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Tuesday, 03/05/2019 1:53:50 AM

Tuesday, March 05, 2019 1:53:50 AM

Post# of 113
Dear Friend;

Children and adults in China can now receive an accurate heart exam.


1. We ventured into China in 2013 with a false start with a large corporation as a distributor and they immediately underwent a restructuring and refused to move forward.
2. In 2014, we got involved with Yutian and then assigned them the rights to establish a JV to manufacture, market, distribute and sell the existing VMS in China, which at the time was for right ventricle only.
3. Fast forward 5 years and Yutian has finally gotten through the Chinese FDA for this first device. It is actually a bit of a hybrid as it uses the RV software and the newer VMS+ hardware. It does not do 4 chambers and still uses the old tracking system.
4. Obviously, they will go forward to get the full VMS+ (4 chambers and new hardware) approved but first they will establish the market with the RV-only system.
5. Yutian has built a 40,000 sq. ft manufacturing facility Ma’amshan and produced 10 VMS+ machines. The facility has GMP certification so the VMS+ are built to western standards. The machines have also been verified to meet ISO60601 specifications (Chinese version of the international standard) for use in hospitals. The factory is ready to produce hundreds of VMS+ machines per year.
6. The market in China is huge and the group is well connected to distribution channels that will rapidly roll out the VMS in the 2,500 tier 1 hospitals in China and then the other 30,000+ hospitals. They have sales targets to maintain their rights and I know they will be working hard to meet them as they have spent so much time and money getting this far. I am glad Ventripoint did not try to do this alone as we would have never had the patience and money to do it.
7. Heart disease is a much bigger problem in China then in North America and the Chinese government is trying to get a handle on it as 23% of hospital admissions are for cardiac dysfunction and this is the major reason they keep building more hospitals and expanding the healthcare service. Like the rest of the world, their population is aging and so the number of elderly people with heart problems is increasing quickly.
8. They actually use cardiac ultrasound as a screening tool to find people with heart problems early. I saw this first hand when I visited a major provincial hospital. People were lined up out the door and down the street to have an echocardiogram done.
9. This was a major milestone in our original agreement to assign the rights for China to Yutian in exchange for investments in Ventripoint, service fees and equity in Yutian. There are still some steps left to make this all happen and we will get them done as soon as possible. The Chinese do not like to tell much about financial arrangements due to competitive concerns, so we will give out what we can. I can say that if only a fraction of what can happen in China happens we will do very well from it and it might even outshine the business in the western world given the overwhelming need.

Thanks for your continued support,

Regards,

George Adams, PhD, ICD.D