KIDNEY TECH INC.

- “WE DO THE FILTERING FOR YOU” WINTER 2009

Bus in es s Pro pos al

Kidney Tech Inc.
TABLE OF
CONTENTS
1.
COMPANY HISTORY “We Do the Filtering For You”
SUMMARY
Company History Kidney failure not only takes
1-4. KidneyTech Inc. (KTI) was
COMPANY OVERVIEW people out of the workforce but
Corporate Mission, Scientific founded in 2008 to meet also costs an extraordinary
Advances, Estimated Market market demand for an amount of money. In order for
Share, Market, Marketing, Growth
Strategy, Advantages implantable artificial kidney. one patient to undergo dialysis
KTI is experiencing rapid treatments, the cost to insurance
5.
PRODUCT AND growth and is seeking new companies is nearly $90,000 per
TECHNOLOGY
investment to allow it to realize year. Considering that the
5-8. its potential.
MARKET AND average patient will remain on
COMPETITION dialysis for 2.7 years, our
Expansion, Strategic Alliances, Summary
Manufacturing Policy, Addressing Dialysis, a treatment that potential investors currently
Competition
replicates normal kidney spend about $240,000 on each
9-12. function, has become a way of individual.
SALES AND MARKETING
life for over 30,000 Canadians The number of Canadians
12-13
OPERATIONAL PLAN with kidney failure. In order to on dialysis is expected to double
Suppliers, Equipment, Clinical live, patients spend at least four within the next decade and as is
Trials, R&D
hours per day, 3-4 times a week evident from the recent economic
13-19
FINANCIAL DATA attached to a dialysis machine. atmosphere, funds may not
Notes, Financial Statements & The incredible time com- always be readily available to pay
Projections
mitment required for for life sustaining dialysis
20 treatments greatly reduces the treatments.
MANAGEMENT quality of life for these patients KTI has introduced the
and their families. Their w o r l d ’ s fi r s t s u r g i c a l l y
employment opportunities are implantable artificial kidney in
greatly reduced because health order to improve patient quality
concerns dictate their daily of life, and more importantly, to
lives and leave little time for address the exponential cost
anything else. increases in treating people who

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 KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”
WINTER 2009
CORPORATE MISSION:
Kidney Tech Inc. was founded to manufacture
the world’s first internal artificial kidney.
Mimicking the ability of the human kidney to
filter waste, while retaining vitamins and
nutrients is a very difficult undertaking.
Miniaturizing the technology so that it fits
inside the human body was even more
challenging. Countless hours of hard work,
perseverance and KTI ingenuity produced a
world first. This device will revolutionize
therapy for kidney failure world wide.
Our patented technology is truly
groundbreaking.
suffer from kidney failure. This amazing product
is the culmination of years of research and
clinical trials. New technologies have allowed us
to shrink down the components of a dialysis
machine while maintaining the same
functionality.
KTI’s artificial kidneys are surgically
implanted inside the body and replace the
patient's own non-functioning kidneys. After
surgery, individuals receiving our artificial kidneys
will be able to return to a normal life. Survey
results from 2008 have overwhelmingly indicated
that dialysis patients want KTI’s artificial kidneys
so they can take their lives back.
To proactively combat the looming increases
in dialysis costs, KTI artificial kidneys cost less
than 15% of what is traditionally spent on a
dialysis patient and are also less expensive and
safer than a traditional kidney transplant. This
amounts to a projected savings for insurance
companies, our potential investors, of $1.23
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Page 2 of 20
Unfiltered Blood
Artificial
Kidney
Filters Blood
Clean & Waste
healthy blood (Urine)
billion over the next three years. Along with the
savings to potential investors, KTI expects gross
sales to exceed $480 million by the end of
2011. The tremendous savings in dialysis
treatment costs coupled with future dividends
ensures that an initial investment of $20 million
will be safe and profitable.
A major part of the projected sales for KTI is
the expansion into the American market in 2011.
President Barack Obama will soon introduce his
national health care plan for all Americans and
this will be the opportune time to bring the KTI
artificial kidneys to American dialysis patients.
Initial talks with the Obama administration on
the issue of alternatives to dialysis have been very
promising. The Obama administration
understands that the cost of treating kidney
failure will only increase if current policy remains
unchanged. KTI artificial kidneys provide the
alternative needed to avoid excessive spending on
 KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”
WINTER 2009

ESTIMATED
MARKET SHARE

Current estimates of market

share by 2011 are 21%,
21% representing annual sales
of $488 million.

67% Growth will be driven by:

• Quality of life benefits for

10% patients
2%
• The technological
superiority of our product

• A lack of similar products

KidneyTech Artificial Kidney External Home Dialysis
No Dialysis Hospitalized Dialysis

a treatment that permits survival but is not a
cure.
Scientific Advances
Using the latest advances in filtration
technology and with patented techniques, KTI
has developed an internal artificial kidney. Our
product is a revolutionary breakthrough in
providing patients an alternative to conventional
blood filtration techniques such as dialysis.
Dialysis machines are bulky and expensive.
Worst of all they are external, meaning that the
pacemaker) that greatly enhances blood filtration,
allowing patients to forgo the discomforts of
dialysis. It filters continuously, day and night, just
like a real kidney, eliminating waste, while
retaining essential nutrients.
The chart bellow shows a summary of our
product’s performance in an actual patient. The
graph shows that waste is reduced four fold with
only minimal loss of nutrients.
Waste Nutrients

patient must visit a hospital for treatment and be 100

immobile during frequent sessions. This has

75
greatly affected the quality of life of thousands of
people.
50
Our research has enabled us to miniaturize
an external dialysis machine, and to manufacture 25
it in a way that prevents the human immune
system from attacking it. The KTI artificial 0
Before Implant After Implant
kidney is a surgically implantable device (like a

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 KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”
Growth Strategy for
2009-2015:
Ensure product is built to the
highest quality standards.
Follow up with patients to
ensure the longevity of the
product.
Research continuously to
improve on original patent in
future generations of the
product.
Continue to patent new
technology to stay ahead of
the competition.
Keep price of product
competitive.
Manufacture products
according to the KTI
manufacturing policy.
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WINTER 2009
Other lab tests prove that
after a patient receives our
artificial kidney, blood waste is
greatly reduced, without a
significant decrease in the
levels of minerals and nutrients
essential for the body to
remain in good health.
Since the device is working
constantly, waste levels are
much better controlled
compared to dialysis. Also, our
device is safer and more
desirable than a traditional
kidney transplant because of
lower waiting times to obtain
an organ, no risk that the
immune system will attack the
transplant and no need for
side-effect causing immune
suppressing drugs. Life
expectancy in KTI
transplanted patients is
projected to be significantly
higher than in dialysis patients
and traditional transplant
patients.
Market
The KTI implantable
artificial kidney will provide
thousands of dialysis patients
across Canada and North
America to take back their lives
and leave the dialysis machine
behind.
www.KidneyTech.ca
ADVANTAGES
OVER THE
COMPETITION
KIDNEY TECH INC.
CONTINUES RELIES ON
ITS BASIC STRENGTHS:
• Superior quality products
• Unique technical and
manufacturing expertise
• Efficient and reliable
access to distribution
networks
• Price advantage compared
with other products.
• Continued research and
development.
Marketing
KTI’s artificial kidney will
be initially marketed to
Canada’s dialysis population.
With over 30,000 patients
currently on dialysis and an
expected increase to 60,000
over the next 10 years, it will
be important to make kidney
specialists across Canada
familiar with this new
technology. Doctors will also
be important in following up
with patients so that
improvements can be made in
future generations of this
product.
KTI estimates a market
share of 21% by 2011 and
continued rapid growth over
 INVESTOR
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NEWSLETTER
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N°3
FILTERING FOR YOU”
the next ten years. This will be
driven primarily by the market’s
current lack of a comparable
product, a patent protecting our
new technology and future
advances from our R&D
division.
Growth will also be achieved
by collaborating with health
insurance companies, which
currently spend about $90,000
per dialysis patient each year.
Even by covering the entire cost
of an artificial kidney, companies
will save over a billion dollars in
the next two years, while patients
experience a greatly enhanced
standard of living.
Product and
Technology
KTI’s patented artificial
kidney is very desirable for
patients because it will give
customers the ability to reclaim
their lives and spend time on the
things they enjoy.
Traditional artificial kidney
technology, such as dialysis, has
existed since the turn of the
century, however, it is
impractical for a number of
reasons: 1) it restricts patients to
the bedside every other day. 2) it
is long, taking time away from
family, friends and limiting
employment opportunities. 3) it
is very expensive for Health
WINTER
Canada and private insurance
companies. It is also the fastest
growing medical expense.
Now that our internal
artificial kidney technology has
been patented and perfected, full
scale production can begin. By
the end of May, 400 units will be
available for patients across the
country. By the end the of 2009,
we will sell over 2,000 artificial
kidneys.
Market and
Competition
Market d e fi n i t i o n
description
Kidney disease can strike
anyone, at any age at any time.
Fatal kidney malfunctions, while
uncommon, occur mostly in
middle aged and older
individuals (over 50), but also
affect over 12,000 children in the
US.
About 2 million
Canadians have kidney disease,
or are at risk (have related
conditions such as diabetes and
high blood pressure, which are
the leading causes of kidney
failure www.kidney.ca.)
Every day, 14 Canadians
learn that their kidneys have
failed. Our market is substantial
now and will continue to grow in
the future
FALL 2008
2009
HEMODIALYSIS:
While waiting to receive any
transplant, patients with kidney
failure must endure regular
hemodialysis, 3-4 times a week
for about 4 hours.
Patients blood is pumped into a
large machine that cleans it,
while leaving important vitamins
and nutrients in the blood.
All forms of dialysis are
expensive. In-hospital
hemodialysis, the most common
dialysis treatment in North
America, costs $88,653 annually
per patient. While Home
hemodialysis may cost $138,000
annually per patient
and
(Kidney International, 2003)
The total annual cost of dialysis
in Canada is $2.65 billion.
The number of people receiving
hemodialysis treatments in
Canada has increased by 50%
over the last ten years. It is
expected to double over the
next ten year.
Canadian Institute for Health
Information, 2006

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Problems with
Hemodialysis
Treatment is done during
business hours, as often as five
times a week. Treatment can
take from 3 to 4 hours at a
time.
External dialysis machines are
very expensive, but can be
purchased and introduced into
the home. This provides
patients with a more
comfortable environment, but
does not solve problems
intrinsic to external dialysis.
For example:
• Space is needed for the
dialysis machine and its
associated supplies.
• The external unit will greatly
increased utility costs.
• Supplies need to be
constantly restocked, creating
an added financial burden.
Furthermore, each item may
be delivered by a separate
supplier, requiring that
someone be at home
constantly to ensure that
deliveries are not missed.
• Private nurses and
technicians need to verify
that the equipment is
functioning normally and that
blood waste levels are
acceptable, adding additional
costs.
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Treatment Options Do Exist:
Kidney Transplantation
Several kidney replacement
therapy treatments are
available for the treatment of
kidney failure. Most experts
agree that kidney
transplantation is the
treatment of choice for
patients. However, lack of
organ availability and risks of
immune system incompatibility
Treatment
Hemodialysis
Home hemodialysis
New transplant
Functioning transplants
with the transplant limit
transplantation as an option
for most dialysis patients.
The buying and selling of
organs for transplant is illegal
in Canada and most of the
world. Waiting lists have been
set up to give patients
compatible organs on a first
come first serve basis. Waiting
times for organ transplants are
long and patients can die
waiting. The average wait for a
kidney transplant in British
Colombia is currently 5 years.
Of the 4,200 Canadians on
the waiting list for an organ
www.KidneyTech.ca
FALL 2008
2009
transplant as of December 31,
2007, 3000 (75%) were waiting
for a kidney.
The annual cost for a new
transplant patient is estimated
at $105,300 for the first year
and $15,000 per year
subsequently, assuming the
transplanted kidney is
functioning. The costs of
treatment options are outlined
below.
Number of Expenditure per patient
Patients
13,394 $88,653
226 $38,000
968 $105,300
11,078 $15,000
If the transplant fails due
to immune rejection, the
patient must have an
emergency surgery to remove
the transplant, must restart
dialysis and is put back on the
waiting list for another kidney.
This is extremely dangerous
and can lead to patient death.
By treating people with the
KTI internal artificial kidneys,
Health Canada and private
insurance companies will save
millions of dollars. Also organ
rejection by the immune
system would be prevented,
further saving lives.
 KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”
WINTER 2009

70,000 considered a competitor

Increase in patients waiting but, rather, a life sustaining
for kidney transplant treatment until a
52,500
compatible organ is found.
Thanks to the KTI
35,000 artificial kidney, all patients
Total number of transplants healthy enough for surgery
Living Transplants
Number of persons on the waiting list can have a new kidney,
17,500 effectively curing them of
kidney disease.

1990 1992 1994 1996
Expansion to the USA,
US Market Description
There are currently over
290,000 Americans on dialysis
By 1990 there were almost
17,000 people waiting for a
kidney transplant. This
number grew rapidly, so that
about 65,000 persons were on
this waiting list by the
beginning of 2006.
Strategic Alliances
Manufacturing suppliers
In January of 2009, KTI
signed a financial contract
with its main plastic
supplier, Japan’s Terumo
1998 2000 2002 2004
Corporation, to supply us
with their world renowned
hollow plastic micro fibers
for $23,000 per kilogram.
Terumo agreed to give KTI
$2,000 off the regular
price (per kg) in exchange
for being our exclusive
supplier for the next 3
years.
Specific Competition
Our product is so
revolutionary that we do
n o t h av e a n y d i r e c t
competitor yet.
Hemodialysis is not
desirable and should not be
0
2006 KidneyTech Inc.
Manufacturing Policy
KTI produces artificial kidneys
only from the highest quality
materials, free of any defects.
We test all artificial kidneys
thoroughly before delivery to
customer.
KTI follows up with all patients
at 6 months and two years
following transplantation.
In the unlikely event of a device
failure within 3 years of
purchase, KTI provides a state
of the art replacement model,
free of charge.

R&D representatives contact

implant surgeons to discuss
improvements which could
facilitate device implantation in
future generations of our
product.

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 INVESTOR
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NEWSLETTER
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N°3
FILTERING FOR YOU”
1%
32%
42%
17% 7%
Risk management:
KTI is the first corporation to design
and manufacture an artificial kidney, and
benefits from a patent on the technology.
The patent will expire in 15 years
providing KTI with plenty of time to
market and sell our product as well as
Hollow Micro Fibers
Terumo Corporation began developing
hollow fiber technologies in 1967. In 1977,
the company released its second generation
hollow fiber, a product that enabled it to
enter the artificial organ market and gain
international recognition. It has remained
competitive in this field since and is
considered by many the world’s best hollow
micro fiber producer.
further refine it.
Our research and development
department is hard at work developing a
second generation product to keep KTI
ahead of the competition. Research is
geared toward making the current product
more efficient and easier to produce and
easier for a surgeon to transplant. Any
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FALL 2008
2009
How Much Would You Pay
for an Artificial Kidney?
I would Re-Finance my Assets (42%)
No more than 10000
More than 10000
My Life Savings
I would not pay for this
advances related to the second generation
product will be patented, to maintain
KTI’s edge in the artificial kidney market.
Our product’s quality and the overall
lifestyle benefits our product offers patients
positions us in a favorable situation for
e x p o r t i n g o u r p ro d u c t w o rl d w i d e,
beginning with the United States. The
absence of significant competitors in
foreign markets facilitates expansion.
Addressing competition:
In order to stay ahead of the competition,
KTI is quickly moving to the international
market to satisfy demand for our product
worldwide, before our competitors do. Our
patent is effective for North America,
Europe and Asia so direct competition is
not likely in the near future.
Since KTI is the most experienced
company in the artificial kidney field,
advertisements will highlight our products
long safety record, reputation and overall
quality. Real life testimonials will highlight
the benefit of life advantages of our
product over the competition as well as
make KTI artificial kidneys more
www.KidneyTech.ca
 INVESTOR
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appealing for our customer.
KTI will also increase
retailer distribution, point-
of-sale displays,
promotional literature, and
customer satisfaction
surveys to maintain the
KTI image and keep our
product the choice
patients.
Sales and
Marketing
Customer Interest &
Survey Results
Demand for Artificial Kidneys
Over 30,000 potential
customers in Canada spend
around 4 hours per day,
3-4 times per week
attached to a dialysis
machine because of
impaired kidney function.
Our product will greatly
increase the quality of life
for our customers by
eliminating the need for
regular hospital visits.
Our customers will return
to a lifestyle that is not
dominated by health
concerns, but rather, is
focused on enjoying time
with friends, family, and
personal pursuits.
In 2008, a short marketing
survey was sent to all
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FILTERING FOR YOU”
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hospitals across Canada
and the United States that
are actively offering
dialysis services to
distribute to patients (who
have reached the age of
majority). There were
106,823 respondents and
of the results of the survey
are summarized below.
Summary of Survey Results
Overall, the survey
indicated a very high
demand for our product
among individuals
currently receiving dialysis
treatments. 73.6% of
survey respondents are 60
years of age or more. With
the largest age bracket
(31.7%) between the ages
of 60-69 years.
When asked if they would
accept an artificial kidney
to completely eliminate the
need for dialysis, 98.4% of
respondents replied “Yes.”
Marketing Strategy
Customers: The Initial Market
There are more than 30,000
Canadians on dialysis. Every
year dialysis treatments cost
$88,653 per patient. For
30,000 patients in Canada, the
total annual cost of dialysis is
$2.65 billion. Each patient
remains on dialysis for an
www.KidneyTech.ca
Page 9 of 20
FALL 2008
2009
average of 2.7 years, which
represents an average cost of
almost $240,000 per patient.
I n 2 0 0 7 , over 1 , 2 0 0
Canadians received a kidney
transplant at an average cost
of $105,300 per patient for a
total cost of over $126 million.
After a successful transplant,
there is an annual cost of
$15,000 per patient for
medications to maintain the
quality of the transplanted
kidney Currently, over $2.8
billion are spent annually on
patients with kidney failure.
There are over 2 million
Canadians at risk of
developing kidney failure, so
the Canadian market and
demand for our product will
only continue to grow.
Annual Financial
Breakdown of
Canadian Market
Dialysis Treatments $2,659,590,000
Kidney Transplants $126,360,000
Post-Transplant $18,000,000
Medications
Total Annual Cost $2,803,950,000
New Customers: Expansion to
the USA
There are currently over
290,000 Americans on dialysis.
Although the vast majority of
Americans cannot afford our
product “out-of-pocket,” the
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REAL PATIENTS:
Before her surgery, Marisa needed dialysis four times a week. Now that
she has a new KTI artificial kidney, she has more time to spend doing what
she loves, teaching piano.
Obama administration led by former Senator
Thomas Daschle is preparing a public health
care system for all Americans.
Preliminary talks with Mr. Daschle have been
optimistic that the American government will be
able to cover a substantial portion of the cost of
our artificial kidneys so that in the long run, they
will save large sums of money on claims made by
dialysis and kidney transplant patients. We expect
to be selling our product in the United States by
2011.
Projected Sales and Revenues
Sales and Revenue in 2009
With the 7% market penetration we expect to
achieve in 2009, our product will be bought by
2,000 customers at a cost of $35,000 per unit.
Our total sales in 2009 are projected to be $70
million.
Sales and Revenue in 2010
We estimate that in 2010 we will penetrate
another 13% of the Canadian market, totaling
4,000 customers. Our total sales in 2010 are
expected to be $140 million.
Sales and Revenue in 2011
In 2011, we have projected that we will
penetrate 18% of the Canadian market and 3%
of the American market. This forecasts the sale
of 13,955 units corresponding to total sales of
$485.5 million.
Advertising Strategy
The main targets of our promotion strategy
are health professionals, as these are the people
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Page 10 of 20
FALL 2008
2009
who will recommend our product to their
patients on dialysis and are also trusted in high
regard by our future customers.
Ad Campaign: Canada
We are advertising in the Canadian Medical
Association Journal as this publication is
distributed to all physicians and medical students
in Canada. This journal has an impact rating of
7.1 and the website receives 25 million hits
annually. The cost of running a one-page
advertisement that will appear 240 times
throughout the year is $2,365.
Ad Campaign: USA
We are advertising in the Journal of the
American Medical Association as this publication
is circulated to over 330,000 physicians, medical
professionals, and medical students. A one-page
advertisement with an annual frequency of 1008
times costs $11,341.
Continuing Medical Education Sponsorship
KTI is a main sponsors at the Primary Care
Today educational conference and medical
exposition held at the University of Toronto from
May 7-9, 2009. At this event we will showcase
our artificial kidney and allow physicians to
directly ask any questions they may have
regarding our product. Furthermore, the KTI
logo will be showcased on lanyards worn by all
conference delegates.
We will also be a Platinum sponsor at the
Canadian Society of Nephrology’s annual
meeting in Edmonton, Alberta from May 10-13,
 KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”
WINTER 2009
2009. As a major sponsor of this event our logo
will be visible on all paper brochures and programs
as well as on banners at the entrance to the facility
and on the main stage where the keynote speakers
will present.
We have signed on to be a Platinum Level
sponsor at Renal Week in San Diego, California
put on by the American Society of Nephrologists
from October 27-November 1, 2009. Here, our
logo will be found on the cover of all brochures
and programs throughout the week and we will
have a booth where physicians and other health-
related professionals can speak with us directly
about our product. The cost of being a Platinum
Level Supporter at Renal Week is $20,000.
To sponsor and attend these three events in
2009 will cost KTI $69,100.
Distribution Channels
Within Canada
Hospitals will order the units for the customers.
KTI will ship the units to the requesting hospital
using FedEx. We have a contract established with
FedEx that the cost of shipping anywhere in
Canada with delivery the next morning by 9:00am
at the latest will cost $150 per unit. This price
Projected Savings due to KTI Artificial
Kidneys in Canada and the US
$1,500
Millions of Dollars
$1,125
$750
$375
$0
2009
2010
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Page 11 of 20
includes insurance for lost or damaged goods.
According to the contract, FedEx will replace a
unit should it be lost or damaged during shipping.
Furthermore, if any unit is not received by the
requesting hospital on time KTI will only be
charged 50% of the shipping fee.
The projected costs of distribution within
Canada in 2009 is $300,000; in 2010 is $600,000;
and in 2011 is $1,753,500.
To the United States
As in Canada, hospitals will order the units for
the customers and KTI will ship the units to the
requesting hospital using FedEx.
KTI has a contract established with FedEx for
shipping anywhere in the United States with
delivery the next morning by 11:00am for $200
per unit. This price also includes all applicable
customs fees and insurance for loss of or damages
to the products. For any lost or damaged products,
FedEx will replace the lost or damaged unit. Just
like in Canada, any late shipment will be 50% off.
The cost of distribution to the United States in
2011 is estimated at $453,000.
How KTI Will Save
Insurance Companies Money
By agreeing to cover 100% of the cost of the
artificial kidney to the customer, you will not only
save an estimated total of $1.23 billion between
2009 and 2011 in Canada and the United States,
but you will also retain customers whom you can
charge increased insurance premiums. Without
our product, patients on dialysis will succumb to
their disease within the next 5 years. This is
especially important when considering that 50.9%
of survey respondents are more than 5 years away
from reaching the average life expectancy.
2011
www.KidneyTech.ca
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FALL 2008
2009

Operational Plan BREAKDOWN OF OUR agreement with Bioengineering

Suppliers: Hollow micro SALES & MARKETING Company in the amount of
fiber are essential to the
EXPENSES FOR 2009
manufacturing process of the
KTI artificial kidney. Four
competitors produce these
highly specialized micro
fibers. After a vigorous
internal quality control
process KTI chose Terumo
Corporation as its official
supplier. Their hollow micro
fibers are able to withstand
the fluid forces an artificial
kidney will be exposed to and
in our opinion is the best
hollow micro fiber product on
the market today.
Terumo Corp has a
warehouse in Montreal
minimizing the cost for
shipping and handling to our
manufacturing facility.
Once the micro fibers
arrive at our facility, KTI’s
patented process provides the
fi b e r s w i t h t h e r i g h t
permeability to different
chemicals: nutrients will not
leak out while waste will
be removed. Thousands of
hollow micro fibers form a
subunit, while each kidney is
made up of 7 identical
subunits, like a real kidney.
$1,000,000 for ten years at 5%
interest.
Manufacturing and quality
Sponsorship control staff have been hired
8% to carry out the construction
of the artificial kidneys.
Staff Key Equipment
36% Distribution Three main pieces of
equipment are being used by
54%
Advertising KTI.
2% • A hollow microfiber
shaper to form hollow
microfibers into our patented
overall performance of our final product
product will not be • Two specialized quality
compromised. The kidneys are control machines, required to
shaped and assembled in ensure proper functioning of
the form and size of a real each artificial kidney.
kidney. Clinical study
Finally artificial veins, After testing the device in
made from the same starting animals to ensure safety and
materials as the artificial function, KTI transplanted
kidney are added to the device five volunteers with internal
and the appropriate artificial kidneys. Each had
connection valves are then been on dialysis for more than
fitted. The device is then tested 2 years. Presently, all five
by our skilled quality control artificial kidneys have been
team before it is ready to be working properly, successfully
implanted into a
Raw Materials, Staff
patient.
Specialized equip- 2009 2010 2011
Hollow $46,000,000 $92,000,000 $320,965,000
ment is necessary to microfibres (2,000 units) (4,000 units) (13,955 units)
produce the KTI Chemicals $105,000 $173,000 $556,000

This redundancy ensures that artificial kidney. KTI Lab staff $330,000 $500,000 $1,050,000

even if a subunit fails, the has signed a financing Total $46,445,000 $92,673,000 $322,571,000

FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 12 of 20

 INVESTOR
KIDNEY TECH
NEWSLETTER
INC. - “WE ISSUE
DO THE
N°3
FILTERING FOR YOU” WINTER
FALL 2008
2009

REAL PATIENTS:

Jenn received a KTI artificial kidney transplant. She had been so

sick while awaiting her transplant that she was wheelchair
bound. Just a couple of months after her transplant she was
back to enjoying activities like riding bikes with her children.

replacing the natural functions
of the kidney. These patients
now have much more time to
do the things they enjoy.
Research and Development
In North America, 12,000
children are affected by kidney
failure every year. Unfor-
tunately the current KTI
artificial kidney is too large to
be surgically implanted into
c h i l d r e n . K T I ’s R & D
department is hard at work to
test a smaller version of our
product, with less subunits that
can be used to treat children of
various ages.
Plan B
Disposable External Kidney
KTI’s R & D department is
experimenting with
modifications to the KTI
internal artificial kidney to
produce a small, disposable
external kidney which can last
at least one year. This external
artificial kidney could be used
by patients who are a high risk
of death during surgery, due to
heart disease, high blood
pressure or other serious health
problems.
Although this device would
have less quality of life benefits
for patients, it would be
marketable to a larger number
of people because it would be
cheaper and would not require
transplant surgery. Since the
device would need to be
replaced annually, this product
could generate greater income
for KTI. The external kidney
would also require storage and
washing solutions which KTI is
currently developing.
Financial Statements
Notes to the Financial
Statements
Business Description
Kidney Tech, Inc. is
focused on the development
and commercialization of an
internal artificial kidney. It was
incorporated under the
Canadian Federal laws in 2008
and was continued under the
Canada Business Corporations
Act.
Summary of Significant
Accounting Policies and Reporting
Practices
These financial statements
have been prepared by
management in accordance
with Canadian generally accepted
accounting principles, GAAP.
The reported amounts and
disclosures are determined using
management’s best estimates
based on assumptions that reflect
the most likely set of economic
conditions.
We used fairly low
estimates for market share
since we are new to the
market, and also because we
believe it better to err on the
side of caution. Where
possible, costs are based on
actual costs according to our
research.
Furniture, fixtures and
e q u i p m e n t ( l a b o r a t o r y,
manufacturing, computer, etc)
are recorded at cost.
Amortization is provided on a
straight-line basis over their 10
year estimated useful lives.

FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 13 of 20

 Projected Monthly Statement of Revenues and Expenses
Jan Feb Mar Q1 Apr May Jun Q2

Total Sales $350,000 $2,012,500 $2,012,500 $4,375,000 $5,250,000 $5,250,000 $5,250,000 $15,750,000

Cost of Sales
Raw Materials, Chemicals, Packaging $236,217 $1,328,858 $1,328,858 $2,893,934 $3,462,717 $3,462,717 $3,462,717 $10,388,150

Shipping and Distribution $1,500 $8,625 $8,625 $18,750 $22,500 $22,500 $22,500 $67,500

Salaries: Manufacturing $20,000 $45,000 $45,000 $110,000 $78,333 $78,333 $78,333 $235,000

Lease: Manufacturing Center $8,333 $8,333 $8,333 $25,000 $8,333 $8,333 $8,333 $25,000

Utilities and Janitorial Services $5,000 $15,000 $15,000 $35,000 $20,000 $20,000 $20,000 $60,000

Total Cost of Sales $271,050 $1,405,817 $1,405,817 $3,082,684 $3,591,883 $3,591,883 $3,591,883 $10,775,650

Gross Profit $78,950 $606,683 $606,683 $1,292,316 $1,658,117 $1,658,117 $1,658,117 $4,974,350

Sales, General, & Admin Expenses

Advertising and Sponsorship $2,365 $11,341 $0 $13,706 $0 $0 $0 $0

Salaries: Marketing Staff $20,000 $20,000 $20,000 $60,000 $30,000 $30,000 $30,000 $90,000

Salaries: Owners and Financial Staff $45,500 $65,000 $65,000 $175,500 $116,667 $116,667 $116,667 $350,000

Lease: Office $3,750 $3,750 $3,750 $11,250 $3,750 $3,750 $3,750 $11,250

Office Utilities and Janitorial Services $15,000 $15,000 $15,000 $45,000 $15,000 $15,000 $15,000 $45,000

Overhead $15,000 $20,000 $20,000 $55,000 $25,000 $25,000 $25,000 $75,000

Total Sales, General, Admin Expenses $101,615 $135,091 $123,750 $360,456 $190,417 $190,417 $190,417 $571,250

Research and Development Expenses

Laboratory Consumables $14,000 $15,000 $15,000 $44,000 $17,000 $17,000 $17,000 $51,000

Salaries: Laboratory Staff $27,500 $27,500 $27,500 $82,500 $27,500 $27,500 $27,500 $82,500

Lease: Laboratory $4,167 $4,167 $4,167 $12,500 $4,167 $4,167 $4,167 $12,500

Laboratory Utilities and Janitorial $5,000 $8,000 $8,000 $21,000 $10,000 $10,000 $10,000 $30,000
Service
Total Research and Development $50,667 $54,667 $54,667 $160,000 $58,667 $58,667 $58,667 $176,000
Expenses
Total Expenses $152,282 $189,758 $178,417 $520,456 $249,083 $249,083 $249,083 $747,250

Increase (Loss) Before Amortization $ (73,332) $416,926 $428,267 $771,860 $1,409,033 $1,409,033 $1,409,033 $4,227,100

Amortization
Furniture, Fixtures, and Equipment $176,250 $176,250 $176,250 $528,750 $176,250 $176,250 $176,250 $528,750

Patent $417 $417 $417 $1,251 $417 $417 $417 $1,251

Total Amortization $176,667 $176,667 $176,667 $530,001 $176,667 $176,667 $176,667 $530,001

Net Profit (Loss) Before Income Tax $ (249,999) $240,259 $251,600 $241,859 $1,232,366 $1,232,366 $1,232,366 $3,697,099

Opening Retained Earnings (Deficit) $0 $ (249,999) $ (9,740) $0 $241,859 $1,474,226 $2,706,592 $241,859

Closing Retained Earnings (Deficit) $ (249,999) $ (9,740) $241,859 $241,859 $1,474,226 $2,706,592 $3,938,958 $3,938,958

FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 14 of 20

for the Year Ending December 31, 2009
Jul Aug Sept Q3 Oct Nov Dec Q4 Year End

$7,525,000 $7,525,000 $7,525,000 $22,575,000 $9,100,000 $9,100,000 $9,100,000 $27,300,000 $70,000,000

$4,957,717 $4,957,717 $4,957,717 $14,873,150 $5,992,717 $5,992,717 $5,992,717 $17,978,150 $46,133,385

$32,250 $32,250 $32,250 $96,750 $39,000 $39,000 $39,000 $117,000 $300,000

$100,000 $100,000 $100,000 $300,000 $110,000 $110,000 $110,000 $330,000 $975,000

$8,333 $8,333 $8,333 $25,000 $8,333 $8,333 $8,333 $25,000 $100,000

$30,000 $30,000 $30,000 $90,000 $35,000 $35,000 $35,000 $105,000 $290,000

$5,128,300 $5,128,300 $5,128,300 $15,384,900 $6,185,050 $6,185,050 $6,185,050 $18,555,150 $47,798,385

$2,396,700 $2,396,700 $2,396,700 $7,190,100 $2,914,950 $2,914,950 $2,914,950 $8,744,850 $22,201,615

$30,900 $0 $0 $30,900 $38,200 $0 $0 $38,200 $82,806

$40,000 $40,000 $40,000 $120,000 $55,000 $55,000 $55,000 $165,000 $345,000

$116,667 $116,667 $116,667 $350,000 $116,667 $116,667 $116,667 $350,000 $1,225,500

$3,750 $3,750 $3,750 $11,250 $3,750 $3,750 $3,750 $11,250 $45,000

$25,000 $25,000 $25,000 $75,000 $25,000 $25,000 $25,000 $75,000 $240,000

$30,000 $30,000 $30,000 $90,000 $35,000 $35,000 $35,000 $105,000 $325,000

$246,317 $215,417 $215,417 $677,150 $273,617 $235,417 $235,417 $744,450 $2,263,306

$17,000 $17,000 $17,000 $51,000 $18,000 $18,000 $18,000 $54,000 $200,000

$27,500 $27,500 $27,500 $82,500 $27,500 $27,500 $27,500 $82,500 $330,000

$4,167 $4,167 $4,167 $12,500 $4,167 $4,167 $4,167 $12,500 $50,000

$10,500 $10,500 $10,500 $31,500 $11,000 $11,000 $11,000 $33,000 $115,500

$59,167 $59,167 $59,167 $177,500 $60,667 $60,667 $60,667 $182,000 $695,500

$305,483 $274,583 $274,583 $854,650 $334,283 $296,083 $296,083 $926,450 $2,958,806

$2,091,217 $2,122,117 $2,122,117 $6,335,450 $2,580,667 $2,618,867 $2,618,867 $7,818,400 $19,242,809

$176,250 $176,250 $176,250 $528,750 $176,250 $176,250 $176,250 $528,750 $1,586,250

$417 $417 $417 $1,251 $417 $417 $417 $1,251 $3,753

$176,667 $176,667 $176,667 $530,001 $176,667 $176,667 $176,667 $530,001 $1,590,003

$1,914,550 $1,945,450 $1,945,450 $5,805,449 $2,404,000 $2,442,200 $2,442,200 $7,288,399 $17,652,806

$3,938,958 $5,853,508 $7,798,957 $3,938,958 $9,744,407 $12,148,406 $14,590,606 $9,744,407 $0

$5,853,508 $7,798,957 $9,744,407 $9,744,407 $12,148,406 $14,590,606 $17,032,805 $17,032,805 $17,032,805

FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 15 of 20

KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”

Projected Monthly Balance Sheet for

Year End
2008 Jan Feb Mar Q1 Apr May Jun

ASSETS
Current Assets:

Cash $0 $0 $133,000 $382,375 $382,375 $927,500 $1,575,000 $1,732,500

Accounts Receivable $0 $52,500 $301,875 $402,500 $402,500 $1,050,000 $1,207,500 $1,365,000

Inventories $74,976 $434,875 $784,875 $784,875 $784,875 $2,782,500 $3,097,500 $4,074,000

Pre-paid Expenses $75,024 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000

Total Current Assets $150,000 $662,375 $1,394,750 $1,744,750 $1,744,750 $4,935,000 $6,055,000 $7,346,500

Capital Assets:

Furniture, Fixtures, and

$1,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000
Equipment Cost
Accumulated Amortization
$0 $176,250 $352,500 $528,750 $528,750 $705,000 $881,250 $1,057,500

Net Furniture, Fixtures,

$1,150,000 $20,973,750 $20,797,500 $20,621,250 $20,621,250 $20,445,000 $20,268,750 $20,092,500
and Equipment
Patent Cost $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000

Accumulated Amortization
$0 $417 $834 $1,251 $1,251 $1,668 $2,085 $2,502

Net Patent $75,000 $74,583 $74,166 $73,749 $73,749 $73,332 $72,915 $72,498

Total Assets $1,375,000 $21,710,708 $22,266,416 $22,439,749 $22,439,749 $25,453,332 $26,396,665 $27,511,498

LIABILITIES

Current Liabilities:

Accounts Payable $0 $594,457 $1,278,656 $1,569,140 $1,569,140 $3,719,106 $3,798,823 $4,050,040

Total Current Liabilities $0 $594,457 $1,278,656 $1,569,140 $1,569,140 $3,719,106 $3,798,823 $4,050,040

Long Term Debt $0 $20,000,000 $19,640,000 $19,280,000 $19,280,000 $18,920,000 $18,560,000 $18,200,000

Long Term Equipment

$1,000,000 $991,250 $982,500 $973,750 $973,750 $965,000 $956,250 $947,500
Financing

Shareholder's Equity

Capital Stock $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000

Retained Earnings/(Deficit)
$0 ($249,999) ($9,740) $241,859 $241,859 $1,474,226 $2,706,592 $3,938,958

Total Shareholder's Equity

$375,000 $125,001 $365,260 $616,859 $616,859 $1,849,226 $3,081,592 $4,313,958

Total Liability and

$1,375,000 $21,710,708 $22,266,416 $22,439,749 $22,439,749 $25,453,332 $26,396,665 $27,511,498
Shareholder's Equity
FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 16 of 20
KIDNEY TECH INC. - “WE DO THE FILTERING FOR YOU”

the Year Ending December 31, 2009

Year End
Q2 Jul Aug Sept Q3 Oct Nov Dec Q4 2009

$1,732,500 $2,117,500 $2,709,000 $3,386,250 $3,386,250 $3,543,750 $5,096,000 $5,915,000 $5,915,000 $5,915,000

$1,365,000 $1,956,500 $2,633,750 $2,633,750 $2,633,750 $3,640,000 $3,822,000 $4,095,000 $4,095,000 $4,095,000

$4,074,000 $5,342,750 $6,020,000 $7,183,750 $7,183,750 $8,918,000 $10,010,000 $11,200,000 $11,200,000 $11,200,000

$175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000

$7,346,500 $9,591,750 $11,537,750 $13,378,750 $13,378,750 $16,276,750 $19,103,000 $21,385,000 $21,385,000 $21,385,000

$21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000

$1,057,500 $1,233,750 $1,410,000 $1,586,250 $1,586,250 $1,762,500 $1,938,750 $2,115,000 $2,115,000 $2,115,000

$20,092,500 $19,916,250 $19,740,000 $19,563,750 $19,563,750 $19,387,500 $19,211,250 $19,035,000 $19,035,000 $19,035,000

$75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000

$2,502 $2,919 $3,336 $3,753 $3,753 $4,170 $4,587 $5,004 $5,004 $5,004

$72,498 $72,081 $71,664 $71,247 $71,247 $70,830 $70,413 $69,996 $69,996 $69,996

$27,511,498 $29,580,081 $31,349,414 $33,013,747 $33,013,747 $35,735,080 $38,384,663 $40,489,996 $40,489,996 $40,489,996

$4,050,040 $4,880,783 $4,765,457 $4,853,090 $4,853,090 $5,539,174 $6,115,307 $6,147,191 $6,147,191 $6,147,191

$4,050,040 $4,572,823 $4,765,457 $4,853,090 $4,853,090 $5,539,174 $6,115,307 $6,147,191 $6,147,191 $6,147,191

$18,200,000 $17,840,000 $17,480,000 $17,120,000 $17,120,000 $16,760,000 $16,400,000 $16,040,000 $16,040,000 $16,040,000

$947,500 $938,750 $930,000 $921,250 $921,250 $912,500 $903,750 $895,000 $895,000 $895,000

$375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000

$3,938,958 5,853,508 7,798,957 $9,744,407 $9,744,407 $12,148,406 $14,590,606 $17,032,805 $17,032,805 $17,032,805

$4,313,958 $6,228,508 $8,173,957 $10,119,407 $10,119,407 $12,523,406 $14,965,606 $17,407,805 $17,407,805 $17,407,805

$27,511,498 $29,580,081 $31,349,414 $33,013,747 $33,013,747 $35,735,080 $38,384,663 $40,489,996 $40,489,996 $40,489,996

FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 17 of 20

 Projected Statement of Revenues and Expenses 2010-2011
Q1 Q2 Q3 Q4 Year End Q2 Q4 Year End
2010 2010 2010 2010 2010 2011 2011 2011
Total Sales $29,050,000 $33,075,000 $36,925,000 $40,950,000 $140,000,000 $104,125,000 $177,100,000 $488,425,000

Cost of Sales
Raw Materials, Chemicals, Packaging $19,131,150 $21,783,150 $24,319,150 $26,972,150 $92,205,602 $68,541,150 $116,613,150 $321,553,602

Shipping and Distribution $124,500 $141,750 $158,250 $175,500 $600,000 $460,000 $817,000 $2,206,500

Salaries: Manufacturing $252,000 $253,500 $255,000 $264,000 $1,024,500 $291,000 $430,000 $1,329,000

Lease: Manufacturing Center $87,500 $87,500 $87,500 $87,500 $350,000 $225,000 $225,000 $900,000

Utilities and Janitorial Services $120,000 $140,000 $170,000 $195,000 $625,000 $265,000 $60,000 $883,000

Total Cost of Sales $19,715,150 $22,405,900 $24,989,900 $27,694,150 $94,805,102 $69,782,150 $118,145,150 $326,872,102

Gross Profit $9,334,850 $10,669,100 $11,935,100 $13,255,850 $45,194,898 $34,342,850 $58,954,850 $161,552,898

Sales, General, & Admin Expenses

Advertising and Sponsorship $16,325 $0 $63,800 $81,400 $161,525 $35,400 $44,020 $102,970

Salaries: Marketing Staff $91,250 $91,250 $91,250 $91,250 $365,000 $237,500 $237,500 $950,000

Salaries: Owners and Financial Staff $405,000 $405,000 $405,000 $405,000 $1,620,000 $475,000 $475,000 $1,900,000

Lease: Office $22,500 $22,500 $22,500 $22,500 $90,000 $37,500 $37,500 $150,000

Office Utilities and Janitorial Services $60,000 $69,000 $60,000 $75,000 $264,000 $85,000 $114,000 $372,000

Overhead $108,000 $116,000 $122,500 $140,000 $486,500 $243,500 $325,000 $1,038,500

Total Sales, General, Admin Expenses $703,075 $703,750 $765,050 $815,150 $2,987,025 $1,113,900 $1,233,020 $4,513,470

Research and Development Expenses

Laboratory Consumables $900,000 $1,200,000 $2,300,000 $2,551,667 $6,951,667 $2,524,000 $2,610,000 $10,196,000

Salaries: Laboratory Staff $125,000 $125,000 $125,000 $125,000 $500,000 $250,000 $350,000 $1,050,000

Lease: Laboratory $52,500 $52,500 $52,500 $7,917 $165,417 $75,000 $75,000 $300,000

Laboratory Utilities and Janitorial $80,000 $120,000 $140,000 $170,000 $510,000 $177,500 $186,000 $718,000
Service
Total Research and Development $1,157,500 $1,497,500 $2,617,500 $2,854,583 $8,127,083 $3,026,500 $3,221,000 $12,264,000
Expenses
Total Expenses $1,860,575 $2,201,250 $3,382,550 $3,669,733 $11,114,108 $4,140,400 $4,454,020 $16,777,470

Increase(Loss) Before Amortization $7,474,275 $8,467,850 $8,552,550 $9,586,116 $34,080,790 $30,202,450 $54,500,830 $144,775,428

Amortization
Furniture, Fixtures, and Equipment $528,750 $528,750 $528,750 $528,750 $2,115,000 $528,750 $528,750 $2,115,000

Patent $1,251 $1,251 $1,251 $1,251 $5,004 $1,251 $1,251 $5,004

Total Amortization $530,001 $530,001 $530,001 $530,001 $2,120,004 $530,001 $530,001 $2,120,004

Net Profit (Loss) Before Income Tax $6,944,274 $7,937,849 $8,022,549 $9,056,115 $31,960,786 $29,672,449 $53,970,829 $142,655,424

Opening Retained Earnings (Deficit) $17,032,805 $23,977,079 $31,914,927 $39,937,476 $17,032,805 $68,793,307 $137,633,604 $48,949,008

Closing Retained Earnings (Deficit) $23,977,079 $31,914,927 $39,937,476 $48,949,008 $48,949,008 $98,465,755 $191,604,432 $191,604,432

FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca Page 18 of 20

 Projected Balance Sheet for 2010-2011
Year End Q1 Q2 Q3 Q4 Year End Q2 Q4 Year End
2009 2010 2010 2010 2010 2010 2011 2011 2011
ASSETS
Current Assets:
Cash $5,915,000 $6,853,000 $9,896,250 $11,935,000 $13,702,500 $13,702,500 $26,832,750 $48,517,000 $48,517,000

Accounts Receivable $4,095,000 $6,597,500 $7,962,500 $9,712,500 $12,320,000 $12,320,000 $28,432,250 $54,145,000 $54,145,000

Inventories $11,200,000 $15,102,500 $19,050,500 $22,879,500 $28,000,000 $28,000,000 $62,840,750 $122,500,000 $122,500,000

Pre-paid Expenses $175,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000

Total Current Assets $21,385,000 $28,803,000 $37,159,250 $44,777,000 $54,272,500 $54,272,500 $118,355,750 $225,412,000 $225,412,000

Capital Assets:
Furniture, Fixtures,
$21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000 $21,150,000
and Equipment Cost
Accumulated
$2,115,000 $2,643,750 $3,172,500 $3,701,250 $4,230,000 $4,230,000 $5,287,500 $6,345,000 $6,345,000
Amortization

Net Furniture,
Fixtures, and $19,035,000 $18,506,250 $17,977,500 $17,448,750 $16,920,000 $16,920,000 $15,862,500 $14,805,000 $14,805,000
Equipment

Patent Cost $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000

Accumulated
$5,004 $6,255 $7,506 $8,757 $10,008 $10,008 $12,510 $15,012 $15,012
Amortization
Net Patent $69,996 $68,745 $67,494 $66,243 $64,992 $64,992 $62,490 $59,988 $59,988

Total Assets $40,489,996 $47,377,995 $55,204,244 $62,291,993 $71,257,492 $71,257,492 $134,280,740 $240,276,988 $240,276,988

LIABILITIES
Current Liabilities:
Accounts Payable $6,147,191 $7,197,166 $8,191,816 $8,363,267 $9,423,484 $9,423,484 $25,081,485 $40,056,222 $40,056,222

Total Current
$6,147,191 $7,197,166 $8,191,816 $8,363,267 $9,423,484 $9,423,484 $25,081,485 $40,056,222 $40,056,222
Liabilities

Long Term Debt $16,040,000 $14,960,000 $13,880,000 $12,800,000 $11,720,000 $11,720,000 $9,620,000 $7,520,000 $7,520,000

Long Term
$895,000 $868,750 $842,500 $816,250 $790,000 $790,000 $738,500 $721,333 $721,333
Equipment Financing

Shareholder's Equity
Capital Stock $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000 $375,000

Retained Earnings/
17032805 23,977,079 $31,914,927 $39,937,476 $48,949,008 $48,949,008 $98,465,755 $191,604,432 $191,604,432
(Deficit)
Total Shareholder's
$17,407,805 $24,352,079 $32,289,927 $40,312,476 $49,324,008 $49,324,008 $98,840,755 $191,979,432 $191,979,432
Equity

Total Liability and

$40,489,996 $47,377,995 $55,204,244 $62,291,993 $71,257,492 $71,257,492 $134,280,740 $240,276,988 $240,276,988
Shareholder's
Equity FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca
Page 19 of 20
 Patent costs include legal fees to obtain patents
and patent application fees. Patent was amortized on
a straight-line basis over its estimated 15 year useful
life.
KTI periodically evaluates the recoverability and
estimated lives of our property, plant and equipment and
intangible assets. Our evaluations occur whenever events
or changes in circumstances indicate that an amount may
not be recoverable or the useful life has changed.
Projected outcome
The income statements indicate that, KIT will be
successful financially. Even with a slow start in the first few
months of operation (during the first quarter of 2009),
the company shows a likely net income of $17,032,805 in
the first year of operations, $57,321,474 in 2010 and
$191,604,432 in 2011. To achieve these results, we are
minimizing the expenses by controlling the purchase of
property and excessive inventory, while keeping staff at a
minimum until manufacturing can not keep up with
market demand.
Management
KTI’s management team is composed of five highly
skilled and resourceful individuals. (For their statements of
net worth, please contact KTI.)
They have built a company that is at the cutting-edge
of kidney replacement therapy, developing the world’s
first implantable artificial kidney. KTI’s expertise is
unparalleled in this field.
Executives
The company’s president Artem Luhovy, MBA,
Ph.D completed his business and research training
simultaneously at McGill University. His artificial organ
researched was instrumental in developing KTI’s first
prototype. He is also a capable organizer and an inspiring
leader, able to coordinate the diverse business styles of the
management team.
KT’s manufacturing is headed by Hanan Elimam.
After graduating the university of Toronto’s Mechanical
Engineering program she worked in the polymer
manufacturing sector for Polymer Plainfield and
Bombardier. After a close friend required dialysis to treat
her kidney condition, Hanan became very interested in
the possibility of creating an artificial kidney. Her
FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE: www.KidneyTech.ca
Page 20 of 20
incredible insight into plastic manufacturing allowed KTI
to benefit from the latest advances in polymer formulation
and bulk manufacturing techniques. Her unique polymer
design was incorporated into KTI’s patent.
KTI’s CFO is a graduate of the John Molson
School of Business. Madhavi Latha Vemuri has
spent years in the health science sector with previous
experience at Pfizer and GlaxoSmithKline. Madhavi
has always been excited to start a project from its
inception and is dedicated to see KTI flourish
financially.
Staying at the cutting-edge of artificial kidney
technology is a priority for KTI and is a key part of
the company’s long term sustainability and growth
strategy. Nahid Golabi, an MIT graduate, has the
training and the experience to research and
develop the next generations of KTI’s products,
keeping us one step ahead of the competition. Nahid
has previously worked for Baxter helping improve
the artificial heart valve.
The management team could not be complete
without the endless efforts of Michelle Miller, VP
Marketing. This graduate of the Ontario College
of Art & Design has produced marketing campaigns
for Amgen and Biovail. She is intimately familiar
with the kidney replacement market as she has
previously worked to supply Canadian hospitals with
state of the art dialysis equipment. Michelle is
qualified and passionate about her new position and
a valuable asset to the management team.
In addition to management, KTI has hired
research assistants, lab technicians, manufacturing
personnel and quality control officers to ensure that
our product meets the highest quality standards.