ELECTRONIC MEDICAL RECORDS FOR EYE CARE

INVESTMENT OPPORTUNITIES

Executive Summary

The next two years will see explosive growth in implementations of electronic medical
records (EMR) technology, thanks to federal incentives made possible by the American
Recovery and Reinvestment Act (ARRA) of 2009. Investors looking for opportunities to
capitalize on this funding are advised that $19 billion is currently allocated to providing
incentives for medical practitioners to adopt EMR solutions for managing patient records.
Currently, the majority of EMR solutions do not address the needs of specialized fields of
medicine such as the eye care industry. The ODOS-EMR is a proven, off-the-shelf product
designed by a practicing ophthalmologist to make medical records management faster,
easier, and more efficient. It has been field-tested within a multiple-provider practice and is
ready for sale. For the over 50,000 practicing ophthalmologists and optometrists in the
United States, it offers an attractive alternative to the generic EMRs that currently dominate
the market, as it is a cost-effective solution tailored to the specialized needs of the eye care
field. With over $2 billion of funding available to these practitioners alone, the ODOS-EMR
solution offers a solid opportunity for investors. Because of the sliding scale nature of the
incentive payment structure, practitioners who adopt early will benefit most, as will
investors who seek early returns. The ODOS-EMR solution is ahead of the curve both in
addressing the needs of eye care providers and in its potential to become the market leader
for eye care-specific EMRs. It is poised to become the first choice of providers looking to
maximize their government incentive payments. Early adopters must have a system in
place in 2010 in order to receive full benefits, so the investment window is short for this
high potential opportunity.

Overview

The American Recovery and Reinvestment Act of 2009 has moved the subject of electronic
medical records (EMRs) from the “nice to have . . . someday” category to the forefront of
medical practices’ capital purchase plans. The bill includes $147.7 billion allotted to the
health care industry, with $19 billion of that intended for direct payments to health care
professionals who adopt EMR systems. Incentives of up to $44,000 each for health care
providers ($48,400 for rural providers) who implement EMRs will be distributed on a sliding
scale starting in 2011 and ending in 2015. Early adopters will benefit most. Practitioners
who do not implement EMRs will experience up to 5% cuts in Medicare and Medicaid
reimbursements.

Many current EMR solutions are rather “one size fits all” in that, while designed to manage
and handle medical records, they are not tailored to the needs of individual health care
specialties. This approach does not serve specialists well, since the information needed to
document patient visits in specialty fields may be radically different from that required by
primary care doctors. In the eye care field, much of the information that is relevant to
patient care is unique to this specialty. A solution that more specifically addresses the needs
of the eye care industry offers attractive advantages both to the ophthalmologists and
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optometrists who will use it and to investors looking to capitalize on the opportunities made
possible by the ARRA legislation.

Eye care is a multi-billion dollar industry that serves the needs of millions of patients in the
United States. It is a highly specialized sector, with continuous development of advanced
technologies to serve the needs of patients and practitioners alike. Billions of dollars are
spent every year on products to support eye care, in areas that include optics,
pharmaceuticals, diagnostic equipment, and surgical products. Now, with the signing of the
ARRA by President Obama, information technology will move near the forefront of spending
by the industry.

EMR systems exist that are tailored to the eye care industry, but these tend to be complex
and cumbersome. Most will create and store records with the information appropriate to the
field. However, the efficiency with which a practitioner can see patients is decreased when
switching from paper charts to most of these systems. Practitioners must spend significant
amounts of time entering data at a terminal, or pay a scribe to accompany them and enter
the data as they see patients. For a practitioner seeing forty to sixty patients a day, any
additional time required by documentation becomes a significant burden and cost.

The ODOS-EMR product is an electronic medical records database that was designed by a
practicing ophthalmologist to minimize the time taken by data entry, and maximize speed
and efficiency in creating, storing, and managing medical records by eye care practitioners.
Because of its ability to decrease time spent entering and managing records, the system
frees doctors to see more patients, shortening the period needed to achieve return on
investment and increasing overall revenues.

The ODOS-EMR system is available now for deployment and has been proven in actual
implementation within a clinic of eight eye doctors. By bringing the product to market now,
investors can expect exponential growth in sales in conjunction with eye care providers
moving to take advantage of the ARRA incentives. Currently there are over 18,000
ophthalmologists 1 and 33,000 optometrists 2 in the United States alone. At the maximum
rate of $44,000 per provider, the money available from the government for EMR purchase
within this specialized field totals $2,276,252,000. Because EMR systems will presumably
continue to be used beyond the initial adoption period, systems that compete successfully in
the initial phase can expect to realize even greater long-term profits in the future. ODOS-
EMR is a proven, developed product, and is therefore well positioned to compete for a large
share of the initial EMR purchases in the coming few years as well as the long-term profits
from continuing licensing and service in this market.

Regulatory Environment

The American Recovery and Reinvestment Act of 2009 will create a short-term spike in
demand that will precipitate a mass-conversion to EMR systems in the next few years and
cause enormous growth in the EMR industry. Whereas a small percentage of practices had
EMR systems prior to the ARRA, in five years the majority of them will.

1
18,733, per the AMA Physician Masterfile, 2005 (AMA #312.464.5000)
2
US Bureau of Labor Statistics, 2006
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Under ARRA, providers who implement a qualified EMR system can receive up to $44,000
each in incentives if they are early adopters. By implementing a qualifying EMR solution in
2010, providers can become eligible for payments starting in 2011, with benefits paid over
five years. Providers can receive up to $18,000 in incentive payments in the first year alone.
The following chart illustrates the incentive payment schedule:

Year of Payment Payment Payment Payment Payment Total

adoption 2011 2012 2013 2014 2015 paid

2011 $18,000 $12,000 $8,000 $4,000 $2,000 $44,000

2012 0 $18,000 $12,000 $8,000 $4,000 $42,000

2013 0 0 $15,000 $12,000 $8,000 $35,000

2014 0 0 0 $15,000 $12,000 $27,000

2015 0 0 0 0 0 0

Because the greatest incentive payments will go to practitioners who adopt EMR systems
early, the majority of purchases of these products will occur in the next few years. Because
of this, there are significant advantages for vendors who already possess an EMR platform
over those who are coming to the market late. Companies with the ability to penetrate the
market early will possess a huge advantage, as late-comers will miss the initial wave of EMR
adoption.

Early market leaders will benefit the most from the conversion to EMR. Once a practice has
adopted an EMR system, it will likely stay with the same vendor, as these solutions are
expensive and difficult to implement. Conversions from one EMR system to another will be
infrequent. Vendors who capture clients early will enjoy a continuing revenue stream from
licensing and support that will be difficult for competitors to disrupt. Moving quickly in this
market is therefore essential. Because ODOS Industries already has a proven product, it will
be able to compete early for the initial wave of EMR adoption in the eye care industry, and
out-maneuver many of its competitors.

Certification

The American Recovery and Reinvestment Act requires that practitioners demonstrate
“meaningful use” of a “certified” system to qualify for the incentive bonus. The ARRA
specifies that the Secretary of Health and Human Services will determine what qualifies as
“meaningful use,” and “certified.” As of this writing, the new Secretary, Kathleen Sebelius,
has not yet defined these terms, but it is likely that the Certification Commission for
Healthcare Information Technology (CCHIT), an independent, private agency partially
funded by the U.S. government, will be the certifying body.

CCHIT currently has criteria for certification of primary care, cardiology, and emergency
medicine EMRs, but no criteria for eye care EMRs. Because CCHIT does not plan to establish
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certification criteria for eye care EMRs until 2011, after the payment of the first incentive
bonuses, it is likely that ophthalmology/optometry EMRs will be exempted from the
“certified” criterion, at least initially.

Standards do exist for ambulatory (i.e. primary care) EMR certification, and the ODOS-EMR
solution largely meets these standards. As the standards for eye care-specific EMR
certification become clearer, certification will be a major focus of company efforts.
Customers who purchase an uncertified version of ODOS-EMR can be easily upgraded to the
certified product using data import/export functions, if necessary.

EMR Benefits

More and more providers, especially those just entering the medical field and accustomed to
online information sharing and data look-up, recognize the merits of a “paperless” system of
records management. In addition to qualifying a practice for discounts and incentives, a
well-designed EMR provides many advantages over the old, manual system of filing,
updating, and handling patient records:

• Improved documentation improves compliance with Medicare and private insurance

standards, allowing the practitioner to increase collections and decrease audit risk.
• Charts are legible, meeting regulatory standards, improving patient safety and
decreasing malpractice risk.
• Both the number of staff and the amount of time required for maintaining medical
records are reduced. Staff members no longer waste expensive hours looking for
charts.
• Surgical scheduling is simplified.
• Improved legibility, reduced transcription errors, and easy visibility of important
medical information all contribute to reduce medical errors.
• Charts are accessible anywhere with an internet connection and the appropriate
software. Practitioners can access charts when on call at home, or from the hospital
surgical suite.
• Patient confidentiality is improved. Access to information can be restricted by
privilege sets, on a “need to know” basis, improving federal privacy standards
compliance.

The ODOS-EMR also improves the speed and efficiency of documentation of patient
encounters, surgical planning, communication with other providers, and coding of charts.
The ease with which providers can perform these functions differentiates it from other
products, which tend to be more complex, and have steeper learning curves.

Which EMR?

Electronic medical records solutions will be judged by practitioners according to their ease of
use, speed, and efficiency. A practicing ophthalmologist may see from thirty to sixty
patients a day, with some seeing even more. Revenue from an average patient visit to the
practice may range from $150 for a comprehensive ophthalmologist to $400 for a retina
surgeon. Efficiency in the clinic makes an enormous difference to practice revenue. When a
practitioner is able to see, on average, a few more patients a day, he or she can realize
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large gains in revenue and compensation. A comprehensive ophthalmologist who works

forty-five weeks per year will gross an additional $33,750 by seeing just one more patient
per day; for the retina surgeon, $90,000. By contrast, any medical records system that
slows the practitioner down can have a devastating effect by decreasing revenues by the
same amounts.

The ODOS-EMR was designed with the understanding that doctor time is the greatest
expense of any practice. Anything that slows a doctor down in the clinic decreases the
number of patients he or she can see, and adversely affects practice revenues. Both the
time required to set up and learn a new system, and the time required to operate it when
seeing patients, are major factors that most practices will consider in choosing their EMR
solution. Because the ODOS-EMR was designed to be intuitive, simple to operate, and
powerful, it will contribute to efficiency, not detract from it. This solution will therefore have
a significant advantage over more complex and cumbersome systems that are harder to
learn and slower to operate.

ODOS-EMR Approach

ODOS-EMR is an electronic medical record database that recognizes the importance of a

doctor’s time. It is simple and intuitive to operate, so there is a short learning curve.
Designed to be easy to configure, it can adapt easily to a physician’s practice style, surgical
planning needs, and work flow. Above all, it is efficient and fast at documentation and
planning, freeing up the provider to see more patients, to document his or her encounters
more thoroughly, and to spend more time doing the high-value things an eye care provider
does.

The ODOS-EMR system, unlike many other electronic medical records systems, is designed
specifically for use by eye care professionals. Created by a practicing ophthalmologist and
field-tested for several years within his own practice, the system has had time to mature
and develop functionality tailored to the needs of this specialized field of medicine. For
instance:

• Eye care differs significantly from other branches of medicine in the data required for
examinations, prescriptions, surgical scheduling, and other tasks. Generic EMR
applications do not adequately address these needs. ODOS-EMR does.
• Written by an ophthalmologist specifically for ophthalmologists and optometrists, it is
an easy-to-learn and efficient system. It works for the user, not the other way
around. Very little of the practitioner’s time is spent on data entry.
• The system is highly customizable. Based on the Filemaker platform, ODOS-EMR
easily adapts to the practice patterns of its user. It allows integration of existing
hospital forms, surgery consent forms, and consultation requests into the
application, ensuring seamless integration with the needs of the practitioner.
• ODOS-EMR applications come with local physician and pharmacy data already built
in, eliminating the need for the clinic staff to build the contact database from scratch.
• Other medical systems interface with ODOS-EMR, allowing easy import of data from
diagnostic devices, cameras, and hospital systems.
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Designer

Dr. Kevin Cranmer, the designer of the ODOS-EMR solution and founder of ODOS
Industries, is a Harvard-trained, board-certified ophthalmologist practicing in Norwich,
Connecticut. After completing his residency at Wills Eye Hospital in Philadelphia, one of the
top three eye hospitals in the United States 3, Dr. Cranmer quickly recognized the need for
better medical records management to improve the quality of patient care and to decrease
the potential for medical errors. Using his undergraduate degree in engineering and his
experience as an independent database consultant, he developed the original ODOS-EMR for
use in his own practice. The system returned significant improvements in the efficiency of
seeing patients, scheduling surgery, and ensuring the most efficient and safe care for his
patients. Dr. Cranmer saw the potential to expand ODOS-EMR’s use to other eye care
professionals, and founded ODOS Industries, Inc. for that purpose.

ODOS Product Differentiation

The ODOS-EMR solution offers significant advantages over other EMR products and powerful
incentives to practices looking to implement a whole new method of records management.
Among these are:

• ODOS-EMR is faster than competing systems. The greatest cost in any practice is
doctor time. The ODOS solution allows physicians to see more patients, improve
patient satisfaction, and increase revenues for the practice.
• The program is intuitive and easy to use. Training time for doctors and staff is
measurably less than with other solutions, including eye care-specific systems. Staff
members who have used the system in Dr. Cranmer’s clinic generally required less
than an hour of training to become proficient. Older physicians have had no trouble
adapting to ODOS-EMR.
• ODOS-EMR allows for customization to the specific practice. Rather than a rigid set of
screens that cannot be altered, the individual practitioner can set up the program to
best meet his or her needs.
• The software was written from the standpoint of a practicing ophthalmologist, from
an insider perspective within the eye care field. This offers priceless advantages over
solutions that were not written specifically for eye care practitioners, or that were
written by database developers who were not eye care professionals.
• ODOS-EMR is competitively priced against existing off-the-shelf solutions.

ODOS Industries: Plans for Growth

Currently the product is tested and ready for widespread marketing efforts and installation.
Investment funding will be used to:

• Drive sales

3
US News and World Report, 2009 rankings.
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• Attain CCHIT certification, when standards for certification are available

• Develop the HL-7 interface, which allows interoperability with EMR solutions in other
practices, hospitals, and outside facilities
• Develop an iPhone reporting application, allowing remote reporting and access to the
system

ODOS Industries is currently ready to market this fully-tested and market-ready product
directly to the database of eligible providers suited for this solution, as well as to distribute,
install, and train practice staff on the ODOS-EMR software.

Opportunities for investors

The American Recovery and Reinvestment Act of 2009 has created the “perfect storm” in
the healthcare IT industry. Over the course of the next several years, there will be a
massive move by medical practices to electronic medical records. The EMR industry will
experience unprecedented growth, and there will be a scramble by companies with EMR
products to establish market share. Large profits are possible in the initial period as medical
providers take advantage of government incentives to switch to electronic records. These
profit streams will continue for companies who establish contracts with providers early.

The eye care industry provides a niche market for EMR vendors, with enormous potential
profit margins. Eye care technology enjoys large margins on sales because of the high-
dollar, specialized nature of the field and the significant barriers to entry for competition.
The eye care field is unlike any other field of medicine; vendors who try to adapt
information technology from the general medical market to this specialized sector will likely
not satisfy the needs of eye care providers. For companies who are tightly focused on this
area, however, there is great potential for initial and continuing profit.

ODOS Industries, Inc. has a ready-for-market product designed exclusively for eye care. It
is proven in actual use, and allows eye doctors to see more patients, more efficiently, and
with greater ease than a paper chart or competing products. It requires only the investment
needed to market it aggressively.

Investors seeking to capitalize on the American Recovery and Reinvestment Act of 2009
have an opportunity to realize large profits in the eye care sector with the ODOS-EMR
product. Investment in ODOS Industries, Inc. will allow the company to market the ODOS-
EMR to a larger segment of the eye care industry and establish a greater market share
during the initial critical period while practices choose their vendors. Investors will benefit
from the initial profits from sales and installations of the ODOS-EMR, and will realize long-
term returns from customization, support, and licensing purchased by customers.

Investors interested in discussing opportunities should contact Kevin Cranmer, MD, at

ODOS@emreyes.com.

CONCLUSION

The health care industry will witness tremendous forward movement in 2009 and 2010
toward implementation of EMR solutions. Health care practitioners are highly incentivized to
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move forward with evaluating and choosing appropriate solutions for their own practices.
Those who do not will be penalized, both by losing out on the payments available through
the ARRA incentives, and through reduction in payments for Medicare and Medicaid claims.
ODOS Industries, Inc. is well positioned to become the market leader in EMR solutions for
the eye care industry. ODOS-EMR offers an excellent opportunity to investors looking for a
solid, ready-for-market product with high-return potential within a relatively short time
frame. Its potential for steady, ongoing profits after the initial spike in implementations
caused by the American Recovery and Reinvestment Act of 2009 is unlimited.