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    Date submitted
  • 13-Nov-2017

Food safety, defense and quality

Abstract

Unique Optical Imaging Technology

SafetySpect's (the Company’s) underlying technologies were originally developed for the medical industry by it's Chief Scientific Architect and Company co-founder, who served as the principal investigator on over $80 million in related field grants, including several from the National Institute of Health (NIH).

These core technologies are designed into SafetySpect's prototypes by augmenting and expanding the existing optical imaging devices and software developed by Dr. Daniel Farkas and the SafetySpect team, for commercialization in the food safety and quality industry.

Validation that the targeted optical technology and its cost-effective practical use for deployment in the food safety and quality industry is demonstrated by the Company’s industry traction and test development programs with key food safety University programs.

Formal agreements have been signed with universities, leaders in the food industry, U.S. Military, and key food safety and defense stakeholders. Traction and interest by the Company’s University participants in the food safety, and biologics/food defense sectors.

SafetySpect is leveraging the years and millions of dollars invested in the platform technology. This meaningfully reduces our execution and start-up risk.

Our team believes that its technologies and capabilities are superior to competing approaches being applied to the food safety sector. Technology specifics and advantages are summarized below.

Summary of Business Drivers and Strategy

The Company has developed proprietary food safety/defense contaminant identification solutions superior to alternative solutions currently available in the market. These solutions offer real-time, reliable, detection of harmful contaminants in our food system.

SafetySpect systems are designed to scan for harmful substances such as Salmonella, E coli, Listeria, pesticides, ricin, anthrax and additional harmful bacteria and other food and water contaminants. Management believes that its technology is disruptive, and will be widely adopted. Key advantages include:

• Faster and Easier Testing: The SafetySpect technology allows for real time scanning vs. current methods – most of which take from 2-36 hours, requiring local laboratory facilities and qualified staff

• Cost Advantage: The SafetySpect scanning devices are less expensive when considering the all-in lifetime cost per scan/test over the medium term and equipment life

◦ Our technology and approach requires an up-front equipment cost and an annual service fee, but no cost per scan

◦ After upfront / fixed costs - each scan/test is effectively free as opposed to expensive PCR / ELISA tests, etc.

• Facilitates Greater Volume of Testing: Food sector participants will be able to cost effectively scan a far larger component of the food stuffs and agricultural produce

• Big Data and Automation Applications: Our scanning devices are designed to capture not only data related to primary contaminant identification – but also multiple other signatures.

◦ Our business model includes utilizing this broader data capture via cloud-based services, to offer other revenue possibilities for the Company, and create a proprietary ecosystem that supports customer retention drivers

◦ Our devices can be integrated into production lines, conveyor belt systems and other automated scanning venues

• Ancillary Customer Benefits: Our scanning devices can easily (and cheaply) scan for other identifiers and signatures that have secondary benefits for both the customer and SafetySpect. The main uses are targeted toward:

◦ Primary uses: contaminant identification

◦ Secondary uses: size, shape, freshness, consistency, food adulteration / counterfeiting identification and analysis, organic validation (pesticide identification), food origin markets, etc.

◦ Tertiary uses; One customer’s secondary use may be another customers’ primary use: market expansion and customer adoption implications

The above drivers result in easier testing and realistic mass testing, meaningful direct cost savings, and the ability to meet regulatory requirements while reducing contaminant risks and the potential for consequent reputational harm for all sector participants.

This paradigm will heavily influence both customer adoption and customer utilization – all driving an increased rate and volume of testing and a realistic move from a reactive to a preventative food safety testing system and regime.

Management further believes that widespread adoption of SafetySpect technology will be transformative for the relevant industrial sub-sectors of the food testing/scanning market that are targeted. Adoption will lead to cost savings within the sector, more testing, additional paid-for services and ultimately market expansion.

The combination of technologies being customized for SafetySpect will be certified under validation standards required by the FDA, USDA and the relevant European Community bodies and other major economies.

These regulatory obligations are prompting the industry to increase the quantity of food that is actively monitored and tested.

Currently there are a limited number of cost effective approaches in our national and international capabilities to meet these food safety monitoring and testing obligations. As a consequence, very little food is actually tested for contaminants. For these reasons it is necessary to constantly generate new tests and methodologies to both to keep current with legal and regulatory requirements but also to increase effectiveness.

Key Research and Commercial Relationships Established

SafetySpect has established a number of key relationships that will be instrumental in executing it’s business plan and commercializing it’s food safety scanning devices.

We are working with several U.S universities (with demonstrated expertise in the food safety and defense sectors) to further develop our technology for food safety / defense testing and scanning solutions via research collaboration agreements. These include Auburn University's "Detection and Food Safety Center” to further develop our technology for food safety / defense testing and scanning solutions, Chapman University in Orange County California where we are scanning biologics in their secure facilities and the University of Maryland.

The Company is in negotiation with a leading industrial design firm to commercialize the units.

Market Size and Strong Potential Investment Returns

The global food and agricultural industry accounts for 10% of the world’s GDP, approximately a$7.8 trillion in the year 2015. The food safety testing market alone is projected to reach $17bn by 2021 according to Mordor Research.

Video

Original YouTube URL: Open

Introduction Video

Additional Questions

Who is your customer?

SafetySpect will initially sell a limited number of units to academic and research facilities. The commercial industrial units (hand scanners and later conveyor belt devices) will be sold directly and through a large distributer network that currently services the food manufacturing, processing and distribution industries in the U.S. and abroad. Industry Segments to be serviced include: 1. Food Safety Modernization Act (FSMA) Affected Facilities 2. Supermarkets 3. Restaurants 4. Individual Customers

What problem does this idea/product solve or what market need does it serve?

SafetySpect scanning technologies allow cost effective real time scanning and detection of food contaminants and quality grading (processing time in seconds). This technology makes feasible mass scanning/testing of a greater volume of foods and agricultural products as well as the transport/containers with which they come in contact. This enables the paradigm shift from reactive testing to preventative testing and monitoring. SafetySpect Management believes that with cost effective products that actually enable greater volumes of testing to occur, the existing food safety testing market size will expand faster than currently projected: 1. As customers deploy our systems in both the less expensive mobile device configuration and more expensive ‘conveyor belt’ configuration, greater volumes of foodstuff and agricultural products will be scanned and tested 2. More agricultural and food industry participants will become ‘active testers’, at more frequent intervals (junctions) in the processing (farm to table) lifecycle 3. Additional, complementary ‘scanning and detection services’ such as food quality grading, will be offered beyond driving early adoption pathogen/contaminant identification services 4. Cost effective scanning and testing will generate other cost savings for the customer base and the food sector

What attributes will make this idea/product successful? Why do you believe that those features will create success?

SafetySpect technology is disruptive on many levels. This multi-level impact is what will drive (i) more frequent customer utilization, (ii) testing applications, (iii) expansion of customer base and ultimately market size / revenue opportunity, and (iv) provide enriched data collection on a fundamentally disruptive basis and scale for the food industry. There are several attributes of the SafetySpect technology that sets it apart from competitors: 1. Time: testing in real time (seconds), on location, no need for transport off site, or for test cultures, extended processing periods, etc… 2. Applications: testing devices can be utilized for multiple applications including signatures for intentional and unintentional contamination (Salmonella, E. coli, Listeria, anthrax, ricin, etc.); food adulteration/counterfeiting 3. Labor: less expertise needed for operating the devices / lower labor cost / no trained lab technician(s). 4. Frequency: each test / scan is included in the cost of the equipment and service fee. A customer is not hindered by cost prohibitive per test pricing models. Once the up front purchase price is paid / annual service charge incurred (or lease payments made), the customer has every incentive to utilize device to maximum potential utilization a. Materially lower costs per test, including amortized up-front device costs b. Supports step-change in quantum/amount of testing that occurs c. Supports cost effective expansion of testing to additional threat junction / critical points on farm to fork food chain 5. Automation: logical integration into robotics / automation for certain applications 6. Big Data: SafetySpect scans will create valuable data a. The availability of large amounts of data will eventually create multiple opportunities for secondary services and revenue streams, increasing customer adoption and competitor replacement incentives (solidifying ‘SafetySpect Product Stickiness’ and growing barriers to entry vis-à-vis competing products as a ‘SafetySpect Ecosystem’ is developed). b. SafetySpect devices will generate and capture significant amounts of data that go well beyond the identification of the primary signature/object(s) targeted. These secondary sources of data can be crafted by SafetySpect and individual customers to achieve data capture associated with secondary business uses and regulatory functions. For example, a customer’s primary testing / monitoring objective may be monitoring for a specific / small group of identified biologic contaminants such as E. coli, Salmonella, Listeria, Campylobacter, etc., while the device and software can be customized to capture multiple secondary data objectives with no additional cost. This will enable analysis of: i. Size, shape, color and freshness data ii. Ingredient assurance / adulteration / counterfeit identification / insect detection /food source confirmation iii. Consistency data and patterns, among many, many others iv. Regulatory: modifying data capture and monitoring interfaces for regulatory / security purposes is very realistic, and will be of great value to regulators and government a. This capability, which can be implemented at nominal cost, will make SafetySpect device utilization a positive outcome / in alignment with regulatory and government security objectives b. Big data capture (in combination with real time / low cost scanning) will be a material mover and enabler in the shift from a reactive to preventative food safety monitoring and regulatory environment

Explain how you (your team) will execute to make this idea/product successful? What gives you (your team) an advantage over others already in the market or new to this market?

SafetySpect has assembled a blue chip team of executives and advisors that have a deep understanding of how to deploy the SafetySpect service throughout the world. This pool of knowledge, experience and contacts gives SafetySpect a clear advantage to succeed with its targeted objectives. The SafetySpect founders have brought together recognized members of the science community, government regulators, the business community and food / agriculture industries. All have proven successes in their respective fields of expertise. Competitive Advantages 1. First of its kind to market (expected) 2. Unique, proprietary, market-dominating patented intellectual property 3. Experienced management team, with defined plan to augment for critical roles, at the right time and cost effectively with targeted food sector veterans 4. The right market at the right time (Food Safety Modernization Act) with the right products and services to satisfy significant unmet demand while reducing customer costs 5. Leveraging off of significant in-place research and product development investment and the resources, expertise and reputational benefit provided by academic partners