8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): September 18, 2007

HAPC, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	0-51902	20-3341405
(State or other jurisdiction of incorporation	(Commission File Number)	(I.R.S. Employer Identification No.)

350 Madison Avenue

New York, New York 10017

(Address of Principal Executive Offices)(Zip Code)

(212) 418-5070

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure

On September 29, 2006, HAPC, INC. (“HAPC”), I-Flow Corporation (“I-Flow”), InfuSystem, Inc., a wholly-owned subsidiary of I-Flow (“InfuSystem”) and Iceland Acquisition Subsidiary, Inc., a wholly-owned subsidiary of HAPC (“Acquisition Subsidiary”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which Acquisition Subsidiary will acquire all of the issued and outstanding capital stock of InfuSystem from I-Flow (the “Acquisition”) and subsequently merge with and into InfuSystem. InfuSystem will be the corporation surviving the merger.

HAPC plans to hold presentations for certain of its stockholders to discuss the transactions contemplated by the Stock Purchase Agreement. At such presentations, the presentation materials attached to this Current Report on Form 8-K as Exhibit 99.1 will be distributed to certain participants. The information contained in the presentation materials shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended.

HAPC’s amended and restated certificate of incorporation (the “Certificate of Incorporation”) requires that the Acquisition be approved by the holders of a majority of the shares of HAPC common stock sold in HAPC’s April 2006 initial public offering (the “IPO”) that cast votes on the issue. The Acquisition cannot be completed if holders of 20% or more of the shares of HAPC common stock sold in the IPO vote against the Acquisition and, as permitted by the Certificate of Incorporation, demand that their shares be converted into the right to receive a pro rata portion of the net proceeds of the IPO held in a trust account established for this purpose at the time of the IPO.

On August 8, 2007, HAPC filed a definitive proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the Acquisition and required stockholder approval, and commenced mailing the definitive proxy statement to its stockholders. HAPC’s stockholders are urged to read the definitive proxy statement and other relevant materials as they contain important information about the Acquisition. HAPC stockholders may obtain a free copy of such filings at the SEC’s internet site (http://www.sec.gov). Copies of such filings can also be obtained, without charge, by directing a request to HAPC, INC., 350 Madison Avenue, New York, New York 10017, Tel: (212) 418-5070.

HAPC and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of HAPC in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction is included in the definitive proxy statement.

Item 8.01 Other Events

The information set forth under Item 7.01 above is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
99.1	Presentation of HAPC, Inc.

Forward Looking Statements

This Report on Form 8-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. These forward-looking statements include, but are not limited to, statements regarding whether the transaction will be completed and the expected timing of the closing. Readers are cautioned that these forward-looking statements involve certain risks and uncertainties. These risks and uncertainties, which could cause these forward-looking statements to not be realized, include: continuous infusion treatment protocol trends, including factors affecting supply and demand; labor and personnel relations; healthcare payor reimbursement risks affecting HAPC’s revenue and profitability; conditions in financial markets that impact HAPC’s ability to obtain capital to finance capital expenditures; changing interpretations of generally accepted accounting principles; and general economic conditions, as well as other relevant risks detailed in HAPC’s filings with the SEC, including the final prospectus relating to HAPC’S IPO. HAPC disclaims any obligation to update any information contained in any forward-looking statement.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HAPC, INC.
By:	/s/ Erin Enright
	Name:	Erin Enright
	Title:	Chief Financial Officer

Dated: September 18, 2007

EXHIBIT LIST

Exhibit No.	Description
99.1	Presentation of HAPC, INC.

EX-99.1

1

September 2007

Investor Presentation

HAPC, Inc.

2

Disclosure

The

attached

presentation

was

filed

with

the

U.S.

Securities

and

Exchange

Commission

(“SEC”)

as

part

of

the

Form

8-K

filed

by

HAPC,

Inc.

(“HAPC”)

on

September

18,

2007.

HAPC

is

holding

presentations

for

its

stockholders

regarding

its

purchase

of

InfuSystem,

Inc.

(“InfuSystem”).

A

copy

of

the

complete

presentation

is

available

at

the

SEC’s

website

(http://www.sec.gov).

This

presentation

has

been

prepared

solely

by

HAPC.

Neither

InfuSystem

nor

its

affiliates

(including

its

parent,

I-Flow

Corporation)

have

approved

or

are

responsible

for

the

presentation

information.

HAPC

and

its

directors,

executive

officers,

affiliates

may

be

deemed

to

be

participants

in

the

solicitation

of

proxies

for

the

special

annual

meeting

of

HAPC’s

stockholders

to

be

held

to

approve

this

transaction

on

September

26,

2007.

The

directors

and

officers

of

HAPC

have

interests

in

the

merger,

some

of

which

may

differ

from,

or

may

be

in

addition

to

those

of

the

respective

stockholders

of

HAPC

generally.

Stockholders

of

HAPC

and

other

interested

persons

are

advised

to

read,

HAPC’s

definitive

proxy

statement

filed

with

the

SEC

on

August

8,

2007

in

connection

with

HAPC’s

solicitation

of

proxies

for

the

special

annual

meeting

to

approve

the

acquisition

because

the

definitive

proxy

statement

contains

important

information.

Such

persons

can

also

read

HAPC’s

periodic

reports

filed

with

the

SEC,

for

more

information

about

HAPC,

its

officers

and

directors,

and

their

interests

in

the

successful

consummation

of

this

business

combination.

Information

about

the

directors

and

officers

of

InfuSystem

as

well

as

updated

information

about

the

directors

and

officers

of

HAPC

is

included

in

the

definitive

proxy

statement.

On

August

8,

2007

the

definitive

proxy

statement

was

mailed

to

stockholders

of

record

as

of

August

6,

2007

in

connection

with

the

special

annual

meeting

to

vote

on

this

transaction.

Stockholders

and

other

interested

persons

may

also

obtain

a

copy

of

the

definitive

proxy

statement,

and

other

periodic

reports

filed

with

the

SEC,

without

charge,

by

visiting

the

SEC’s

Internet

site

at

(http://www.sec.gov).

3

Safe harbor

This

presentation

may

contain

forward-looking

statements

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995,

about

HAPC,

InfuSystem

and

their

combined

business

after

completion

of

the

proposed

transaction.

Forward-looking

statements

are

statements

that

are

not

historical

facts.

Such

forward-looking

statements,

based

upon

the

current

beliefs

and

expectations

of

HAPC’s

management,

are

subject

to

risks

and

uncertainties,

which

could

cause

actual

results

to

differ

from

the

forward-looking

statements.

The

following

factors,

among

others,

could

cause

actual

results

to

differ

from

those

set

forth

in

the

forward-looking

statements:

continuous

infusion

treatment

protocol

trends,

including

factors

affecting

supply

and

demand;

labor

and

personnel

relations;

healthcare

payor

reimbursement

risks

affecting

HAPC’s

revenue

and

profitability;

conditions

in

financial

markets

that

impact

HAPC’s

ability

to

obtain

capital

to

finance

capital

expenditures;

changing

interpretations

of

generally

accepted

accounting

principles;

and

general

economic

conditions,

as

well

as

other

relevant

risks

detailed

in

HAPC’s

filings

with

the

SEC,

including

the

definitive

proxy

statement

filed

with

the

SEC

on

August

8,

2007

in

connection

with

the

acquisition

of

InfuSystem

and

HAPC’s

form

10-K

for

the

fiscal

year

ended

December

31,

2006.

The

information

set

forth

herein

should

be

read

in

light

of

such

risks.

HAPC

assumes

any

obligation

to

update

information

contained

in

this

presentation.

This

presentation

contains

disclosures

of

EBITDA

for

certain

periods,

which

may

be

deemed

to

be

non-GAAP

financial

measures

within

the

meaning

of

Regulation

G

promulgated

by

the

SEC.

Management

of

HAPC

believes

that

EBITDA,

or

earnings

before

interest,

taxes,

depreciation

and

amortization

are

appropriate

measures

of

evaluating

operating

performance

and

liquidity,

because

they

reflect

the

resources

available

for

strategic

opportunities

including,

among

others,

investments

in

the

business

and

strategic

acquisitions.

The

disclosure

of

EBITDA

may

not

be

comparable

to

similarly

titled

measures

reported

by

other

companies.

EBITDA

should

be

considered

in

addition

to,

and

not

as

a

substitute

for,

or

superior

to,

operating

income,

cash

flows,

revenue,

or

other

measures

of

financial

performance

prepared

in

accordance

with

generally

accepted

accounting

principles.

A

reconciliation

of

EBITDA

to

Net

Income

is

included

on

the

‘EBITDA

Reconciliation’

page

of

this

presentation.

4

Agenda

Summary

Financials and valuation

Growth strategy

InfuSystem overview

Industry overview

Overview

5

Acquisition details

Buyer:

HAPC, Inc. (OTCBB: HAPN, HAPNW, HAPNU) is a blank

check company (SPAC) formed for the purpose of

acquiring one or more operating businesses in the

healthcare sector

Target:

InfuSystem, Inc., (a subsidiary of I-Flow Corporation,

NASDAQ:

IFLO), a leading provider of ambulatory

infusion pump management services to oncologists and

their patients in the United States

Consideration1:

$85 million cash

$15 million debt

Record date:

August 6, 2007

Shareholder vote:

September 26, 2007

Anticipated acquisition closing:

September 28, 2007

1

On

September

12,

2007,

HAPC,

Iceland

Acquisition

Subsidiary,

Inc.,

InfuSystem

and

I-Flow

entered

into

a

non-binding

Memorandum

of

Intent

(the

“MOI”)

which

contemplates

an

amendment

to

the

Stock

Purchase

Agreement,

dated

as

of

September

29,

2006,

by

and

among

the

foregoing

parties,

pursuant

to

which

the

original

purchase

price

payable

by

HAPC

to

I-

Flow

for

InfuSystem

would

decrease

from

$140,000,000

to

$100,000,000.

The

cash

portion

of

the

purchase

price

payable

to

I-Flow

will

remain

at

$85,000,000,

less

the

amount

returned

to

stockholders

of

HAPC

exercising

their

conversion

rights

as

described

in

HAPC’s

Definitive

Proxy

Statement.

HAPC

will

also

deliver

a

promissory

note

to

I-Flow,

the

amount

of

which

will

range

from

$15,000,000

to

$35,000,000

depending

upon

the

number

of

HAPC

stockholders

who

exercise

their

conversion

rights.

The

MOI

contemplates

that

HAPC

would

pay

contingent

consideration

to

I-Flow,

provided

that

certain

conditions

related

to

the

operations

of

InfuSystem’s

business

are

met.

The

contingent

consideration

would

be

based

upon

the

compound

annual

growth

rate,

or

“CAGR”,

of

HAPC’s

consolidated

revenues

over

the

three-year

period

ended

December

31,

2010

and

would

be

paid

in

2011.

No

additional

payment

will

be

made

unless

HAPC

achieves

a

revenue

CAGR

of

at

least

40%

over

the

three-year

period.

The

payment

will

range

from

$3,000,000

to

$12,000,000

depending

upon

the

extent

to

which

revenue

CAGR

for

the

three-year

period

exceeds

40%.

The

maximum

potential

amount

of

the

contingent

consideration

is

$12,000,000

and

would

be

payable

to

I-Flow

if

HAPC

achieves

a

revenue

CAGR

of

50%

over

the

three-year

period.

The

parties

to

the

MOI

have

not

yet

amended

the

Stock

Purchase

Agreement

to

reflect

the

contemplated

changes

in

the

consideration

payable

by

HAPC

to

I-Flow

for

the

acquisition

of

InfuSystem,

nor

are

the

parties

under

any

obligation

to

enter

into

such

an

amendment.

6

Investment highlights

Nation’s largest continuous chemotherapy infusion services (DME) company in

a high growth, highly fragmented market

High barriers to entry

–

60% penetration of oncology offices

–

Contracts with managed care organizations representing 125 million

covered lives

Significant near-term opportunities to expand to other cancer treatments and

beyond (+25% growth anticipated)

32% revenue CAGR (5 year) without new initiatives and currently no

meaningful marketing efforts

Significant margins (2006)

–

Gross margin: 73%

–

EBITDA margin: 49%

High return on invested capital

7

Agenda

Summary

Financials and valuation

Growth strategy

InfuSystem overview

Industry overview

Overview

8

Continuous infusion cancer treatment

Continuous Infusion (CI) allows for gradual administration of chemotherapy via a

small portable pump over several days as opposed to traditional chemotherapy

treatments given in a single high dose over a short period of time (known as bolus

infusion)

CI has achieved increased acceptance and is becoming a market standard of care

for colorectal cancer (CRC) due to:

–

Increased efficacy and comfort for patients (lower toxicity)

–

Lower cost compared with hospitalization or home care

–

Higher margin to physicians due to changes in Medicare reimbursement

In 2004, sanofi-aventis and Pfizer introduced CRC treatment protocols FOLFOX and

FOLFIRI, which include courses of CI. Their marketing efforts have helped to

increase physician awareness of CI.

There are currently over 120 CI drug therapy clinical trials in progress

Recent drug protocol approvals for head and neck, lung, pancreatic, gastric and

other cancers

9

$368

$932

$1,517

$1,948

$2,127

$0

$500

$1,000

$1,500

$2,000

$2,500

2002

2003

2004

2005

2006

Representative growth of continuous infusion

Source: sanofi-aventis

Sales of Oxaliplatin (used in continuous infusion protocol)¹

1

sanofi-aventis’

Eloxatin (oxaliplatin) –

utilized in FOLFOX protocol in conjunction with continuous infusion of 5-FU (fluorouracil)

10

Market acceptance of CI growing and accelerating

Source:

Everett

Rogers

Diffusion

of

Innovations

model

InfuSystem’s early adopters and

innovators consist of 5 of the top

10 cancer centers in the US

Estimated position of continuous

infusion for cancer treatment

11

Near-term opportunities for continuous infusion in cancer

17,500 –

CRC

6,000 –

Other indications

Potential continuous infusion

market that requires no additional

regulatory approval and minimal

payor approval

$40mm

20,000

CRC –

Stage II

(high risk)

$494mm

247,030

Total

$43mm

21,260

Gastric

$74mm

37,170

Pancreatic

$35mm

17,600

Head & Neck

(Neoadjuvant)

$53mm

26,400

Head & Neck

(Chemo & RT)

$80mm

40,000

CRC –

Stage II

$169mm

84,600

CRC –

Stage III & IV

Opportunity1

Estimated

2007

new cases

Cancer type

Only represents near-term opportunity

1

Based on $2,000 revenue per year per case

Patients using InfuSystem pumps

12

Agenda

Summary

Financials and valuation

Growth strategy

InfuSystem overview

Industry overview

Overview

13

InfuSystem overview

Leading healthcare services company that provides ambulatory

infusion pumps for oncologists and their patients in the U.S.

–

Pumps are primarily used for the continuous infusion (CI) of

chemotherapy drugs for patients with colorectal cancer

InfuSystem provides a complete solution to doctor & patient:

–

Supplies equipment (pumps and related disposable supplies)

–

Handles billing and collection directly from the patients’

insurers and

from the patients for pump and supplies

–

Maintains, cleans & services equipment

–

Supports patient or doctor inquiries with 24/7 nurse-staffed hotline

InfuSystem also rents and sells other supplies to oncologists

InfuSystem has 110 employees and nationwide coverage

14

Compelling value proposition to all players

Physicians

Patients

Payors

Higher professional service

fees

Improved patient outcomes

Strengthens relationship with

patient

Lower administrative burden

Lower cost

Improved patient

outcomes

Continuity of care

Reduced side effects

Comfort and convenience

Lower cost

Patients Win

Payors Win

Physicians Win

Patients, Physicians and Payors all benefit with InfuSystem

15

Significant competitive advantages

Regional DME Providers

No significant scale

Limited pump selection

Limited insurance

contracts

Hospital

Hospitals unlikely to

support competing

hospitals

Limited capital budgets

Home care

Takes revenue from

physician office

More costly for patients

and payors

Less convenient for

patients

Physician owned Durable

Medical Equipment

(DME)

More time intensive and

costly for physicians

Biomed

On-call

Vast pump selection

Covers approximately 65% of

managed care lives

Bulk discount on pumps

Provides additional revenue

stream to physicians

24-hour staffed nurse hotline

to patients reduces load on

physicians staff

Servicing 60% of oncology

practices

InfuSystem operates in a highly fragmented market with the next

leading competitor being a fraction of InfuSystem’s size

16

Board and management team with deep healthcare expertise

Sean McDevitt, Chairman

–

Alterity Partners, founder (sold to FTN Midwest)

–

Goldman Sachs, investment banking

–

Pfizer, sales & marketing

–

U.S. Army Rangers, Captain (decorated)

Wayne Yetter, Director

–

Verispan, CEO

–

Odyssey Pharmaceuticals, President & CEO

–

Synavant, Chairman & CEO

–

Novartis Pharmaceuticals, U.S. President & CEO

–

Astra Merck, President & CEO

–

Current Board member of Noven Pharmaceuticals

(NOVN), Matria Healthcare (MATR) & EpiCept

(EPCT)

Jean-Pierre Millon, Director

–

PCS Health Systems, President & CEO

–

Eli Lilly, various senior executive positions including

President and General Manager of Lilly Japan

–

Current Board member of CVS/Caremark (CVS) &

Cypress Bioscience (CYPB)

John Voris, Director

–

Epocrates, Chairman (formerly CEO)

–

PCS Health Systems, Executive Vice President

–

Eli Lily, various senior executive positions

–

Current Board member of Oscient Pharmaceuticals

(OSCI), Epocrates & Gentiae Clinical Research

Steve Watkins, CEO

–

Co-founder of InfuSystem; serial entrepreneur

–

Former VP of Aventric Medical, a Midwest

distributor of high tech equipment

–

Dallas Durable Medical Inc., Officer

–

American Medical Finance, President

Jan Skonieczny, VP of Operations

–

Aventric Medical, Operations Manager

–

Charwood Cardiac Testing Lab, Supervisor

Tony Norkus, VP of Sales

–

Served as VP of international and domestic sales

for all equipment lines at I-Flow

–

Ambulatory pump products, product director

–

Parker Biomedical, national sales and marketing

manger

–

I-Flow, director of sales and marketing

CFO (to be determined)

–

Candidates identified

VP of Marketing

–

Already working with HAPC as consultant

17

Agenda

Summary

Financials and valuation

Growth strategy

InfuSystem overview

Industry overview

Overview

18

Growth strategy

Distribution of other products &

services through current channel of

oncologist

–

Drugs

–

Safety products

–

Disposables

Immediate Impact

Initiatives

1

Extend CI Services

2

Expand Product

Portfolio

3

2008 and Beyond

4

Untapped international CI market

Other cancer types

Acquire regional “mom & pop”

DME providers

Fragmented market

Companies typically have less

than $10m in revenue and can

be purchased at 4-6x EBITDA

Increase pump utilization to 75-80%

Invigorate sales force

New marketing initiatives

Expand deeper and wider within

current base

Extend to CRC stage II

Head and neck, lung, pancreatic,

gastric

19

1. Immediate Impact Initiatives

Goal:

Increase pump utilization from 60% to 75-80%

Invigorate sales force

New marketing initiatives

Expected Results:

Decreased capex

A 4% increase in pump utilization would have eliminated 2006 pump capex spending

Increased EBITDA –capex (cash flow)

75% pump utilization would allow for 2007 revenue growth of 27% with no

additional capex (a savings of over $7 million)

Pump utilization -->

65%

70%

75%

80%

Potential Pump Revenue

$34,503,313

$37,157,414

$39,811,515

$42,465,616

Potential Revenue Growth

10%

19%

27%

36%

Capex savings

$2,366,118

$4,732,237

$7,098,355

$9,464,473

Estimated 2007 revenue supported with no additional capex

20

2. Extend CI services

Goal:

Expand deeper & wider within current established base of oncologists

Extend continuous infusion services to CRC Stage II & other cancers indications

–

Other cancers are a growing part of InfuSystem’s business

–

Recent drug protocol approvals for head and neck, lung, pancreatic, gastric and

other cancers

Expected Results:

Sustained long-term financial performance

–

+ 25% revenue growth

–

+ 40% EBITDA margins

21

Agenda

Summary

Financials and valuation

Growth strategy

InfuSystem overview

Industry overview

Overview

22

InfuSystem financial performance

+40% Adjusted EBITDA margins

$10,292

$13,022

$19,349

$28,525

$31,716

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

2002

2003

2004

2005

2006

Revenue

26,424

27,320

26,996

28,621

28,893

25,000

25,500

26,000

26,500

27,000

27,500

28,000

28,500

29,000

Q1'06

Q2'06

Q3'06

Q4'06

Q1'07

Total patient billings

InfuSystem

Q1 '07

2006

2005

2004

Net rental revenue

7.9

31.7

28.5

19.3

Revenue growth

2%

11%

47%

49%

Cost of revenues

2.3

8.5

7.7

5.6

Gross profit

5.6

23.3

20.8

13.8

Gross margin

71%

73%

73%

71%

Selling & marketing exp.

1.0

3.8

4.3

3.2

G&A expense

1.8

7.2

7.1

4.7

Bad debt expense

1.7

4.0

1.3

1.3

Operating income

1.0

8.2

8.1

4.7

Operating margin

12.9%

25.8%

28.3%

24.0%

Interest expense

0.0

0.1

0.1

0.0

Income before income taxes

1.0

8.1

8.0

4.6

Income tax expense

0.4

3.1

2.9

1.7

Net income

0.6

5.0

5.1

2.9

EBITDA calculation:

Operating income

1.0

8.2

8.1

4.7

Depr. & amort.

1.0

3.7

3.3

1.8

EBITDA

2.0

11.9

11.3

6.5

Adjusted EBITDA calculation:

EBITDA

2.0

11.9

11.3

6.5

Stock based comp.

0.1

0.4

1.1

0.3

MI sales & use tax accrual

0.1

0.2

0.2

0.1

Bad debt exp. due to BCBS

billing delays

1.0

2.0

-

-

Proforma

revenue from

transition services agreement

0.2

1.1

0.7

0.3

Adjusted EBITDA

3.4

15.6

13.3

7.2

Adjusted EBITDA margin

43.2%

49.1%

46.7%

37.0%

Adjusted EBITDA less capex

2.1

11.9

5.3

0.5

Adjusted EBITDA less capex

growth

NA

125%

1030%

NA

23

Structure and valuation

Officers and Directors

4,166,667

20%

HAPN Public Stockholders

16,875,251

80%

Total Shares Outstanding

21,041,918

100%

Officers and Directors

4,166,667

20%

4,166,667

7%

HAPN Public Stockholders

16,875,251

80%

16,875,251

29%

Warrants

-

-

33,750,502

58%

Management Warrants

1,071,429

2%

UPO Shares

-

-

833,333

1%

UPO Warrants

-

-

1,666,666

3%

Total Shares Outstanding

21,041,918

100%

58,363,848

100%

Pre-Merger

Post-Merger

Basic

Fully-Diluted

80%

20%

87%

9%

4%

HAPN price per share in trust (2007Q2)

$5.94

2006 Proforma EBITDA

$15,574,550

Pro forma basic shares outstanding

21,041,918

Market Capitalization

$125,017,005

EV/2006 Proforma EBITDA

10.5x

Plus: in-the-money warrant value

$32,778,972

Peer Group:

Plus: debt (assuming no redemptions)

$15,000,000

EV/2006 EBITDA

20.7x

Less: cash

($10,000,000)

Implied Enterprise Value

$162,795,976

Post-Transaction Metrics

Implied Transaction EV Multiples

24

Public company comparables

Source: Reuters & Capital IQ

Note: Market cap & enterprise value calculated as of 8/17/07 on a fully diluted basis

*

Currently in the process of being acquired by Walgreens Corp.

High Growth/Margin Healthcare Companies

($ in millions)

Market

Enterprise

Revenue Growth

EBITDA Margin

EV / Revenue

EV / EBITDA

Company

Ticker

Cap

Value

2007P

2008P

2007P

2008P

2006A

2007P

2008P

2006A

2007P

2008P

Healthways, Inc.

HWAY

1,854

$    

2,112

$    

51%

29%

21%

23%

4.8x

3.1x

2.5x

21.8x

14.3x

10.6x

HMS Holdings Corp.

HMSY

641

647

65%

15%

27%

29%

7.6

4.6

4.0

34.1

17.0

13.8

Integra LifeSciences Holdings Corp.

IART

1,446

1,775

31%

13%

22%

23%

4.2

3.2

2.9

19.3

15.0

12.2

Matria Healthcare Inc.

MATR

580

876

6%

10%

23%

24%

2.6

2.4

2.2

11.6

10.6

9.1

NightHawk Radiology Holdings, Inc.

NHWK

625

606

71%

39%

29%

30%

6.6

3.8

2.8

18.1

13.1

9.2

Option Care, Inc.

*

OPTN

719

823

24%

14%

7%

7%

1.2

1.0

0.9

19.3

15.5

13.2

Mean

41%

20%

21%

23%

4.5x

3.0x

2.5x

20.7x

14.3x

11.4x

Median

41%

14%

22%

24%

4.5

3.2

2.6

19.3

14.6

11.4

High

71%

39%

29%

30%

7.6

4.6

4.0

34.1

17.0

13.8

Low

6%

10%

7%

7%

1.2

1.0

0.9

11.6

10.6

9.1

25

Agenda

Summary

Financials and valuation

Growth strategy

InfuSystem overview

Industry overview

Overview

26

Summary

Business historically run for cash will be free to grow

Significant near-term opportunities for growth with minimal execution risk

Achievable growth strategy

Increase pump utilization to 75-80%

Extend CI services

Expand coverage

Use of leverage in purchase price will increase ROE

High margin business with high barriers to entry