Investment Opportunity

Revenue from hospital operating rooms by providing an urgently needed device and technology to account for sharps.

A rapidly growing Medtech platform with over $8M invested in product development and Intellectual Property that is offering $10M of new capital placement to investors to support manufacturing agreements, deliver to existing Try-and-Buy customers, expand operations and enhance the balance sheet.

The Company is now starting commercial contracts with large hospital systems as described in this offering memorandum.

Projecting $117M annual revenue by 2026, with 3x higher EBITA than medtech average and a straight-line path to exit through acquisition.

RECURRING REVENUE BUSINESS MODEL

!e 2025 target of $47M of revenue and $31Mof EBITDA is 90% recurring, and customer’s order volumes are projected based on their known operating room volumes. Given the technical problems that Magvation solves for customers with active operating rooms,

management believes there are high switching costs in its products and services and as result projects recurring revenues.

 

 

 

$50M NEW CUSTOMER PIPELINE AND CONVERSATIONS

With the advantage of Jason Howe as CEO and head of business development, the Company hasrelationships with the top 25 hospital systems, representing an initial $3-5M of Try&Buy contract revenue for the initial product release. In addition, the Company will

continue to leverage Jason’s relationships in the industry, with over 50 hospital systems in the pipeline, targeting $117M in year 3 sales given his experience in this sector with similar products.

 

PROVEN OPERATORS IN $100M REVENUE FROM HOSPITALS

Many of the principals of Magvation have more than 20 years experience, individually, in high growth sales directly to hospitals. Jason

Howe, CEO, was one of the founding partners of sponge tracking system where he led the sales and services division for five years. He

has previously developed a sales team specifically for hospital system sales that generated over $100M annually, resulting in over $235M of enterprise value upon exit. Jason is well known for operational excellence in the customer base we seek to target.

OUR
SOLUTION

For surgeons, scrub techs and ultimately hospitals who are frustrated by ongoing incidents and injuries from errors counting sharps, and who are exposed to millions in unwanted legal, insurance and operational costs, HAYSTACK is in a new product category called the Surgical Safety System. Unlike red plastic needle count boxes, whiteboards and other partial solutions that create added distractions, lower operational efficiency, trigger injuries and invite liability, Haystack delivers true surgical safety.

Introducing The Haystack System

Haystack is a part of the surgical theatre. Using computer vision, the machine learning algorithms were trained to recognize any on of 15,000 surgical inventory items in 64 thousand different position

permutations. Displaying count results automatically, logged into a on-site blockchain database.

INVEST ALONGSIDE A MEDTECH TEAM WITH 19 SUCCESSFUL EXITS TOTALING MORE THAN $2B, DELIVERING NEW MEDICAL SAFETY TECHNOLOGY TO AN UNDERSERVED MARKET.

BUSINESS MODEL: HOW WE MAKE MONEY

Management believes there is an opportunity to create billion dollar asset
within four years by capturing revenue from 298 hospitals and 239
ambulatory surgery centers without additional services or up-front costs for buyers, monetizing with a per-operation payment of $499 per. The first-
mover advantage coupled with 5-years of development, patenting, and building on previous work with sponge counting coupled with in-depth
practical surgical and scrub technician insight, have resulted in a highly desirable surgical safety system that’s easy to use and will add layers of stickiness while solving additional OR distractions.

KEY ASSUMPTION #1

Better systems are needed now: Staff safety and
retention is a #1 priority for hospitals. In addition, there is a push for lowering costs while at the same time,
raising patient safety outcomes.

KEY ASSUMPTION #2

The Haystack surgical safety system delivers Immediate “stickiness” in the operating room: While Surgeons and OR teams urgently need needle counting, there are other sources of distraction, to include sponge counting, answering phone calls, texting and playing their music during lengthy procedures. Haystack solves for the top 5 critical distractions.

KEY ASSUMPTION #3

Exit Assumptions: Stryker Medtronic and Cardinal are among the large MedTech suppliers motivated to capture the emerging cobot safety revenue streams to eliminate preventable surgical mistakes.

the Big Idea in 60 seconds

During a surgery, every needle and “sharp” must be counted at least 4 times before the operation can be finalized. In other words: “no needle left behind.” For example, if you’re in open heart surgery, you will remain anesthetized while scrub techs perform 7 full sharp “counts” on 150+ needles.

This current standard practice for counting “sharps” involves visually and audibly counting each sharp multiple times before, during, and after surgery.

This manual count been the standard of practice for almost 20 years. But it cannot continue as-is because the operating room has changed such that manual counts pose of the dangers to patients, physicians, scrub techs and the hospital itself.

MISCOUNTS, RSI & “SHARP STICK” INJURIES

A $7B PROBLEM:

IN 2014, THE ‘COUNT’ BECAME A STANDARD OF CARE
Immediately, the all-in cost of the surgery increased 4%. Management believes it costs more than $32/minute to focus on sharp counting. Here’s why:

Needle counter boxes often require the surgical team to recount multiple needles adding time and complexity to the procedure. Paper, whiteboards, handwriting
and shift-change confusion contribute to the problem.

When counts go wrong, RSI incidents are easy to prove, exposing hospitals to compensation costs of up to $3.7M per incident.

THE SURGICAL MARKET BY THE NUMBERS

50,000,000

SURGERIES IN US PER YEAR

5,465

SURGICAL HOSPITALS

9,280

AMBULATORY SURGERY CENTERS

DEAL SUMMARY & HIGHLIGHTS

EXIT STRATEGY

After five years of development, trial testing in live environments and solving technical, regulatory and manufacturing issues, Magvation has created a $3-5M go-to-market pipeline and put itself on track to create a potential 12X return for investors based on the projected exit valuation.

$750M Projected exit event in 2027: Based on our Proforma, a five-year MedTech Market CAGR of 33.7% and the disruptive nature of the system that threatens to capture the revenue of large players.

12X target return on investment: Based on 80% gross margin and 5x multiple EBITA of 2027 performance, compared to pre-money valuation of $50M.

WE EXIST BECAUSE OPERATING ROOMS ARE AN INCREASING RISK FOR PATIENTS, SURGICAL STAFF AND HOSPITALS.

We systematically improve operating room outcomes by automating needle and sharps counts, and reduce the number of processes that surgeons and scrub techs are responsible for, putting the focus of surgical staff exactly where it needs to be:
on patient welfare, and successful surgical outcomes.

Join me in our mission to give hospitals the ability to keep their needle count errors to zero, lower their overall surgical costs and reduce time-in- surgery by as much as 15% for high risk patients including those in cardiovascular procedures. – Jason.

Get started here…

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