Hayes Batson, President
Richard Flanagan, Ph.D., Clinical Director

Product Line or Service — Epotec is developing and will market and administer Internet-based behavioral health services for major employers. Epotec’s interactive products are designed to help employees identify and solve personal and emotional problems, as well as improve their general health, personal communication and organization skills. These products will be delivered via the Internet and include basic information and referral, 20-30 minute computer interactive assessment and self-help modules, 10-session interactive programs assembled and guided by trained behavioral health coaches, private live chat and a monthly behavioral health magazine. Version 1.0 will include products addressing approximately 35 problem areas such as depression, anxiety, relationships, stress, adjustment to change, insomnia, loss and grief, diet, exercise, communication and time management.

Technology/Proprietary Rights — Epotec is developing a state of the art Web system as well as a proprietary software tool, ModuleBuilder, which will allow the Company’s clinicians and content developers to create Web-ready products without involving programmers. Management believes that this tool, along with the Company’s underlying Web system infrastructure, will give Epotec a substantial advantage over potential competitors in terms of both time to market and development costs. In addition, Epotec will copyright its content as appropriate.

Market Opportunities — Epotec’s products will be targeted towards human resources and benefits departments of major corporations, particularly those in the financial services, insurance, technology, health care, and utilities industries. For these employers, the Company’s products will be positioned as either a supplement to an existing employee assistance program (EAP) or an alternative for employers without an EAP. In 1995, total United States EAP industry revenues were estimated at $1.1 billion, with approximately 50% of the workforce having access to EAP services.

Marketing/Sales and Distribution — Epotec will assemble a salesforce to sell its products directly to large employers in industries with high computer utilization. The company will promote its products through human resources and benefits trade shows and magazines, as well as through direct mail.

Because Epotec’s products are currently 100% Web-based, service delivery is a relatively simple process. After receiving a file from a new client which contains each registered employee’s name, social security number, date of birth, and location number, Epotec will simply activate the new accounts. All further services will be provided through Epotec’s Web system in an automated manner.

Competition — Competition to Epotec, Inc. may come from at least three sources: employee assistance programs (EAPs), current self-help products, and mental health providers. Management believes that the most significant competition will come from the major EAPs, primarily subsidiaries of managed care companies, as they seek to leverage technology and the Internet to provide services to their geographically dispersed client bases. While the behavioral health industry is very concentrated, the EAP segment is still fragmented; the top 6 players control 30-40% of the market. Leading companies include Magellan Health Services, FHC Health Systems, United Behavioral Health, and MCC Behavioral Care.

Manufacturing — NA