6 5 10 Drug Drop, Inc. Business Plan

Drug Drop, Inc. Confidential

Drug Drop, Inc.Business Plan


Mission & Vision Statements• Our Mission:

– Drug Drop, Inc. is an industry financed, not-for-profit business entity, providing public education for safe drug disposal that adheres to strict safety and handling standards; assuring public protection while preventing landfill and waterway contamination.

• Our Vision:

– Creating a superior means for elimination of excess pharmaceuticals and over-the counter medications Drug Drop, Inc. collects drugs for incineration to inert molecules; improving the quality of our drinking water while restoring our natural environment for present and future generations.


The Team• Kim Fithian, CPhT CEO

– Business Development Manager and Entrepreneur Industrial Distribution, Management & Consulting 29 years

• Robin Downing, Director

– Administrative Assistant to the Dean of Instruction, MD, PhD Program, University of Texas, Southwestern Medical Center 20 years

• Randy Moresi, Board of Directors

– CEO North Hills Hospital, 25 years


History: Safe Drug Disposal Act• Consensus across government and the pharmaceutical industry share a widely held

concern that our nation’s waterways and ground water contamination at landfills are

increasingly producing health risks to our drinking water. The Environmental Protection

Agency produced its Fact Sheet: Third Drinking Water Contaminant Candidate List 3 (CCL 3)

citing 104 chemicals and 12 microbiological contaminants are polluting water supplies

affecting at least 41 million constituents. While 271 million pounds of pharmaceutical

waste is legally introduced each year through the manufacturing of pharmaceutical

compounds, over-the-counter drugs, and personal care products, a greater amount is

estimated to be deposited through consumer and human waste each year. Hazardous

pollution from these contaminants is measured to include, antibiotics, anti-convulsants,

anti-depressants, steroids, and sex hormones.

• By August 2009 reports declare 5 states including Florida, Maine, Minnesota, Oregon and

Washington, have proposed legislation for industry-financed collection of unwanted drugs.

Texas passed the Safe Drug Disposal Act of 2009 directing the Attorney General to enforce

new regulations through implementation of a drug disposal program. Texas’ Comptroller

General is presently reviewing options for state administered take-back disposal programs

requiring it to report its findings periodically to Congress.


Industry-Financed Drug Mailback Program

• Drug Drop, Inc. introduces a unique solution of educating the public to the hazards of contaminated

drinking water while combining a single source, industry-financed, drug mailback program operated

nationwide, as a not-for-profit organization. Its board of trustees will establish offices to support

state environmental concerns corresponding to locations where 10 EPA regional Safe Drinking

Water Act (SDWA) Enforcement Teams currently exist, and be compliant with external audits

conducted by the U.S. Department of Justice, Drug Enforcement Administration and state

regulation. Postage prepaid mailback containers are supplied from these 10 offices through: (1)

local pharmacies and retail establishments, (2) toll free phone request, and (3) mail order

pharmacies. Using common package carriers to ship mailback containers to our collection centers,

we identify, report, secure, and properly incinerate these drugs according to compliance standards.

• Start up capital funding is proposed from a combination of private fund capital, EPA Education

Grants, and SBA loans with ongoing operational capital shared by industry-financed contributions.

Mailback, transportation, handling, and disposal costs are minimized through a not-for-profit

business structure shared by operating budgets derived from pharmaceutical manufacturing, over-

the-counter drug, and personal care product industries operating in each regional jurisdiction. Safe

handling and disposal is assured through government compliance and audit standards.


Nonprofit Executive Summary

• Drug Drop, Inc. will establish ten offices across the U.S. aligned with the Environmental Protection Agency Regional Offices and compliant with the Drug Enforcement Agency protocol for handling narcotics, controlled medications and hazardous chemicals.

• Educating the public about proper drug disposal and providing postage prepaid, pre-addressed packaging, free-of-charge for all returns, accomplishes the primary goal of removing these compounds safely from our environment.

• Members across the pharmaceutical industry, over-the-counter drug producers, federal and state government, waste management industry and concerned citizen groups reside on the board of trustees, overseeing program efficacy and efficiently control budgetary costs.


Opportunities

• Draw alliances within the 192 members of TX Drug Disposal Task Force reporting best practice to the Legislature Dec, ’10.

• Seek state government agencies help in presenting this business model to the right audience.

• Solicit U.S. Representative & Senator help to adopt this business model.

• Recruit philanthropic organizations adoption of this business model appropriating donations to raise money.

• Interview Dr. Robert D. Morris, author of The Blue Death: The Intriguing Past and Present Danger of the Water You Drink, to receive critical acclaim for this business model.


Business ConceptFund Capital Finance Model

Drug Drop, Inc.

$400K

$800K

Angel InvestorFund Capital

Private & Federal GrantsSBA Loans

Bank of AnywhereFiduciary Administrator

Private Capital Govt. Capital

Drug Drop, Inc.Corporate Charter

Governance Compliance

Drug Drop, Inc.Board of Trustees

Asset Mgt Stewardship

Regional Privately-Held

Business 1Unique

Product or Service


Business 2Unique

Product or Service


Business 3Unique

Product or Service


Business 4Unique

Product or Service


Business 5Unique

Product or Service

Educational support services NAICS 611710,


Competition: Safe Drinking Water Act• Florida - Operation Medicine Cabinet hosted by Collier

County, Florida located in Naples, FL

• Maine – Safe Medicine Disposal for ME hosted by Univ. of Maine Center on Aging, allows consumers to pick up mailing envelopes at retail pharmacies in 9 municipalities

• Minnesota – House of Representatives passed HF1217 the Safe Drug Disposal Act, March 25, 2010 seeking Senate action on comparative bill SF1568.

• Oregon – An emergency declaration was introduced to the Senate Human Service Committee February 2009 creating the SB 598 Oregon Drug Take Back Bill calling for appropriation and stakeholder endorsements.

• Washington – Pharmaceuticals from Households: A Return Mechanism (PH:ARM) provides secure drop boxes in 36 retail pharmacies located in 20 municipalities


Strategic Goals and Objectives• Position one National Compliance Director to oversee

Directors of Communication in each of ten EPA regions; governing and complying with external audits for our industry funded drug mailback program.

– EPA regulates Drinking Water Contaminate Candidate List (CCL3) consisting of unwanted: (1) household medications, (2) over-the-counter drugs, & (3) personal care products.

– Comply with EPA and DEA mandates interfacing with state office regulation.

• Establish first office January 2011, then expand offices quarterly until the entire U.S. is covered.

– Strategically locate regional offices to support existing EPA regions beginning first quarter 2011 in Region 6 covering TX, OK, NM, AR & LA. Open new offices on demand as urgency arises from lobbying activities.


Operational Goals and Objectives

• Open initial regional drug collection center first quarter 2011 in EPA’s Region 6 consisting of TX, OK, NM, AR & LA, through combination of government and private grants.

– Apply & receive IRS approval for not-for-profit business entity

– Apply & receive EPA Education grants for 2011 disbursement.

– Apply & receive philanthropic grants for 2010

• Open new regional drug collection centers each quarter in the nine other EPA Regions with national rollout complete by spring 2012.

– Schedule launch teams to fund and open regional centers

– Board of trustees oversight and audit compliance


Five Year Financial Plan


Financial Plan –Twelve Month Cash Flow


Financial Plan -Start-Up Expenses


Resource Requirements for 10 Regional Offices

• Personnel – 1 ea President, 1 ea Comptroller, 1 ea National Director of Compliance, 10 ea

Regional Directors of Communication (law enforcement credentials), 20 ea certified pharmacy

technicians, 10 ea administrative assistants

• Technology – Secured business enterprise network for headquarters located in Fort Worth, TX

and 10 ea regional offices consisting of: 50 ea total workstations; 11 ea office outsourced IT

support agreement; 11 ea office managed security alarm system

• Finances – (1) management and administrative; (2) rent & utilities; (3) package courier

agreements; (4) package, printing and postage outsourcing; (5) licensing and education; (6) audit

compliance

• Distribution – Package courier agreements with USPS, UPS & FedEx

• Promotion – Television, Radio Print and Billboard Advertising and Promotion at noncommercial

education broadcast rates in 10 markets

• Products – (1) EPA Region 6 Drug Mailback Program, (2) EPA Region 1 Drug Mailback Program,

(3) EPA Region 2 Drug Mailback Program, (4) EPA Region 3 Drug Mailback Program, (5) EPA

Region 4 Drug Mailback Program, (6) EPA Region 5 Drug Mailback Program, (7) EPA Region 7

Drug Mailback Program, (8) EPA Region 8 Drug Mailback Program, (9) EPA Region 9 Drug

Mailback Program, (10) EPA Region 10 Drug Mailback Program.


Risks and Rewards of Regional Privately-Held Business Investments• Risks

– Economic Conditions - Understanding the threat of changing economic conditions and anticipating how government regulation will impact the business plan of Drug Drop, Inc. are essential to forming strategy for short term business start-up forecasting the 3rd and 4th Qtr 2010, and long term risks during the next 3 to 5 years. Each niche market has its own dynamics surrounding economic conditions that will be detailed later, but the following general risks are relative to all businesses: (1) how inflation dilutes cash flow and ROI, (2) how the national debt crisis will impact social programs, (3) how interest rate increases affect bonds, (4) how tax increases reduce equity, (5) how increased health care costs impact COGS, (6) how energy price increases affect supply and demand, (7) how unemployment shrinks the available market. Similarly, government regulation general risks relative to all businesses include: (1) health care reform, (2) carbon emissions cap & trade, (3) social security deficit, (4) immigration reform, (5) federal bank bailout, (6) insurance reform, (7) credit default swaps, (8) war effort funding, (9) homeland security funding, (10) labor union bias, (11) automobile bailout, (12) Fannie Mae & Freddie Mac bailout, and (13) natural disaster funding.

– Business Climate - Hostilities against the free market system through unprecedented government regulation moving to replace capitalistic ideals with command economy interests.

• Rewards

– Value Proposition - See "Drug Drop, Inc. Recommending a Strategy, Ideas for Today and Tomorrow" Power Point presentation. The strengths presented are for the overall value proposition of creating a Self-Directed IRA and acquiring privately-held businesses to control and manage a personal wealth strategy through a risk-to-reward model based on the continuum span between absentee-ownership and becoming an owner-manager. Beneficial trends assessment include: (1) green energy, (2) clean fuel technology, (3) job creation, (4) environmental education, (5) commercial property foreclosure auctions, and (6) bioscientific healthcare. Market niches that competitors are missing include: (1) fuel cells, (2) automobile fuel conversion kits, (3) residential energy production, (4) noncommercial education broadcasting, and (5) security scanning/surveillance.

– Niche Markets - New technologies to consider include: (1) "Bloom-box"-like fuel cells for coop residential energy conversion, (2) public education for environmental awareness, (3) leased commercial property acquisition, and (4) life science diagnostic and treatment. Marketplace demands will fill customer needs for: (1) Protection of assets, (2) real growth potential, (3) baby boomer investment security, (4) local control over equities market, (5) sensible inheritance investments, (5) productiveness of assets, and (6) legacy of growth that is passed on to the next generation.


Key Issues• Near term

– Start-up funding of $100,000 required to create alliances among government and industry members of Texas Commission on Environmental Quality (TCEQ) Pharmaceutical Disposal Advisory Group Stakeholders consisting of 191 members as of 3/30/2010.

– Recommendations by the Advisory Group Stakeholders derived from questionnaire evaluations is due to be presented to the Texas Legislature by December 1, 2010 proposing the best method for drug disposal.

– EPA Environmental Education Grant, submission and award is due by December 2010 for the 2011 fiscal year.

• Long term

– Create alliances among state and federal agencies in EPA Region 6 states consisting of AR, LA, NM, OK and TX.

– Create alliances among state and federal agencies in 9 other EPA regions to meet Spring 2012 goal of covering the entire United States.

6 5 10 Drug Drop, Inc. Business Plan

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