Aquila Solutions, LLC, (Aquila) is an established consulting company specializing in Regulatory Operations and eCTD submissions.  We support pharmaceutical, biotech and related consulting firms (sponsors) from around the world as they interact with the FDA and other equivalent regulatory agencies in other countries.  Aquila was founded in 2010 by Joshua Boutwell and currently employs 15 people with 2022 profit margin of 29.6% including an existing R&D budget of 11.8%.  We are seeking to grow by extending our core competency through the creation of a novel web-based eCTD publishing software.

Aquila is creating a unique web-based software experience for the creation and management of regulatory applications tentatively named “Altair Web” (Altair).  This is based on a novel security framework utilizing technologies we developed over the last 2.5 years and are patenting.  In addition, Aquila is updating our internal software systems with a project tentatively named “Bolt!” (Bolt).  Altair and Bolt will provide sponsors with opportunities to easily and cost effectively outsource the difficult and time-consuming document remediation part of submission publishing to Aquila.

Aquila has already invested approximately half a million dollars into this development and are seeking financing to complete and launch Altair and Bolt by the end of 2023 or early 2024 to best take advantage of an upcoming change in the submission industry’s regulatory environment while adjusting Aquila to maximize the advantages driven by this software system.

Aquila Solutions, LLC is seeking $1,000,000 in financing to supplement our existing $400,000 to: 

1.       Create and launch Altair Web (~$650,000)

2.       Update internal systems with Bolt (~$150,000)

3.       Prepare Aquila corporate structure and policies for the changes Altair web (~$250,000)

4.       Altair Marketing (~$150,000)

5.       Working capital and project management reserve (~$150,000)

To meet the stated goals of launching Altair Web by December 2023, we expect to spend approximately one million in 2023 and an additional four hundred thousand in 2024.  Revenue from Altair is expected to grow over time and become self-sufficient in Q4 2024 but will not meaningfully contribute to the implementation of the projects listed above.

In late Q2 2022, the FDA announced that they will begin accepting eCTD version 4.0.  This new standard is a radical departure from the current standard and will require all sponsors to reevaluate their internal processes and adjust their publishing procedures and vendors.  Aquila intends to launch Altair Web in December of 2023 to take advantage of this market disruption.

While forecasting is always difficult, Altair is projected to become self-sufficient at approximately 50 sponsors.  We expect to reach this level within the first 12 months after full launch.  Resulting outsourced remediation work is expected to be the primary source of revenue.  This will begin in Q1 of 2024 and the initial 50 sponsors are expected to generate in excess of $750 Thousand and will grow linearly with the usage of Altair.  This added work is within our current bandwidth and can be supported in addition to Aquila’s existing full-service client base.
 

If you wish to sell a drug across state lines, the FDA must issue you an approved New Drug Application (NDA) or similar application.  In these applications the sponsor (company selling the product) must prove that the product is “Safe, Effective and Pure.”  To do this, sponsors conduct numerous studies including chemical, manufacturing, animal, and clinical studies which must be sent to FDA in an NDA or similar submission.  These applications are typically 100,000 pages but can reach millions of pages.  There are similar applications required for development products plus frequent, smaller maintenance submissions.

The FDA is legally obligated to review and approve or deny these applications within 10 months.  To facilitate this, the FDA requires that all sponsors submit their documentation in the electronic Common Technical Document (eCTD) format.  This is an international standard that defines a folder and file naming scheme as well as an XML standard which tracks how the content is updated over time.  At its core, a drug application is a collection of PDF documents that the FDA reviewer analyzes to understand the product.

Aquila takes our clients’ documents and processes them to the eCTD standard and then submits them to the FDA on their behalf.  This process requires that we review every page, clean the content then apply bookmarks and links to aid the reviewer in their assessment.  This is called Remediation.  We then assemble the submission into the final eCTD format.  We also provide consulting support for our clients as they determine the content required for their product.

Aquila primarily provides regulatory consulting and submissions support to small pharmaceutical and biotech companies as well as other consulting firms that support the same types of companies. We currently support about 500 products for 140 clients.  Our clients are worldwide but most are based in the US, Canada, or Europe.

For this support we typically use a base+ model where a base submission is $750 and includes the first 250 pages.  We then charge up to $2.50 per page after the first 250 page.  Our typical turnaround time is 24-48 hours for small submissions and can be 6 months or more for large NDAs.  Large projects, typically greater than 1,000 pages, are executed under a Statement of Work (SOW) with terms that may vary from our standard rates as negotiated with the client.

In 2022, we grossed $1.8 million with a net profit of $509 thousand.  However, we also spent $216 thousand on Research and Development which has directly led to this project and $42 Thousand on the build out of a one-time expansion.  While our absolute profit margin is 28.06%, our real profit margin is 39.97%.

In 2021 we lost $397 thousand on $831 thousand gross income due to three primary issues:

1.       The impact of the COVID-19 shutdowns on clinical studies, causing a drop in expected work of approximately $200 thousand.  This primarily occurred in the first half of 2021.

2.       2021 R&D cost of $138 thousand to kick off the project that became Altair Web.

3.       2020 deferred tax expense held over to 2021 in the amount of $325 Thousand.

In 2020, we made a profit of $978 thousand on a gross income of $1.7 million.  This profit was due to an unexpected windfall from a new client base.  Since we were not required to submit quarterly tax payments in 2020, much of our income tax obligation for that year was deferred to 2021.

Full Financial statements for the years 2022, 2021 and 2020 are available in upon request.

Aquila Solutions, LLC is an S-Corp Limited Liability Company and was initially registered in the state of Georgia on July 13, 2011.  Aquila is 100% owned by the founder and chief executive officer, Joshua Boutwell. 

Mr. Boutwell is 44 years old with a 25-year career history and has earned a Bachelors of Science (BS) in Applied Biology from the Georgia Institute of Technology and a Masters of Business Administration (MBA) from Georgia State University.  Prior to receiving his BS, Mr. Boutwell worked at Ciba Vision and then for the State of Georgia, Environmental Protection Division, Watershed Protection Branch.  Upon graduation, he began his career as an ORISE Fellow at the Center for Disease Prevention and Control (CDC) and was tasked with managing the collection and testing of NHANES data.  Next, he served as a Sr. Research Associate at Emory University where he developed and maintained a 200-cage mouse colony.  These transgenic animals were primarily used to conduct research into age-related effects of prolonged HIV treatments.  Mr. Boutwell has published peer-reviewed scientific papers related to this research.

In 2006, Mr. Boutwell transitioned into Regulatory Affairs and accepted a position as a Regulatory Affairs Assistant at Sciele Pharma, Inc.  Within 3 years he created the Regulatory Operations group at Sciele, was promoted multiple times and managed other employees.  After 3 years at Sciele, the company was purchased by Shionogi Pharma and all employees at the Atlanta location were laid off including Mr. Boutwell.  After leaving Shionogi, Mr. Boutwell accepted several consulting roles and opened Aquila Solutions in 2010.

Mr. Boutwell has designed numerous Regulatory Operations systems for multiple companies.  He designed and programmed the workflow Aquila currently uses and has invented several IT related technologies that are in the process of patenting.  Altair, Bolt and the foundational infrastructure were developed by Mr. Boutwell.  His full resume is available upon request.

Mr. McDonald has a 16-year career and has earned a Bachelors in History from the University of Georgia and a Masters in International Affairs from George Washington University.  He began at Aquila in 2012 as a Support Publisher.  Since that time Mr. McDonald has been promoted several times and now serves as the Program Manager and Lead Consultant.

Mr. McDonald directly manages all Senior, Support and Basic publishers.  His primary responsibilities are to ensure that projects are completed as required, manage the training of new hires and interface with clients as needed.  He directly reports to Mr. Boutwell and is the second-in-command at Aquila Solutions.

Mr. Abercrombie has a 28-year career and has earned a Bachelors in Business Management and Computer Information Systems from Valdosta State University.  Prior to Aquila Solutions, he worked at the FedEx Corporate Account Sales group for 17 years and then 7 years as the Director of Sales at Rigby’s Entertainment Complex and Water World.  Mr. Abercrombie joined Aquila in 2020.

He is responsible for securing new clients for Aquila Solutions and managing the company brand.  This is primarily done through trade conferences, mass emails, development of marketing videos and direct cool calls.  In addition, he manages all marketing associates.  He directly reports to Mr. Boutwell.

Gabriel Ungureanu, Sr. Software Engineer (Contractor)

Mr. Ungureanu has a 29-year career and has earned an Associates in Computer Arts from Heald Business College and a Bachelors from California Creek University.  He has worked on numerous software development projects for large companies (e.g. Intel), several smaller companies, and governments including the cities of San Francisco and Sacramento, as well as the state of California.  Mr. Ungureanu began at Aquila on January 1st, 2023.

Mr. Ungureanu is responsible for translating Mr. Boutwell’s designs for Altair and Bolt into marketable products.  He has taken over the development projects started in 2020 and is leading the Altair and Bolt projects.  Mr. Ungureanu is sourcing other programming assets and managing these resources to meet the defined delivery dates.  He directly reports to Mr. Boutwell.  His full resume is available in appendix 3.

Other Employees

i.                     Publishers

Lead Publisher: 1 – Directly interfaces with clients and guides lower-level publishers.

Senior Publisher: 2 – Creates submissions from remediated documents under the direction of Lead publishers.  Guides lower-level publishers

Support Publisher: 5 – Remediates documents.

Basic Publisher: 0 – Title while training new hires

ii.                    Business Development

Sales Associate: 1 – Create sales materials, contact prospects

iii.                  Operational

IT System Admin: 1 – Manages onsite IT infrastructure, cloud-based IT resources and provides help desk support for employees and clients

Office Admin: 1 – Provides administrative support for the office including transcription, research, purchasing, and limited HR and accounts support.

iv.                  Consultants

Programmers: 5 FTE – Provides programming skill for system development.  Actual hours vary based on specific requirements.

Accounting: As Needed – Accounting support is provided by Rivers CPA and includes audits, tax preparation, limited bookkeeping, and consulting

IT Audits: As Needed – Aquila periodically contracts with Smilinradish, LLC to provide in depth assessments of our IT position and security posture.

 

Aquila Solutions was started August 1st, 2010 in response to Shionogi Pharma laying off nearly all their Atlanta workforce including Mr. Boutwell.  Since an equivalent position was not available locally, Mr. Boutwell started Aquila Solutions as a sole proprietorship company to support his contracting work.  During the initial year, Mr. Boutwell was providing contracting support to multiple companies, both domestic and international, while preparing to fully launch Aquila.  On July 13, 2011, Aquila Solutions, LLC was registered with the state of Georgia.

Aquila met with limited success during the first few years.  When started, Aquila had two large contracts valued at a combined $300 Thousand, however, both projects fell through. One client underwent a corporate restructuring and left this part of the industry while the other had a critical clinical study fail to reach the required scientific endpoint which terminated the project and lead to the bankruptcy of the company.  In addition, during that first year Lilianne, Mr. Boutwell’s daughter, was born premature and with significant birth complications.  The subsequent extended neonatal intensive care treatment and Occupational/Physical/Speech therapies for Lilianne split Mr. Boutwell’s attention. This severely limited Aquila’s growth in 2012.  While difficult, this was the correct decision as, unlike Aquila at the time, Lilianne did thrive and is now a very healthy and happy 11-year-old.

For the next 3 years Aquila subsisted on loans from Mr. Boutwell’s parents, loans against his wife’s retirement, and by Mr. Boutwell not taking any significant compensation.  His family was forced to downgrade from a 2,600 sq ft house to an 1,100 sq ft rental.  During this time, Aquila secured the required IT infrastructure, started marketing to prospects, and began training the initial group of support publishers, including Mr. McDonald.  Our first new client was Nasolux, LLC, developing a non-antibiotic method of decolonizing (killing) nasal infections of the superbug MRSA in hospital settings.  They remain a client after 10 years, despite two acquisitions.  During this time, Mr. Boutwell completed the initial workflow programming allowing for future growth.  Aquila made approximately $50 Thousand profit in 2012 and lost just over $100 Thousand between 2013 and 2014.  

From 2015 through 2019, Aquila made a consistent but small profit.  Gross revenue grew year over year at an average rate of 23% however all available funds were reinvested into Aquila in order to further grow the business.  In 2016, Mr. Boutwell rewrote the internal workflow software into its current version.  Aquila continued to solicit new customers and grow its brand within the industry.  Mr. Boutwell adjusted his salary from $30 Thousand in 2014 to $55 Thousand by 2019.  At the end of 2019 Aquila made a gross revenue of $350 Thousand and employed 6 people in addition to Mr. Boutwell.  Aquila was continuing to reinvest all revenue and realized a net loss $4.2 Thousand in 2019.

In November of 2019, a client introduced Aquila to a new industry, tobacco vaping.  That year a judge ordered the FDA to begin regulating the vaping industry within 12 months.  The new standard defined by the FDA for these applications was very similar to the eCTD standard but since the tobacco industry had no experience with this format, they sought experts to guide them.  During December of 2019 through 2020, Aquila supported about 20 different vaping companies that collectively published almost 8% of all vaping products submitted as a result of the 2019 court decision.  At this time, Aquila also began developing the original Altair Viewer desktop software primarily as a marketing tool. In 2020 Aquila grossed $1.7 Million and made a profit of $978 Thousand.  During this time Mr. Abercrombie joined Aquila as Business Development Manager and Mr. McDonald was promoted to Program Manager.  Mr. Boutwell took $424 Thousand between 2020 and Q1 2021 as a member draw to repay all loans used to finance the initial years of Aquila and to purchase a home so as to move from the 1,100 sq ft rental property.  In addition, Mr. Boutwell increased his salary to $75 Thousand.  Since Aquila lost money in 2019, our accountant advised us to withhold paying quarterly taxes as permitted under federal and state tax law.

During 2021, Aquila experienced a drop in work primarily due to the effect of COVID-19 lock-downs on clinical studies.  This slowing of clinical research resulted in a 20% drop in expected revenues for 2021 or about $200 Thousand primarily in the first half of 2021.  In addition, since no quarterly taxes were paid in 2020, all taxes for 2020 were paid in 2021 and reported against that year’s income.  Finally, Aquila launched Altair Viewer desktop in January 2021.  However, two weeks before the launch, Mr. Boutwell conceived of the first technology Aquila is now patenting and began the development project that would eventually evolve into Altair Web.  Aquila spent $138 Thousand to support this software development in 2021.  Due to the combined effects of deferred taxes, COVID slowdown and R&D expenditures, Aquila lost $397 Thousand on a gross income of $831 Thousand in 2021.

2022 resulted in a gross revenue of $1.8 million, a growth of 217% over the previous year.  This growth was primarily driven by two factors.  First a major vaping industry submission deadline for synthetic nicotine products resulted in $500 Thousand of unexpected revenue.  Second, pharmaceutical projects saw a very significant growth of 49% year over year.  During 2022, Aquila grew to its current size of 14 full time employees.  Aquila continued to develop Altair Web through 2022, spending an additional $216 Thousand.  During this R&D, Mr. Boutwell invented the additional technology required to create Altair Web.  Aquila retained all earnings to cover a planned project to replace the aging internal workflow system with Bolt allowing for further growth and to prepare for the new standard, eCTD 4.0.

However, in July of 2022 the FDA unexpectedly announced their plan to begin accepting eCTD 4.0 in 2023 and mandate it 5 years later.  Considering the likely market reaction to this change, Aquila’s core competencies of document remediation, the technologies invented for Altair Web, and Aquila’s name recognition in the industry, Mr. Boutwell decided to expand Altair from a simple viewer to a fully capable publisher now named Altair Web targeting the project launch for the end of 2023.  To provide the required expertise and ensure Altair Web’s success, in August 2022, Aquila began recruiting a Senior Software Engineer.  This process included a 5-stage interview process to which over 1,000 candidates applied.  Mr. Ungureanu accepted the role in late December.  At the end of 2022 Aquila had made a profit of $509 Thousand and held $657 Thousand in cash assets despite spending an additional $219 Thousand in software R&D and $42 Thousand for an office expansion.

At the beginning of 2023 and after 12 years of consistent and carefully managed growth, Aquila has developed sufficient brand recognition to successfully launch a new software product.  Aquila has developed novel technologies ensuring that Altair will have unique security features unavailable to other vendors.  Aquila has assembled a talented team with the expertise to achieve the development goals.  Finally, the industry is preparing for a significant disruption which provides an opportunity for new entrants so long as the product can launch by early Q1 2024.
 

The pharmaceutical and biotech industry, which will be supported by the initial version of Altair Web, is valued at approximately $829 Billion for the year 2021.  The direct costs to meet the regulatory burden is generally considered to be approximately 3% of the total cost or $24.87 Billion per year.  This is the estimated size of the Regulatory Affairs industry.

Aquila specializes in Regulatory Operations and Submissions.  This sub-section of Regulatory Affairs is approximately 5% of the total costs of Regulatory Affairs.  Therefore, the potential market for the initial version of Altair Web is estimated at $1.24 Billion per year.

Aquila primarily create submissions to the FDA.  This is in excess of 85% of its projects.  Federal regulations require that all submissions to FDA are sent electronically through the FDA’s Electronic Submission Gateway (ESG) and the FDA publishes statistics on the number of submissions received (https:// www.fda.gov/industry/about-esg/submission-statistics).

In 2022, the FDA received 933,287 submissions that Altair Web will be able to support initially (CDER and CBER submissions).  Future versions of Altair will include support for medical devices and tobacco submissions which are an additional 4.9 million submissions per year.  These are not eCTD formatted submissions; therefore, support will be added by the end of 2024.  That project is outside the scope of this plan.

Based upon Aquila’s experience in the industry, most approved applications have 3 - 6 small submissions per year while development applications require an average of 12 small submission and 1 larger submission per year.

Over the previous 12 years, Aquila has completed 2,023 ‘per-page’ publishing projects where we charge a base rate for a submission then an additional charge for each page above the base.  By analyzing this data, we are able to estimate the typical submission size as well as the variance between submissions with a fair degree of accuracy.  

The typical size of a base submission is under 75 pages however we do not record the base size so we will assume all submissions are at least 75 pages.  Within these projects the average page count is 1,324.4 pages per submission.  Within this set, the median page count is the base submission of 75 pages with a standard deviation of 7,710.6 pages.  Therefore, while most (51.6%) of submissions are small submissions, the submissions that are not small tend to be very large, frequently tens of thousands of pages.

Aquila’s current record for largest project is 1.1 million pages and 14.6 GB (https://www.evofem.com/our-product/phexxi/).  FDA occasionally receives initial applications that exceed 100 GB suggesting page counts of tens of millions of pages.

It is not possible to directly estimate the likely market penetration Altair Web will achieve.  There are currently 8 established software systems that offer publishing support to various degrees.  The largest are Veeva, Extedo, Lorenz, and Rosetta.  In addition, there are numerous legacy systems that have either been developed internally, like Aquila’s current workflow system, or are no longer sold but are still functional.  

Under normal circumstances, Aquila would not expect to rapidly grow market share; however, with the introduction of eCTD 4.0 beginning at the end of 2023, the Regulatory Publishing market presents a unique opportunity for accelerated growth so long as Altair Web is launched by the time the eCTD 4.0 transition begins.  All legacy systems must be updated.  Many will not be able to adapt to the new standard and will have to be abandoned.  In addition, this market disruption will likely trigger a general reassessment of internal workflows and system.  While most sponsors will likely remain with their current system, some percentage will entertain changing options seeking updated functionality.
 

Aquila is a highly specialized firm.  We are exceptional at providing document remediation and publishing support quickly and cost effectively.  However, because we are so specialized, we have little to offer sponsors until they are ready to begin their first clinical study and submit their first eCTD.  The challenge is that once a sponsor selects a vendor, they are highly reluctant to change vendors unless the current vendor makes a major error.  This is due to the nature of the eCTD standard which demands an all or nothing approach as multiple vendors will conflict with each other when submitting.  The result is that Aquila has a very difficult time securing new clients.

Aquila primarily markets by exhibiting at trade shows and conferences.  While at these events we meet with a wide variety of people but our conversations are limited to only a few types.  The first, and by far the most common, begins with “Hello, you are in Regulatory Operations, what is your software?”  After we explain we are a full-service provider and not a software vendor the prospect almost universally says “That is great but my boss told me to find a software.”  Occasionally we also have conversations that begin “Hello, you are in Regulatory Operations, I bought software X and it is terrible.  It is hard to use and the FDA reviewers can never find anything.”  The software named has been every single commercial software currently available.

Over time we have identified a common issue.  Software is exceptionally good at creating a technically complaint submission that can pass validation by the FDA ESG system.  However, it is extremely poor at ensuring the actual content of the documents is easy for the FDA reviewer to follow.  The method required to make documents easy to follow is called “Document Remediation.” This process requires a person to go through each page and ensure the content is easy to read then create suitable bookmarks for easy navigation and finally apply links to the text in a way that highlights the critical information and guides the FDA reviewer to the answer for the question they just asked themselves while reading the document.

This task is extremely man-power intensive and is as much art as science.  Sponsors that transition to Aquila from existing software almost universally show poor document remediation.  This appears to be the primary point of dissatisfaction with existing publishing software. 

Altair Web will be positioned as a cost-effective software and will specifically target micro-pharmaceutical companies.  These companies are primarily virtual, have 10 or fewer employees, and have secured financing through grants, Angel investors, or sometimes an initial round of Venture funding.  Micro-pharma concentrates on the research required to turn a university discovery into functional products.  These companies are exceptionally common within the industry but typically only last a few years before bankruptcy or acquisition.  To reduce costs, they frequently share lab equipment and other support facilities by joining research incubators where each incubator can support dozens of companies.  For example, Fitci (https://www.fitci.org/) supports 75 concurrent companies while Venturelabs (https:// venturelab.gatech.edu/) at Georgia Tech claims hundreds of participants.  This demonstrates how common these companies are within the pharmaceutical development industry.

This class of sponsors is ideal as they do not already have a preferred vendor, they tend to be understaffed for regulatory support plus they are generally very price sensitive while not requiring complex support which together limits the practicality of the other larger software vendors.

To better attract micro-pharma, Altair will adopt a freemium subscription model with optional add-ons.  In this model users may create a free account.  They will also be able to use the software at no cost so long as they stay below a specified usage.  For forecasting, we are assuming a free account will be limited to one application.  This level was selected as micro-pharma must typically submit a few small submissions prior to sending the Investigational New Drug (IND) research application.  The hope is that sponsors will use our software initially for the free option and stay with us as they continue their research.  Since clinical studies cost millions of dollars to run, it is reasonable to assume that by the time the sponsor submits the initial IND, they will have sufficient funds for a license.

As identified in the market analysis section, most submissions are small.  These submissions are relatively simple, consisting of only a few documents and are easy to prepare even for a small company with only one or two regulatory professionals.  However, occasionally these sponsors must submit a larger submission, frequently tens of thousands of pages.  Sponsors with the man-power to process small submission are easily swamped with even a moderately sized submission.

As identified in the Sponsor Pain Points section, poor document remediation appears to be the primary point of failure with other publishing systems.  This failure is easily understandable when you consider the limited manpower available to most sponsors when faced with processing anything but the smallest submissions.

Therefore, the primary add-on for Altair Web will be the outsourcing of document remediation to Aquila.  Users will be able to flag any document for remediation.  This will securely transfer the document from Altair to Bolt.  Aquila publishers will then perform the remediation and return the document to the user.  This updated document will replace the original document and become available for publishing by the Altair user.

Other Add-ons may include expedited rates, extended linking support, document rendering, sale of eCTD format templates, upgrading to full-service publishing support, training, and other consulting services.

Aquila’s core competency is the remediation of documents.  Support publishers can remediate and QC documents at the sustained rate of 3,650 pages per publisher per week so long as there are documents to remediate.  Aquila is currently capable of processing about 2,000,000 pages per year without overtime or other extreme measures.  In addition, Aquila’s current training program can train a new hire with no experience to 60% effectiveness within 4-6 weeks and 100% within 3 months.

For conservative forecasting purposes, we have assumed a fee of 50% of our full-service rate.  At an outsourced rate of $1.25 per page, which is competitive with international publishing in India or other Asian countries, every support publisher will generate $228 Thousand in revenue per year and will directly cost $60 Thousand in salary, taxes, perquisites, and overhead.  However, it is also important to note that the outsourcing per-page rate can be adjusted automatically to fit the real-world supply/demand curve for publishing and thereby maximize Aquila profit.

While the potential for profit is clear, there are a number of issues identified with this strategy presented in order of decreasing risk:

 

1.       Trust:  We are asking sponsors to trust us with their IP.  This is the single greatest issue we will face.

 

To address this concern, Aquila is developing an extremely stringent end-to-end encryption system to protect client data.  This prevents anyone, including Aquila from accessing client data without their authorization.  We will also document how we are a 100% US based company which provides confidence to many sponsors.  In addition, we will invest heavily into customer support so we always have people available to address concerns.  Finally, we will provide extreme transparency to Altair users regarding the location and state of their document processing.

 

 

2.       Liability:  Aquila will be processing critical documents without a personal relationship with the Altair user.  The concern is the possibility of miscommunication regarding the finished product.  At best this will lead to an unsatisfied customer and at worst could lead to claims of legal liability should an application receive an unfavorable review by FDA.

 

This is best addressed with a combination of well documented End User License Agreements (EULA) and very thorough documentation on the remediation process and goals.  Automated notification clarifying the status of the document remediation will also be provided to Altair users.

 

 

3.       Throughput:  Aquila will be limited by the number of publishers we can identify, hire, and train.  If we are not able to provide sufficient manpower then we will miss promised delivery dates or even fail to accept all offered work leading to user dissatisfaction with the service.

 

This is addressed through a combination of multiple solutions.  First there must be tight integration between Bolt and Altair which allows for communication of Aquila’s available capacity to Altair users and transparently provide expected delivery times for specific documents.  Second, the Altair user will never be required to use the outsourced remediation.  They can always decide to remediate the documents themselves using the Altair provided tools thus providing an alternative should Aquila become swamped.  Next, Altair users will be given the option to “expedite” remediation work for an added fee which will prioritize the remediation of their documents.  Further, the outsourcing fee can be adjusted to increase the per-page fee thereby reducing the demand.  Also, Aquila will need to optimize the training program to allow for the training of more candidates concurrently.  Finally, Aquila will develop additional tools to assist with remediation work.  While outside of the scope of this plan, Mr. Boutwell has outlined an AI powered method to pre-mark document links.  This pre-marking can increase the remediation rate to approximately 5,000 pages per person per week based on internal testing.

 

 

4.       Quality:  With added volume comes increased risk of errors.  

 

This is addressed through two solutions.  First, the remediation EULA will include a Service Level Agreement (SLA) that specifies the acceptable error rate.  Second, the Aquila workflow will be updated during the development of Bolt to add an additional round of QC as needed and to allow for the hidden automated testing of publisher accuracy.

 

 

5.       Direct Competition:  It is likely that others will replicate this concept if we demonstrate its validity.

This will always be risk and there are limited options to mitigate this concern.  The best option is to thoroughly document that all Aquila publishers are US based while the majority of other large publishers are based in India.  Since many sponsors have a justifiable concern for the theft of their intellectual property when it is sent to countries with less strict IP regulations, retaining all work within the US is a competitive advantage.  Next, Aquila hopes to have the advantage of being the first-mover and thus capture the sponsors who are interested in the service.  Finally, Aquila is very good at this work and consistently out performs other publishing companies with regard to speed and quality.  All other publishing software vendors are either specialized into providing the software or are part of very large and very expensive consulting companies.  Aquila hopes that this will make it difficult for others to easily replicate the same system.
 

The solicited financing will primarily support the following projects over the following 18 months.  Details for each project are available in Appendix 1.

Allows Altair Users to load and view eCTD applications.

This is the base functionality and will launch 1st in December 2023

Allows Altair Users to create new eCTDs within Altair and then ‘publish’ the submission to disk.

This will be completed by December 2023 and Launch in Q1 of 2024.

Assesses eCTD application structure to verify that the submission can be successfully submitted.  This functionality is required for Altair Web Publisher

This will be completed by December 2023 and Launch in January 2024.

Altair Add-ons

Allows Altair Users to accelerate document processing by outsourcing the calculations to Aquila for an additional fee.

This will be completed by  December 2023 and Launch in Q1 of 2024. 

Allows Altair Users to send documents to Aquila for document remediation for an additional fee.  This will permit micro pharmaceuticals to create submissions more easily.

This will be completed by  December 2023 and Launch in Q1 of 2024. 

Other Projects

Aquila expects to receive a great deal of follow on work from Altair Users.  In addition to new full-service publishing clients, we expect to receive request for training, project management computer validation and other regulatory services.  Aquila will need to identify and appropriate resources to provide these services.

Altair Web will lead to a significant positive change but these changes will require substantial and accelerated changes to the corporate structure of Aquila.

Aquila is pursuing three patents as well as expanding into several new services.  This will require legal support to write contracts, submit patent applications and minimize the risks Aquila will face with the implementation of Altair Web.

Aquila is exceptionally strong financially.  In 2022, we made a net profit of $509 Thousand despite spending $261 Thousand in R&D and a onetime expansion build-out.  These activities are entirely surplus to Aquila’s day-to-day operations and can be discontinued without impacting gross revenue.  

Aquila possesses an established and growing client base.  Historically over the previous 12 years, Aquila has enjoyed a 23% year over year growth rate in gross revenue.  The services offered by Aquila are clearly identified and are expected to remain a viable and growing service for at least 10 years due to the regulatory requirements around pharmaceutical and biotech development.

Based on 2022 numbers, Aquila can afford to spend approximately $20 Thousand every month towards R&D or debt servicing without jeopardizing the growth potential of Aquila.  

Given this fact, Aquila is more than financially capable of servicing a loan of $1,000,000 at market driven terms.

Aquila expects our gross revenue to reach $1.2 million in 2023.  This is a drop from the $1.8 million gross revenue realized in 2022.  The projected drop is due to three primary factors:

1.       2022 had approximately $510 Thousand in one time windfall profits that are not expected for 2023.

2.       General market trends suggest a full recession is likely for 2023.  While pharmaceutical development is relatively immune to recession, it is reasonable to assume that we will not see our historical 23% growth in gross revenue in 2023.

3.       Altair Web is not expected to generate significant revenue in 2023

Aquila is expecting our gross revenue to reach approximately $2 million in 2024.  This is an increase of $800 thousand over 2023.

1.       A resumption of the natural growth of 23% in pharmaceutical and biotech client projects

2.       $110 thousand in Altair Web revenues

3.       $375 thousand in Altair Remediation revenues.  We expect to reach 50 sponsors by the end of 2024 through steady growth therefore the expected remediation revenue of $750 Thousand is only 50% realized.

Altair is expected to become self-supporting by October of 2024 based upon the following assumptions:

1.       Altair Web – Publisher will launch in Q1 of 2024

2.       Altair will grow at an average of 1 paying sponsor per week

3.       Each sponsor will create 12 submissions a year

4.       Each sponsor will outsource one 10,000-page remediation per year, averaging 833.33 pages per month

Below are the projected expenses for the projects listed.  In addition to direct project expenses, there are other activities that are indirectly related to the primary projects but necessary for successful execution.

Altair Web is expected to begin generating revenues as early as Q3 of 2023; however, self-sustaining revenue is not expected until the end of Q4 of 2024.

 | Description | Rate | 2023 | 2024 | Programmer Support |   |   |  
 | Sr. Software Engineer
 January 2023 | $130,000 / Year | $130,000 | $130,000
 | Programmer .NET Start in February 2023 | $105,000 / Year | $87,500 | $105,000
 | Programmer Node.JS Start in April 2023 | $105,000 / Year | $70,000 | --
 | Programmer/QA Specialist Start in May 2023 | $105,000 / Year | $61,250   | --
 | Help Desk x3 Start in June 2023 to support Altair Web | $50,000 / year / person | $75,000 | $150,000
 |   |   |   | 
 | Business Support  |   |   | 
 | Aquila Training Creation of training system and integration into Bolt. |   | $65,000 | $15,000
 | Marketing for Altair Web This is in addition to the marketing Aquila normal undertakes |   | $150,000 | $50,000
 | Business Consultants Advise on transitioning from a small to a medium sized business |   | $50,000 | $10,000
 | Site Search Aquila will need to expand to allow for direct hiring of specialists not available in Warner Robins |   | $10,000 | $15,000
 | Legal Expenses Primarily patent attorney and contract, SLA and EULA authoring for Altair but also legal retainer as the risk profile has increased. |   | $35,000 | $10,000
 |   |   |   | 
 | IT Services / Equipment |   |   |  
 | AWS Development Environment Ongoing expense for development and maintenance | $300 / month | $3,600 | $3,600
 | AWS Production Environment Base line costs, will scale with user base.  Begins in June | $1000 / month | $7000 | $12,000
 | Internal Server Equipment Server grade equipment primarily for Bolt! and training. | $25,000 | $25000 | --
 | Software Licensing Aquila will utilize a variety of commercial software licenses to speed development and reduce overall costs. |   | $5000 | --
 |   |   |   | 
 | Additional Staff |   |   |  
 | Marketing Associate x3 Marketing associates will assist with promotion of Altair and onboarding of new Altair clients.  They will start in Q4 of 2023 | $50,000 / year | $37,500 | $150,000
 | Computer Validation Altair will require formal computer validation to meet FDA regulation 21CFR11.  After validating Altair, this individual will serve as a consultant for clients. | $125,000 / Year | -- | $125,000
 |   |   |   | 
 | Other Expenses |   |   | 
| Management Reserve Projects with novel technologies and aggressive timeline are subject to frequent unexpected difficulties.  The management reserve retains cash to also Aquila to adapt to the changing requirements of the project.  This is set as 10% of all other costs. |   | 81,000 | $77,500
| Working Capital Aquila does not require working capital for this project as our ongoing activities will support the operations of the company. |   | 0 | 0
|   |   |   | 
| Total: $1,745,950 over 2 years |   | $892,850 | $853,100

 

 

Appendix A: Project Description

(Named after the largest star in the constellation Aquila) Launch December, 2023

The initial phase will allow users to load their drug and biologic eCTD submissions and view the full application in a variety of ways using unique Aquila technology to create a strong end-to-end encryption environment.

 

Current planned pricing: $250 per user per year. User may always use Altair Render and Altair Remediation after the launch of publisher.  This rate is based on the rate of similar existing products.

Freemium model:  Free account may load one application.

Trial: We will provide a sample application for users to experiment with in case they do not have an application already.

 

Launch Q1, 2024

The validator reviews loaded or draft submissions and applications against eCTD standards, industry best practice and Aquila’s own experience to ensure the submission is valid and well assembled.  The output are flags within the system and an exportable report.

This functionality contains capabilities required for the Publisher component so it will be launched at the same time as the publisher.  This requires Altair Web Rendering functionality.

 

Current Planned Pricing:  Upgrade to viewer license costing and additional $250 per user per year.  Based on market testing, we may eliminate this level and include it in the base viewer subscription.  Users may always use Altair Render and Altair Remediation.

Freemium Model: Unlicensed user may validate the first application loaded into the free viewer.  It will not validate other applications.

Trial: Users may Validate the sample application

 

Launch Q1, 2024

Allows users to create new applications and submissions within Altair.  This requires Altair Web Validator and Rendering functionality.  The user is only charged when the submission is published to disk which also locks the submission details against changes.

 

Current Planned Pricing:  $200 per submission published.  Must have upgraded (validator) license unless that level is integrated into the base viewer subscription.  User may always use Altair Render and Altair Remediation.

1.       Unlicensed users may create 1 application so long as they have not loaded any other applications.

2.       The unlicensed user may create and publish up to 5 submissions on the first application they loaded.

3.       The unlicensed user may create drafts after there are 5 submissions but cannot publish these drafts to disk.  We are evaluating how to create a draft publish that is not submittable.  

4.       Viewer licensed users may create applications and create draft submissions but may not publish.  If the Validator Upgrade is integrated into the base viewer license, then this restriction will be eliminated.

Trial: User may create submissions using the sample application and export draft submissions to disk

 

Launch  December, 2023 of 

The creation of drug applications requires a great deal of document manipulation to create the required submission elements and PDF versioning.  This capability will be built into Validator and Publisher; however due to the nature of the security and the web-based interface, the user will be required to stay on the page while documents are processing which can be excessively long (hours) for very large submissions.  In addition, Aquila requires this function for our internal processing.

Altair Render is an add-on feature for Publisher that allows the processing to be securely offloaded to our servers (supported by AWS fargate) and processed there.  We are using an ephemeral model where no user content is ever stored to disk and the moment the processing is done the details are permanently lost.  This is a controlled break in the end-to-end encryption and highly documented for users.

 

Current Pricing Plan: Market driven add-on to publisher but based on time used for the request.  For financial projections I am doubling the AWS charge for a 100% profit margin however I expect this is a significant under estimate.

Since we are using AWS fargate resources, the costs will scale directly with use and overhead will be only a few hundred dollars a month.  We will test the market demand for this service and scale the rates to produce the most profit.  While I expect this to be a profit generator, I do not expect to make large amounts from Rendering services.

Freemium model: None.  The outsourced capability is not required so no freemium model is required.

Trial: None.  

 

Launch Q1 2024

Based on experience in the market, the primary complaint from software users revolves around the “remediation” of documents.  This is the process where the documents are cleaned, lightly formatted, converted to PDFs and have bookmarks and links added to aid FDA navigation.  Within submissions, this is 80% or more of the man-power required to create a submission.

Altair Remediation will allow users to send documents to Aquila for remediation and then have the documents reinserted into the user’s application in Altair.  We are uniquely suited for supporting this as our publishers are extremely efficient, being able to process 3,650 pages per person per week on average when kept at full capacity.  In addition, we are a 100% US based company which provides significant comfort for the protection of users IP when compared to outsourcing to China or India which is a common concern among sponsors.

 

Current Pricing Model: Market driven based on pages and availability of Aquila publishers and premium options.  For conservative financial projections we are using $1.25 per page which is 50% of our full-service rate and similar to the rate charged by Indian outsourced work.

The price will adjust dynamically based on the number of available publishers as well as any premium services like expedited service or resolving external linking requested by the client.  This will require tight integration with Bolt.

Freemium model: None.  The outsourced capability is not required so no freemium model is required.

Trial: We will give every new user a hundred pages to try out the service.  This is approximately 1 hour of work for one publisher

 

(Named after the lightning bolts that Aquila carried to Zeus) Launch Q1/Q2 2024

“Bolt!” is the replacement to Aquila’s internal project and workflow management system.  It is not intended for resale but instead allows us to produce our service at the efficiency we require.  Our current system, known as “Clarizen” (for the web app project management software used as an interface) was designed and written by Mr. Boutwell in 2012 and rewritten in 2016.  It has functioned well but with 14 active users it is becoming unstable.

Bolt! is being designed to 

1.       Allow for 100 active users

2.       Provide for eCTD 4.0 support

3.       Integrate with Altair Remediation

4.       Resolve outstanding workflow design issues

5.       Enable the collection and tracking of better employee performance metrics

6.       Eliminate the reliance on external resources for the internal processing of client data

7.       Address the IT security concerns identified by a 3rd party IT assessment in 2022

Bolt is likely to use MS SharePoint, node.js and other similar technologies which will require the purchase of an additional server equipment and software licenses for Aquila’s main office.

 

Launch by Q1 2024

Aquila Support Publishers are best classed as entry level data entry clerks according to the Bureau of Labor Statistics (BLS) definitions.  We typically hire recent college graduates from regional colleges around Warner Robins and Macon.  It currently takes about 6 weeks to train a new hire to be minimally competent and an additional 3-4 months to reach the 3,650 pages per week rate.  This is a very management intensive process.

With the addition of Altair Web, we expect to need many new publishers in 2024.  This will be very difficult using our current training paradigm.  In addition, while our employee turnover is very low, under 5% per year, this is expected to increase with company size.  This increase is due to our inability to be as selective with our new hires. With consistent work derived from Altair Remediation and process improvements with Bolt, it becomes less critical that our entry level employees meet the same high standards we have insisted upon previously.

Aquila plans to replace the existing hands-on training with a more computer-based training (CBT) model that is integrated into Bolt.  While not eliminating the manager involvement in training, this will dramatically reduce it and allow for easy retraining of any less gifted employees that are hired.

We expect to outsource the creation of the training system to specialists in that area.

 

Expected Q2 2024

While the primary outsourcing from Altair will be document remediation, Aquila also expects clients will request other consulting services.  Among these are our full-service publishing, external training in publishing, computer validation support and, in time, medical writing and more general regulatory consulting services.

External training, software validation, medical writing and other fields require specialists that Aquila does not currently possess.  Typical salary ranges for experts typically run from $80 Thousand up to $150 Thousand per year.  Many of these professionals will agree to consulting contracts versus full employment or can successfully work remotely.  Unfortunately, remote work is frequently not advisable when compared to more traditional environments where a central office provides both resources and accountability.  This suggests the need for a physical presence near an area that currently supports consultants of the required skill set.

 

Q2 2023 – Q4 2024

Aquila is currently a very lean organization.  Mr. Boutwell directly oversees most functional areas and Mr. McDonald oversees the remainder.  This is highly effective within a small organization but will quickly lead to chaos if maintained while Aquila grows.  While Mr. Boutwell is familiar with all areas of business through his MBA training, he is not an expert at everything.  Aquila will need talented support for Marketing, Sales, HR, Accounting, and other areas.  Therefore, during 2023 and the first half of 2024, Aquila will prepare for the expected growth driven by Altair.

This restructuring will require the hiring of business consultants that will assist with adapting roles and responsibilities, marketing strategies as well as internal policies for HR, Accounting, and IT.  In addition, Aquila has found it difficult to recruit senior level regulatory professionals to middle Georgia due to the lack of Biotech/Pharma infrastructure in the area.  Aquila will need to evaluate the possibility of establishing a presence in a location that has a pre-existing regulatory affairs environment.

 

Present – Q4 2024

Altair Web development will expose Aquila to new and significantly broader legal risks.  Some will be well defined such as the writing of patents and copyrights.  Others can be easily predicted such as the need of very well crafted EULAs, SLAs, and other contracts.  Finally, as we grow, we may become targets of law suits or other legal actions and need to prepare for the eventuality.

To minimize the risks of this growth Aquila will retain suitable legal representation.  We have already retained Mr. Cirino, an attorney specializing in patent law to assist with the submission of three technologies related to Altair Web.

 

Appendix B: Patent Descriptions

AVAILABLE upon request during negotiation