OVERVIEW
To introduce a 21st Century, personalized, patient-driven, novel, and highly disruptive restorative, joint salvage outpatient approach and e ffective solution to fill the gaping, costly, inefficient, and non-therapeutic space between pills, shots, bracings, physical therapies, and the limiting of daily activity for patients su ffering from osteoarthritis, and the much more dramatic, life-altering and barbaric surgical replacement of joints with a simple outpatient procedure.
The intent was that the principle would be used in all mammalian joint-knee, hip, shoulder, etc throughout the long bone interfaces (appendicular
skeleton)
CORE TECHNOLOGY
Resilient Arthroplasty Device (RAD) is a patented implantable medical device by which patients presenting with osteoarthritis will find pain relief through the padding, cushioning, and protecting of the damaged joint surfaces.
The iKnee will change the pain profile by covering the dominant surface of the damaged joints.
THE FIRST APPLICATION
The first application of the RAD is for the knee, where the femur interacts with the tibia and patella.
Instead of cutting away and removing significant portions of the patient’s bone and cartilage, the device will cover and protect the damaged surfaces, in eff ect, sparing the joint from resection.
WEBSITE: iOrthopedicsInc.com
EMAIL: eric@pfdcap.com
TEL: +1-888-475-4748
US ADDRESS:
23161 Lake Center Drive
Suite 100
Lake Forest, CA 92630
KEY HIGHLIGHTS
The PFD/iOrthopedics Inc (PFD/iOI), Resilient Arthroplasty Device (RAD), and its first product candidate the iKnee, have been IRB IDE authorized
for human use in the fi rst 10,000 quali ed patients.
- Better patient outcomes
- Faster recovery
- Lower cost
- Lower risk
- Major paradigm change from ablation to preservation
Bridges the existing gap between non-invasive and totally invasive ablative, barbaric, and antiquated surgery.
- No more metal
- No irreversible destruction of tissue
- Protective restorative biocompatible polymeric implant
- Minimally invasive
- Preserves remnant cartilage and ACL ligament
- O ffers joint salvage with regeneration potential
- iKnee’s are arthroscopically facilitated
- Potential stem cell adjuncts
Outpatient procedure culminating in the placement of a custom polymer resurfacing femoral arthroplasty device saving time, money, rehabilitation
reducing pain, improving function in activities of daily living, and aiding patients to resume a normal life. Immediately weight-bearing.
Large patent estate with 25 issued patents
- Awarded an engineered implant design and an IRB/IDE approval for a clinical study, phase one (up to 10,000 patients) with billable codes and
events. - First mover advantage
- First in humans
- First to market
- The first new approach in decades to salvage advanced arthrosis
Strong management team
- A well-resourced international engineering team
- World-renowned research study coordinators, ensuring pristine longitudinal data reporting with the study registry
INVESTMENT OVERVIEW
By packaging this startup equity investment within a proven revenue-generating program at PFD Management Opportunity Fund 3001, LLC (PFDMOF3001).
The investor receives:
- 5% annually on invested capital, distributed on a quarterly basis.
- 165% of invested capital back at the end of year 5 ($1.00 gets $1.65 at term)
The internal rate of return is 18% annually
- 5% annually for 5 years is 25%
- 165% at term is an additional 13% annually for 18% IRR
The investor has little else to be concerned with should the exit of this project take longer to exit, or the projected valuation varier from initial projections.
- Upon exit of this portfolio company, the fund will distribute the net proceeds to fund members proportional to their ownership in the fund.
Projected additional equity return:
- The targeted additional return is estimated for a 398% one-time distribution.
Total knee arthroplasties (TKA) are performed each year in the US at a median cost of $40,000 per surgery.
PRESENTATION
The PFD/iOrthopedics Inc (PFD/iOI), Resilient Arthroplasty Device (RAD), and its first product candidate the iKnee, provides a revolutionary new alternative to Total Knee Arthroplasty for those suffering from severe damage to the knee joint. The iKnee restores knee health without the removal of bone or tissue or the need for a large prosthetic device.
TAKE A LOOK AT THIS PRESENTATION TO SEE HOW AND WHY THE iKNEE WILL CHANGE THE FUTRE OF RESTORATIVE KNEE TREATMENT.
PAIN POINT
Current knee replacement procedures have a very high cost:
No existing treatments halt degenerative joint disease.
- Except for Carticel treatments which cost $50,000.
- Osteoarthritis occurs when the protective cartilage that cushions bones wears down over time, causing debilitating
pain.
Current treatments are limited to palliative or ablative therapies.
- Injection/pills cost $16B annually/19M patients.
- Debridement costs $2B annually/1.5M patients.
There is a huge therapeutic gap.
- Replacement Total Knee Arthroplasty (TKA) costs $17B plus another $9B for the hardware annually/1M procedures in the US, and another 1M annually outside the US
Current ablative surgeries unchanged in 50 years.
- The current standard of care requires the barbaric removal of bone and cartilage, including normal and healthy cartilage unaff ected by osteoarthritis along with ACLs that are important for knee stability.
- Current joint arthroplasties remove entire joints replacing them with artificial clunky metal with a hard plastic core.
Over 1M TKAs are performed annually in the US.
- No restorative solution.
- High cost.
- Long recovery.
- Revision, rejection, and infection occur in 20% of all cases.
- Months of PT with potential addiction to opioids.
- Loss of production & back to activities of daily living (ADL).
of patients suffer a significant infection incident after a TKA. In addition 1.2 percent of patients are hospitalized with blood clots within 90 days of total knee replacement surgery and an even higher number experience Osteolysis, stiffness and chronic pain. More than 5% of patients with a TKA will need a revision (second replacement) within 10 years.
With TKAs “the cure” can be much worse than the disease.
ELEVATOR PITCH
- Patented.
- IRB/IDE in place.
- First in humans.
- First to market.
- Several additional applications.
- Pain reducing.
- Patient-specifi c customized medicine.
- Outpatient procedure.
- Saves time and money.
- Faster recovery times.
- Immediately weight-bearing.
- Superior outcomes with more economical care.
- The RAD technology and the iKnee product will change the pain profi le by restoring, cushioning, and regenerating natural
cartilage. - No more burning of future bridges to normal joint motion.
- Solution for millions of sufferers.
- Joint salvage versus joint destruction.
- Restorative versus ablative.
- Saving limbs can save lives.
ADDRESSING THE MARKET
Aging population:
- 18% growth in US population (2000-2020)
- The 65 and older age group will double in the US from 2000-2030
- Increased Longevity and activity are expected.
Younger patients getting hip and knee implants:
- Increased 35% in the last decade (from 34% to 46% of surgeries)
- Accounts for $6B of the hip and knee market.
Expanding market boundaries:
- Use in younger patients.
- Safer for older or inoperable patients.
- More adaptable to emerging markets worldwide.
The primary addressable market is Total Knee Arthroplasty and Partial knee replacement surgeries:
- $10B annual opportunity.
- Growing 5% annually.
Secondary Market:
- Younger sports med and elderly populations.
Additional opportunities:
- All human joints in arms and legs – expanding from knee, hip and shoulder, etc.
- The veterinary marketplace is untapped.
of adults in the US will develop knee osteoarthritis in at least one knee in their lifetime.
INTELLECTUAL PROPERTY
- PFD/iOI has established an aggressive strategy of patent and trademark protection to secure its intellectual property.
- 25 patents issued in US and Internationally
- Additional updates and lings are anticipated as innovations to claims and processes are designed.
PATENT CLAIMS
Six main claims in the RAD and iKnee technology::
- Resilient interposition arthroplasty implant for application into a knee joint to pad cartilage defects, cushion a joint, and replace or restore the articular surface.
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- May preserve joint integrity
- May reduce pain
- May improve function
- The implant will endure variable joint compressive and shear forces and cyclical loads
- The implant may repair, reconstruct, and regenerate joint anatomy and thereby improve upon joint replacement alternatives.
- The walls of the implant may be used to capture, distribute and hold living cells until fi ber-cartilage and hyaline cartilage
regrowth occurs. - The implant may be deployed into debrided joint spaces, molding and conforming to surrounding structures with sufficient stability so as to enable immediate limb use after outpatient surgery.
- RAD implants will support the repair and reconstruction of natural cartilage, ligaments, and tendons – as opposed to removing them all to install a metal joint.
25 Patents Issued Globally To Protect IP
SCALABLE BUSINESS MODEL
PFD/iOI will market the iKnee orthopedic implant along with the iKnee Revenue program to hospitals, ASC’s and payors, and will market a complete program based on superior outcomes, more economical treatment, pain reduction, and improved activities of daily living (ADL).
The value proposition to surgeons is based on the clinical benefits of addressing knee arthritis physiologically using robust safe soft pliable polymers in lieu of metal and hard PE.
The iKnee “does no harm” – whereas current technologies destroy the entire joint, discarding bone, cartilage, and ligament precluding natural healing. There will also be an opportunity for a complete outright purchase of the IP with or without retention of distribution rights by PFD.
- Obtain Authorization for Human Use Allowance
(COMPLETED) - Get FDA-certified IRB to designate the iKnee as NSR (non-significant risk) procedures
(COMPLETED) - Development of its proprietary 3D printing process for the iKnee
(ONGOING) - Development of a Strategic Advisory Team and Affinity Partners in the Orthopedic Medical and Sports Medicine sectors
(ONGOING) - 10,000 patient clinical trial to gather data sets for its regulatory submission for first application commercialization
(IRB SECURED) - Establishment of 12,000 sq./ft. Center of Orthopedic Excellence for training and demonstrations.
- Integration of procedure into Ambulatory Surgery Outpatient Centers and hospitals
PFD/iOI is ready to become a significant player in the $53B Global Orthopedic Marketplace.
COMPETITIVE LANDSCAPE
RAD (iKnee) is a new product category
- The iKnee is a non-signi cant risk conservative therapy measure.
- The iKnee can and should be used as an adjunct therapy and precursor to TKA.
- Current technologies are archaic if not barbaric.
- The routine arthrosis treatments have changed little in a century where natural joints were entirely resected, discarded in the OR as waste, then replaced with a combination of metal and hard polyethylene components.
- There are currently no 3D printed patient-speci fic, nonmetal biocompatible polymeric implants. All existing technologies show remarkable similarities with metal and hard plastic parts for the femur, tibia, and patella.
Total Knee Arthroplasty Marketplace
Four companies (Stryker, Zimmer, Smith & Nephew, DePuy Synthes) account for an 82% market share in the current Total Knee Arthroplasty Marketplace. They are the leading players with a strong brand presence combined with a wide range of product offerings. These players are likely to continue their dominance in the knee arthroplasty area and generate signi cant revenue in the forthcoming years owing to their persistent investments in research and development for the launch of cost eff ective and innovative knee implants. Moreover, a strong focus on strategic partnerships with other players in the knee implants segment is likely to support the expansion of their market footprint.
Triathlon Revision
Persona®
LEGION™ CONCELOC™
ATTUNE®
ADVANTAGE
Despite the larger companies’ footprint currently existing in the knee replacement market, PFD/iOI believes that it delivers several signi cant advantages that address the obvious shortcomings of the current industry
model. These advantages include:
- The current technologies are archaic if not barbaric.
- The routine arthrosis treatments have changed little in a century.
- Natural joints are still entirely resected or discarded in the operating room as wasted, then replaced with a combination of metal and hard polyethylene components.
- There are currently no 3D printed patient-specifi c, nonmetal, biocompatible polymeric implants.
SKILLED LEADERSHIP TEAM
The RAD technology and its first product candidate the iKnee, were created by R Thomas Grotz MD through iOrthopedics INC a Nevada corporation.
Founded in 2017, the company was established to provide a vehicle for the innovative work of inventor/founder Dr. R Thomas Grotz, MD, a noted orthopedic surgeon whose decades of experience have earned him the respect of many peers and colleagues.
Throughout his career, Dr. Grotz envisioned the idea of a totally new approach to traditional TKA surgery that would provide better patient outcomes.
In 2021, PFD purchased 50% of iOrthopedics INC and entered into a funding project management and marketing agreement with the company.
Today PFD/iOI remains in Nevada with project management offices in California.
The PFD/iOI team has grown to include several key individuals who together will bring the PFD/iOI vision to the eager marketplace.
EXECUTIVE MANAGEMENT TEAM
R. Thomas Grotz, MD
FOUNDER, INVENTOR and CHIEF EXECUTIVE OFFICER
Gary L Ermoian
CHIEF OPERATING OFFICER
Robert Pryke
CHIEF TECHNOLOGY OFFICER and FUND MANAGER
Christopher J. Woodson, MD
CHIEF INVESTIGATOR
Daniel Rastein, MD, MPH
FDA IRB CONSULTANT
Ryan Helber
REGULATORY CONSULTANT
Eric Hansen
CLINICAL DIRECTOR and PATIENT #1
Mitch Graffeo
PATENT ATTORNEY
Advarra Inc.
IRB SPONSOR
FUNDING TEAM
PFD Capital Partners, Inc
PFD Capital Partners, LLC
PFD Management, LLC
RISK FACTORS
The following is not an exhaustive list of risk factors that may impact the PFD MOF3001 and or this particular portfolio company’s ability to fulfill its goals and/or negatively impact stakeholder value.
In evaluating the PFDMOF3001, the Company itself, and the portfolio company described within these pages and its business, the following risk factors should be considered.
Challenges of penetrating the market with new technology:
Businesses that are often under pressure to cut costs are often hesitant at adopting new technologies. There is a chance that the PFD/iOI RAD technology will have a difficult time penetrating a large sales projection.
Market Messaging:
The program may be the first mover. This fact may prove challenging from a marketing perspective. If the program is unable to deliver a clear message to its potential customers of the benefits of its product. (accuracy, time, etc.) it will have a hard time in market acceptance.
Competition:
The PFD/iOI RAD technology is highly disruptive to a very assertive and lucrative market, therefor the product may be met with much resistance, especially from the current market leaders, all of which are very well financed and entrenched.
Venture Capital Speculation:
Venture capital is highly speculative and entails significant risk. Due to this, investments should not be made by investors who cannot afford to lose their entire investment. In addition, these types of securities are illiquid, and investors cannot predict when to expect a return on their investments if any. Even an exit event for a company may yield a partial, if any, return on investment. No communications through PFDMOF3001’s website or any other medium should be construed as an investment recommendation. If you have any questions with respect to legal, financial, or tax matters relevant to your interactions with us, you should consult a professional adviser.
Liquidity:
Investments made via our fund are generally illiquid. This means that once you have committed your money it could be difficult for you to exit your investment and get your money back at a time that suits you. There is no secondary market for your investments.
Control:
By making an investment in PFDMOF3001, you acknowledge that you are making a long-term investment. You will not have control over the day-to-day decisions made in relation to a particular investment or the timing of your exit.
Tax Issues:
You must ensure that you are aware of your tax obligations or any related risks that might apply to you as a result of any investment made by you in this fund. We encourage you to consult with appropriately qualified tax professionals regarding your tax circumstances.
Financial Risks:
Companies which are financed through venture capital may not be fully capitalized. The company may need to raise additional significant funds in the future in order to realize its business plan, which may dilute an investor’s holdings. There is no guarantee that the company will be able to secure future funds.
Execution Risk:
A company may be unsuccessful in executing its business plan for a variety of unforeseen factors. Business plans are necessarily based on a series of assumptions, some of which may not materialize as thought. Such factors include but are not limited to unforeseen challenges in research and development, unforeseen delays in securing key partnerships such as manufacturing, distribution, and marketing partners as well as delays in securing sales.
Adverse Economic Conditions:
Unfavorable changes in economic conditions, including inflation, recession, foreign currency fluctuations, political instability, or other changes in economic conditions, may have an impact on the overall investment environment for early-stage venture investments.
Management Risks:
Early-stage companies depend on a small key management team to make critical corporate decisions. Such a team may prove to be unreliable or ill-equipped for long-term corporate leadership or may simply leave for other opportunities.
Technological Risks & Defensibility:
The company’s underlying technology or intellectual property could be rendered obsolete, ineffective, or invalid by competitors or new technological breakthroughs.
Market Risks:
Even profitable companies are vulnerable to numerous external risks such as fluctuations in market trends, which could negatively impact a company’s core technology or assets, especially those companies which target a narrow sector of the market.
Regulatory & Legal Risks:
Changing regulatory and legal environments may have a significant impact on early-stage companies, complicating or outlawing key success factors. Additionally, your investment is not covered by the US FDIC or UK’s FSCS or other regulatory arrangements, nor any other statutory or voluntary compensation scheme.
Geo-Political Risks:
Early-stage companies that operate in unstable geopolitical regions may be vulnerable to events such as civil unrest, war, and sanctions.
DISCLAIMER
FORWARD-LOOKING STATEMENTS
CERTAIN INFORMATION SET FORTH IN THIS SUMMARY CONTAINS “FORWARD-LOOKING INFORMATION” UNDER APPLICABLE SECURITIES LAWS (“FORWARD-LOOKING STATEMENTS”). EXCEPT FOR STATEMENTS OF HISTORICAL FACT, INFORMATION CONTAINED HEREIN CONSTITUTES FORWARD-LOOKING STATEMENTS AND INCLUDES,
BUT IS NOT LIMITED TO, THE (I) PROJECTED PERFORMANCE OF THE COMPANY; (II) COMPLETION OF, AND THE USE OF PROCEEDS FROM, THIS FINANCING; (III) THE EXPECTED DEVELOPMENT OF THE COMPANY’S BUSINESS, PROJECTS, AND PARTNERSHIPS; (IV) EXECUTION OF THE COMPANY’S VISION AND GROWTH STRATEGY, INCLUDING WITH RESPECT TO FUTURE MARKETPLACE ADOPTION, PARTNERSHIP ACTIVITY, AND MARKET GROWTH; (V) SOURCES AND AVAILABILITY OF THIRD-PARTY FINANCING FOR THE COMPANY’S OPERATIONS; (VI) COMPLETION OF THE COMPANY’S ACTIVITIES THAT ARE CURRENTLY UNDERWAY, IN DEVELOPMENT OR OTHERWISE UNDER CONSIDERATION; (VI) RENEWAL OF THE COMPANY’S CURRENT CUSTOMER, MEMBER, PARTNERSHIP AND OTHER MATERIAL AGREEMENTS; AND (VII) FUTURE LIQUIDITY, WORKING CAPITAL, AND CAPITAL REQUIREMENTS. FORWARD-LOOKING STATEMENTS ARE PROVIDED TO ALLOW POTENTIAL INVESTORS THE OPPORTUNITY TO UNDERSTAND PFD’S BELIEFS AND OPINIONS BASED ON THE COMPANY’S BELIEFS AND OPINIONS WITH RESPECT TO THE FUTURE. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND SHOULD NOT BE RELIED ON IN ANY WAY. SUCH FORWARD-LOOKING STATEMENTS NECESSARILY INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, WHICH MAY CAUSE ACTUAL PERFORMANCE AND FINANCIAL RESULTS IN FUTURE PERIODS TO DIFFER MATERIALLY FROM ANY PROJECTIONS OF FUTURE PERFORMANCE OR RESULT EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. ALTHOUGH FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION ARE BASED UPON WHAT PFD AND THE MANAGEMENT OF THE COMPANY BELIEVE ARE REASONABLE ASSUMPTIONS, THERE CAN BE NO ASSURANCE THAT FORWARD-LOOKING STATEMENTS WILL PROVE TO BE ACCURATE, AS ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH STATEMENTS.
SUMMARY of TERMS
owns 50% of iOrthopedics Inc.
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Is a vendor to PFDMOF3001, LLC
Responsible for:
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- Project Management
- Operations
- Funding
- Commercialization
- Distribution
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- Is assigned 20%* of PFDCP equity in iOrthopedics Inc.
- 397% additional returns are targeted to B Membership Unit holders
*20% of PFDCP equity earnings are 25% of total earnings
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B MEMBERSHIP UNIT HOLDERS TARGETED RETURNS:
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5% annually on capital invested proportionately to ownership
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Additional 130% return on capital at term in 5 years (6%)
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IRR of 11%
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Plus equity on the commercialization of iKnee, targeted at an additional 198% on invested capital
SPONSOR
PFD Capital Partners
Lake Forest, CA 92630
Email:
info@PFDCap.com
Office Phone:
(888) 475-4748
VENDOR
PFD Management LLC
Lake Forest, CA 92630
Email:
team@pfdmanagement.com
Office Phone:
(888) 475-4748
ECONOMICS
Hardware Reimbursement: Estimated $3000.00 (per device)
Professional Fee Reimbursement: Estimated $5,000. (per procedure)
Facility Fee Reimbursement: Estimated $15,000 plus depending upon other co-procedures during joint preparation for implantation.
Exit Strategy for PFDMOF3001 Members:
Buyout by the healthcare device manufacturer
- Estimated to reach multiple billion-dollar value
Buyout with retention of Distribution rights
- Estimated to reach billion-dollar value with ongoing revenue
Direct to market distribution
- Will require operating company development
- Estimated at several billion dollars in gross revenue annually to prove viability and generate buyout, and merger interest.
MEDIA
iKnee Overview Video
PFD Medical Receivables Overview Video
How Ideas for Positive Change in Medicine Evolve into Reality
Frost and Sullivan Proposal For PFD Capital iOI
Dr. R. Thomas Grotz Carticel Talk for Inmann
