What on Earth CONFIDENTIAL - Profound Ventures, LLC Happened to - - PowerPoint PPT Presentation

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What on Earth CONFIDENTIAL - Profound Ventures, LLC Happened to - - PowerPoint PPT Presentation

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1 10X Medical Device Conference - May 14, 2019 What on Earth CONFIDENTIAL - Profound Ventures, LLC Happened to Proove Biosciences? 2 What Well Discuss Tonight A Little About Me About Profound Ventures

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“What on Earth Happened to Proove Biosciences?”

10X Medical Device Conference - May 14, 2019

CONFIDENTIAL - Profound Ventures, LLC

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What We’ll Discuss Tonight

  • A Little About Me
  • About Profound Ventures
  • About Proove Biosciences
  • After 7 Years of Success: Where was Proove in December 2016
  • What Happened Next? 7 Months of Destruction
  • Where Do You Go From There?

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CONFIDENTIAL - Profound Ventures, LLC

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A Little About Me

  • Husband: Married over 19 years to my

Best Friend, Catherine, a Lawyer & Law Professor at Chapman University

  • Dad: Parents of 3 great kids and

devout members of The Church of Jesus Christ of Latter-day Saints

  • Idealist: Activist, Volunteer, Youth

Sports Coach, PTA President, Former Publicly-Elected School Board Member

  • Award-Winning Executive & Social

Entrepreneur:

  • Earthly Angel, Baltimore Sun;
  • Emerging Technology Company CEO of the

Year, OCTANe;

  • Excellence in Entrepreneurship Award, OCBJ;
  • Two-Time Finalist, EY Entrepreneur of the

Year Award (OC);

  • Worked at Eli Lilly, Johnson & Johnson,

Prometheus, & founded Proove Biosciences

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CONFIDENTIAL - Profound Ventures, LLC

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CONFIDENTIAL - Profound Ventures, LLC

Entrepreneurship to solve profound societal problems by creating, seed funding, and growing new business ventures and non-profit organizations

Profound Ventures, LLC (“Profound”) is a social entrepreneurship seed fund and new venture accelerator dedicated to using new business models and technologies to solve profound societal problems based in Orange County, California.

Who We Are

  • Brian Meshkin

Managing Partner

  • Award-Winning Health

Technology Entrepreneur (Inc 500, Deloitte Fast 500), founder

  • f Proove, fmr with Lilly, J&J, &

Prometheus Labs

  • Laura Hunter, Esq.

Partner

  • Fmr General Counsel of Obagi

Medical Products, CLO of Proove Biosciences & Head of Life Science Practice at international law firm, Brobeck

Leadership

  • Felix Frueh, Ph.D.

Partner

  • Fmr head of Genomics at

FDA/CDER; fmr CSO at Human Longevity; fmr President of Medco Research Institute

  • Khanh Nguyen

Partner

  • Fmr CTO of Proove Biosciences,

Freedom Communications, the Milken Institute, & DoctorDrew.com

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Revolutionizing Diagnostics to Deliver Value through Hospitals Beyond the Duopoly of LabCorp & Quest Diagnostics

Our Current Portfolio

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CONFIDENTIAL - Profound Ventures, LLC

Providing improved

  • utcomes at the

intersection of behavioral healthcare & advanced telehealth data technology Providing at-home rehab & data analysis for stroke recovery - 5th leading cause of death in the US Rapidly Aging Population Which Will Account for 25% of the US Population in 15 Years The Largest and Most Expensive Health Condition & the Leading Cause of Preventable Death Exploding Growth of Neurological Disease Cost the U.S. more than $1.5 trillion per year—8.8% of GDP Next-Gen Brain Computer Interfaces advancing neuromodulation with advances in big data analytics to personalize therapy

?

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What on Earth Happened to Proove Biosciences?

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CONFIDENTIAL - Profound Ventures, LLC

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CONFIDENTIAL - Profound Ventures, LLC

About Proove Biosciences

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Proove Biosciences: December 2016

  • 278 FT Employees
  • 60,000 sq. ft. campus in Irvine Spectrum
  • CLIA-credentialed, CAP-accredited clinical laboratory
  • 354K precision medicine panels in 2016 alone
  • $28.1M in cash collected revenue for 2016, $1M in

cash EBITDA

  • 2nd yr in a row Inc. 500, Deloitte Technology Fast 500
  • World’s Largest & Highest Quality DNA Biobank &

Big Data Clinical-Genetic Database in Chronic Pain – >153,000 patients

  • 15 precision medicine profiles on the market

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CONFIDENTIAL - Profound Ventures, LLC

  • Research collaborations with leading centers: USC,

UNC, McGill, Univ. of Utah, Cedars Sinai & others

  • Research awards from medical societies (ASIPP,

ASRA, AAN)

  • Over 100 scientific abstracts presented at meetings
  • Over 10 peer-reviewed publications
  • CMS and NIH Pain Consortium leadership support of

technology

  • Strong Board of Directors
  • 2-years of externally audited financials
  • Preparing to file S-1, raising mezzanine cross-over

round to position the company for a strong IPO

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And then we were victimized by Fake News & Corporate Espionage

  • Warren Buffett once

said, “It takes 20 years to build a reputation and five minutes to ruin it.”

  • Quite a Fall from Grace

to Go from “Earthly Angel” in the Baltimore Sun to a “Corrupt CEO” in STAT News

Reporter Charles Piller intentionally ignored primary sources provided Reporter Charles Piller used sources fabricated by taking Proove’s logo

  • ff the Internet and

putting it on fraudulent documents

3 disgruntled employees conspired to invent accusations for a “Whistleblower” lawsuit to protect themselves while they were competing with Proove. Then after being fired, they went to Charles Piller…

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The Dangers of a One-Sided Story:

How Charles Piller & STAT News Reported the “Facts”: Prince William Gives Onlookers Rude Gesture

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CONFIDENTIAL - Profound Ventures, LLC

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The Dangers of a One-Sided Story:

How a Professional Journalist Would Report the “Facts”: Prince William Holds Up the Number 3

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CONFIDENTIAL - Profound Ventures, LLC

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The Dangers of a One-Sided Story:

Whether You Like Prince William or the Royal Family Determines Your Agenda or “Confirmation Bias”

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CONFIDENTIAL - Profound Ventures, LLC

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How One Discredited Reporter Fired from the Los Angeles Times Created His Lies

Share Misinformation with Experts to Get Their Reaction to the Falsehood Quote Their Reaction to False Information as an opinion of the Person or Company Voila: a Credible “Quote” about the Company or Person to Create Plausible Deniability about Fake News

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CONFIDENTIAL - Profound Ventures, LLC

Pure Genetic Test KOL Reaction Former Employee Opinions Billing Practices Research Practices OIG Investigation of an Ordering Doctor

Examples:

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Some of Piller’s Lies Reported by STAT News

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CONFIDENTIAL - Profound Ventures, LLC

Bias Piller’s Lies Truth – The Antithesis of the Accusations

Laboratory-Developed Tests (LDTs) Are Not Credible Because They Are Not Approved by the FDA

No scientific evidence supporting testing

  • Extensive published scientific evidence (>100 scientific posters,

dozens of 3rd party publications, 10 peer-reviewed publications)

  • On just one of its profiles, Proove had 3 clinical validity papers of
  • ver 5K patients showing up to 97% accuracy and 3 clinical utility

papers of over 15K patients showing 90% effectiveness

Laboratories involved in pain and addiction are involved in “kickback” schemes

Paid docs to

  • rder tests
  • Piller used a fraudulent source document where someone pulled

down our logo from the Internet and created a false document

  • Proove engaged in IRB-approved studies, listed on

ClinicalTrials.gov, approved by leading institutions

  • No doctor was ever paid or financially-induced to order testing

Laboratories are corrupt and any successful lab must be like Theranos

Research is a sham

  • Award-winning research from leading medical societies,
  • Collaborations with leading researchers and research centers,
  • Research methods reviewed and approved by leading centers to

surpass highest standards (even beyond NIH-awardees)

Laboratory billing practices are corrupt and abuse the system

Engaged in Medicare fraud

  • Coding approved by CMS in writing on four occasions,
  • Proove underbilled and was paid at a price equal to 10% of what
  • ther labs were getting paid for PGx tests by CMS,
  • Technology supported by the CMO & CDO of CMS
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What did we do about it?

  • Legal Counsel’s Recommendation: “Don’t respond. It makes you look
  • defensive. We reached out to the government and they told us that there is

no investigation of Proove. As a limited-use public figure, defamation laws do not protect you, so you will not win a defamation lawsuit.”

  • Board of Director’s Recommendation: “As Mark Twain said, “Never Pick

a Fight with People Who Buy Ink by the Barrel.” We’ve been around a long-

  • time. We are doing all the right things. Just take the high road.”

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CONFIDENTIAL - Profound Ventures, LLC

Unfortunately I was scared and inexperienced, and so I listened to the advice of legal counsel and my All-Star Board of Directors. I was wrong do to so.

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 The Situation Went from Bad to Worse…

  • May 2017
  • U.S. Attorney’s office accidentally leaks a whistleblower lawsuit from a

disgruntled ex-employee

  • Proove lawyers inform U.S. Attorney’s office of administrative mistake
  • f leaking “sealed” documents on PACER
  • U.S. Attorney’s office re-seals accidentally unsealed documents
  • Proove offers to meet with government to answer any questions
  • June 7, 2017
  • FBI delivers subpoenas to Proove’s office with the TV Cameras from

the local Los Angeles CBS, NBC, and ABC television stations present

  • Media reports “FBI Raid” which suggests charges, arrests, etc.
  • FBI delivers subpoena for documents and buys employees pizza while

collecting documents

  • No charges, indictments, arrests, or any formal allegations of

wrongdoing

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Within 90 days of Subpoena for Documents, 7 months after 2nd Piller Hit Piece

  • 90% Reduction in Revenue
  • Before: $2.5M in mo. revenue; Now: $180K
  • Medicare and private payer reimbursement placed on hold
  • Ordering clinicians spooked (over 50% reduction)
  • Senior management stop taking pay (VP and C-Level)
  • Fire almost all employees (Before 278, After < 5)
  • Couldn’t cut costs fast enough (built up a $3M AP)
  • Put the company into a Receivership to restructure, ultimately Receiver decides to

liquidate assets against initial plan, ceases operations and customer orders

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Proove Biosciences: August 2017

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 What was the result of the inquiry?

  • Government inquiry resulted in…
  • NO ALLEGATIONS OF WRONG DOING or CHARGES
  • NO FINES or EVEN A SINGLE-DOLLAR OF A RECOUPMENT/CLAWBACK
  • NO INDICTMENTS and NO ARRESTS

THE ONLY TECHNOLOGY CLINICALLY-PROVEN IN PEER-REVIEWED LITERATURE TO HELP SOLVE THE OPIOID CRISIS CAME OFF THE MARKET, STAT NEWS GOT THEIR ADVERTISING REVENUE, & PILLER GOT A NEW JOB.

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Where do you go from here?

  • You take the lessons learned from the tragedy

and help others avoid the pain you went through

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CONFIDENTIAL - Profound Ventures, LLC

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Where do you go from here?

  • You finish the mission you started.

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CONFIDENTIAL - Profound Ventures, LLC

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Questions & Answers

If you’d like to get in touch, feel free to email me: brian@profoundvc.com 949-812-0081 21

CONFIDENTIAL - Profound Ventures, LLC