONNEL Mr Neil White BSc MRPharmS Director “FAD”

Neil White has over 20 years of pharmacy practice and pharmaceutical product knowledge and experience. Mr. White also has extensive knowledge in establishing and operating successful pharmacy and medical supply businesses in the UK and Europe.

He is a registered Pharmacist in the UK. The technologies within “FAD” and all development have been coordinated over the last 18 months by him.

Jaswinder Singh Gill

Mr. Gill received his undergraduate and postgraduate degrees from Manchester University in Chemical Engineering and stochastic network modelling using Monte-Carlo techniques. He has since worked for specialist chemical companies for the last 14 years bringing innovative plastics and chemical additives to the market. He has worked in Europe, Singapore Dubai and Hong Kong and has an international focus for high tech products. The last 5 years Mr. Gill has been working for DeBeers Industrial diamonds as Business Unit Director for Medical Products, commercialising innovative diamond technologies.

Mourad Mankarios – Non Executive Director

Former Chairman and CEO of Philips Electronics Singapore Pte Ltd.

Mr Mankarios started his career with Bell Canada in Information Technology in 1966. When he left Bell in 1981, he had been through a variety of departments including the set up of an "Automated Office Systems" Group. From 1981 to 1985, he went to Kuwait, still in the IT business until he joined Philips Electronics in 1986.

He was born on 9 October 1944 in Alexandria, Egypt and studied at University of Alexandria, Egypt.

Mr. Mankarios is married and has one son and two daughters. He is fluent in English, French and Arabic.

Professor Todor Popov – Medical University, Sofia, Bulgaria

A Professor at the University of Sofia, Clinical Centre for Allergology, Dr. Popov is a globally recognised allergologist, sitting on the Boards of numerous bodies active in the filed of allergological science and medicine. Dr. Popov has also written scores of well-received papers/journals on the subject.

He is an internationally respected Scientist and is a key asset to the company.

Professor Stephan Dunev

Stefan Stefanov Dunev was born in 1932 in Gabrovo, Bulgaria.

In 1951 he graduated the technical school (Mechanical – Electro technical) in Gabrovo. In 1963 he graduated “The Physics faculty” at Sofia s University.

In 1966, he began to work as an assistant professor in the Institute of Hygiene and labor protection - section “Physiology of the labor”, profile “Noise and vibrations” and “electrophysiology”.

In 1980 he defended a dissertation “Methods and installation for the analysis of the heart rhythm and variability in the production conditions”. The same year he became PhD.

From 1985 to 1992 he worked as a professor in the Central Laboratory for Medical Devices at the Medical Academy, Sofia – mainly in the field of electrocardiography and balance

In 1986, as an assistant at the Institute for neurology research at Bulgarian Academy of Science he created a device for researching the stages of sleep of the astronauts from the orbital space station “Soyuz”.

In 1992 he retired.

9. FINANCIAL HIGHLIGHTS DISCLAIMER

This financial model has been prepared by Delmedica Investments Limited (“DMI”) for the purpose of projecting Delmedica Investments (“the Business”) business prospects and to demonstrate the sensitivity of the business to changes in various inputs. It is not intended to represent a valuation of the Business.

A separate financial model is available for “FAD” and “SBS” (Strategic BioSciencies consolidated with Sinol), prepared by the management of the companies.

All inputs, assumptions and financial statements were provided by the management.

While DMI has made all reasonable efforts to ensure that the model structure and methods of projection, the model has not been audited by an independent party, nor has a qualified accounting advisor confirmed that accounting policies and generally accepted accounting practices have been followed in the model's assumptions, calculation or presentation.

It is impossible to for see all possible changes in assumption and certain assumption changes may result in invalid results that must be corrected or adjustments made to accommodate the business case. For example, should a negative cash balance occur in a given year, the injection of additional funds or credit facilities must be modelled in. In addition, it is assumed that the financial model will be run and amended by persons familiar with the model and modelling and accounting principals.

Sensitivity analyses provided herein are intended to demonstrate the impact of discrete assumption changes, or in the case of scenario analyses, to an assumption set. Please note that discrete assumption changes may not produce linear results and individual sensitivity results may not combine in an additive manner.

This notice is an integral part of the model and must accompany the model, its output, or any information derived therefrom.

9.1 Delmedica Investments Limited DMI has prepared a financial projection for the company in order to incorporate and articulate the business outlook and financial assumptions. While it is not meant to yield a valuation, it is intended to demonstrate the potential returns that DMI hopes to offer its shareholders and to illustrate the sensitivity of these to selected factors and assumptions both within and beyond its control.

The business case modelled does not presume the value realised on the potential disposal of its investment in “X-HALO”, or the value that it might create by reinvestment of the disposal proceeds and subsequent royalties. All figures are in USD, and are subject to constant update and revision. The full financial model is available on request after signing of a CDA.

9.2 Fortune Apex Development Limited In the opinion of the board of Directors, the following are the top three reasons to invest in FAD:

• Poised for market leadership in strategic growth markets

• Strong aggregate experience and network of FAD s, SBS and SRxA management, research staff and partners

• Shareholder value-oriented policy

FAD S POTENTIAL FOR MARKET LEADERSHIP

FAD aims to establish and sustain market leadership in selected niche biomedical segments through its established patent rights and low ongoing costs of research.

FAD projects strong growth in earnings over the next 4 years, primarily driven by its core product, MUCOAD, via the Joint Venture SBS (Strategic BioSciences).

EXPERIENCE AND NETWORK

The aggregate experience and marketing network of the company s management and its partners are the keys to achieving this growth in a short timeframe. This will be further complimented by significant appointments made to the board of SBS .

As described in the business plan, each member of FAD, SBS, TCI and SRxA existing management and research team bring a wealth of experience in the pharmaceutical and biomedical industries.

FAD s partnership with SRxA, an established pharmaceutical marketing organisation is intended to make use of SRxA s corporate network. SRxA is located in the United States of America, the world s largest pharmaceutical market and home to many of companies that FAD wishes to target for licensing agreements.

MAXIMISING SHAREHOLDER VALUE

FAD s management is focussed on its key value drivers: its ability to capture new markets, defend its intellectual property and competitive position, minimise running costs and capital expenditure and to return this value to investors as quickly as practicable.

Having already successfully developed MUCOAD, FAD anticipates that it will be able to earn licensing and royalty fees due to the enormous potential global market for MUCOAD, which is estimated at USD 85 billion. The incremental marketing, research and development expenses associated with each additional drug is relatively very small by industry standards and compared to expected returns and each additional development and licensing agreement signed generates a strong positive economic value added. From these agreements FAD expects to earn substantial profits leading RTO/IPO late 2010 early 2011 via the JV company, SBS.

FAD plans to maximise investment return and reduce investment risk by becoming cash flow positive. All key patents relating to MUCOAD have been filed and the UK Patent was granted to FAD in January 2007. Concurrently FAD is already in advanced stages of discussion with potential licensees and anticipates that additional license agreements will be signed within 2009 and begins paying royalties in 2011/12, US Patent grant is key, and this is expected 3rd quarter 2009.

In addition to royalties, FAD expects substantial licensing fees to be paid immediately upon signing, which will more than offset required incremental research and development and provide an immediate return on FAD s intellectual property. As a result of this advantageous licensing structure, FAD projects that investors will realise significant returns on their investment within two years of the initial cash injection from dividends, IPO/RTO would realise further significant returns on original investment.

With most of its research operations located initially in Bulgaria, the company s capital requirements and burn rate are minimised, reducing financial risk for and improving shareholders return on investment.

Furthermore, FAD has adopted a flexible approach to funding research and development through multiple development and licensing applications. These include: collaborative arrangements to allow pharmaceutical companies with drugs coming off patent to develop and produce reformulations; FAD s own in-house research and development could become involved in the manufacturing of drugs which are no longer under patents; and external research by third parties, this possibility is currently being explored.

While FAD s profits are projected to continue to grow for several years, it is mindful that its Investors may prefer to realise value sooner and a premium is attached to liquidity. FAD/SBS strategy affords several exit strategies, including:

• Possible listing of the Joint Venture on NASDAQ within 18-24 months.

• Trade sale of FAD to a strategic investor with a tag-along provision for Investors; and/or

• Private market disposal of shares in FAD/SBS by its Investors once licensing agreements have been signed or

• RTO within 18-24 months

9.3 Strategic BioSciences FAD has prepared a financial projection for the company and the JV SBS in order to incorporate and articulate the business outlook and financial assumptions. While it is not meant to yield a valuation, it is intended to demonstrate the potential returns that FAD hopes to offer its shareholders and to illustrate the sensitivity of these to selected factors and assumptions both within and beyond its control.

The financial model is being updated to include consolidated projections from Sinol Inc, Sinol-M income and product extensions. It is envisaged with a mixture of royalties converted to equity, further licensing and cash injections that SBS/FAD will control p to 60% of Sinol within 12 months, it is planned to trade sale Sinol Inc before the end of 2010 realising a significant one-off capital gain pre IPO/RTO.

10. DMI – TECHNOLOGY

10.1 Technology and Background The device has been co-developed by Dr.Stehan Dunev who is not only a medical doctor but also a physicist, he has previously designed experiments for the Soyuz Russian space programme. A device was designed to measure exhaled breath temperature, the only measurable inflammatory indicator to assist in diagnosis and the management of Asthma, amongst other conditions (e.g. viral (FLU and bacterial infections).

“X-HALO” has recently won Gold award in the highly coveted and globally recognised iF Design Award, for its aesthetic, and functional excellence. An accolade that Delmedica and its designer, Phillips Electronics, are understandably proud of.

The Singapore economic Development Board also recognises the enormous potential of the “X-HALO” technology. They will be providing support to Delmedica to develop next generation devices, which will be designed by Philips Electronics.

10.2 Principles of technology Subjects inhale through the nose and exhale through the mouth into a heat reservoir isolated from the exterior environment. The exhaled air warms a metal core of high heat capacity. With each exhalation its temperature into the reservoir gradually rises, until it levels up with the temperature of the exhaled air (reaching the so called heat equilibrium). As the reservoir is relatively large, transient changes in the air temperature do not have a significant influence on the accuracy of the measurements.

10.3 Potential applications Studies have indicated a correlation between the onset of asthmatic episodes and a rise in exhaled breath temperature. Studies have been initiated to further clarify and quantify this relationship. The device is currently in the published phase of its PCT patent application, with national patents currently being prosecuted in all relevant markets.

During the last decades of the past century the concept of airway inflammation as underlying feature of asthma has became the basis of our understanding and management of this chronic disease. This came as a result of invasive methods of investigation (bronchoscopy with alveolar lavage and biopsy), and was further reinforced by non-invasive methods like sputum analysis, measurement of nitrogen oxide in the exhaled breath, measurement of inflammation mediators in exhaled breath condensates. However, these methods are time consuming, expensive and difficult to standardize.

Inflammation is a universal pathological reaction and is characterized among other things by increased heat production / higher temperature. The question stays whether the inflamed lung airways contribution to the overall exhaled breath temperature can be detected and differentiated by the “white noise” of confounding factors. Paredi et al. (1) and Piacentini et al. (2) have measured the temperature of the exhaled breath of subjects while measuring their level of the exhaled nitric oxide used temperature sensors in front of their mouths. This approach to measure exhaled breath temperature is rather sophisticated and difficult to standardize, but still the authors have found an association between the amount of the exhaled nitrogen oxide and the features of the temperature of the exhaled air.

We have managed to gather data on the exhaled breath temperature of healthy volunteers and asthmatics.

1. We measured the repeatability of exhaled breath measurements of in 11 healthy volunteers at the same time on consecutive days using repeated measures analysis. The intra item correlation turned out to be excellent ( 0.99). Its correlation with atrial (ear) and axillar temperature was low, suggesting that it is measuring a different and more consistent physiological variable (Table 1).

Table 1: Reliability Statistics

Common Mean 34,104

Common Variance 1,418

True Variance 1,407

Error Variance ,011

Common Inter-Item Correlation ,991

Reliability of Scale ,996

Reliability of Scale (Unbiased) ,997

2. We also compared the morning exhaled breath temperature of 19 asthmatics and 17 non-asthmatics by independent samples t-test (Figure 1). There was a difference between the exhaled air temperature of asthmatics (mean 34.41 ± s.e.m. 0.27°C) and controls (35.02 ± 0.21°C), but there was considerable overlap (p=0.081). It should be stated that most of the asthmatics studied were relatively well controlled on inhaled corticosteroids.

Figure 1

There was a significant difference between the exhaled air temperature of asthmatics before (mean 35,33 ± s.e.m. 0.17°C) and after improvement under anti-inflammatory treatment (34,64 ± 0.21°C), (p=0.000). (Figure 2).

Figure 2

CONCLUSIONS

The device we constructed can measure the temperature of exhaled air in human subjects in a simple and acceptable non-invasive and user-friendly way. Further experiments are warranted to find out if it can be applied as individual device for asthmatics to assess the degree of control of their airway inflammation. Studies in other lung diseases may provide support about the validity and usefulness of the method in chronic and infectious pulmonary diseases.

REFERENCES

1. Paredi P, Kharitonov SA, Barnes PJ. Faster rise of exhaled breath temperature in asthma: a novel marker of airway inflammation? Am J Respir Crit Care Med 2001; 165: 181–184.

2. Piacentini GL, Bodini A, Zerman L, et al. Relationship between exhaled air temperature and exhaled nitric oxide in childhood asthma. Eur Respir J 2002; 20: 108–111.

10.4 IP Portfolio PATENT CASE: DMI002 EBT DEVICE

Title: Method and device for measurement of exhaled respiratory gas temperature.

Abstract: An apparatus for the measurement of exhaled respiratory gas temperature during free voluntary tidal breathing, comprises a housing 1 defining a chamber, an air inlet 2 for receiving a stream of exhaled respiratory gas and an air outlet 4 for permitting escape of exhaled respiratory gas from the chamber to outside of the housing. A tube having inner and outer surfaces, is located within the housing and extends from the air inlet into the chamber provides a passageway through which the stream of exhaled respiratory gas may travel from the air inlet in to the chamber. A temperature sensor 6 is located within the housing for measuring the temperature of exhaled respiratory gas. The air inlet, temperature sensor and air outlet are configured such that in use the stream of exhaled respiratory gas travelling within the housing contacts with at least part of the inner surface of the tube when the respiratory gas is travelling upstream of the temperature sensor and contacts with at least part the outer surface of the tube when the stream of respiratory gas is travelling downstream of the temperature sensor.

Country Case Ref Applicant Priority

Date Application Date Application

No Status

BG DMI002/BG/P DMI 27/07/2005

27/07/2005 BG109243 Published

28/02/2007; Priority Application for DMI002/WO

EP DMI002/WO/EP DMI 27/07/2005

12/06/2006 EP06765569.5 Pending

examination

JP DMI002/WO/JP DMI 27/07/2005

12/06/2006 JP2008-523473 Pending

examination

US DMI002/WO/US DMI* 27/07/2005

12/06/2006 US11/996,963 Pending

examination

WO DMI002/WO DMI 27/07/2005

12/06/2006 PCT/IB06/001677 Complete:

International Search Report Issued 8/9/2006; No Demand for International Preliminary Examination to be filed; Progressed into national/regional phase in above EP, JP & US

* US application currently in name of Popov & Dunev – assignment to DMI to be recorded

TRADEMARK CASE: DMI / TM / X-halo

Mark: X-halo

Goods: Medical devices for the measurement of exhaled respiratory gas temperature; parts and fittings for the aforesaid goods1

Country Case Ref Applicant Class Priority

Date Application Date App /Reg No Status

EC DMI/TM/X-halo/EC/10 DMI 10 n/a

15/09/2008 EC007234891 Allowed,

pending registration

JP1 DMI/TM/X-halo/JP/10 DMI 10 n/a

18/09/2008 JP2008-76381 In

examination

US DMI/TM/X-halo/US/10 DMI 5 n/a

18/09/2008 US77/569450 Allowed.

Registration pending filing statement of use

10.5 Market Opportunities It is estimated that there are some 300 million asthma sufferers around the world rising to some 400 million by 2025, this is the Total Available Market (TAM). To put a dollar value to this market it is necessary to estimate a sales price of the device. There are no direct competitors for this device although peak flow meter manufacturers come close. Peak flow meters are supplied by many manufacturers one of them being Ferraris Medical Ltd. They are typically selling for between $25 for the low end and $75 for the digital versions per unit. Taking an average sales price of $50 per unit the TAM becomes $15 billion in 2006 growing to $20 billion by 2012. The Service Available Market (SAM) is defined as the market that is actually available to you due to many factors (price, distribution technology etc). The SAM for this product could be defined as those people suffering from asthma who can afford to pay for such a device. Looking at the market data split per region and the fact that asthma seems to be more prevalent in affluent countries a reasonable estimate would be that some 30% of asthma sufferers could afford to buy such a device. This would give a potential market for this device of $5 billion in 2008/9 growing to $6.5 billion in 2012.

Further opportunities exist for other airway related diseases such as bronchitis, smoking related bronchial problems, pneumonia etc. The device may also be an excellent tool to give early warning of viral diseases that affect the respiratory tract including diseases such as Tuberculosis, SARS etc.

The strategy is to sell the device at a reasonable price to retail customers and keep the cost structure low through high volumes. Due to the relatively simple design of the device currently it is estimated that the cost structure of the device will be between US$70-90, dropping to US$45-50 in volume. To carry out this strategy will require a highly extensive distribution network coupled with a highly efficient supply chain. Therefore the preferred strategy is to licence the technology to major device manufacturers who posses the above mentioned requirements.

COMPETITION

The major competition will be peak flow meter manufacturers, but the “X-HALO” device has a distinct advantage over the competition because it actually gives an early warning before the lungs have started to constrict thereby giving the patient time to follow the protocol that has been set out for them together with their healthcare professional. Peak flow meters measure the volume of exhaled air in a given time this will only change therefore once constriction of the airways has already started to occur.

There are companies who claim to manage asthma through measurement of Nitric Oxide levels in exhaled breath but these devices are large and very expensive (range $6,000 to $40,000) and their target markets are research hospitals and large clinics and not the retail customer.

RESEARCH AND DEVELOPMENT

Further research work will focus on further reducing response times and making the device more ergonomic as well as strengthening the patent position, part funded by the Economic Development Board EBD of Singapore.

Further devices will be developed, using Philips design and partnering with the Singapore EDB, to diagnose other conditions e.g. fertility, virus infections, bacterial infections, and metabolic disorders.

CLINICAL TRIALS

Clinical trials started in early 2008 and covers countries in Europe the US, Russia and Australia. The results have been published in a series of prestigious publications during 2008 / 9. Many of our own scientific advisory board members have taken part in the studies. The range of work being carried out covers all the important application areas in which we expect this technology to offer a real and significant benefit to patients. A summary along with published papers is available on:

http://www.x-halo.com or by request.

COMMERCIALISATION

Market data has been collected for all the application areas where we expect the technology to offer a clear benefit for customers. We expect to finalise the business plan by Q3 2009 and to have patents granted by Q4 2009. The aim is to distribute this technology to a number of medical device distributers by Q4 2009; and license to a suitable “Respironics” type company by Q4 2010 (see full financial model).

11. FAD – SUMMARY Fortune Apex Development Limited (“FAD”) is a special purpose biotechnology company established to acquire and commercialise the mucosal drug delivery technology (MUCOADTM) owned by FAD, a company incorporated in the British Virgin Islands and operating from Hong Kong.

MUCOAD is a novel mucoadhesive solution utilising an existing regulatory approved compound as its carrier.

FAD signed all the required agreements to establish the Joint Venture Company, Strategic Pharmaceutical Company LLC, marketing the technology under the brand Strategic Biosciences (“SBS”). With Strategic Pharmaceutical Advisors (“SrxA”) based in New Jersey in the USA, November 2006, revised and updated agreements will be signed by the end of June 2009.

SrxA have extensive experience in facilitating licensing of biotechnology products and will fully utilise their expertise and industry contacts under the Joint Venture Company (“JV”). SBS.

Out-Licensing is being further facilitated by “Technology Catalyst International” (http://www.technology-catalysts.com).

Once Investment has been secured by FAD and agreements have been signed with SrxA to assign the Intellectual property (“IP”) to SBS, then a number of significant appointments will be made to the board of SBS. These will be Industry recognized executives that will drive the business to fully exploit the potential of MUCOAD. The corporate focus becomes SBS.

FAD will continue to develop the MucoAd technology in Bulgaria and ensure all the required formulation and analytical work is completed in a cost effective manner.

FAD has appointed a Scientific Advisory Board (“SAB”) that consists of 8 of the worlds leading peer group in the field of Asthma, Immunology and Allergology. The panel of experts available is further to be enhanced by a similar Scientific Advisory Board being appointed by the JV company, Strategic BioSciences.

This is an invaluable tool for advice, recommendations and endorsement to the scientific community and Industry. The members of the SAB are strategically, Globally distributed and currently are members of the committees of a number of International bodies including the World Allergy Organisation, the World Health Organisation (“WHO”) and numerous other bodies, they act as consultants and advisors to a number of large pharmaceutical companies.

The endorsement by this peer group will lead to easier acceptance and accessibility of our technologies and facilitate numerous license agreements and collaborations. Endorsement was given and acceptance made to our SAB after careful consideration and review of information supplied, they all realise the significant impact our technologies will make.

Investors in FAD have an opportunity to participate at the “ground floor” and be part of the “vend” into an exciting, remarkably well-developed and structured biotechnology company, that through the JV company will realise a significant return on investment and well as being part of a second stage NASDAQ listing in a USA listed vehicle. Investors in FAD will benefit by participating directly in a rapidly growing commercialisation facilitation business, as well as the equity component of each deal packaged and listed on the NASDAQ, They will also be backing a team with a proven track record of identifying and packaging outstanding technology deals and generating superior returns. FAD/SBS will have an unlimited life span.

An investment in FAD is an opportunity to participate in a flow of quality, high reward technology projects at the ground floor. The MUCOAD technology has multiple applications and hence unlimited opportunities that are well protected by extensive Patent protection.

11.1 IP PORTFOLIO Patent Case: FAD001

Title: Method of preparing a pharmaceutical composition and pharmaceutical compositions obtainable thereby

Abstract: An aqueous pharmaceutical composition comprising:

a) 0.005 to 10% by wt of one or more water-soluble pharmaceutically active ingredients or pharmaceutically acceptable salts thereof;

b) from 0.01 to 10% by wt hydroxypropyl methyl cellulose having a viscosity of from 2500 to 5500 cps (mPa.s); and

c) a buffer for maintaining the pH of the aqueous pharmaceutical composition from 5 to 7;

can be prepared by a method which comprises:

i) dissolving the above components in water to form an aqueous solution, and

ii) filtering the aqueous solution formed in i) through a sieve having a mesh size from =1 micron but = 10 microns.

The compositions obtainable by this method are capable of demonstrating improved mucoadhesive consistency and stability.


Date Application Date Application

No Status

BR FAD001/WO/BR FADL 24/10/2005

16/01/2006 BRPI0617961-4

Examination requested

CA FAD001/WO/CA FADL 24/10/2005

16/01/2006 CA22627271 Examination to

be requested by 16/01/2010 (Est. cost ~£600)

CN FAD001/WO/CN FADL 24/10/2005

16/01/2006 CN200680039496.7


EP FAD001/WO/EP FADL 24/10/2005

16/01/2006 EP06710396.0


IN FAD001/WO/IN FADL 24/10/2005

16/01/2006

IN783/MUMNP/2008 National phase

confirmed 14/5/2008

JP FAD001/WO/JP FADL 24/10/2005

16/01/2006 JP2008-536138


KR FAD001/WO/KR FADL 24/10/2005

16/01/2006 10-2008-7012076


RU FAD001/WO/RU FADL 24/10/2005

16/01/2006 RU2008120592


SG FAD001/WO/SG FADL 24/10/2005

16/01/2006 SG200802266-7 Granted:

SG141038, expires 16/01/2026

UK FAD001/GB/P FADL 24/10/2005

24/10/2005 GB0521708 Granted:

GB2423711, expires 24/10/2025

US FAD001/US FADL 24/10/2005

20/12/2005 US11/312,887 Under

examination

WO FAD001/WO FADL 24/10/2005

16/01/2006 PCT/IB06/000319 Complete:

International Search Report issued 27/9/2006; International Preliminary Report on Patentability issued 5/12/2007; Progressed into national / regional phase in BR, CA, CN, EP (all states), IN, JP, KR, RU & SG

Patent Case: FAD003

Title: Liquid mucoadhesive pharmaceutical composition

Abstract: A liquid mucoadhesive pharmaceutical composition, characterized in that it contains pharmaceutically active substance from 0.01 up to 10.00 wt%, mucoadhesive substance from 0.1 up to 10.0 wt%, preservative from 0.01 up to 5.00 wt%, sodium chloride from 0.1 up to 0.9 wt%, and buffer system with pH 5-7 up to 100 wt %, the relative viscosity of the solution is from 5.00 up to 500.00 and relative adhesive capacity is 105.0% up to 120.0%.


Date Application Date Application No

Status

BG FAD003/BG/P FADL* 22/02/2002

22/02/2002 BG106430 Under

examination; Priority Application for WO03/070213**. Application being handled by M.

*Applicants: Popov/Tzachev

**WO03/070213 was filed in the name of Bio Therapeutics, of Sofia, claiming Convention priority from BG106430. This International patent application is dead and no national or regional patent applications were progressed therefrom.

Patent Case: FAD004

Title: Pharmaceutical composition for topical application

Abstract: A pharmaceutical composition comprises a solution having a pH of from 5 to 7.5, including loratadine and/or desloratadine. The composition is suitable for treatment of e.g. allergic rhinitis and allergic conjunctivitis.


Date Application Date Application No

Status

GB FAD004/GB/P FADL 21/11/2008

21/11/2008 GB0821298.7 Combined

search and examination report issued 23/03/2009; Convention filings due 21/11/2009.

Trademark Case: FAD/TM/MUCOAD

Mark: MUCOAD

Goods: Pharmaceutical preparations and substances; pharmaceutical excipients; additives for the preparation of medicaments1

Country Case

Ref Applicant Class Priority

Date Application Date App /Reg No. Status

AU FAD/TM/MUCOAD/AU/5 FADL 5

13/12/20052 19/01/2006 AU1095239

Registered – renew 19/01/2016

EC1 FAD/TM/MUCOAD/EC/5 FADL 5

n/a 13/12/2005 EC004780722


JP1 FAD/TM/MUCOAD/JP/5 FADL 5

13/12/20052 24/01/2006 JP2006-

004773 Registered –renew 16/03/2016

UK FAD/TM/MUCOAD/GB/5 FADL 5

n/a 13/12/2005 GB2408938 Registered

– renew 13/12/2015

US1 FAD/TM/MUCOAD/US/5 FADL 5

13/12/20052 07/01/2006 US78787040


1 Unless otherwise stated

EC – specification of goods revised during opposition: “Mucosal pharmaceutical excipients; additives for the preparation of mucosal medicaments; but not including any excipients and additives for pharmaceuticals and medicaments being enzyme preparations including oral enzyme preparations”.

JP – specification of goods: “Agents for dispersing purposes; other agents”.

US – specification of goods: “Pharmaceutical preparations and substances, namely, pharmaceutical excipient, and hypromellose-based bioadhesive excipient in solid, powder or liquid form for use in transmucosal delivery of pharmaceutical active ingredients”.

2 Priority claimed from GB2408938 filed 13/12/05

12. X-HALO LAUNCH

Breakthrough in the fight against lung diseases

Launching the X-halo at the

EUROPEAN RESPIRATORY SOCIETY ANNUAL CONGRESS

October 4th-8th, 2008, Berlin, Germany

SINGAPORE, SEPTEMBER 22nd, 2008. As many as 300 million people worldwide suffer from asthma and its prevalence is on the rise as societies become increasingly urbanised. The Global Burden of Asthma Report, released in 2004, warns there could be an additional 100 million diagnosed asthmatics by 2025. Worldwide, deaths from asthma have reached more than 250,000 a year and its economic cost is estimated to exceed those of tuberculosis and HIV/AIDS combined.

Now, in an effort to improve the management of asthma and other respiratory diseases, Delmedica Investments of Singapore introduces a device that easily and accurately measures the temperature of a patient s exhaled breath. Already used by a number of internationally respected researchers and clinicians, it offers a breakthrough in the treatment of lung diseases.

In a number of recent medical studies, specialists have concluded that an asthma sufferer s exhaled breath temperature is related to the degree of airway inflammation. Further, exhale breath temperature is different to core body temperature, as determined by otic or axillar thermometers.

“In asthma there is increased vascularity of the airway mucosa, altering heat loss in the airways,” write Dr Paolo Paredi and fellow researchers at Imperial College London s National Heart and Lung Institute, in a study published in the American Journal of Respiratory and Critical Care Medicine in 2002.

“Exhaled breath temperature is related to the degree of airway inflammation in asthma,” conclude researchers at the University of Verona in a paper in the British journal Clinical & Experimental Allergy in 2007.

“Inflammation is characterised among other things by increased heat production,” write Todor Popov and fellow researchers at the Medical University of Sofia. Their study, published in Respiratory Medicine in 2007, concludes: “Exhaled breath temperature is increased in uncontrolled asthmatics and decreases under anti-inflammatory treatment.”

The concept that airway inflammation underlies the wide clinical spectrum of asthma has been a cornerstone of medical understanding for the past 20 years. It was first established using bronchoscopy and, later, less invasive methods of assessing inflammatory markers. Evaluating sputum samples was followed by measuring the level of nitric oxide and other markers of inflammation in exhaled breath condensate.

While these approaches are beneficial, they are too sophisticated and expensive to use in routine clinical practice. Some eight years ago, Dr Popov and fellow researchers began working on an inexpensive and user-friendly device to measure exhaled breath temperature. The result is the device designed by Philips Electronics Singapore for Delmedica and manufactured by Delmedica in Singapore.

The essence of the invention is an environmental chamber with a thermal core heated by exhaled air. Each exhalation increases the temperature inside this reservoir until equilibrium is reached and measured by a thermal sensor. To use the instrument, a patient inhales through the nose and exhales into the device.

The thermal sensor in the device is accurate to 0.03 degrees Celsius. It has been observed that exhaled breath temperature can rise up to 1.2 degrees before an asthma attack, and that this rise is distinct and measurable in both adults and children.

The device automatically displays and stores the final temperature. A maximum of 122,400 individual data points can be stored and then downloaded via a USB port from the device to a computer. The device is powered by two AAA batteries and can run continuously for 11 days.

Due to limited initial production, Delmedica is now offering the device exclusively to researchers and clinicians. It will secure FDA approval early next year.

The ability for doctors, patients and/or family members to accurately measure changes in exhaled breath temperature in a non-invasive and user-friendly way offers a new way of controlling respiratory illness before the patient presents with acute symptoms. It also offers the opportunity to treat patients with different anti-inflammatory and anti-microbial medicines at doses depending on how critical the illness is as measured by exhaled breath temperature.

Delmedica says the device could also be used in the diagnosis and management of viral and bacterial infections including tuberculosis, pneumonia and severe acute respiratory syndrome (SARS). Further scientific work needs to be done to confirm this.

Writes Popov: “The temperature of the exhaled breath turns out to be an unexplored area on the map of human physiology and disease. There are preliminary reports that increased exhaled breath temperature could be a marker for viral and bacterial infections of the respiratory system, but there is a vast territory to systematically cover in order to figure out the utility of this simple and cheap approach.”

ABOUT DELMEDICA INVESTMENTS

Based in Singapore, Delmedica Investments are a specialist funding company offering investors access to the immense potential of the global biotechnology industry. Via their impressive resources and network of health care professionals, Delmedica identify new opportunities with tangible commercial potential, opportunities that represent low risk, high-growth and clear exit strategies. Recently the healthcare industry replaced technology as the fastest growing sector in the U.S., now accounting for 12% of the total U.S. economy. Find out how Delmedica offers the investor access to innovations that represent the future of the healthcare industry.

TO ORDER YOUR X-halo VISIT

www.x-halo.com

FOR MORE INFORMATION PLEASE CONTACT

Jas Gill

Delmedica Investments (Singapore) Pte. Ltd

7 Temasek Boulevard. #06-01. Suntec Tower 1, Singapore 038987

Phone: +65 6415 3102 Fax: +65 6415 3108

E-mail: [email protected]

www.delmedicainvestments.com

13. DETAILS OF THE OFFERINGS

13.1 Delmedica Investments Limited PURPOSE OF THE OFFER

The purpose of the Offer is to raise funds to progress commercialisation of Delmedica particularly the production and marketing of the “X-HALO” device and to forward the development of MUCOAD, the novel mucosal drug delivery technology owned by Fortune Apex. The overall strategic objective of the company is to market the “X-HALO” device into the asthma market segment whilst at the same time continuing R&D activities to ascertain the usefulness of the device in other product / market combinations and to use the experience of its directors and scientific advisors to bring other technologies to the market where we believe they offer a real and tangible advantage to the end-user.

In the short to medium term the Company intends to undertake the following to achieve this objective:

a) Secure sufficient finance to fund all production and marketing expenses for the commercialisation of the “X-HALO”.

b) Complete the technical and regulatory packages for required to achieve FDA and CE approval for the device (on-going this will be completed summer 2009).

c) Expand the current research and development for IP protection/expansion and identification of new product / market combinations, working with “EDB” Singapore and Philips Electronics (Singapore) Pte Ltd.

d) Develop the distribution through, key, pre-identified distributors, globally.

e) Continue to explore new opportunities.

• Revenue is projected to far exceed expenditure; therefore, the model is generally insensitive to inflation, or forecasting of future levels of expenditure. The only period in which expenditure is a critical factor and needs to be examined closely is 2009 / early 2010, due to a moderately high level of MARCOM and production expenditure.

• Revenues modelled relate only to market penetrations of less than 1% of the total service available market for Asthma in terms of units, the true value of the business potential is far understated, as the technology can be applied to other product market combinations as well (such as bird flu, SARS, Tuberculosis and pneumonia as well as potentially metabolic disorders). The revenues that could be generated from these product / market combinations has not been included in the current financials model.

• All revenue and income predictions are dependent upon securing and defending US and international patents, and upon management s performance in identifying and opening up channels to the market.

• Note that management considers that it has been conservative with its operating assumptions; and furthermore, the model does not take into account optimal capital structuring. Leverage may be appropriate once the company has fully secured its intellectual property and has contracted to receive a fixed stream of revenues.

• Capital investment including the protection of existing IP and the development of new technologies is minimal. The disposition/disposal of intellectual property including for example MUCOAD, the device and any additional technologies to be developed and brand assets has not been considered.

f) With the injection of additional capital to drive product marketing, communications and working capital, DMI expects to be selling 5,000+ units per month by the end of 2010, increasing rapidly in the years following (see financial model).

At this stage DMI will have a substantial market presence, a body of well-established medical evidence, a distributor network and a track record of sales growth. Management will reinitiate discussions with one of the world s largest medical device manufacturers and distributors, a wholly owned subsidiary of one of the largest global companies actively seeking to increase its health care related income.

By the end of 2010, we expect to realise a one-off capital gain on disposal of “X-HALO”. With a trail of on-going royalties of at least 10% of free cash flow, generated from sales that can be re-invested in new medical devices and biotechnology companies.

Through the success of “X-HALO” and subsequent investments, we plan to list DMI through a reverse take over or Initial public Offering within 18-24 months.

USE OF FUNDS DMI intends to raise 3,500,000, initially less fundraising costs. We expect that 700,000 shall be raised between July to September 2009, followed by drawing down of the remaining funds in 2009/2010. Funds will also be raised to make further investments into FAD (see FAD section).

The funds raised will allow us to add substantial value to the business. Development of a second generation product suitable for the retail market with a 30 second measurement time compared to the current 4 minutes will require: software development costing 48,000, ISO certification costing 148,000 product development costs of

429,000 and tooling costing 143,000. This will be supported by clinical trials costing 430,000 over 4 years. The remainder of the funds raised will primarily be allocated to working capital for inventory and receivables, allow us to place larger, more cost efficient X-Halo manufacturing orders and provide contingent support for the company should there be delays in development or sales growth.

The proposed investment programme will allow us to accelerate sales growth tremendously. In early years we will reinvest our profits allowing us to increase our management and sales force capabilities with requisite office accommodation and infrastructure. A sales growth will also enable more extensive travel, continued attendance of trade shows and marketing communications of roughly 20% of turnover. Within two years, we expect to achieve sales at a rate of hundreds of thousands of units per annum. This will in turn redefine DMI s value to a potential buyer of our IP, or ensure a high market valuation on listing, should market conditions be appropriate.

CAPITAL STRUCTURE

The capital structure of the Company following the completion of this Offer is summarized below.

Capital Structure No. of Shares

Shares on issue at date of business plan (consolidated)

26,000,000

Shares to be offered to existing shareholders and shares now offered for subscription

6,000,000

Issued share capital after completion of the issue

32,000,000

Please note the average price payable for equity will vary as to the amount invested, private placement are proceeding at 1.00 per share, initially.

FURTHER INFORMATION AVAILABLE

1. Audited accounts for DMI (2007, 2008).

2. 2009 Management accounts.

3. IP Portfolio.

4. Full legal DD files.

5. Full technical DD files.

6. Full financial model for DMI.

7. Business Plan.

8. Sales and Marketing Plan / MARCOM, Phase I and II.

13.2 Fortune Apex Development Limited PURPOSE OF THE OFFER

The purpose of the Offer is to raise funds to progress commercialization of MUCOAD, the novel mucosal drug delivery technology owned by Fortune Apex.

The overall strategic objective of the company is to become a leader of drug delivery systems for partnering to the biopharmaceutical industry and ensure wide acceptance and commercialization of the technology and the device via SBS. It will also provide sufficient funds to explore, assign and develop further technologies that will come to the attention of FAD and to develop and protect the IP.

In the short to medium term the Company intends to undertake the following to achieve this objective:

a. Secure sufficient finance to fund all expense, loan monies if required to the JV company (up to 3 million Euro, convertible to equity under a convertible bond, CB will be in USD) and expand the current research and development for IP protection/expansion;

b. Complete the technical and regulatory packages for MUCOAD and to support the Company s partnering strategies, with regard to the JV company;

c. Continued development of the intellectual property to support the Company s partnering strategies;

d. Raise up to 3.8 million Euro initially, with a further 20 million USD raised by SBS;

e. Eventual listing of SBS on one of the exchanges in the USA, eventually leading to a listing on the NASDAQ exchange and

f. Continue to explore new opportunities that are continually presented to FAD.

1. Revenue is projected to far exceed expenditure; therefore, the model is generally insensitive to inflation, or forecasting of future levels of expenditure. The only period in which expenditure is a critical factor and needs to be examined closely is 2009/2010, due to a moderately high level of research expenditure, and the expenditure of professional fees.

2. Revenues modelled relate only to deals currently under development; the true value of the business potential is far understated, as the technology can be applied to a substantial portion of the global pharmaceutical market. Deals are modelled to give an indication of the expected timing of initial cash flows and to illustrate the pattern of income going forward.

3. It is likely that should one or more of the deals under consideration fail, other deals could be initiated to take their places. Therefore, the most appropriate valuation should be based upon a potential trade sale or public offering at a discount to its full market potential, further discount to today s price.

4. Both value and cash budgeting are dependent upon securing and defending US and international patents, upon management and/or the JV s performance in securing evaluation agreements and upon successful trials. Commercial and fundraising viability is furthermore critically dependent upon achieving this in a timely manner.

5. Note that management considers that it has been conservative with its operating assumptions; and furthermore, the model does not take into account optimal capital structuring. Leverage may be appropriate once the company has fully secured its intellectual property and has contracted to receive a fixed stream of revenues.

6. Capital investment including the protection of existing IP and the development of new technologies is minimal. The disposition/disposal of intellectual property including for example MUCOAD, the device and any additional technologies to be developed and brand assets has not been considered.

7. FAD/SBS expects to generate income in the near term through the following existing and high-probability product lines and deals

SINOL-M a product that has been successfully launched and is generating sales income.

SINOL product extensions, which have already been formulated and are soon to be marketed.

Xylometazoline dossier completion and licensing.

Metoclopramide dossier completion and licensing.

FAD and SBS will then have exposure in to not only the USA but also the important European, Eastern European and Asian markets with a full range of activities from research to manufacturing, distribution and licensing of all classes of products, including alternative/herbal, over the counter and prescription products. FAD expects to receive grant of its pending US Patent within the 2nd quarter of 2009. This will lead to 1-2 significant new license deals with major, listed Pharmaceutical companies already under CDA.

The first deal is an over the counter product with a number one globally recognised brand, the second is a market leading nasally applied anti-histamine.

These licenses are expected to be effective in 2010. License fees of up to 10 million USD will be generated in 2010-2011 with royalty income from 2011 onwards. These products and licenses are expected to generate 20 million of income in 2010 and at least double in 2011/2012.

The levels of these incomes therefore facilitate a reverse take over or initial public offering at $5 USD per share on recurring income at 10x P/E ratio.

USE OF FUNDS

It is intended to apply funds raised from the Offer as follows:

Application EURO

FAD Working Capital 500,000

Loan to JV company (under CB) 3,000,000

Costs of the issue* 250,000

Legal /Professional 50,000

Total 3,800,000

* Assumes payment of a minimum 5% fund raising fees payable to Venture Capital Fundraiser and other Financial Services License holders on the

3.800,000 in funds to be raised.

It should be noted that the budgets for the Company will be subject to modification on an ongoing basis having regard to a number of factors, including:

a. Collaborations and joint funding with respect to the development and commercialization of delivering existing drugs with MUCOAD via the JV,

b. Fluctuations in exchange rates, in particular the US dollar and Euro.

CAPITAL STRUCTURE

The capital structure of the Company following the completion of this Offer is summarized below.


Shares on issue at date of business plan (consolidated)

20,000,000

Shares to be offered to existing shareholders and shares now offered for subscription

6,000,000

Issued share capital after completion of the issue

26,000,000

The SBS JV is initially capitalised as follows:

FAD's intellectual property valued at $15,000,000

SRXA's expenditure of $500,000

Total assets $15,500,000

Under the Operational Agreement, SBS' capital structure is as follows:

FAD 30,000,000 shares (fully paid up through injection of IP at USD$0.50)

SRxA 20,000,000 shares (250,000 shares paid up at USD$0.30, plus a $5,500,000 capital account deficit)

Issued share capital 50,000,000

FAD has a 60% controlling stake in SBS.

FAD will reinvest US$4,000,000 of the funds to be raised buy the Issue into the SBS JV as a loan convertible at USD$0.25 per ordinary share. The capital structure of the SBS JV following the completion of the reinvestment of is summarised below.


Shares in issue 50,000,000

Additional shares issued on conversion of FAD's loan 16,000,000

Additional shares issued on exercise of management options 5,000,000

Issued share capital after completion 71,000,000

FAD will have a total stake in SBS of 64.7%

SBS plans to later raise a further US$20 million to raise its stake in the SBS JV through the issuance of a further 20 million ordinary shares in SBS at $1 per ordinary share.


Shares in issue 71,000,000

Additional shares issued on investment 20,000,000

Issued Share Capital After Completion 91,000,000

Through capitalising its license fee valued at US$1.5mm, SBS as taken a stake in Sinol. FAD has negotiated to acquire a loan note convertible into an additional stake in Sinol for $180,000.

SBS stake from capitalised license fee 22%

FAD conversion of loan note 11.6%

Furthermore, SBS will take an additional 27% stake in Sinol by converting royalties to be accrued till the end of 2009 on Sinol M and its product extensions. This will give FAD and SBS a controlling majority stake in Sinol.

14. THE COMPANY CORPORATE STRUCTURE Pre-Investment Corporate Structure:

Capital Structure of DMI:

Authorized Capital: 30 million shares of USD $0.01 each

Issued Capital: 20 million shares of USD $0.01 each

Medtec owned by Jaswinder Gill

Post -investment Corporate Structure

Capital Structure of DMI:

Authorized Capital: 30 million shares of USD $0.01 each

Issued Capital: 26 million shares of USD $0.01 each

Full corporate structure charts are available after signing of the required NCND agreement, as well as access to all audited accounts, certain technical files and other confidential information in order to facilitate investment.

15. GLOSSARY OF TECHNICAL TERMS “active ingredient(s)” component of the drug product that

causes the desired effect

“affinity” the degree to which a chemical/drug/carrier binds to its target (relates to potency)

“analgesic” a substance that alleviates the symptom of pain

“antiemetics” a substance that is used to prevent or reduce vomiting

“antihistamines” a substance that reduces the levels of histamine in the body and thereby reduces symptoms of allergy

“bioavailability” rate and extent of absorption of a substance into the body

“cancer” unregulated growth of cells which tend to infiltrate and give rise to new growths or metastases

“central nervous system” comprises the brain and spinal cord

“cilia” hair like filaments that line the surfaces of the nose, throat and passages to the lungs (respiratory system) that pass inhaled dust and microbes that have become trapped in the mucous towards the throat where they are swallowed

“clinical study” a trial using human subjects to test the safety and efficacy of a substance in a given disease or condition

“corticosteroid” natural or synthetic hormones that reduce the body s inflammatory response; often used to treat allergy and asthma

“double-blind” design of a clinical study where both the doctor administering substances and the patient receiving substances do not know what is being administered. Used to ensure that any therapeutic effect seen in a clinical study is due to the test substance and not to a non-pharmacological placebo effect

“drug carrier” components of a pharmaceutical product that deliver the active ingredient to the site of action

“drug delivery platform” a drug carrier system that can be used to deliver drug for multiple clinical conditions

“X-HALO device” device for measuring the temperature of the exhaled breath

“efficacy” measure of the effectiveness of a drug substance to produce a desired effect

“histamine” a substance produced by numerous cells that causes vasodilation, increased permeability of blood vessels and constriction of airways

“In-vitro” in an artificial environment outside a living organism

“in-vivo” within a living organism

“Investment agreement” An arms length agreement signed between DMI and FAD to provide a strategic investment from DMI into FAD. This agreement will be determined once the directors of FAD have accessed the required funding

“interpenetrated” ability to move through the mucous layer and bind to the underlying cells lining the mucous membranes

“M-A Technology” mucous drug delivery platform developed by FAD

“metoclopramide” an active ingredient that increases the movements or contractions of the stomach and intestines to relieve symptoms such as nausea, vomiting, continued feeling of fullness after meals, and loss of appetite

“muco-adhesive” a substance that has a high affinity for mucous membranes

“mucociliary apparatus” combination of mucous and cilia used to move trapped particles to the mouth for swallowing

“mucosa or mucosal membrane” a membrane that lines a body cavity, the digestive, respiratory, urinary and reproductive tracts

“mucous” a viscous fluid secreted by the cells of the mucous membranes. Protective against mechanical, chemical, bacterial or viral influences, and has also lubricating function

“nasal cavity” the mucosa-lined cavity of the nose

“nasal airflow resistance” a measure of the flow of air through the nasal cavity. Indicative of the levels of nasal congestion

“patent” A grant to an inventor of the right to exclude others for a limited time from making, using, or selling his/her invention in a particular region or country

“periodontal” relating to the membranes covering the sockets of the teeth of the upper and lower jaw

“pharmacokinetics” collective measurements of the absorption, distribution and elimination of an active ingredient

“pre-clinical development” A series of tests for a new potential drug conducted to gather evidence justifying a clinical trial of such a drug in humans

“polymer” numerous natural and synthetic compounds consisting of up to millions of repeated linked units, each a relatively light and simple molecule

“randomised/randomisation” statistical system used to allocate test and placebo substances to subjects in a clinical study. Used to reduce the likelihood of statistical bias and/or error in the design of a clinical study

“rhinitis/hay fever” inflammation of the nasal mucous membranes

“sustained release” the release of an active ingredient over a prolonged period of time following a single administration of the drug product

“tolerability” measure of how well a drug product is able to be tolerated

“vascular” pertaining to or containing blood vessels

“viscosity” measure of resistance to flow in a fluid or semifluid

“xylomethazoline” active ingredient with the ability to constrict blood vessels that is used as a nasal decongestant spray

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