April 14, 2004April 14, 2004 11

STATagSTATag

Milestones PresentationMilestones Presentation

Daniel Tubbs Brian EastonDaniel Tubbs Brian Easton

Jason Sadler Latricia SimonJason Sadler Latricia Simon

Joseph Williams Francis DoligosaJoseph Williams Francis Doligosa

April 14, 2004April 14, 2004 22

The STATag

Solutions for

Real-Time Equipment Tracking

April 14, 2004April 14, 2004 33

Problem

Hospitals need to reduce costs to increase profitability

– From 1997 to 2001, spending on hospital care increased by $83.6 Billion3

– Hospital gross margins have declined annually every year since 19973

– Wages & Benefits for nurses account for 36% of Hospital costs ($166.4 Billion)3

April 14, 2004April 14, 2004 44

Percent of Total Hospital Costs by Percent of Total Hospital Costs by Type of ExpenseType of Expense

57%

13%

8%

5%

17%

Wages &Benefits

Other Products(excluding Rxdrugs)

Capital

PrescriptionDrugs

Other Services

Cost of Caring: Key Drivers of Growth in Spending on Hospital Care, PriceWaterhouseCoopers, February 19, 2003 (Appendix B)

April 14, 2004April 14, 2004 55

The Cost of InefficiencyThe Cost of Inefficiency

35-60% of a nurse’s time is wasted on35-60% of a nurse’s time is wasted on55

– Searching for equipmentSearching for equipment– Clarifying ordersClarifying orders– Entering redundant informationEntering redundant information

Wasting $58 - $99 Billion annuallyWasting $58 - $99 Billion annually66

April 14, 2004April 14, 2004 66

Solution

The use of STATags will:

Reduce man hours searching for needed equipment

Lower operating costsLower operating costs– Save a real $1 for every $4 of efficiency gainedSave a real $1 for every $4 of efficiency gained77

(Reduction of overtime, increased turnaround, etc.)(Reduction of overtime, increased turnaround, etc.)

Increase staff efficiency – Increase a nurse’s efficiency at least 10%Increase a nurse’s efficiency at least 10%55

April 14, 2004April 14, 2004 77

““Brilliant Idea”Brilliant Idea”

- Cindy Jimmerson, founder of reVIEW - Cindy Jimmerson, founder of reVIEW (Realizing Exceptional Value in Everyday (Realizing Exceptional Value in Everyday Work), and National Lecturer on Hospital Work), and National Lecturer on Hospital EfficiencyEfficiency

April 14, 2004April 14, 2004 88

User Interface ViewsUser Interface Views•Default screen presents the user with a list of items that can be queried•User selects item and selects ‘Query Nearest Device’ to locate that closest particular item

An ‘Administrative Use’ button is also available for authorized personnel to make any necessary maintenance to the system

April 14, 2004April 14, 2004 99

User Interface ViewUser Interface View

Following query execution, a next screen presents a map of the facility and the location of the nearest queried item

April 14, 2004April 14, 2004 1010

DB ServerNetwork Coordinator

User

Internal Webserver

Database

`

Web Browser

STATag

STATag

STATag

STATag

STATag

STATag NetworkSTATag Network

April 14, 2004April 14, 2004 1111

Individual STATagIndividual STATag

Microcontoller

802.15.4 Module

Flash RAM (1MB)

Usage Module(In use switch)

Movement Detection Module

(Gyroscopes & Accelrometers)

Tamper Detection Module(Tag Removed Switch)

Battery

April 14, 2004April 14, 2004 1212

Software InterfaceSoftware Interface(STATag – Server)(STATag – Server)

General SpecificationsGeneral Specifications– All STATags have a unique IDAll STATags have a unique ID– STATags transmit their location periodically or STATags transmit their location periodically or

when queriedwhen queried– STATag location data is stored in the STATag location data is stored in the

database by STATag IDdatabase by STATag ID– Software interface updates the database Software interface updates the database

using SQLusing SQL

April 14, 2004April 14, 2004 1313

User InterfaceUser Interface

Allows for fast lookupsAllows for fast lookups

User selects type equipment to locateUser selects type equipment to locate

Query is sent to web serverQuery is sent to web server

Web server retrieves the location of the Web server retrieves the location of the closest piece of equipment of the selected closest piece of equipment of the selected typetype

Position is displayed on a map for the userPosition is displayed on a map for the user

April 14, 2004April 14, 2004 1414

Underlying Interface AbstractionUnderlying Interface Abstraction

Installation associates the equipment’s Installation associates the equipment’s serial number and equipment type with the serial number and equipment type with the STATag’s unique IDSTATag’s unique IDEquipment type queries return all STATag Equipment type queries return all STATag IDs associated with the requested typeIDs associated with the requested typeEach STATag’s location is compared to Each STATag’s location is compared to the requester’s locationthe requester’s locationLocation of the closest STATag not in use Location of the closest STATag not in use is returnedis returned

April 14, 2004April 14, 2004 1515

Objective

Create a Real-Time Equipment Tracking system using STATags that increases staff efficiency and allows hospitals to reduce operating costs

April 14, 2004April 14, 2004 1616

STATags will:

Use “Dead Reckoning” to determine current location

Use network security

Self-discover & self-configure network

Handle large quantities of equipment

April 14, 2004April 14, 2004 1717

STATags will (continued):

Activate Alarms

Store historical location and usage data

Run without intervention for long periods– Battery lasts 5-7 years– Need calibration only when battery is changed

April 14, 2004April 14, 2004 1818

STATags will not:

Prevent theft

Collect or transmit personally identifiable health information (covered under HIPAA)

Communicate further than 100 feet between STATags

April 14, 2004April 14, 2004 1919

Major Risks

Interference with hospital monitoring equipment– STATag transmits 1% the power of other safe

wireless devices– Most major Hospitals are implementing WiFi

Conflicts with other 2.4 GHz networks– 802.15.4 has been designed for interoperability

802.15.4 and ZigBee are new standards and therefore there maybe unknown issues– Hardware issues are being resolved by manufactures– Software issues will be correctable by patching

April 14, 2004April 14, 2004 2020

Management PlanManagement Plan

The management plan encapsulates the The management plan encapsulates the following:following:– Program management overviewProgram management overview– Management structureManagement structure– Project teamProject team– Project planningProject planning– Financial managementFinancial management– Management reviewsManagement reviews

April 14, 2004April 14, 2004 2121

Team DistributionTeam Distribution

Project Lead /ComputerEngineer

Daniel Tubbs

Manufacturing Director

Francis Doligosa

R&D / QA

Latricia Simon

FinancialDirector

Brian Easton

Marketing & Web

Development

Jason Sadler

PersonnelDirector

Joseph Williams

Office ManagerInstallationEngineers

SalesManager

Help DeskCoordinator

DevelopmentStaff

Salesmen

InventoryManager

AccountsManager

AccountsReceivable

SupportStaff

GraphicsDesigner

TechnicalWriter

ComputerEngineer

Drafter

April 14, 2004April 14, 2004 2222

Evaluation PlanEvaluation Plan

Monitor milestonesMonitor milestones

Track budget and scheduleTrack budget and schedule

Monitor quality assuranceMonitor quality assurance

Track customer impact and satisfactionTrack customer impact and satisfaction

Evaluate areas for improvementsEvaluate areas for improvements

April 14, 2004April 14, 2004 2323

Marketing PlanMarketing Plan

Target market: US HospitalsTarget market: US Hospitals

Installation cost: approximately $392,000 Installation cost: approximately $392,000

The hospital will recover the installation The hospital will recover the installation cost in only 7.5 monthscost in only 7.5 months

The hospital will save $6.1 Million over 10 The hospital will save $6.1 Million over 10 yearsyears

Sold via direct salesSold via direct sales

April 14, 2004April 14, 2004 2424

Market AnalysisOur target market is US hospitals:

Hospitals: 5,7942

Total Registered Beds: 975,9622

Estimated mobile medical equipment in US: Approximately 10 Million4

Potential future market: International hospitals

April 14, 2004April 14, 2004 2525

Market Analysis (continued)

Hospital equipment is very expensive and highly mobile

Equipment tracking is a large problem that causes:– Time consuming equipment searches– Unnecessary equipment purchases

Locating equipment is one of the Top 10 most wasteful hospital activities7

April 14, 2004April 14, 2004 2626

Hospital SavingsHospital SavingsTotal Savings

$263,330

$918,878

$1,574,427

$2,229,975

$2,885,524

$3,541,072

$4,196,620

$4,852,169

$5,507,717

$6,163,266

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

1 2 3 4 5 6 7 8 9 10

Year

Total Savings

April 14, 2004April 14, 2004 2727

Funding PlanFunding Plan

Phase 1 – $100,000 SBIR Phase 1 GrantPhase 1 – $100,000 SBIR Phase 1 Grant

Phase 2 – $750,000 SBIR Phase 2 GrantPhase 2 – $750,000 SBIR Phase 2 Grant

Phase 3 – $200,000 SBA LoanPhase 3 – $200,000 SBA Loan

Break even point – August 15, 2006Break even point – August 15, 2006

Net Profit as of December 31, 2007Net Profit as of December 31, 2007

$76.4 Million$76.4 Million

April 14, 2004April 14, 2004 2828

Balance Sheet: Phases 0-2Balance Sheet: Phases 0-2Balance

$0.00

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

Jan,

200

4

Feb, 2

004

Mar

, 200

4

Apr, 2

004

May

, 200

4

Jun,

200

4

Jul, 2

004

Aug, 2

004

Sep, 2

004

Oct,

200

4

Nov, 2

004

Dec, 2

004

Jan,

200

5

Feb, 2

005

Mar

, 200

5

Apr, 2

005

May

, 200

5

Jun,

200

5

Jul, 2

005

Aug, 2

005

Sep, 2

005

Oct,

200

5

Nov, 2

005

Dec, 2

005

Jan,

200

6

Feb, 2

006

Mar

, 200

6

Apr, 2

006

May

, 200

6

Jun,

200

6

Balance

April 14, 2004April 14, 2004 2929

Balance Sheet: Phase 3Balance Sheet: Phase 3Balance

$451,433.79$1,317,918.31$2,761,453.36

$4,758,745.56$7,319,901.50

$10,401,627.82

$14,120,831.12

$18,434,218.02

$23,351,895.12

$28,830,569.06

$34,463,709.13

$40,197,915.33

$46,033,187.68

$51,969,526.16

$57,953,530.78

$64,092,001.53

$70,331,538.42

$76,672,141.46

$0.00

$10,000,000.00

$20,000,000.00

$30,000,000.00

$40,000,000.00

$50,000,000.00

$60,000,000.00

$70,000,000.00

$80,000,000.00

$90,000,000.00

Jul,2006

Aug,2006

Sep,2006

Oct,2006

Nov,2006

Dec,2006

Jan,2007

Feb,2007

Mar,2007

Apr,2007

May,2007

Jun,2007

Jul,2007

Aug,2007

Sep,2007

Oct,2007

Nov,2007

Dec,2007

Balance

April 14, 2004April 14, 2004 3030

Major Milestones – Phase 0Major Milestones – Phase 0

3-May-043-May-04 SBIR Grant ApplicationSBIR Grant Application

3-May-043-May-04 SBIR PresentationSBIR Presentation

April 14, 2004April 14, 2004 3131

Deliverables - Phase 0Deliverables - Phase 0

12-Jan-0412-Jan-04 Project StartProject Start

11-Feb-0411-Feb-04 Individual Project Individual Project PresentationPresentation

17-Mar-0417-Mar-04 Feasibility PresentationFeasibility Presentation

14-Apr-0414-Apr-04Milestone PresentationMilestone Presentation

3-May-043-May-04 Website CompleteWebsite Complete

April 14, 2004April 14, 2004 3232

Major Milestones – Phase 1Major Milestones – Phase 1

10-Sep-0410-Sep-04 Prototype Specifications Prototype Specifications (Draft) Complete(Draft) Complete19-Nov-0419-Nov-04 Lab Prototype BuiltLab Prototype Built25-Nov-0425-Nov-04 Lab Prototype Testing Lab Prototype Testing CompleteComplete2-Dec-042-Dec-04 Product Specification (final) Product Specification (final) CompleteComplete10-Dec-0410-Dec-04 SBIR Phase 2 Application SBIR Phase 2 Application SubmittedSubmitted

April 14, 2004April 14, 2004 3333

Deliverables - Phase 1Deliverables - Phase 1

8-Oct-048-Oct-04 Parts AcquiredParts Acquired

29-Oct-0429-Oct-04Computer Interface CompleteComputer Interface Complete

1-Nov-041-Nov-04 Dead Reckoning Module Dead Reckoning Module CompleteComplete

28-Oct-0428-Oct-04802.15.4 Module Complete802.15.4 Module Complete

18-Nov-0418-Nov-04 Software Interface Software Interface CompleteComplete

April 14, 2004April 14, 2004 3434

Major Milestones – Phase 2Major Milestones – Phase 2

25-Feb-0525-Feb-05 SBA Loan ObtainedSBA Loan Obtained9-May-059-May-05 Database Development CompleteDatabase Development Complete11-Aug-0511-Aug-05 Web Interface Development CompleteWeb Interface Development Complete28-Sep-0528-Sep-05 Integration Testing CompleteIntegration Testing Complete25-Feb-0525-Feb-05 Documentation CompleteDocumentation Complete26-Apr-0526-Apr-05 Design FinalizedDesign Finalized3-Jan-063-Jan-06 FCC Approval ReceivedFCC Approval Received10-Jan-0610-Jan-06 STATags ready for Real World TestingSTATags ready for Real World Testing2-May-062-May-06 STATags Ready for SaleSTATags Ready for Sale

April 14, 2004April 14, 2004 3535

Major Milestones – Phase 3Major Milestones – Phase 3

8-Aug-068-Aug-06 Full ProductionFull Production

11-Jul-0611-Jul-06 Support Department EstablishedSupport Department Established

8-Aug-068-Aug-06 Installation Engineers TrainedInstallation Engineers Trained

15-Aug-0615-Aug-06 Break Even PointBreak Even Point

April 14, 2004April 14, 2004 3636

Project BudgetProject Budget

Phase 1Phase 1 $96,600 $96,600

Phase 2Phase 2 $836,000 $836,000

Phase 3Phase 3 $3,431,600$3,431,600

TotalTotal $4,364,200$4,364,200

April 14, 2004April 14, 2004 3737

Budget by YearBudget by Year

2004 – $206,9762004 – $206,976 Phases 0 & 1 Phases 0 & 1 CompleteComplete

2005 – $505,5122005 – $505,512 Production Sample Production Sample Complete, FCC Testing Complete, FCC Testing CompleteComplete

2006 – $1,599,1042006 – $1,599,104 Phase 2 Complete, Phase 2 Complete, Full Production, Installed Full Production, Installed

in in 43 hospitals43 hospitals2007 – $2,052,6002007 – $2,052,600 Installed in 271 hospitalsInstalled in 271 hospitalsTotal $4,364,192Total $4,364,192

April 14, 2004April 14, 2004 3838

Resources - Phase 1Resources - Phase 1

Office Space 2600 Sq. FeetOffice Space 2600 Sq. Feet $7,200$7,200UtilitiesUtilities $2,000$2,000Telephone/InternetTelephone/Internet $1,600$1,600Office FurnitureOffice Furniture $6,000$6,000Electrical Eng. EquipmentElectrical Eng. Equipment $2,500$2,500Office ComputersOffice Computers $8,000$8,000Peachtree 2004Peachtree 2004 $1,000$1,000Network / ServerNetwork / Server $3,500$3,500MS Visio / MS ProjectMS Visio / MS Project $3,000$3,000Web Site HostingWeb Site Hosting $200 $200Prototype PartsPrototype Parts $1,000$1,000TotalTotal $36,000 $36,000

April 14, 2004April 14, 2004 3939

Personnel - Phase 1Personnel - Phase 1

Francis Deligosa - Manufacturing DirectorFrancis Deligosa - Manufacturing Director $9,000$9,000Daniel Tubbs - Team Manager / Computer EngineerDaniel Tubbs - Team Manager / Computer Engineer $9,000$9,000Joseph Williams - Personnel ManagerJoseph Williams - Personnel Manager $9,000$9,000Latricia Simon - R & D Manager / QA ManagerLatricia Simon - R & D Manager / QA Manager $9,000$9,000Brian Easton - Finance OfficerBrian Easton - Finance Officer $9,000$9,000Jason Sadler - Marketing DirectorJason Sadler - Marketing Director $9,000$9,000Drafter (plastic parts)Drafter (plastic parts) $600 $600Computer EngineerComputer Engineer $6,000$6,000TotalTotal $60,600 $60,600

April 14, 2004April 14, 2004 4040

Resources - Phase 2Resources - Phase 2Office Space 2600 Sq. FeetOffice Space 2600 Sq. Feet $30,600$30,600 Car RentalCar Rental $400 $400UtilitiesUtilities $8,500 $8,500 Telephone/InternetTelephone/Internet $6,800 $6,800Office FurnitureOffice Furniture $6,000 $6,000 Office ComputersOffice Computers $12,000$12,000Network / Server Network / Server $6,000 $6,000 Development SoftwareDevelopment Software $8,000 $8,000Web Site HostingWeb Site Hosting $850 $850 Graphics DesignerGraphics Designer $1,600 $1,600Trade Show Booth RentalTrade Show Booth Rental $30,000$30,000 Trade Magazine AdTrade Magazine Ad $55,000$55,000Airfare to TradeshowAirfare to Tradeshow $4,000 $4,000 HotelHotel $1,000 $1,000EntertainmentEntertainment $1,000 $1,000 Test WWW ServerTest WWW Server $2,500 $2,500Test DB ServerTest DB Server $2,500 $2,500 Test WorkstationsTest Workstations $3,000 $3,000Plastic ToolingPlastic Tooling $40,000$40,000 Production EngineeringProduction Engineering $15,000$15,000Test RunTest Run $5,000 $5,000 Error Reporting Software Error Reporting Software $5,000$5,000FCC Approval TestingFCC Approval Testing $20,000$20,000

TotalTotal $264,750 $264,750

April 14, 2004April 14, 2004 4141

Personnel - Phase 2Personnel - Phase 2

Daniel Tubbs - Team ManagerDaniel Tubbs - Team Manager $68,000$68,000Joseph Williams - Personnel managerJoseph Williams - Personnel manager $59,500$59,500Brian Easton - Finance ManagerBrian Easton - Finance Manager $59,500$59,500Latricia Simon - R&D Manager / QA ManagerLatricia Simon - R&D Manager / QA Manager $59,500$59,500Jason Sadler - Marketing DirectorJason Sadler - Marketing Director $59,500$59,500Francis Deligosa - Manufacturing DirectorFrancis Deligosa - Manufacturing Director $59,500$59,500Office ManagerOffice Manager $42,500$42,500LawyerLawyer $54,000$54,000Software Engineer 2Software Engineer 2 $76,500$76,500Technical WriterTechnical Writer $8,750 $8,750Installation EngineerInstallation Engineer $12,000$12,000Network EngineerNetwork Engineer $12,000$12,000TotalTotal $571,250 $571,250

April 14, 2004April 14, 2004 4242

Resources - Phase 3Resources - Phase 3Office Space 6000 Sq. FeetOffice Space 6000 Sq. Feet $80,000 $80,000UtilitiesUtilities $20,000 $20,000Telephone/InternetTelephone/Internet $12,000 $12,000Office FurnitureOffice Furniture $10,000 $10,000Office ComputersOffice Computers $20,000 $20,000Network / ServerNetwork / Server $10,000 $10,000Development SoftwareDevelopment Software $10,000 $10,000Web Site HostingWeb Site Hosting $1,000 $1,000Trade Show Booth RentalTrade Show Booth Rental $120,000$120,000Trade Magazine AdTrade Magazine Ad $44,000 $44,000Airfare to TradeshowAirfare to Tradeshow $32,000 $32,000Car RentalCar Rental $1,600 $1,600HotelHotel $8,000 $8,000EntertainmentEntertainment $8,000 $8,000Ticket Tracking SoftwareTicket Tracking Software $5,000 $5,000Retool Plastic MoldRetool Plastic Mold $320,000$320,000TotalTotal $701,600$701,600

April 14, 2004April 14, 2004 4343

Personnel - Phase 3Personnel - Phase 3Daniel Tubbs - Team ManagerDaniel Tubbs - Team Manager $100,000$100,000Joseph Williams - Personnel managerJoseph Williams - Personnel manager $80,000 $80,000Latricia Simon - R&D Manager / QA ManagerLatricia Simon - R&D Manager / QA Manager $80,000 $80,000Brian Easton - Finance ManagerBrian Easton - Finance Manager $80,000 $80,000Jason Sadler - Marketing DirectorJason Sadler - Marketing Director $80,000 $80,000Francis Delegosa - Manufacturing DirectorFrancis Delegosa - Manufacturing Director $80,000 $80,000Office ManagerOffice Manager $70,000 $70,000Accounts ManagerAccounts Manager $80,000 $80,000Accounts Receivable Accounts Receivable $70,000 $70,000Lead Installation EngineerLead Installation Engineer $100,000$100,000Installation Engineers (6)Installation Engineers (6) $540,000$540,000Help Desk CoordinatorHelp Desk Coordinator $60,000 $60,000Tech Support (3)Tech Support (3) $150,000$150,000Sales ManagerSales Manager $140,000$140,000Salesmen (6) Salesmen (6) $720,000$720,000Software Engineers 1 (3)Software Engineers 1 (3) $240,000$240,000Inventory ManagerInventory Manager $60,000$60,000TotalTotal $2,730,000 $2,730,000

April 14, 2004April 14, 2004 4444

References & CalculationsReferences & Calculations

1 $462,221,560,0001 $462,221,560,00022 x 57% x 57%33 (all wages & Benefits) (all wages & Benefits) x 63%x 63%33 (nurses wages & benefits) (nurses wages & benefits)

2 2 Hospital Statistics, 2004 edition, American Hospital Association, as reported by the American Hospital Association website (Appendix B)

3 3 Cost of Caring: Key Drivers of Growth in Spending on Hospital Care, PriceWaterhouseCoopers, February 19, 2003 (Appendix C)

4 975,9622 Beds x 10 Mobile Medical Devices per bed = 9.76 Million Mobile Medical Devices

April 14, 2004April 14, 2004 4545

References & CalculationsReferences & Calculations

5 Cindy Jimmerson, April 7, 20045 Cindy Jimmerson, April 7, 2004

6 $166 Billion (Nurse’s Salary and Benefits)6 $166 Billion (Nurse’s Salary and Benefits)11 x 35% = $58 Billionx 35% = $58 Billion

$166 Billion (Nurse’s Salary and Benefits)$166 Billion (Nurse’s Salary and Benefits)11 x 60% = $99 Billionx 60% = $99 Billion

7 Murphy, Mark: Eliminating Wasteful Work 7 Murphy, Mark: Eliminating Wasteful Work in Hospitals Improves Margin, Quality, and in Hospitals Improves Margin, Quality, and Culture (Appendix D)Culture (Appendix D)

April 14, 2004April 14, 2004 4646

Questions?Questions?