To Our Members
In the first half of 2023, Clovis AI continued expanding its marketing efforts, tweaking its
software and mobile App platforms, and building up its inventory in the Daytona Beach
fulfillment center. Our US inventory position is approaching three-quarters of a million dollars,
which is sufficient to supply devices to the various Pilot Programs and new accounts expected
to come online in the second half of this year. Clovis AI has field tested and activated all
aspects of its Remote Patient Monitoring (RPM) Rental Program. From here on our focus and
expenditures will be directed towards marketing and generating monthly recurring revenue
from the Clovis AI RPM Rental Program.

Danger Ranger Watch Update
The Clovis AI second generation cellular watch known as the “Danger
Ranger Watch” or the “DR Watch” will be delivered to Daytona Beach in
September. As mentioned in previous reports, the watch was initially
anticipated by the end of May but was delayed due to component
configuration issues. We took advantage of this delay to incorporate
additional software features into the firmware, particularly upgrading
and adding to the language options and improving the way data and
information is displayed on the small watch screen. This watch includes
a smart cellular chip and will function as a gateway for our other vital monitoring devices. The
wearer can use the DR Watch to make an emergency phone call by itself without pairing it to a
cell phone. Our Angel Support team of registered nurses call contact the wearer via the DR
Watch cellular interface in the event dangerous vital signs are flagged by the AI monitoring
software and the patient cannot be contacted by their preferred method.
The DR Watch is designed to be used by large healthcare organizations and insurance carriers
who wish to reduce hospital and emergency room medical costs by monitoring a large group of
patients. This market includes Accountable Care Organizations (ACOs) which are often
hospital owned entities operating out-patient clinics in rural areas and contracted by CMS to
cover all the medical costs of that group under a pre-payment of the projected medical costs
that CMS would otherwise have to incur. Because CMS pre-pays for these medical services,
no RPM reimbursements are available. But there is a huge incentive for the ACO to reduce
medical expenditures by monitoring its group of patients and catching dangerously trending
medical conditions early. The DR Watch will be rolled out in three different models. The base model includes all the
functionality of our current Smart Health Vital Watch, but also incorporates the cellular chip for
direct upload to our health cloud without the need for pairing with a cell phone or router. The
mid-range model will add a pre-diabetic blood glucose testing function that alerts the user to
obtain further tests and examination to determine if they have developed a diabetic condition.
The Clovis AI top-of-the-line DR Watch model will have full cellular voice calling functionality
(the “Dick Tracy” watch) by using an upgraded chip. It will also have full GPS precise location
capabilities that can be used for Geo Fencing: creating a virtual geographic boundary around
an area by means of GPS technology, enabling software to trigger a response when a mobile
device enters or leaves the area. There will also be a “Find My DR Watch” function to use on
another internet connected device to locate a misplaced watch. See the Comparison Table
The DR Watch will also be available on Amazon. When a medical practice signs up a patient
for our RPM Rental Program and that patient is qualified and approved, the watch can then be
ordered by the doctor from Amazon with a one-time code and delivered to the patient within
two days. Amazon Fulfillment Centers will stock the DR Watch in Mexico and Brazil for fast
delivery to many of the populated areas of those countries. Initially, fulfillments to Puerto Rico
will be handled out of our Daytona Beach distribution center. As delivery                                                                                                                                                             of the DR Watch approaches, there has been a flurry of interest around the world to use and license                                                                                                          the rights to distribute the DR Watch and the underlying Smart Health software platform and App                                                                                                               in foreign countries. As a development partner and funding source
of the DR Watch, Clovis AI will enjoy a portion of the profits realized from sales both inside,
and to a lesser extent, outside of the US. The company is a party to negotiations in several
countries including Mexico, Brazil, South Korea, India, China, Saudi Arabia and the Middle
East, and the United Kingdom. Initial revenue from these negotiations will be realized in 2024.

Product & Software Upgrades
The Smart Health mobile device App and the AI monitoring software platform are receiving
various upgrades to due intense interest from customers in different markets. For instance:
Transitional Care Management (TCM) Module – TCM is a service that helps patients
transition from one care setting to another, such as from hospital to home. In most situations, if
a patient is readmitted to a hospital within 30 days from discharge, then the hospital can be
held liable for the resulting costs of readmittance and not be reimbursed by Medicare. To
incentivize ongoing monitoring of the patient during this timeframe, CMS added new CPT
Codes in its final rule last November and updated those originally issued in 2013. The idea is
to detect any post discharge medical problems early and immediately intervene with the
patient to treat and correct the problem on an outpatient basis or actual at-home visit and avoid
the tremendous costs of readmittance. TMC Codes reward medical providers for care that
facilitates the transition of a patient from an inpatient hospital setting to the patient’s community
setting. In order to bill for either code, the provider MUST have an interactive communication
(bi-directional telephone call, emails, texts, etc.) with the patient or caregiver within 2 business
days of discharge.

Aside from reimbursing doctors for face-to-face follow-up visits soon after discharge, CMS has
continued to incentivize the value-based care reimbursement model by expanding the type and
scope of reimbursements with new CPT Codes (CPT = Current Procedural Terminology). The
recent 2022 and 2023 CPT Codes related to the remote monitoring of vital signs or activities
that can be captured by our devices are being integrated into the Smart Health software

RTM, BHI and Medication Adherence — CMS recently expanded its value-based care
reimbursement incentives for Remote Therapeutic Monitoring and Behavioral Health
Integration to include medication adherence. In both treatment areas, taking the prescribed
medication in the proper dose at the times directed is critically important for the patient being
able to return to a healthy status or maintain a higher quality of life.
Under RTM, medication adherence is reimbursable via CPT Code 98980 for therapeutic
treatments of the respiratory and musculoskeletal systems. Under BHI, CPT Code 99484
provides reimbursements for facilitating and coordinating pharmacotherapy (the treatment of
disease and especially mental illness with drugs). BHI is a general term that brings various
treatment disciplines together; consequently, monitoring a patient’s medication adherence and
other activities is more specifically referred to as Collaborative Care Management (CoCM).
Clovis AI, as an RPM rental program provider, is not going to rent equipment for a short 30-to                                                                                                                   90-day Transitional Care duration. However, a significant percentage of TCM patients have
chronic conditions that benefit greatly from long-term vital signs monitoring and will qualify for
RPM CPT Codes reimbursements and participation in our rental program.
Palliative Care is somewhat related to TCM, but of longer duration. Often, patients who do not
qualify for Hospice care due to the fact they are projected to survive more than 6-to-12 months,
may receive Palliative care, which is care given to improve the quality of life of patients who
have a serious or life-threatening disease, such as cancer. Palliative care is an approach to
care that addresses the person as a whole, not just their disease. The goal is to prevent or
treat, as early as possible, the symptoms and side effects of the disease and its treatment, in
addition to any related psychological, social, and spiritual problems. Abnormalities in vital signs
readings can provide early warning of a potential change in status, and incorporating the
Clovis AI RPM Program into such patients’ care is beneficial to extending their quality of life.
Clovis AI is in the process of contracting with a group that specializes in Transitional Care and
has close contacts with the Hospice and Palliative care communities. This group will utilize our
devices and software systems wherever possible, and the companies will cross promote each
other’s services.

New Medication Dispenser — In conjunction with the new medication adherence
reimbursements and our new software upgrade, we are building a new medication dispenser
for home use that will track when each prescribed medication is taken from the dispenser.                                                                                                                       There will also be extra compartments the patient can use for non-prescription vitamins and
supplements. Remembering when to take, or if one took, a particular medication becomes
increasingly difficult in older patients. Our medication dispenser will communicate with our
mobile App and AI software platform via Bluetooth and will be capable of providing audible
alerts as well as text, email, and automated phone reminders to the patient if medication times
are missed. One model of this device will also incorporate a cellular chip for direct transmission
to our secure health cloud and will be capable of acting as a gateway for our other Bluetooth
enabled devices.

Expanded Language Capabilities – We are incorporating a new language translation system
into our software platforms. We will be delivering systems this year imbedded with English,
Spanish, Portuguese, and Mandarin. However, the support platform will soon have a
translation matrix installed which translates email and text messages on-the-fly from the user
to our support center to avoid delays in communication. This ability to translate into most any
language will gradually be rolled out to all applications next year.

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As mentioned in the 1st Quarter Report, Clovis AI’s pre-revenue operations were paid for by the
managing member HME Technology and affiliated companies throughout the 2022 start-up
phase. Financial assistance included providing the software, technology and platform support,
office and warehouse space, and operational personnel. Beginning in the first quarter of 2023,
the Partnership assumed responsibility for its operating expenses going forward. Beginning in
the second quarter, the Partnership also placed personnel on Clovis AI payroll and assumed
so upgrade costs for the software platform and mobile app, which collect and collates vital
signs readings and data from the various monitoring devices via the secure health cloud.
Second quarter 2023 sales revenue is insignificant and consists of charges for watch and
device samples sent to prospects and affiliates for review. Clovis AI anticipates revenue will be
realized in the third quarter as marketing efforts escalate and the delivery and activation of
RPM Rental Program devices and payment for services billed to medical provider customers is
realized. There is an average lag time of at least 90-days from the signing of a contract until
revenue begins flowing from a customer due to software installation, training, delivery and set
up of devices with patients, the built-in delay of initial reimbursement payments from CMS and
insurance companies, and Clovis AI billing the care provider the month following qualified
patient RPM services are rendered. Therefore, meaningful revenue from rental program
activities is not anticipated until the fourth quarter of 2023.

Financial Statements are shown below — Balance Sheet as of June 30, 2023 and Profit &
Loss Statement for the 2nd Quarter 2023 (April – June), followed by P&L for Q1 & Q2 combined
(January – June). Please direct any questions to