Listing 690 Overview of Developer n Founded

Listing 690

Overview of Developer n Founded in 1999 n Technology Portfolio n Sensor Technologies – materials and chemistry n Software to monitor & predict p. H shifts n Intellectual Property Portfolio n Patents filed worldwide n Copyrights and Trademarks n Market Applications n Healthcare, Food Safety, Biomedical, Biohazards, Water Safety, Viticulture/Agriculture

Technology Overview n Proprietary Sensor n Predictive Sensors n predict p. H shifts n Proprietary Indicator System n Preventive Indicators n prevent unhealthy conditions caused by p. H shifts n System senses & displays danger points in- advance creating opportunity for intervention and prevention

The Market Opportunity n U. S. Adult Institutional markets n Skilled nursing and extended care facilities n Briefs and pads n New Premium Brand & Positioning n Higher value proposition product n Advanced & new technology provides market leadership position n Promotes additional products, technology, or services bundling and revenue generation

Institutional Market Assumptions n Total U. S. Skilled Nursing Facilities n #1, 500, 000 units/year n $1, 500, 000+/year n New Brand @ 15% penetration n #225, 000 units/year n Premium value of +$0. 40/unit @$1. 40* § * Without CMS remuneration n Estimated net new revenue $90, 000/year

Market Analysts n “Lister technology provides the first measurable, scientific method of diaper changing. It should be attractive to all major manufacturers” n Alan Perlman, Marketing Opinion Letter, formerly of Arthur D. Little n “The user benefits provided by the predictive indicators make powerful claims for both adult and infant markets. ” n John Starr, John R. Starr Inc.

The p. H Problem with Diapers n Exposure to elevated p. H is the underlying cause of skin degradation and infections in diapered area n Diapered skin p. H cannot be controlled by the diaper manufacturer n skin degradation & proclivity to infections are idiosyncratic & idiopathological n p. H in diapered area rises variably according to the individual wearer n p. H increases at an accelerating rate

Dynamics of p. H in Diapers n Known: p. H will rise as long as diaper is worn. n Known: p. H will become increasingly deleterious to wearer. n Unknown: what is p. H at any given time, and how fast is it rising, and when will it reach the problem stage?

Usage Problem with Diapers n Caregivers don’t know when to change because they have no way to know p. H status = ineffective & inefficient care n Changing too frequently n Wastes time & money n Changing too infrequently n promotes costly skin degradation / infections / malodors / discomfort

This Technology Solves the Problem n Predictive p. H indicators provide advance warning when the diaper/pad will need to be changed to prevent and reduce skin damage and infections n Time to change: n Not too soon …. . n Not too late …. . n Just in time! n Optimizes usage, costs and prevention

p. H Sensors for Absorbent Articles Bruce G. Pound, Ph. D. Exponent, Inc. May 2005 SF 26810. 000 A 0 T 0 1101 BP 13

What is p. H? n Measure of acidity or alkalinity of a liquid n p. H = - log (activity of hydrogen ions) n Activity ~ concentration n p. H range usually taken as 0 to 14 Acidic 0 Neutral 7 Alkaline 14

Wetness Enables Smart Sensors? n p. H is measurable if liquid is present n Conductivity is measurable if liquid is present n Certain compounds change color with a change in hydration due to liquid

Wetness sensors vs. p. H sensors n Wetness sensors are binary n Detect only wet/dry state n Not necessarily chemical changes n Not multiple changes n “Smart” p. H sensors monitor chemical changes that affect skin health n Follow change in p. H with time n. Predict remaining safe life of absorbent article

Types of p. H sensors n Chemical sensors n Color of dye changes with p. H n No intrinsic electrical signal n Electrochemical sensors n Electrochemical potential changes with p. H n Voltage output gives predictive capability

Electrode Requirements for Diaper Use n Comfort n Flexible, low profile= thin wire or foil n Safety n Unbreakable components n Non toxic, non-irritant chemicals n Cost/Disposability n Low-cost materials and manufacture n Environmentally acceptable materials

Electrochemical p. H Sensors n Two components n p. H electrode n Reference electrode

Foil Strip Electrodes Copper reference electrode Untreated ends Aluminum p. H electrode

p. H Kinetic in Diapers (Typical)

p. H Kinetic in Diapers (Extended Range)

p. H Kinetic in Diapers (Short Range)

Ph Change in Diapers 120 minutes 7. 0 p. H 5. 5 Time

Response of p. H Wire Sensor n Potassium chloride solution n Stepwise addition of potassium hydroxide n Time for voltage to stabilize decreases as p. H increases n Stable after a few minutes at higher p. H

Locations with different p. H n Different p. H levels simultaneously present at different locations in a diaper n Strips of filter paper on 10 -inch foil sensor electrodes p. H 7 solution at location 1 p. H 10 solution at location 2

Sensor Response with Different p. H }

Implications of Sensor Response n Onset of wetness was immediately detected through p. H measurement n p. H monitored was the most alkaline (highest) value along the sensor n Response of sensor was a novel and critical result n for detecting “hot” p. H zones n for predicting when to change a diaper

Lister Intellectual Properties n U. S. Patent n Electro-chemical p. H sensor for diapers n International patent filings n Copyrights, trademarks, provisional patents and regulatory filings n U. S. Patent Pending n Color change chemical p. H sensor

Basic Patent 6, 617, 488 n “Method and Apparatus for Indicating the Conditions in an Absorbent Article” n ABSTRACT n “systems for displaying the p. H on the outside of the article that provide visual and/or audible warnings that toxic levels are approaching and that it is time to remove and replace the article” n KEY CLAIM n “A method of predicting the remaining safe life of a diaper. ”

Medical Values of Lister Technology n Projected Medical Efficacies n Reduce incidence of Stage 1 skin degradation. n Reduce incidence of infections. n Slow progression of Stage 2, 3, 4 skin degradation. n Mitigate infections. n Reduce skin care costs, including doctors. n Reduce hospitalizations for above illnesses n Reduce nosocomial costs.

Lister Dermatology Study Conclusion n “The goal with diaper p. H indicators is to save money on manpower, as well as improve quality of life for the aged, with less disruption of sleep and other activities, as well as effective prevention of diaper rash. This study demonstrates such a goal is relevant and obtainable. ” § Ruby Ghadially MD, UCSF Dermatology, Principal Investigator on Lister study.

Incontinence Management Problems n In Skilled Nursing and Extended Care facilities incontinence management is: n n Inefficient Medically ineffective A major profit drain A client satisfaction and PR dilemma n Regulatory demand is for prevention of dermal deterioration n Lack of standards for incontinence management makes compliance impossible n U. S. cost of non-compliance n I. T. I. est. $3+ billion/year

Solution - Smart. Change™ System Smart. Change System. TM Systemizes Incontinence Management

Smart. Change™ System Secured patient unit Embedded p. H sensors Caregiver receives instant updates on “time-to-change” Caregiv er Unit Bedsid e Nursing station exchanges real time data from multiple beds/patients/caregivers Transcei ver Bedside transceiver receives real time data from p. H sensor Nurse’s Workstation

Smart. Change™ System Reusable transmitter fits in secure pouch

Smart. Change™ System User Friendly information display – easy to understand initiate action as needed Bedside Transceiv er Nurse’s Workstation

Smart. Change™ System Caregiver Unit Universal and compatible to current wireless handheld systems – easy to read and create action

Smart. Change™ System Benefits n Skilled Nursing & Extended Care Facilities n Direct Cost Savings n Fixed labor cost savings § Automated status and feedback eliminates need for manual diaper checks & unnecessary changes § Facility wide reduction in labor required for skin care § Reduces costly skin care treatment procedures for damaged or infected skin § Automated reporting reduces administrative costs n Material cost savings § Optimized diaper changes & reduced ointment/treatment medicines & medicaments

Smart. Change™ System Benefits n Skilled Nursing & Extended Care Facilities n Indirect Cost Savings n Skin degradation lawsuit filings are increasing due to Medicare requirements (MDS) n Facility liability insurance is increasing due to higher awards per claim n Increased federal and state penalties/fines for noncompliance n Lower turnover rates from patient movement and better client relations

Smart. Change™ System Benefits n Skilled Nursing & Extended Care Facilities n 510(k) medical device (filing in progress) n Best method available to produce highest quality patient care n Decubitus care directives and urgency of the ulceration problem is driving innovation and new standards for prevention n Remuneration potential is established for 510(k) devices for improved incontinence management n Qualifies facility to receive remuneration & to promote themselves as providing higher quality (QIC) indicators

Hot Zones are Critical Factors n Predictive + Preventive = Remunerative

Smart. Change™ System Benefits n Benefits to the End User n Maximized comfort and care n. Improved health and quality of life § Change only as needed – optimum timing § Not an arbitrary schedule § No unnecessary sleep interruption § Better relations with caregiver § Patient dignity n Promotes more effective and efficient caregiver habits

Defining the Market n Five constituencies that desire improvement – all must be satisfied n Government agencies, clients/patients, institution owners, facility administrators and individual caregivers n Government – Prevention n Patients – Quality of life n Owners – Cost containment & efficiency n Facility manager – Compliance, higher QI ratings, staff/patient retention and morale n Caregiver – User friendly technology, improved patient relations, reduced workload, respect

Benefits to Diaper Manufacturer n Efficient Marketing/Sales n Large chains dominate SNF market – few corporate sales yield large market shares n Standardization Potential n State governments and VA regions may mandate use of the technology, based on 510(k) health benefits n Bundling Potential n Incontinence products pull other product lines n Reputation n Create image as ‘The Healthy Diaper Company’

Benefits to Diaper Manufacturer n Remuneration Potential n Likelihood of securing 510(k) based on Smart. Change health benefits n FDA and CMS cooperating to foster new technologies to prevent skin degradation and infection spread n CMS mandate to prevent skin ulceration n CMS can act independently of FDA to establish remuneration policy n Conclusion: remuneration likely

Benefits to Diaper Manufacturer n Protection from Competition n. Lister basic patent (6, 617, 488) overcomes seminal Kimberly Clark patent to Everhart n. Lister basic patent overcomes seminal Procter & Gamble patents to Roe n. Lister patent portfolio includes minefield protections of basic patent

Benefits to Diaper Manufacturer n Cost of Goods Efficiencies n Smart. Change™ Diaper n Foresight of when a diaper will need to be changed should lead to less costly diapers n “Modified cost models have been constructed that show that Lister predictive indicators may permit cost-saving modifications in the diaper design…. particularly the absorbent core. ” § COGs Analysis, John R. Starr, John Starr, Inc.

Diaper of the Future Multifunctional n The Diaper as a Diagnostic Device n Additional information/data generation n Incorporating sensors into diapers opens the path for many useful on-line reports: n Pulse (predictive) n Temperature (predictive) n Patient location n Other diagnostics

Enhanced Functionality

Colormetric, Predictive p. H Indicators n IP folio includes patent pending and patent filings on color-change indicators for a number of mass market products. n Patent coverage for predicting safe-life of infant diapers, for predicting the onset of malodors, and for predicting the shelf life of packaged foods. p. H 8. 5 - 10+ Act Now! p. H 7. 5 - 8. 5 Act ASAP p. H 6. 5 - 7. 5 Act in 1 hour p. H 5. 5 - 6. 5 Safe-No Action

Color/Smart ™ Technology n Patent pending n R&D at Arthur D. Little and Stanford Research Institute International n extensive experience in diaper R&D n extensive experience in colorimetrics n p. H Sensor/Indicators developed: n display bright distinct range of colors/hues n employ p. H sensitive dyes, leuco dyes, p. H sensitive coatings, chelating compounds and hybrids of the previous n Any range of p. H change can be measured and predicted with custom sensors

Markets for Color/Smart ™ Indicators n Advance warning of skin discomfort/damage: n Infant Diapers n Advance warning of odor formation: n Adult Retail Diapers n Adult Assisted Living / Home Care diapers n Catamenial products n Advance warning of packaged food spoilage: n Meat / Chicken / Fish / Dairy et. al.

Infant Diaper - Get Ready to Change Indicators can be placed where consumers prefer

Infant Diapers n What does the customer want? n 70% CONVENIENCE nfewer changes / no leaks n 15% COMFORT / SKIN WELLNESS n 15% LOWEST PRICE § Reference: John R. Starr

Longevity Problem with Infant Diapers n Consumers Demand Convenience n In 2005, diapers worn twice as long as in 1990. n Over long-wearing, p. H rises continuously faster & faster. n High diaper p. H causing an epidemic of skin problems: n 66% of infants have diaper rash monthly n Parent or daycare providers do not know when to change. . .

Marketing Claims for Infant Diapers n The Most Convenient Diaper n The indicator tells at a glance and in advance when a change will be needed. (No need to open, sniff, feel the diaper. ) n The Most Comfortable Diaper n Timely changing will help prevent skin irritation/discomfort. n The Healthiest Diaper n Timely changing helps keep healthy skin healthy.

Current Development Activity n Design for Manufacturing Activity n High volume sensor manufacturing n Wireless/IT components manufacturers n Ongoing clinicals at UCSF n FDA 510(k) filings n Ongoing market research n VA hospitals

Summary and Next Steps n This technology is unique and protected n Electrochemical Smart. Change™ technology n Manufacturable unique sensors n Proprietary software n Remuneration has value for higher profits n Color/Smart Color change technology n Low cost, easy to use, market focused n Available to Diaper Manufacturers for license.

Follow Up n Please refer to Tynax listing number: 690 with regard to this opportunity. n Inquiries should be directed to: n David Smith n david@tynax. com

Thank You