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ALRT Technology Solutions

"In 2005, a New England Journal of Medicine study confirmed that 33% to 69% of medication-related hospital admissions in the US are due to poor medication adherence, with a resultant cost of approximately $100 billion a year.”

Overview

ALR Technologies, Inc. specializes in health and disease management products and services, and designs and manufactures health management compliance products and compliance monitoring and intervention systems to meet the needs for several targeted user groups. ALRT's system, branded Constant Health Companion(TM), fills a serious gap in standard disease management practices in the US. It provides for continued compliance oversight to help keep people healthy, whether they suffer from diabetes, heart disease, asthma, have had an organ transplant or other serious conditions.

Investment Highlights

• $140 billion in healthcare costs are reported due to noncompliance of medical treatments. Limiting factors such as cost, ease of use, and portability have been overcome by ALRT with their system.
• ALRT has established itself as a pioneer in the disease management compliance marketplace, with a complete variety of medication compliance reminders and monitors. The ALRT systems can be monitored by a healthcare provider, homecare companies or family members and offer the essentials such of affordability and ease of use which are necessary to develop this market.
• ALRT’s products and services cost to the consumer is at least 31% lower than the next least expensive system, with the company still generating healthy margins.
• ALRT is the only company with a Nebulizer Monitoring System; this monitoring System is patent-pending and allows the company to dominate a marketplace of 16 million people suffering from Chronic Obstructive Pulmonary Disease (COPD) as well as applicability to the millions of people who suffer from acute asthma.
• ALR Technologies, Inc. announced earlier in 2007 that they have received their FCC license for the data communications modem for their patient health management compliance system, one of the crucial final steps prior to full commercial availability.
• ALR Technologies, Inc. announced in March 2007 that PrecisionRx Technologies & Services Inc. will begin providing ALR Technologies' medication compliance products to pharmacies and patients in Canada beginning in the second quarter of 2007.
• If ALRT were to establish their nebulizer monitoring system (the company has the only nebulizer monitoring system in the world) with JUST 1% of the 4 million users of nebulizers the first year revenue would be $19 million with gross profit of approximately $14 million.

Profile

ALR Technologies Inc. is a pioneer in the emerging market for the home health management and disease management industry. While medical researchers and pharmaceutical companies have been effective in developing treatments to manage many diseases and health issues, poor medication compliance at home, mainly forgetting when and which medication to take, has rendered the treatments less effective. The growing problem of patient non-adherence to medical treatments contributes to more than $140 billion dollars annually in excess health care costs. Health care costs in the US currently account for 15% of the gross domestic product and is expected to reach 25% by 2020.

ALRT has developed a technology-based "clinically proven" system, the Constant Health Companion™ to address the problem of patient non-adherence. The Constant Health Companion will serve as a medication reminder for the patients at home, monitor the patients' compliance to prescribed medical treatments and, if necessary, facilitate timely intervention by their health care providers.

At the present time, current US health management practices fall far short as patients are left largely on their own after they are discharged from the hospital, leave the medical clinic or after the case manager leaves their homes. The Constant Health Companion will enable remote and continued oversight of the patients by their health care providers. The system will provide the necessary information for health care providers to improve treatment adherence by their patients resulting in more favorable health outcomes and containment of health care costs. ALRT is focused on becoming the leader and driver of growth for the emerging health management compliance market.

With the ALRT health management products and systems, health care providers can now remind patients what to do at the appropriate times, determine patients' compliance and intervene when necessary. Improving compliance and intervening on a real time basis will result in better health outcome and reduce the overall cost of healthcare. Accordingly, use of the Constant Health Companion will realize significant return on investment. Furthermore, the Constant Health Companion system will provide valuable information for financial decision-making. Insurance providers can monitor plan members' compliance and adjust the pricing of their coverage based on adherence by the members to prescribed health management programs.

In the course of developing the Constant Health Companion over the past five years, the company has also developed other spin-off compliance reminder products such as the ALRT PC 200, and other specialized products targeting specific health care needs.

ALRT has recently completed in-market pilots and trials with patients suffering from chronic conditions such as congestive heart failure, diabetes, organ transplant, HIV/AIDS as well as with assisted living organizations and Medicaid patients. Companies that participated in the pilots reported significant return on investment and improved health outcome results. These companies are also committing to use the ALRT system in their business operations. ALRT is starting its first full manufacturing run for product delivery in January 2007.

It is estimated that there are 110 million people in the US alone taking medications or treatments for chronic conditions. According to a 1997 Health Economics analysis by the University of Arizona’s School of Pharmacy, noncompliance of medication contributed nearly $77 billion in excess annual medical care cost. This number is thought to have exceeded $140 billion in 2004. In 2005, a New England Journal of Medicine study confirmed that 33% to 69% of medication-related hospital admissions in the US are due to poor medication adherence, with a resultant cost of approximately $100 billion a year. The rate of non-compliance for a number of chronic diseases has been documented as follows:

The next significant growth area in healthcare and the one area to help contain/reduce costs is health management compliance and monitoring. Currently, the marketplace for compliance monitoring is directed to heart disease and a select few of the other most severe ailments. The systems that are currently available are very narrow in their focus due to the highly targeted population, and high cost of the systems. Compliance and monitoring of health management treatments, medications and other activities have significant untapped market size potential, as awareness and the availability of affordable and user friendly effective systems are established.

In a market size of this magnitude, just a small percentage of market penetration can translate to significant market potential for ALRT products. The respiratory market potential alone includes more than 16 million people with COPD, 4 million who use a nebulizer to deliver medication to their lungs 3 to 4 times every day. Compliance with this is essential for maintaining quality of life and preventing rapid deterioration. If ALRT were to establish their nebulizer monitoring system (the company has the only nebulizer monitoring system in the world) with JUST 1% of the 4 million users of nebulizers the first year revenue would be $19 million with gross profit of approximately $14 million. With several other disease conditions having equal or greater potential, this level of revenue and profit could be achieved in multiple population groups, such as mental illness, and diabetes and heart disease.

Products and Services

All of ALRT’s products are tailored towards disease management and compliance monitoring which helps to generate better health outcome to the patient and lower the overall cost of care to the provider. The products are affordable, portable, and easy to use. The patient/user does not require a PC to allow monitoring, only a phone jack; making it easy for elderly patients.

The Company's product line consists of Medication Reminder Devices, Compliance Monitoring Systems, Monitoring and Intervention Systems, and a Diagnostic Test Monitoring System. In addition, diagnostic data monitoring capability has already been programmed in the ALRT system and will be added to the commercial offering in the future.

Constant Health Companion™ Compliance Reminder and Monitoring System

The Constant Health Companion™ (aka ALRT500) Compliance Reminder and Monitoring System has been the primary development focus of the company, as a result of qualitative research conducted in 2000 with leaders in the healthcare industry. The Constant Health Companion is designed to manage the medical and health compliance needs for anyone suffering from a chronic condition including HIV/AIDS, diabetes, cystic fibrosis, CHF (Congestive Heart Failure) COPD, organ transplantation, and mental health.

The Constant Health Companion, not only reminds a person to take the necessary health management medications or other actions at the appropriate time(s) of day but it also displays on a LCD screen the exact actions to conduct, allows users to access critical data such as medical clinic names and phone numbers and any precautions from use of medications. The Constant Health Companion makes it possible for insurance providers, case managers and/or family members of elderly patients to monitor a patient’s proper compliance of medication and compliance of other disease management activities. The system also has proven beneficial as a reminder to caregivers in assisted living organizations - to assist the caregiver in completing the many tasks as scheduled.

The value of monitoring are many; including more timely intervention which can prevent deteriorating conditions, ER visits, etc. and prompt case managers to initiate additional behavior education and patient training on the necessity of adherence to their health management treatment regimen. A study conducted by the Missouri Medicaid Program showed a $3,400 annual reduction in cost of care for each diabetic patient using a disease management compliance reminder.

ALRT Nebulizer Compliance Monitoring

ALRT is the only company that offers a nebulizer monitoring system. This system will be commercially available along with the Constant Health Companion. The Constant Health Companion connects to a custom port at the nebulizer compressor switch, and can be adapted to all types of nebulizers at minimal costs. This system monitors the use of the nebulizer by:

• Recording time of day used
• Recording length of time used
• Alerting healthcare providers or caretakers when person is noncompliant
• Allowing for timely intervention when a patient is noncompliant
• Recording nonscheduled nebulizer events which can assist a caregiver in better understanding a
patient’s behavior in using the nebulizer

ALRT PC200

The ALRT PC200 is the Company's second generation medication reminder system and is currently available on the market. The PC200 can be customized for each patient’s need and can be programmed by their healthcare provider at the medical clinic or by their disease management provider and mailed directly to the patient. The PC200 is a standalone medical reminder without the attached monitoring system. This reminder system is light weight, easily transportable, and gives healthcare providers a simple tool to help keep their patients on schedule with the medication.

Specialized Products

In addition to their primary products, the company has also developed a successful line of specialized products targeting specific healthcare needs, including the Contact Lens Reminder, the 48 Hour Reminder, the Weekly Reminder, and the Monthly Reminder. These products are designed primarily for pharmaceutical manufacturers and retail distributors. Many medications are now offered for weekly administration and monthly administered medications are also now available for osteoporosis. Patients who are switched from daily to weekly or monthly are thought to have even higher prevalence of noncompliance.

A specialized product designed specifically for the veterinary pharmaceutical market, the ALRT Pet Reminder, is a medication reminder product for pet treatments and medications. By reminding the pet owner to administer a medication on schedule, the ALRT Pet Reminder can help optimize a drug's therapeutic benefit to the pet. Nearly 40 million dogs and cats in the US alone receive heartworm preventatives. The ALRT pet reminder has been shown to improve pet owner compliance with heartworm preventives by 25%. Missed doses of heartworm preventatives can result in the pet contracting this potentially deadly disease.

Growth Strategy

The company’s goals are to make the ALRT compliance monitoring systems a ‘standard operating
procedure’ (SOP) by health insurance payers and their contracted disease and case management
companies.

Progress and results to date reveal significant recognition of need within the health insurance payer industry, the assisted living organizations and the special needs markets such as COPD, organ transplantation, diabetes and heart disease. With the aging population and increasing number of elderly due to the aging of the “boomer population” the need for the ALRT system will continue to achieve healthy growth as the boomers age. The increasing availability of disease treatment and prevention remedies creates an ever increasing need to assist the patient with the actions they require to complete on repetitive basis. The ALRT system provides ongoing support and continuing oversight of the patient where current health management practices fall short.

Copyright © 2007 [Walstreet International Inc]. All rights reserved.
Revised: 11/27/07.