1. MedHab, LLC
Proposed Incentive Offer
Donna Osborne
Economic Development Coordinator

2. Introduction to MedHab
 Johnny Ross (San Angelo native) and Tim Sanghera
 High-tech, medical device company
 Multiple patents filed; some already awarded
 Provisional patents for second product line
 Third product in preliminary stages
 Low natural resource requirements
 Advisory Board – leaders in high tech & medical fields
 Steve Martin with West Texas Rehab
 Will launch product in Australia by June 2012 and US
as soon as FDA approval received

3. Introduction to MedHab
 Received incentive offers from:
 Midland, Odessa, Temple, Lubbock, Abilene
 Only Abilene still under consideration with San Angelo
 $17,500 per job incentive from Abilene
 Received $1.8M from private investors
 3 San Angelo
 3 Austin
 1 Lubbock
 2 Dallas
 Identified source for mezzanine financing ($3M)

4. Project Eligibility
• COSADC incentive guidelines allows individuals and
companies to apply for incentives
• Under the law, Corporations and Limited Liability Companies
has an independent legal existence separate and apart from
their members and/or owners
• The criteria for individual applicants do not apply to business
organization applicants
• COSADC operates under the Texas Non-Profit Corporation
laws, and its board members are not subject to state conflict of
interest statutes
• These statutes and COSADC bylaws require abstention from
discussion, deliberation, and voting on a matter in which a
board member has a financial interest in an applicant company

5. Conflict of Interest
• State conflict of interest laws are not legally relevant to
a discussion about applicant qualification standards
• Conflict of interest laws are relevant at the stage of
discussion, deliberation and voting on a matter when it
involves consideration of the application for
assistance, the award to, and approval of the contract
with an entity in which a member of the City Council
has a “substantial” financial interest
• If applicable, requires Council member to file an
affidavit and abstain from “further participation in the
matter”

6. Product Overview
• StepRite® - a wearable medical device (insole)
• Capability to measure: body weight, pressure, gait and
flexibility
• 4-component technology: accelerometer, thermal
sensors, weight/pressure/gait sensors, and wireless
user interface technology
• Developing cell phone application
• Remote medical technology is emerging sector
• Customizable physical rehabilitation protocol
• Winner – Rice Alliance Elevator Pitch

7. Product Overview
• Initial product designed for lower extremity injury rehab
• Knee, ankle, foot
• Measure weight, gait, pressure, and range of motion
• Next, will enhance for diabetic neuropathy segment
• Will add thermal sensors
• Additional applications
• Detection and prevention
• Professional athletes
• Third product will be for back injuries
• Working on provision patent documents

8. Project Overview
 Initial product line: 85 FTEs
 2 additional lines – project more than 200 FTEs
 Staffing: Management, Manufacturing, Distribution,
Technical Support, Quality Assurance, and Patient &
Healthcare Provider Support
 Jobs will have full benefits; company will offer state-of-
art wellness program
 Will generate $5 – 6M annual payroll at capacity
 Jobs multiplier for industry is 2.5
 Will provide career paths for call center and IT
professionals (weakness ID in strategic plan process)

9. Company Overview
 Plant Operations to begin in Incubator
 Will allow company to expand operations while purchasing
and renovating permanent location
 Proposed permanent location in existing building
 Multiple buildings meet company requirements
 Plan to invest more than $500,000 in building upgrades
 Three phases of renovations, based on product expansions
 Plan to invest $2,000,000 in property and equipment
 Plan to secure EB2 financing to purchase building by
year three of operations

10. Partnership With Community
 Requesting incentives, based on performance and/or
investment first by Company
 All incentive payments to be paid in arrears, or on a
reimbursement schedule
 Will complement available workforce provided by:
 Howard College, Goodfellow and ASU
 Company has already invested in San Angelo:
 $90K contract with ASU to design software to collect data
 Exploring $30-50K contract opportunity for 2nd program
 Discussing pilot project for industrial intelligence application

11. Recommended Incentives
• Job creation incentive for first five years
• Up to 227 FTEs
• Average $7,929 per job
• Other investment-based incentives
• Lease assistance for up to 36 months (25%)
• Not needed, if stay in Business Incubator
• Renovation of existing building (52%)
• 3-Phase renovations, up to $500,000 investment
• Code compliance costs for renovations (25%)
• Tax rebates on additional capital investment (100%)
• Average total incentive per new job: $12,994

12. Estimated Return on Investment
Annual
Projected Annual Return on Performance Additional Community
Investment At Year 6 Impact Impact Notes
Annual Payroll (1.5 multiplier) $6,500,000 $9,750,000
Estimated FTEs (2.5 multiplier) 150 - 200 375 - 500
Improved Property Value $3,000,000 $23,700 property tax (City only)
Personal Property Value $2,000,000 $15,800 property tax (City only)
Additional Indirect Investment $250,000 $1,975 additional prop. tax revenue
Demand for New Housing 42 units
Value Added to Tax Rolls $3.269M
Additional Property Tax Revenue $80,521 annual increase
Additional Annual Sales Tax $44,825 additional sales tax revenue
Non-salary Subtotal $166,821
Total Annual Impact $9,916,821

13. Summary of Offer
Recommendations:
Job Incentives: $1,800,000 maximum up to 227 jobs; average of $7,929 per job
Building Renovations: $575,000 maximum 52% of total invested
Lease Assistance: $108,000 maximum 25% of total costs
New Capital Equipment: $300,000 maximum 15% of total invested
Code Compliance Costs: $12,500 maximum 25% of total costs
Tax Rebates on Incr. Values: $154,285 personal &real property; City & County
Subtotal: $2,949,785 Maximum Cash incentives
$1.00 per year lease in Incubator for up to
Foregone rent: $648,000 three years
Total assistance to MedHab: $3,597,785