Oracle Health on Republic | Should You Invest?

Oracle Health on Republic | Should You Invest?

Company Overview

Founded in May 2019, Oracle Health is a medical device technology startup focusing on the development of a tiny insertable cardiac monitoring device to monitor heart failure. Our monitoring device is designed to detect signs of heart failure early enough so that non-hospital treatments can be administered and, thus, hospitalizations that typically result from heart failure can be reduced and prevented.

The device, which has not yet been cleared by the FDA, will offer a long-term solution to heart failure monitoring to improve simplicity, accuracy, high patient protocol compliance and hospital economics. The device is equipped with multi-sensors to track trending changes in heart performance, including heart rhythms, electrocardiogram (ECG or EKG), and heart and lung sounds and activities, to monitor heart failure using telemedicine and machine learning technology.

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Oracle Health's Intellectual Property

The company filed a provisional patent application that covers the technology, software dashboard, smartphone app and data accumulation techniques in May 2019, and a non-provisional utility patent application in May 2020 (Patent application No. 62/853,899). They plan to submit our insertable cardiac monitoring device to the FDA for a pre-submission, or Pre-Sub, review under the 510k framework in the first quarter of 2021.

Oracle Health Business Structure

  • Form: Corporation
  • Jurisdiction of Incorporation/Organization: Delaware
  • Date of organization: May, 2019

The Deal Terms

  • Security: Common Stock
  • Valuation Cap: $20,000,000
  • Price Per Security: $2
  • Min. Offering Amount: $250,000
  • Max. Offering Amount: $8,000,000
  • Min. Investment: $250
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Competition

Oracle Health's primary competitors are CardioMems by Abbott, Sensible Medical Innovations, VitalConnect and ReThink Medical. The following briefly describes these competitors’ products:

CardioMems by Abbott: CardioMems is a Class III, cardiac cath lab procedure device to monitor pressure changes in the pulmonary artery, to monitor heart failure. This device has been in the market for more than 15 years. It was originally acquired by St. Jude Medical in 2014.

Sensible-Medical Innovations: This company is a medical technology startup, developing a wearable vest to monitor fluid levels in the heart. The device is currently under clinical trial.

VitalConnect: This company is a medical technology startup developing an external sticker patch for a temporary solution to monitor heart failure.

ReThink Medical: This company is a medical technology startup developing a smartwatch app that monitors heart failure progression.

How will Oracle Health Use The Funds Raised On Republic?

Development of the heart monitor device including engineering consultation, systems architecture design and development, electrical, mechanical, software and manufacturing engineering, raw materials purchasing and the building of 30 devices for mechanical engineering optimization and stress testing;

Development of prototype devices for testing in a canine model, to test the device functionality, biocompatibility, stress testing, quality management systems and validation and verification.

FDA preparation and filing of Pre-Sub and 510k submissions;

Patent protection;

Operational and administrative expenses, including certain salaries; commercialization, manufacturing and marketing; and working capital and other general corporate purposes.

Oracle Health's Use Of Republic Campaign Proceeds
Source

The Team

Jaeson Bang (CEO) founded Oracle Health in May 2019, after approximately four years at EBR Systems, a Silicon Valley-based medical technology startup. While at EMR, Jae worked cross functionally with the CTO and R&D engineers on device development, as well as leading a national team of therapy development managers and field clinician engineers. Prior to that, he spent time consulting the business and clinical operations team at Keystone Heart, ltd., a venture-backed Israeli medical technology company.

Throughout his career, Jae has worked at startups that operate at the intersection of medicine, technology, and business. These companies have been funded by investors such as Johnson & Johnson and New Enterprise Associates (NEA). Jae graduated from the Northwestern University – Kellogg School of Management with his Executive MBA in 2015.

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Employees: Oracle Health currently have only one (1) full-time employee, the Chief Executive Officer. They expect to hire a chief technology officer and a chief medical officer as our business grows.

Debt

Oracle Health's Balance Sheet
Source

In 2020, the Company issued a convertible promissory note in exchange for $100,000 (“the Note”). The Note bears an interest rate of 5% per annum and will mature in thirty-six months at which the principle and all accrued interest will be due. The Note will convert under certain pre-defined condition such as a Qualified Financing Events or Change of Control. Upon conversion, the Note will convert to common shares of the Company at a 20% discount. During 2020, the Company accrued $1,798 in interest associated with the Note.

In 2020, the Company received an Economic Injury Disaster Loan Advance under the Paycheck Protection Program provision of the CARES Act. The advance does not have to be repaid and bears no interest. The Company received $4,000 from this program and has netted this amount against the salaries and wages expense on the income statement.

As of June 30, 2020, the Company had $403,606 of SAFE obligations outstanding, with a valuation caps ranging from $1,666,666 and $5,000,000. Subsequent to the period, the Company issued a $28,000 SAFE agreement.

The Financials

Oracle Health's Income Statement
Source
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