QUARTERLY REPORT 2009/Q1

Summary:
During the first quarter RMS met several significant milestones towards commercialization of the Cardiac Simulation System (CSS) Product line. Additionally, the company forged numerous relationships with potential customers, and research and development partners.
In March we applied for a Small Business grant that is now under review for funding required to further develop the CSS technology, and secure it's position within the Medical Education, Institutional, and Research Markets.

We continued design refinements of the CSS-LS-100 targeted for Research & Development customers, primarily in the Medical Device Market. We’ve also finalized design, and have begun building the first CSS-LS-101 for use in the education and institutional market. Additionally at the request of an existing customer we initiated design on the CSS-LS-102 for device sales and clinical training featuring a single enclosure, scaled down actuation system combined with Left Ventricle and Aortic Arch anatomy. These three products complete the portfolio for entry to all target markets.

Our multimedia web presence resulted in contact by a renowned cardiac device researcher who is interested in validating the CSS-LS-100 for several applications including valve implant studies and clinician training in Echo Doppler and MRI diagnostic procedures involving variable cardiac conditions. This particular researcher has vast experience with all existing cardiac heart simulators on the market today, and many custom models as well.

He indicated that he was immediately impressed by the CSS, its design features and capabilities, and knew that it is likely the only simulator with the potential to meet his goals in cardiac valve advancement. He is proposing a collaborative effort with two world renowned clinicians to further validate that the CSS produces physiologically accurate cardiac rhythm, wave forms and offered to provide physical properties validation. This represents an incredible opportunity for the company to publish expertly assessed results supporting the validation and use of the simulator for targeted medical device research and education.

Highlights:
• Research Partnership:
This relationship and the research direction under discussion will ultimately position the CSS as the most versatile physiological and kinetically accurate cardiac simulator available for a myriad of applications and training. The program will foremost within the first phase, validate the system for emulation of human physiological and hydrodynamic states and responses in the left heart and aorta. This effort is critical, and of highest priority for the researcher and company.
Further, we are outlining a scope of work that will engage preeminent researchers in the use of the simulator for MRI, Echo Doppler and Implantable Heart Valve Research.

The entire scope of the effort will result in several research and clinical use publications in Scientific and Professional Medical Journals that have been identified by the Researcher and Company. Each phase of the effort will yield publishable articles in various disciplines including; Fluid Dynamics and Biomechanics publications, Clinical Diagnostics & Training Journals, Cardiology Societies Journals and various Scientific and Academic Research Journals.

Our company and our research partners are very excited to collaborate in this shared vision. We are placing a high priority on achieving the first phase for validation of the CSS believing it is a gateway to the global market.

• Product Development:
The CSS-LS-100, 101 & 101 designs are ready for production with sales orders being accepted. An alternately designed (lower cost) actuation mechanism with similar performance capabilities is moving toward prototype performance testing as funding permits. A removable apex section was developed and prototyped providing a “customizable” ventricle for implant applications requiring apical surgery applications.

• Intellectual Property:
A patent was filed, application number assigned and confirmation receipt recorded. As our research continues to uncover new uses for the simulator an expanding list of addendums are planned for the non-provisional submission.

• Funding:
We submitted a start-up budget with grant application and completed many other collateral materials in support of the business. We are seeking seed capital to support Phase I of the Research Initiative which is pivotal for the CSS commercialization strategy. Partners in the Company continue to work without compensation.

• Organizational Development:
We created a Marketing Advisory Team that is supporting our goals for commercialization and market development. We met with several key business advisors to discuss markets, product offering and funding strategies.

• Customer Relations:
CSS-LS-100 was utilized by a customer for fluoro-particle flow tracing with ventricular assist device. RMM supported the project and has an open order for additional work. This is a new use of our simulator in support of a breakthrough medical device technology.

• Educational Market Development:
We established a relationship with a State Collage for educational curriculum development. Our contact there assisted in our Grant Application. 

• Medical Institution Market Development:  CONFIDENTIAL

• Medical Device Market: CONFIDENTIAL

• Clinician Support:
We have developed relationships with Stuart Cardiology Group, Ocala Heart and Vascular Institute and many others who have been very supportive in providing collaboration in targeting specific applications and physiological algorithms for training or research.

• Infrastructure:
We have completed operational build-out at the Dominica Terrace location with and have FTP and website up and running for collaboration and promotion.

We want to thank our key business advisors, interested parties and associates that have contributed to our current status. Our staff has worked long and hard without compensation to develop the business opportunity as described above. We continue to develop our business plan and create many key relationships that will support our success and growth objectives.

While our momentum is significant, we are reaching a threshold that requires additional seed capital to convert several of the opportunities outlined above. We continue to seek sources for capital, without equity commitments, that will provide short term cash and working capital requirements, and maintain flexibility for future stakeholders in a higher value growth proposition for all.

END

By Donald Rodrigue

rodrigue@hometownnewsol.com

STUART - Founded in 1994, Drafting Designs offers a variety of services, including three-dimensional, computer-aided design, production drawings and rapid prototyping.

The company is in the final stages of completing what owner David Carson's research proves to be the "world's first pulsatile cardiac simulation system," a hi-tech medical model for testing medical devices.

Drafting Designs has been developing the anatomically accurate left-heart simulator for the last 10 months, in conjunction with two Stuart research and development firms, Reality Medical and New Frontiers Technology. Mr. Carson credits the Business Development Board with enabling Drafting Designs to become certified for medical device design and manufacturing by the Organization for Standardization.

The board did so by helping the company attain an Incumbent Worker Training grant through one of its economic development partners, the Florida Manufacturing Extension Partnership. Once certified, Drafting Designs won a contract to design the cardiac simulation system from a Miami firm that wanted to use it to test new assist devices, such as pumps.

"Through the Business Development Board of Martin County, we acquired the necessary tools and know-how needed to prepare for our penetration into the medical product market," Mr. Carson said.

Once the simulator is finished, Mr. Carson hopes it will create interest among medical facilities and research institutions that may want to use it for laboratory and classroom testing. He shares the credit for the device with two local research and development professionals, Raymond Beja and Michael Romeo, the owners of New Frontiers Technology.

"What was most gratifying was was manipulating human CT Scan data with Computer Aided Design technology to make state-of-the-art custom molds," Mr. Carson said.

The three men gathered recently for a demonstration of the simulator, which sounds just like a living and beating heart when activated.

"The sound you hear is not simulation," Mr. Romeo said. "It's actually being generated by the heart simulator, which also regulates the temperature at 98.6, just like the human body."

In addition, the simulator regulates and records (blood) pressure, flow rate and rhythm, and can be used to replicate surgical procedures, such as catheterization and cardiac pump implants. When ready for the market, the device will sell from $100,000 up to $300,000, depending on customizations desired by the customer.

"It's basically a teaching tool that any physician can use instead of a cadaver or an animal," Mr. Beja said. "You can simulate things with it that you can't do with a real patient."

The success with the medical model has prompted Mr. Carson to merge Drafting Designs with the other two companies, as well as form a new entity with Mr. Beja and Mr. Romeo, Reality Medical Models, LLC. The merger will call for more assembly and showroom space, as well as the addition of a few new employees in the near future.

Business Development Board President Ron Bunch praised the board's economic development partners, which helped make this success stories like this possible.

"These partnerships make it possible to help companies transition from local to global success," Mr. Bunch said. "By connecting them with the right training and services, from partners like Florida Manufacturing Extension Partnership, we are able to ensure that Martin County companies have a competitive edge."