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Forward  Looking  Statements  

 This  presenta.on  includes  “forward-­‐looking  statements”  within  the  meaning  of  the  Private  Securi.es  

Li.ga.on  Reform  Act  of  1995.  These  statements   include  but  are  not   limited  to  our  plans,  objec.ves,  

expecta.ons   and   inten.ons   and   other   statements   that   contain   words   such   as   “expects,”  

“contemplates,”   “an.cipates,”   “plans,”   “intends,”   “believes”   and   varia.ons   of   such  words   or   similar  

expressions  that  predict  or  indicate  future  events  or  trends,  or  that  do  not  relate  to  historical  maJers.  

These   statements   are   based   on   our   current   beliefs   or   expecta.ons   and   are   inherently   subject   to  

significant  uncertain.es  and  changes   in  circumstances,  many  of  which  are  beyond  our  control.  There  

can   be   no   assurance   that   our   beliefs   or   expecta.ons   will   be   achieved.   Actual   results   may   differ  

materially  from  our  beliefs  or  expecta.ons  due  to  economic,  business,  compe..ve,  market,  regulatory,  

and  other  factors.  A  full  discussion  of  our  opera.ons  and  financial  condi.ons,  including  risk  factors  that  

may  affect  our  business  and  future  prospects,  is  contained  in  our  most  recent  regulatory  filings.  For  a  

complete  account  of  our  official  corporate  documents,  you  are  encouraged  to  review  documents  filed  

with  the  securi.es  regulators  in  the  U.S.  and  Canada.    

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Investment  Highlights  

•  1st  point-­‐of-­‐care  diagnos.c  plaTorm  for  tears  

•  Ini.al  test  for  Dry  Eye  Disease,  focused  on  the  most  common  age  related  eye  disease    

•  Technology  objec.vely  diagnoses  Dry  Eye  Disease  

•  Safe,  easy-­‐to-­‐use  plaTorm  requiring  only  50  nL  of  tear  film  

•  FDA  510(k)  approval  and  recent  CLIA  waiver  issued  on  January  24,  2012  opens  the  door  to  all  U.S.  optometry  and  ophthalmology  offices  (~50,000  doctors)  

•  Recurring  revenue  model  with  3-­‐year  contracts  for  minimum  purchases    

•  Large  IP  porTolio  built  around  nanofluidic  systems  creates  barriers  to  entry  

•  Na.onal  Medicare  code  83861  Reimbursement  $45.42/pa.ent  ($22.71/  eye);  growing  base  of  reimbursement  from  private  insurance  companies  

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Breakthrough  Technology  

•  Accuracy  –  <  2.33%  coefficient  of  varia.on  (“CV”)  @  50  nanoliters  –  Glucose  ≥  5.0%  CV  @  5  microliters  –  Cholesterol  >  4.0%  CV  @  20  microliters  

•  Safe,  simple  collec.on  –  No  reports  of  corneal  or  conjunc.val  trauma  in  468  eyes  

TearLab™  FDA  510(k)  submission  

•  2009  Winner  of  the  Medical  Design  Excellence  Awards  (“MDEA”)  award  for  In  Vitro  Diagnos.cs  

20  µL   5  µL   50  nL  

Sources: Kimberly MM et. al., Clinica Chimica Acta 364 (2006); Volles DF et. al. Pharmacotherapy 18:1 (1998)

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Intellectual  Property  

•  Large  IP  porTolio  on  tear  collec.on  –  9  patents  issued:  7,017,394;  7,051,569;  7,111,502;  7,129,717;  7,204,122;  

7,574,902;  7,810,380;  7,905,134;  7,987,702;  8,020,433  –  Several  pending  (around  design,  manufacturing  and  other  tests)  

•  Electrochemical  plaTorm  that  has  broken  the  nanoliter  volume  barrier  –  Enables  standard  tes.ng  methodologies  on  this  plaTorm  for  many  different  

diagnos.c  tests  for  a  variety  of  markers  –  Patents  pending  on  other  analytes  (proteins,  genes)  and  methods  to  

measure    

•  Core  claims  around  lab-­‐on-­‐a-­‐chip  in  the  U.S.  and  selected  key  countries  

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•  DED  is  a  disease  of  the  tears  and  ocular  surface  resul.ng  in  fluctua.ng  vision,  tear  film  instability  and  increased  osmolarity  that  can  cause  serious  damage  to  the  ocular  surface    

•  Tears  are  a  sophis.cated  3-­‐layer  film,  each  with  a  specific  func.on  –  The  front  layer  is  oil  and  it  keeps  tears  from  

evapora.ng;  –  Middle  (aqueous  layer)  gives  it  the  thickness  

and  uniformity  to  ensure  a  clear  image;  and  –  The  back  layer  is  a  polish  that  fills  in  any  

irregulari.es  in  the  corneal  surface    

Introducing  the  First  Test:  Dry  Eye  Disease  

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Large  PaDent  PopulaDon  (and  Growing)  

Dry  Eye  Syndrome  To  Become  Most  Common  Eye  Disease  in  Baby  Boomers    

Dry  eye  expert  Dr.  David  Kisling  reports  that  Dry  Eye  Syndrome  will  be  the  most  prevalent  eye  disorder  the  Baby  Boomer  genera;on  faces  in  the  future.  Shi?ing  demographics  in  an  aging  popula;on  will  result  in  a  ;dal  wave  of  dry  eye  problems  by  2030.*    

•  Survey  by  Harris  Interac.ve  on  behalf  of  Allergan,  Inc.,  found  that  nearly  

half  of  all  U.S.  adults  (48%)  experience  one  or  more  dry  eye  symptom(s)  regularly  

 •  TearLab  Osmolarity  Prevalence  Study  found  the  overall  incidence  of  

hyperosmolarity  amongst  the  study  popula.on  was  43.4%  

* PRWeb (June 2, 2011)

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SIGNS  +  SYMPTOMS  do  not  correlate  with  DISEASE    

•  Not  all  pa.ents  who  present  with  symptoms  of  ocular  irrita.on  have  Dry  Eye  Disease  –  According  to  a  2012  study*  only  47.7%  have  DED  –  Infec.ons,  allergies,  etc.  present  with  similar  symptoms  

•  Conversely,  pa.ents  may  be  asymptoma.c  due  to  diminished  sensory  func.on,  but  have  elevated  osmolarity  that  causes  irreversible  damage  –  According  to  study*  40.2%  have  mild  or  moderate  DED  

Tear  Osmolarity  is  objecDve  and  sensiDve  enough  to  be  used  to  both  diagnose  and  manage  DED  

Clinical  Importance  of  TearLab  

*Study presented at ASCRS 2012 - GLOBE NEWSWIRE, April 23, 2012

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Current  Diagnosis  Paradigm  

•  The  main  test  for  dry  eye  is  the  Schirmer  test  

–  Requires  repeated  examina.ons  at  up  to  five  minutes  per  examina.on  

•  Unfortunately,  this  test  misses  detecDng  many  paDents  with  dry  eyes  

•  Other  tests  should  also  be  done  before  ruling  out  a  diagnosis  of  dry  eyes  

(hJp://www.uic.edu/com/eye/LearningAboutVision/EyeFacts/DryEyes.shtml)  Schirmer  Test

1. Report of the Diagnosis and Classification Subcommittee of the Dry Eye Workshop (DEWS).” The Ocular Surface 5(2): 75-92, 2007

2. Tomlinson A., McCann L., Pearce E.I. Comparison of OcuSense and Clifton Nanolitre Osmometers. IOVS ARVO Abstract, 2009

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Becoming  Standard  of  Care  

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TearLab  in  the  PracDce  

General  PracDce  –  Properly  diagnose  pa.ents  with  ocular  irrita.ons  and    measure  the  effec.veness  of  DED  therapies  

Laser  Vision  CorrecDon  –  Iden.fy  pa.ents  with  DED  and  guide  pre-­‐  and  post-­‐surgical  treatment  to  significantly  improve  refrac.ve  outcomes  and  reduce  complaints  of  dry  eye  symptoms  

Cataract  Surgery  and  Premium  IOLs  –  Improve  refrac.ve  outcomes  and  pa.ent  sa.sfac.on  while  appropriately  managing  expecta.ons  following  surgery  

Glaucoma  Management  –  Improve  compliance  and  manage  the  impact  of  chronic  preserva.ves  used  in  glaucoma  pa.ents  which  is  known  to  cause  DED  

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 TearLab®  Osmolarity  Market    

Size  and  Economics  

Card  Revenue  Economics  based  only  on  U.S.  Doctor  UDlizaDon  

There  are  approximately  20,000  ophthalmologists  +  30,000  optometrists  in  the  U.S.    Market  PotenDal  based  on  U.S.  (only)  Doctor  Access  Assuming  50,000  Doctors,  seeing  an  average  of  6  dry  eye  paDents  per  day  tesDng  both  eyes,  assuming  a  $10  card  cost  and  working  250  days  per  year.  

$1.5  Billion  market  based  only  on  rouDne  examinaDons  

AddiDonal  opportuniDes  for  TearLab  in  …    • Refrac.ve  surgery  pre-­‐  and  post-­‐opera.ve  tes.ng  • Cataract  Implantable  lens  fixngs  

• Clinical  trials  

• Rest  of  the  World  

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U.S.  Sales  Strategy  Direct  sales  in  the  U.S.  with  4  regions  and  40  territories  53  members  currently  in  our  sales  group    •  1  VP  •  4  Regional  Sales  Directors  

•  4  Professional  Rela.ons  Coordinators  •  4  Implementa.on  Specialists  •  27  dedicated  TearLab  Territory  Managers  •  13  independent  sales  reps  and  sub  reps  

 

MarkeDng  Strategy  •  Trade  shows  •  Focus  on  Key  Opinion  Leaders  and  Medical  marke.ng  programs  •  Peer-­‐reviewed  clinical  trial  studies  u.lizing  TearLab  technology  

•  Clinical  trials  with  Big  Pharma  •  Introducing  Prac.ce  Management  programs  and  Accredited  DED  prac.ce  program  

U.S.  Sales  and  MarkeDng  Strategy  

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1.  Purchase  Purchase  the  System  for  $9,500  with  no  minimum  card  commitment    

2.  USE  Agreements  Free  use  of  the  system  with  a  minimum  3  year  commitment  to  purchase  cards  

•  1,500  cards  per  year  at  $12.50  per  card  •  2,400  cards  per  year  at  $10  per  card    

3.  MASTERS  MulD  Unit  Program  Many  eye  care  prac.ces  in  the  U.S.  are  comprised  of  mul.ple  doctors  servicing  several  loca.ons.  As  these  prac.ces  see  thousands  of  pa.ent  visits  annually,  produc.vity  is  cri.cal  to  their  opera.ons,  requiring  access  to  a  device  for  every  lane  in  the  prac.ce  in  order  to  maximize  efficiency  and  flow.  While  there  are  no  minimum  card  guarantees  in  Masters  agreements,  a  detailed  analysis  of  pa.ent  volumes  and  clinic  protocols  provide  an  outline  of  volume  expecta.ons  that  are  in  line  with  revenue  expecta.ons  for  all  the  instruments.  

Program  OpDons  

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Understanding  Profitability    

Each  TearLab  unit  opera.ng  in  the  U.S.  is  expected  to  produce  average  revenue  of  $15,000  to  $20,000  per  year    Market  PotenDal    

If  we  assume  that  the  average  MD  buys  2  devices  while  the  average  OD  buys  only  1  device:  10%  of  U.S.  market  alone  is  7,000  units;  ~  $100-­‐  $140  million  of  recurring  revenue        

Bocom  Up  Economics  

·∙    18  

Installed  Base  

03/31/13   06/30/13  

Ac.ve  Purchased  Devices   232   238  

Ac.ve  Devices  Under  Use  Contracts   508   701  

Ac.ve  Devices  Under  Masters  Contracts   148      417(1)  

Total  AcDve  Devices   888   1,356  

Devices  Not  Yet  Ac.vated   212   298  

Total  Devices     1,100   1,654  

Devices  with  Educa.onal  Ins.tu.ons/Research   38   44  

Devices  Sold  Outside  the  U.S.   445   460  

(1) 57 Masters accounts

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System  Orders  Drive  Recurring  Revenue  Growth  

Quarterly  System  Orders  

·∙    20  

Management  Team  Elias  Vamvakas,  CEO  and  Chairman  of  the  Board  20+  years  of  public  company  leadership  focused  in  eye  care  (CEO/founder  TLCVision)  

Benjamin  Sullivan,  Ph.D.,  CSO  Harvard  Medical  School,  University  of  California  San  Diego  

Michael  Lemp,  M.D.,  F.A.C.S.,  CMO  Clinical  Professor  of  Ophthalmology,  Georgetown  &  George  Washington  University  

David  Eldridge,  OD,  F.A.A.O.,  V.P.  Clinical  and  Professional  Development  Adjunct  professor,  NSUCO,  EVP  TLC  Vision,  Occulogix  

Michael  Berg,  V.P.  Clinical  &  Regulatory  25+  years  experience  in  CLIA  waived  IVD,  Hemocue  

Steve  Zmina,  V.P.  Manufacturing  25+  years  experience,  developed  over  100  products,  Thermoscan,  Tandy  

Bob  Walder,  P.A.-­‐C.,  V.P.  OperaDons  30+  years  experience  in  healthcare,  manufacturing  &  opera.ons,  AbboJ  Labs  

Tracy  Puckec,  V.P.  MarkeDng  25+  years  experience  in  healthcare  marke.ng,  McCann-­‐Erickson,  Alimera  Sciences,  Novar.s  Ophthalmics    

Bill  Dumencu,  CFO  25+  years  experience  in  Eye  care  industry  and  manufacturing,  TLCVision,  Occulogix  

Duane  Morrison,  V.P.  Sales  25+  years  of  Sales,  Business  Development  and  Management  experience,  TLCVision,  The  Technology  Source.  

Delanu  Ligu  MSc.,  V.P.  InformaDon  Technology  16+  Years  of  HealthCare  and  IT,  TLC  Vision,  Occulogix  

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Chief Science Officer

http://execrank.com/?s=tearlab&x=0&y=0

·∙    22  

Surgical  Leadership  Group  •  Eric  Donnenfeld,  MD,  FACS  -­‐  Founding  Partner  of  Ophthalmic  Consultants  of  Long  Island,  President  

American  Academy  of  Cataract  and  Refrac.ve  Surgeons.  Editor  and  Chief  Cataract  and  Refrac;ve  Surgery  Today.    

•  Marguerite  McDonald,  MD,  FACS,  OCLI  -­‐  Clinical  Professor  of  Ophthalmology  at  NY  University  and  Adjunct  Clinical  Professor  of  Ophthalmology  at  Tulane  Medical  School,  Staff  Physician  ManhaJan  Eye  and  Ear,  Island  Eye  Surgicenter  and  Mercy  Medical  Center.    Past  President  of  ASCRS,  President  of  the  Int’l  Society  of  Refrac.ve  Surgery  and  President  of  the  Int’l  Society  for  Contact  Lens  Research.  

•  Terrence  O’Brien,  MD  -­‐  Bascom  Palmer  Eye  Inst.,  Asst.  Editor-­‐in-­‐Chief  Journal  of  Refrac;ve  Surgery.    

•  David  Shcanzlin,  MD  -­‐  Gordon  Weiss  &    Schanzlin  Vision  Ins.tute.  Past  Professor  and  Director  Shiley  Eye  Center,  USCD  Dept.  of  Ophthalmology.  Past  Professor  and  Chairman  St.  Louis  University,  Dept.  of  Ophthalmology.    

•  John  Sheppard,  MD  -­‐  President  of  Virginia  Eye  Associates,  Ophthalmology  Research  Program  Director,  Eastern  Virginia  Medical  School  and  Clinical  Director  Thomas  R.  Lee  Center  of  Ocular  Pharmacology.    Medical  Examiner  for  the  American  Board  of  Ophthalmology.  

•  Christopher  Starr,  MD,  FACS  -­‐  Assoc.  Professor,  Director  of  Ophthalmic  Educa.on,  Director  of  the  Cornea,  Cataract  Surgery  Fellowship  and  Director  of  Refrac.ve  Surgery  Service,  Weill  Cornell  Medical  College.    Editor  Refrac;ve  Eyecare,  Advanced  Ocular  Care,  Cataract  Refrac;ve  Surgery  Today,  Current  Ophthalmology  Reports.  Host  Eyetube  Journal  Club  and  Ocular  Surface  Series.  

•  R.  Doyle  StulDng,  MD,  PhD  -­‐  Director  Stul.ng  Research  Center,  Woolfon  Eye  Inst.    Past  President  of  ASCRS.  Past  Editor  &  Chief  Cornea.  

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Clinical  Leadership  Group  •  Charles  Aldridge,  Jr.  OD,  FAAO  -­‐  Founder  of  Aldridge  Eye  Ins.tute.  Founder  of  The  Dry  Eye  Center  of  

the  Carolinas.    •  Marc  R.  Bloomenstein,  OD,  FAAO  -­‐  Director  of  Optometric  Services  at  the  Schwartz  Laser  Eye  Center,  

President  and    founding  member  of  the  Optometric  Council  on  Refrac.ve  Technology.  Member  of  the  ASCRS  Integrated  Eye  Care  Delivery  Task  Force.  Adjunct  Assistant  Professor  at  the  Southern  California  College  of  Optometry  and  Arizona  College  of  Optometry.  

•  Douglas  K.Devries,  OD,  FAAO  -­‐  Co-­‐founder  and  managing  partner  of  Eye  Care  Associates  of  Nevada.  Past  President  of  the  Nevada  Optometric  Associa.on  and  the  Great  Western  Council  of  Optometry  (GWCO).  

•  David  I.  Geffen,  OD,  FAAO  -­‐  Weiss  Schanzlin  Vision  Ins.tute.  Contribu.ng  Editor  Optometry  Times.  •  Paul  Karpecki,  OD,  FAAO  -­‐  Director  of  Ocular  Disease  Research,  Koffler  Vision  Group,  Chair  of  the  

Refrac.ve  Surgery  Advisory  CommiJee  to  the  AOA.  TearLab  Board  Member.    •  Jerry  Nolfi,  OD,  MBA  -­‐  Prac.cing  optometrist.    Has  served  as  a  clinical  and  strategic  consultant  to  

Johnson  &  Johnson  Vision  Care,  Alcon,  Allergan,  AMO  and  TLC  Laser  Eye  Centres.  •  Jim  Owen,  OD,  FAAO,  MBA  -­‐  Optometric  Director  for  Coronado  Eye  Associates.  •  James  Thimmons,  OD,  FAAO  -­‐  Co-­‐founder  of  Ophthalmic  Consultants  of  Connec.cut.    •  William  Townsend,  OD,  FAAO  -­‐  Dis.nguished  Visi.ng  Clinician  in  Residence  at  the  University  of  

Houston  College  of  Optometry,  adjunct  professor.    •  Walter  Whitley,  OD,  FAAO  -­‐  Virginia  Eye  Associates.  Dr.  Whitley  serves  on  the  Board  of  Trustees  for  

the  Virginia  Optometric  Associa.on  and  was  recently  recognized  as  the  VOA  2012  Young  Optometrist  of  the  Year.  VOA  2012  Young  Optometrist  of  the  Year.      

•  Derek  Cunningham,  OD,  FAAO  -­‐  Director  of  Optometry  at  Dell  Laser  Consultants.  

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•  Michael  Lemp,  MD,  FACS  -­‐  Clinical  Professor  of  Ophthalmology,  Georgetown  Univ.  and  George  Washington  Univ.,  CMO  TearLab  Corp.  

•  Christophe  Baudouin,  MD,  PhD  -­‐  Dept.  Head  Ophthalmology  Univ.  of  Versailles,  Dept.  Head  of  Quize-­‐Vingts  Na.onal  Ophthalmoloy  Hospital,  Paris,  President  of  the  Ophthalmology  Society  Paris,  Editor  in  Chief  French  Journal  of  Ophthalmology.  

•  Anthony  Bron,  FRCS  -­‐  Dept.  Head  Nuffield  Laboratory  of  Ophthalmology,  Oxford,  England.  Past  President  Ophthalmic  Sec.on  of  the  Royal  Society  of  Medicine,  London.  

•  Gary  Foulks,  MD,  FACS  -­‐  Arthur  and  Virginia  Keeney  Chair  at  University  of  Louisville  School  of  Medicine.  Director  of  Cornea  Service  and  Medical  Director,  Contact  Lens  Service.  

•  Kelly  Nichols,  OD,  MPH,  PhD,  FAAO,  Dipl  PH  -­‐  Associate  Professor  Ohio  State  University  College  of  Optometry.  

•  Jay  S.  Pepose,  M.D.,  Ph.D.  -­‐    Professor  of  Clinical  Ophthalmology  at  Washington  University  School  of  Medicine.  

•  Alan  Tomlinson,  MSc,  PhD,  FC  Optom,  CCLP,  D  Orth,  FAAO  -­‐  Prof.  Vision  Sciences  Glasgow,  Caledonian  University.    

•  Gerd  Geerling,  MD  -­‐  Professor  Doctor  University  of  Dusseldorf  Moorfields  Hospital  trained  ophthalmic  surgeon.  

Academic  Research  Group  

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Summary  

•  1st  point-­‐of-­‐care  diagnos.c  plaTorm  for  tears  

•  Ini.al  test  objec.vely  diagnoses  Dry  Eye  Disease  

•  Safe,  easy-­‐to-­‐use  plaTorm  requiring  only  50  nL  of  tear  film  

•  Recurring  revenue  model  

•  Large  IP  porTolio    

•  Medicare  reimbursement  $45.42/pa.ent  ($22.71/eye)