Dollinger index

MedTrack will develop the software platform
that will integrate the hardware components
required to transpond, receive, and compile
inventory data. The solution will be marketed
to hospitals with at least 150-bed capacities.

Management

MedTrack is led by Ivanette Bonilla, who has
an MBA and several years of experience in
developing products. The rest of the found-
ing team has several years of experience in
marketing, finance, and operations. All the
members of the management team also have
MBA degrees.

Product and Competition

The overall outlook for MedTrack and RFID
applications looks to be that of high growth as
the industry is expected to grow rapidly to $3
billion in the next two years. The spectrum of
existing firms offering RFID solutions ranges
from small start-ups to industry giants such as
Motorola, Siemens and Texas Instruments.
However, only about four or five firms offer
RFID solutions to hospitals. Research on
these companies indicates less than a total of
five RFID implementations in hospitals.

Funds Requested

MedTrack is requesting $5 million in cash
funds in lieu of equity. Toward the end of the
first year of operation, MedTrack will also
attempt to borrow $4 million in fixed inter-
est loans.

Use of Proceeds

MedTrack will invest approximately $3 mil-
lion in the first year and about $5 million in

the second year toward research and develop-

ment of the product/service.

Exit

At the end of five years, the projected value

of the business is $170 million. Based on the

initial investment of $6 million, the terminal

value of the business represents an IRR of

107 percent. Depending on the market con-

ditions, an IPO of the business will be con-

sidered at the end of year five. Other scenar-

ios of merger with an equivalent-sized com-

pany might also be considered if the market

for IPO is not attractive.

BACKGROUND AND PURPOSE

History

Historically, hospitals have invested less in

Information Technology (IT) than in other

equipment. As a result they have failed to

enjoy fully the benefits of technology and the

information era. This has impacted the

industry both financially and operationally.

Current Situation. Because their primary

goal is to save lives, hospitals are not very

efficient in inventory control, and write off

at least 15 percent of inventory as lost or

stolen. Furthermore, a hospital’s inability to

track its vital supplies and equipment can

prevent it from providing timely care and

treatment. In addition, most hospitals do

not have tools to help prevent errors like

administering the wrong medication to

patients. Such errors cost as many as

100,000 lives a year in the United States.

MedTrack 423

Total revenue

Net income (loss)

Assets

Liabilities

Cash flow

Year 1

$ 1,000

(1,810)

8,310

4,895

7,970

Year 2

$ 8,260

(1,135)

7,651

6,338

4,651

Year 3

$27,498

6,483

16,996

8,417

7,579

Year 4

$63,290

17,344

38,907

13,465

17,382

Year 5

$116,074

32,678

74,786

17,146

34,402

EXHIBIT 1 Pro Forma Financial Projections