Magic Race / Kitalpha Medical

The Neocontrol Treatment Chair

ExMI Treatment Chair/2012 2

Company Background

Started as Neotonus in 1994

Device introduced at American Urology Conference in 1999

Technology and patents acquired in 2009

• Prof. Dr. Michael Jordan. MD sole owner

510(k) approved

In excess of 2,300 devices installed in over 57 countries

Neuro-stimulation device used to treat urinary incontinence

Strong IP protection

Seeking distribution partners and capital for 2nd generation design

ExMI Treatment Chair/2012 3

Device

ExMI Treatment Chair/2012 4

The Neocontrol chair applies ExMI therapy; it has a proven track record with patients suffering from incontinence

ExMI™ is a patented technology for magnetic nerve stimulation.

The Neocontrol chair applies this technology to treat incontinence patients. This adjuvant therapy is 100% non-invasive. Other indications comprise pregnancy after-care, erectile dysfunction (ED), orgasm problems, interstitial cystitis.

Neocontrol therapy is approved by the FDA; the Neocontrol chair is also CE certified.

The main USPs of the Neocontrol chair are the high patient compliance, its proven efficacy and success (documented in clinical studies) as well as its financial appeal for the doctor operating the chair.

Growth opportunities in emerging markets (e.g. China) have not been exploited yet.

There are only two competitors (M-Cube and QRS), but both have not managed to penetrate the market, as their technology is by far inferior to the patented ExMI technology (competitor technology does not reach necessary penetration depth). There are no high-ranking clinical studies that could prove the competitors’ efficacy in treating incontinence.

Executive Summary

Executive Summary

ExMI Treatment Chair/2012 5

The Neocontrol Chair applies the ExMI technology to persistently strengthen the pelvic floor muscles

ExMI™-Technology: Mode of Operation

• ExMI™ produces a highly focused time varying magnetic field which penetrates deep into the perineum, activating the pelvic floor muscles by stimulating all branches of the pudendal and splanchnic nerves. The contractions strengthen the pelvic floor; muscle tonus (vaginal and anal sphincter muscles) builds up:

• ExMI™ produces pulses of steep gradient magnetic flux that are

focused by a specially designed therapy head.

• A time varying magnetic field creates an electrical potential which

causes ion flow, or Eddy currents, in the soft tissues of the pelvic

floor. This ion flow results in a brief depolarization of resting motor

neurons.

• When a threshold is reached, an action potential is initiated for that

neuron. This action potential then propagates naturally down the

axon via the usual Na+ and K+ ion flows.

• Once these impulses reach the motor end plates, the muscles of the

pelvic floor respond by contracting at a equal to the output pulse rate

of the therapy head.

• The muscles contract and relax with each pulse, unless the output

pulse rate exceeds the muscles’ ability to contract and relax,

resulting in a constant, or tetanic contraction on the muscles.

Mode of Operation

Control Unit

Treatment Chair

ExMI™: Nerve Impuls Contraction of Pelvic Floor and Sphincter Muscles

Magnetic Field

Motor-

Neuron

Induced

Nerve Impuls

Pelvic Floor Muscle

Motor End Plate

ExMI Treatment Chair/2012 6

The Neocontrol chair addresses therapy needs of a broad patient pool

• 20 – 23% of the adult population in the developed world suffer from some degree of incontinence

• Incontinence incidence with the female population in the US is at ~ 7%

Continence Care

• Stress Incontinence, Mixed Incontinence

• Incontinence after Radical Prostatectomy Surgery

• Pregnancy After-Care: Recovery of the Vaginal Tonus after Delivery

• Feces Incontinence

• Cystitis Interstitialis

Sexual Dysfunctions

• Erectile Dysfunction (ED)

• Ejaculation Problems

• Orgasm Problems

Neocontrol Chair: Areas of Application

• Globally, about 150 million women and men are estimated to suffer from some kind of the sexual dysfunctions mentioned above

Patient Potential Patient Potential

Source: Townsend et al. (2007): Incidence and Remission of Urinary Incontinece in Middle-aged Women, in: American Journal of Obstet. and Gynecol.

Areas of Application / Patient Pool

ExMI Treatment Chair/2012 7

Patients readily accept ExMI-based treatments as they are non-invasive and painless

USP Competitive Advantage in Detail

1. High Patient Compliance • 100% Non-invasive; patient does not have to actively engage in treatment – Patient sits fully clothed on the Neocontrol chair and can e.g. read a newspaper. No skin contact,

no gel, no probes…

• No side effects; complementary to medication-based therapy – Patient only feels a slight tickling during treatment; some patients may experience light muscle

ache after a therapy session

• Suitable for every age group

• Only little time investment necessary: after 20 treatment sessions the pelvic floor muscles have regained their necessary strength – 2 sessions per week, 20 minutes each, achieve the desired training outcome.

2. Proven Medical Success • Cleary reduced number of leakage episodes (cf. incontinence study results on page 6)

• High patient satisfaction as quality of life increases sharply

• Only standardized pelvic floor therapy on the market: we strive to get the adjuvant, non-invasive therapy with listed in the guidelines for incontinence care.

• Therapy success lasts at least 12 months; thereafter we recommend 5 refreshment sessions / year.

Unique Selling Propositions

Source: Results from clinical studies (cf. following page); patient questionnaires

Unique Selling Propositions of the Neocontrol Chair

Proven medical efficacy, financial benefits for the doctor as well as a high patient compliance set Neocontrol apart from other incontinence therapies

ExMI Treatment Chair/2012 8

Clinical studies and field reports confirm the medical efficacy of treating incontinence with the ExMI technology

Therapy Result Study Findings Authors (Excerpt)

Reduction of voiding frequency

• Voiding frequency significantly reduced

• Continence can be regained more quickly after RPx1

as compared to common pelvic floor gymnastics.

• Reduction of voiding frequency already sets in after

the first month of treatment (quick therapy result)

• Nowak, Martina et al. (2007): Prospective Study of

ExMI Therapy vs. Standard Pelvic Floor Training

Following Radical Prostatectomy

• MacDonald Roderick et al. (2007): Pelvic floor muscle

training to improve UI after RPx: a systematic review

of effectiveness

Reduction of required pads

• If ExMI therapy is started within the first 12 months

after RPx, the number of required pads can be

reduced to 1/3rd (median).

• Moderate cases do not need any pads anymore

• McCammon, Kurt (2008): Multi-Center Study of Extra-

corporeal Innervation for Treatment of UI following RP

• Wöllner, Jens (2008): Therapie der Harninkontinenz

mit Extracorporeal Magnetic Innervation (ExMI)

No or significantly reduced involuntary urine leakage

• Patients are able to better control the act of urination;

proven by weight analysis of used pads before and

after the therapy (degree of wetness)

• Marschall-Kehrel, Daniel (2008): The Magic Magnetic

Chair – How to Facilitate Best

• Gruenwald, I. et al. (2001): The Efficacy of ExMI in the

Treatment of Stress and Urge Incontinence

Increased Quality of Life

• Changes in patients’ perceived quality of life have

been tracked by standardized questionnaires: patients

experience a significant increase in their personal

quality of life.

• Bourcier, Alain: The French Experience on

Extracorporeal Magnetic Innervation

• Madersbacher, Helmut: Was bringt die

hochenergetische Magnetfeldtherapie? – Ergebnisse

einer randomisierten, prospektiven Studie

High patient satisfaction

• Patients appreciate the non-invasive nature of the

therapy, that they do not have to undress

• Patients confirm efficacy in their feedback

• Therapy is painless

• Marschall-Kehrel, Daniel (2008): The Magic Magnetic

Chair – How to Facilitate Best

• Wöllner, Jens (2008): Therapie der Harninkontinenz

mit Extracorporeal Magnetic Innervation (ExMI)

Study Results

Selected Study Results: Incontinence Treatment

(1) RPx = Radical Prostatectomy

ExMI Treatment Chair/2012 9

Due to its patented technology, only the Neocontrol chair achieves the therapeutically necessary penetration depth

Competitor 1: M-Cube (Korea) Competitor 2: QRS (Liechtenstein)

Neocontrol Chair: Proven Efficacy

• “Air-Core technology”

• Achieves only 1.5 - 2 cm penetration depth – not suited for treating incontinence

• Therapeutic efficacy not proven

• Only the patented ExMI™ technology allows for nerve stimulation depth in excess of 7cm; this depth is vital for successfully treating incontinence

• Targeted activation of all incontinence-relevant nerve groups allows for training all relevant muscle groups in the pelvic floor as well as the vaginal sphincter

• Therapeutic efficacy proven by clinical studies (cf. page 7)

Competitive Landscape

Quelle: Product leaflets, laboratory test results conducted by Neotonus Inc., clinical study results (cf. page 6)

Competitive Landscape / Comparison with Neocontrol

• Multi-purpose device (oxygen therapy, light therapy, pelvic floor stimulator)

• Also achieves only 1.5 – 2cm penetration depth

• Therapeutic efficacy not proven

Comparative Study: Test Results

Distance (cm)

V/m

ExMI™ Technology

Competitor (Air-Core)

ExMI Treatment Chair/2012 10

Alternative treatment methods are often painful, highly invasive and inconvenient

Therapy Method

Description Degree of

Invasiveness

Electrical Stimulation

Electrical stimulation probes are inserted rectally or vaginally to innervate the pelvic floor and sphincter muscles. Highly invasive treatment; has to used twice daily for 20 minutes each over at least 6 months.

Biofeedback Training

Extension to conventional pelvic floor gymnastics: by inserting a vaginal probe, the patient receives an acoustic or visual feedback informing her whether she is training the correct muscles. Requires professional instruction.

Vaginal Pessary

Patient inserts a vaginal pessary. Pulling on the pessary forces it apart and to enlarge. The resulting pressure lifts the ureter and thus achieves continence. Uncomfortable and invasive treatment option.

Vaginal Weight Cones

Patient inserts vaginal weight cones that are similar in shape to sanitary tampons. The patient learns to hold the weights by tensing her sphincter muscles. Addition to conventional pelvic floor gymnastics.

Pelvic Floor Gymnastics

Patient performs gymnastic exercises to strengthen the pelvic floor and sphincter muscles. Requires a lot of patience and perseverance. Success is largely dependent upon physical mobility and age of the patient.

Highly invasive Non-invasive

The listed alternatives comprise all the well-established conservative (i.e. non-surgical) therapy options. Source: www.inkontinenz-selbsthilfe.com

Alternative Treatment Options to the Neocontrol Chair

Competitive Landscape

Example: Electrical Stimulation

Alternatives are uncomfortable, highly invasive, and often not sufficiently

effective

ExMI Treatment Chair/2012 11

Independent scientific studies from numerous countries prove the success of ExMI therapy

The full reports are available online by clicking on the WWW-Link (active internet connection required).

Selected Study Results I/II

Brief Summary of Study Results Full Version

UK Rowe et al. (Department of Urology, St. Mary‘s Hospital, London, 2005) write:

„The novel use of pelvic floor electromagnetic therapy may be a promising new noninvasive option for chronic pelvic pain syndrome in men“

AT, I, GR, D

Nowak et al. Write 2007: „ExMI offers a novel medical treatment strategy following radical prostatectomy that provides earlier recovery of continence (at 3 months). At 6 and 12 months post-RPE continence rates were significantly superior to those undergoing PF treatment alone. Thus, ExMI treatment seems to offer a new adjunctive strategy for men with post RPE incontinence and should further be investigated in conjunction with anticholinergic agents.“

AT

Prof. Dr. Madersbacher at the Landeskrankenhaus Innsbruck writes: „[…] urodynamisch wurde bei der Magnetfeldtherapie eine deutliche Zunahme des Harnröhrenverschlussdruckes festgestellt. […] Die Vorteile der hochenergetischen Magnetfeldtherapie mittels Magnetstuhl liegen in der einfachen, schmerzfreien Anwendung, sowie fehlender Nebenwirkungen und einer damit verbundenen hohen Akzeptanz auch bei älteren Betroffenen.“

D

Dr. Jens Wöllner at the Johannes-Gutenberg University Clinic Mainz, writes 2008: „Das ExMI-Verfahren stellt ein effizientes, wirksames und nicht invasives Verfahren in der Therapie der Inkontinenz dar.“

Furthermore, Dr. Wöllner presents his study results at the 60. congress of the German Urological Association. The presentation is available online (in German only): : www.abstractserver.de/dgu2008/video/vortrag_116/index.htm

MEX

Martinez et al. (Centro de Urologia Avanzada, Cd. Delicias, Chihuahua, Mexico) write 2008: „This study provides evidence of the positive impact of electromagnetic wave therapy, increasing patient orgasmic capacity not related to the couples‘ sexual conduct. Our hypothesis is that there is a reactivation of the neuromuscular union or of the afferent fibers as a result of the electromagnetic effect with an increase in the sensorial function of the pelvic floor.“

(Study)

(Presentation)

Appendix

ExMI Treatment Chair/2012 12

Patient Satisfaction after ExMI™ Therapy

Dr. Wöllner observes that patients need significantly fewer pads after undergoing ExMI™ treatment

Example Study Results Dr. Wöllner (Excerpt)

Source: Dr. Jens Wöllner, Johannes-Gutenberg University Clinic, Mainz, Germany, DGU Conference Presentation, 2008

• Good results especially with stress incontinence; high patient satisfaction

• Significant reduction in pad usage, especially when therapy is started early

• Outpatient therapy, non-invasive, painless, no side-effects

• About 80% of those patients that began treatment within 12 months after their first leakage episode were highly satisfied with ExMI™ treatment outcome.

• A later therapy start still yields very satisfactory results.

%

# o f R e q u i r e d P a d s p e r D a y

100 After ExMI™ Before ExMI™

Proportion (%)

On average 4.3 pads / day

On average 1.9 pads / day

79% 63%

Appendix

Significant Reduction of Pads Required

ExMI Treatment Chair/2012 13

Growth opportunities lie in targeting new market segments outside of urology…

(1) Interstitial cystitis = common form of bladder pain syndrome

Growth Opportunities

• Incontinence after radical

prostatectomy

• Erectile dysfunction

• Ejaculation problems

• Stress incontinence, mixed

incontinence

• Feces incontinence

• Acute und chronic pelvic

pain

• Interstitial cystitis1

• Stress incontinence, mixed

incontinence

• Feces incontinence

• Pregnancy after-care:

Strengthening of vaginal

sphincter tonus

• Orgasm problems

• Acute und chronic pelvic

pain

• Interstitial cystitis1

Urology Gynecology Orthopedics Sports medicine

Vision

ExMI™ Platform Technology

NEW NEW NEW

Neocontrol Chair Neocontrol Chair New Devices New Devices

Market penetration Market development Market development Market development

• Thrombosis

(also preventative)

• Osteoporosis

• Osteoarthritis

• Carpal tunnel syndrome

• Nerve stimulation

(e.g. after an accident or

operation)

• Muscle build-up e.g. after a

lesion

• Foster blood circulation

• Treatment and prevention of

thrombosis

• Osteoporosis

• Osteoarthritis

• Carpal tunnel syndrome

• Nerve stimulation

(e.g. after an accident or

operation)

Product

Strategy

Area

Ind

ica

tion

s1

Growth in New Market Segments

ExMI Treatment Chair/2012 14

…and by expanding geographically, especially to emerging markets such as China, India, Brazil

Growth Opportunities

Source: German Medical Association (Bundesärztekammer); United States Department of Labor; American Urological Association; The Japanese Urological Association; Ministerio de Sanidad, Política Social e Igualdad; The National Health Service Information Centre UK

Growth by Further Geographic Expansion

Number of urologists: 8.000 Number of gynecologists: 20.000

Number of urologists: 11.000 Number of gynecologists: 27.000

Number of urologists: 8.000 Number of gynecologists: 15.000

Total of Private Practitioners in EU-Big5, US and Japan: about 89,000

EU BIG-5: D, F, E, UK, IT

ExMI Treatment Chair/2012 15

Summary

Proven, patented, Neuro-stimulation device used to treat urinary incontinence

In excess of 2,300 devices installed in over 57 countries

510(k) approved

Made in the USA

Seeking distribution partners and capital for 2nd generation design

Contact:

Katan Associates, Inc.

Prof. Dr. Michael Jordan, MD