ALR Technologies, Inc. (OTCBB: ALRT) specializes in health and disease management products and services. ALRT designs and manufactures health management compliance products and monitoring and intervention systems to meet the needs of several significant user groups.

ALRT's system, branded Constant Health Companion™, responds to a serious gap in standard disease management practices in the U.S. It provides for continued compliance supervision to help keep people healthy, whether they are recovering from an organ transplant, suffer from diabetes, heart disease, asthma, COPD, or live with other serious conditions. 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.

Current U.S. 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 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 health care. Accordingly, use of the Constant Health Companion will realize significant return on investment.

Furthermore, the Constant Health Companion system provides 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.

Products & 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.

Our 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 our 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 our 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.

Market Potential

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.

HEALTH INSURANCE INDUSTRY

Healthcare costs in the US account for 15% of the gross domestic product and is expected to reach 25% by 2020. The insurance industry readily admits that enhanced compliance will lead to lower costs of healthcare. Currently there is no available system that can assist insurers to assess the degree of compliance to prescribed medical treatments by their plan members. The ALRT monitoring systems will provide an affordable means for the insurance provider/payers to improve targeted plan members compliance, and monitor their compliance by incorporating the Constant Health Companion and monitoring system into their program, insurance payors (corporations with self insured plans, Medicaid and Medicare) will be able to reduce costs of providing care by monitoring plan members with disease conditions where noncompliance will significantly increase healthcare costs.

Additionally, insurance payors will be able to base co-pay or plan premiums on the level of compliance or provide discounts to those who are compliant. The health insurance payer has the most to benefit in ROI through the incorporation of compliance enhancement and monitoring/intervention products and systems. Depending on the disease condition, the annual savings per targeted patient could range from several hundred dollars to several thousand dollars.

ASSISTED LIVING ORGANIZATIONS

Companies providing assisted care services are often penalized by state regulatory boards when medication errors or other noncompliance are apparent. The ALRT system will keep the caregiver compliant and thus reduce errors thereby reducing costly penalties from state funded plans. The ROI is significant and the benefits achieved are realized by the patients with improved health outcomes, by the payers with better health and reduction of cost of care, and by the assisted living company with caregiver's job made easier and reduction in costly penalties. One medium sized national assisted living organization alone could utilize nearly 10,000 ALRT systems which would generate nearly $5 million in 12 month revenue for ALRT with 75% gross profit margin.

COPD

Nearly 16 million people in the US suffer from Chronic Obstructive Pulmonary Disease or COPD; of these more than 4 million people take medication through nebulizers (a device which delivers medication with compressed air that breaks the medication particle size down and more effectively delivers the medication to the lungs). The COPD and respiratory care patients consist primarily of patients with lung failure issues related to bronchitis and emphysema. Many of these patients have to use nebulizer medications three to four times a day for the rest of their life. Health insurance providers are spending billions of dollars for case managers to look after their patients, and once the case manager has left a patient's home, the patient once again is left on their own to administer their medication, many of times which they are non-compliant. ALRT is positioned to dominate the nebulizer market, with the only Nebulizer Monitoring System to be available, supported by pending patent protection. In addition to the COPD patients use of nebulizers, many of the millions of people who suffer from severe asthma also require the use of the nebulizer and many of the home care providers who service the COPD population also provide services to those with severe asthma.

ORGAN TRANSPLANT

There have been nearly 300,000 organ transplants over the past 10 years and more than 30,000 new transplants annually. Adherence to treatments in organ transplant patients can rapidly affect the life of the patient. The number one reason a child loses a kidney transplant is because parents forget to give the medication. ALRT can assist organ transplant patients in maintaining a rigid medication schedule. The cost of losing a transplanted organ is significant in that the health of the recipient is at risk and another transplant becomes necessary. The monetary cost can be several hundred thousand dollars per case. The ROI for the family and the health insurance provider is obvious and the benefit of a transplant center offering the monitoring system is the added value of care along with differentiation from other centers. A pilot with an organ transplant patient commenced in February of 2006 and the ongoing results have been nearly 100% compliance and astatic users have said it has helped make their life much easier. A marketing program to all organ transplant programs in the US will begin in late fall of 2006.

MENTAL HEALTH

There are currently 44 million mental health patients being treated with medication in the US alone. The high-price of medical non-compliance of mental health patients not only affects the patients and their immediate caregivers, mental health patients suffering from bi-polar and schizophrenia and other panic disorders can also generate significant cost to society. ALRT has already generated attention with experts in the mental health industry and commercial pilots are expected to begin in first quarter of 2007.

HIV / AIDS

There are approximately 1 million patients in the US receiving treatment for HIV and AIDS. Treatment programs often involve complex regimens and adherence is essential to maintaining the health of the patient by keeping the disease in check. The ALRT compliance reminder products have already displayed their ability to enhance compliance via the Columbia University clinical trial and more recently, ALRT products have been selected for a major project for HIV patients in Kenya that is funded by the NIH (National Institute of Health), and sponsored by the University of Nairobi and the University of Washington. As the awareness of the value of the ALRT compliance reminder products become known in this population, which exceeds 40 million worldwide, marketing to the many organizations that provide assistance to this population will be launched.

Growth Strategy

In addition to the company's target markets, we believe that there will be significant need for the ALRT compliance monitoring system in other disease categories which include but are not limited to 16 million patients with diabetes, 20 million patients with Asthma, and millions of patients with heart disease, congestive heart failure, coronary artery disease, diabetes, Parkinson's disease and Alzheimer's disease.

Although there are now a few companies offering disease management home monitoring systems, they are focused on specific population targets and most systems lack portability. Also, the ALRT system cost to the market is significantly lower than other competitors, with the company still generating very healthy margins. Competitor's hardware costs range from $100 to $3,000.

The ALRT system is being offered at no cost for the hardware with a 12 month contract for compliance service. The compliance service fee is $40 per month with continuous monitoring, reminders and messaging. The ALRT system, in the future will also provide similar features offered by a few competitors such as linkage to diagnostic or medical equipment to record and transmit diagnostic data to medical professionals and caregivers.

The ALRT system provides many features that these competitors do not, such as compliance reminders, compliance with medications, compliance with treatments, compliance with use of nebulizers, and reminders to use diagnostic tools. Other competitors offer medication management systems that are narrowly targeted to people taking many different medications and who are at risk of overdosing or taking the incorrect medication. ALRT also offers a medication management system that reminds patients when to take their medication, the type of medication, and the dosage amount at a significantly lower cost.

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.

Management

Sidney S. Chan, Chairman and Chief Executive Officer of ALR Technologies Inc. has made a significant contribution to the Company since first becoming involved in August 1997. He has assisted the Company's financing and its evolution into a public company. Most importantly, he has also directed the Company's product development. Mr. Chan has extensive relationships with Hong Kong
area based technology and electronic manufacturers----helping assure the availability of low cost manufacturing and materials procurement.  Mr. Chan is an engineer and obtained his Bachelor of Engineering (Mining) degree with distinction in Mineral Economics from McGill University in 1973.

Stan Cruitt joined ALR Technologies as President in 2000, bringing with him more than 20 years of experience in the pharmaceutical industry. He became President at a key point in the Company's history, when ALRT was evaluating its products and considering innovative uses for medication reminders throughout the healthcare community. Mr. Cruitt has extensive experience in the pharmaceutical industry, where he has held numerous positions ranging from serving as a marketing research analyst with Merck to top marketing and management positions with Ciba and Novartis.  In 1996, Newsweek and Advertising Age recognized him as one of the top marketers in the United States. Mr. Cruitt's experience at building brands, markets and business is a needed fit for ALRT.  Mr. Cruitt received his undergraduate degree from Southern Illinois University and received academic honors during graduate study.

Jaroslav V. Tichy, Ph D, Since December, 2000, has been Vice President of Technology for
the Company. From 1984 through 2000, Dr. Tichy was a Systems Design Specialist with Weir-Jones Engineering Consultants Ltd.  Dr. Tichy has conducted research and lectured in a wide range of areas including asynchronous switching theory, signal theory and pattern recognition. In addition, he has been involved in a number of development projects including analog, digital and mixed circuit design, digital signal processing and microprocessor and microcontroller based systems.  Dr. Tichy received both his Ph.D and MSc. Degrees in Computer Technology from the Technical
University in Brno Czech Republic.
 

Advisory Board

Michael Baumgardner, Ph.D., Chief Executive and President of Burke, Inc. - Dr. Baumgardner has been the President of Burke, Inc., since 1994. Headquartered in Cincinnati, OH, Burke, Inc., is one of the premier international marketing research and consulting firms, with offices and affiliates in 40 countries.

Arnold da Silva, Vice President and General Manager, Schenker of Canada Limited - Schenker of Canada Limited is one of the leading international providers of integrated logistics and freight-forwarding services at over 1,000 locations around the world.

William Lorentz, M.D., Dr. Lorentz is the Associate Chief of Professional Services at North Carolina Baptist Hospital and serves as Professor of Pediatrics of the Wake Forest University Medical School.  Dr. Lorentz is also Medical Director, MedCost Inc. - MedCost Inc. is a leading PPO in North Carolina.

Betsy Pearce, Vice President and Chief Operating Officer of Niblock Financial Systems, Inc. Niblock is one of the largest providers of banking equipment and financial systems software in the United States, with headquarters located in Winston-Salem, NC.

Ronald H. Small, Vice President, Quality Outcomes and Chief Pharmacy Officer for Wake Forest University Baptist Medical Center. Ron is also Adjunct Professor of Pharmacy Practice with the University of North Carolina and Campbell schools of Pharmacy and Lecturer in Hospital Administration at Wake Forest University. He is a member of many organizations, some of them include: APhA (Fellow), ASHP (Fellow), ASPEN and ACCP. Ron has contributed to the professional body of knowledge on topics such as TQM, Pharmacoeconomics, and Pharmaceutical Care, including the concept of Continuity of Care. Ron currently serves on the Advisory Board of Premier Purchasing Partners, an organization representing over 1900 hospitals.