Good Day Directors of Clovis,

For many years the dream of creating a product that could transmit health data to the doctor seamlessly in real time was achieved by HME Providers in 2012 with a product called Eocene. Outside of a few commercial installations the product was not used until 2019 when Medicare introduced new CPT Codes under a new category, Remote  Patient Monitoring (RPM). This new service enabled the doctor and other care givers to be handsomely reimbursed to supply technical and clinical monitoring with-in the patient home.

Mack Bryson has been an advocate of home monitoring for many years. The concept of the cellular capabilities being added to the HME TV Box was suggested to us by Mack. In theory, all that was needed is the addition of the cellular transmittal technology embedded into the Box. The process was far more complicated. One of the biggest hurtles was to source an affordable sim card that could communicate with all carriers and obtain FCC licensing.

With the help of Dev Watson and Ronnie Freeman the need for the Clovis Router continued to grow and money that was not budgeted by HME. We were able to supply the first order from Georgia without FCC approval as a sample order. The second order has encountered a higher cost and was even more difficult to obtain. With the future looking bright for the Clovis Router and that HME is unable and unwilling to fund this project until HME TV is launched in 2023,  I asked the directors of HME to offer our software to another company whereas the momentum of what Mack and affiliates has developed will not be lost.

That brings us to where we are today of the opening of Clovis. In my lifetime of creating products and supplying them to the world market I have never seen such a promising opportunity available to the owners of Clovis. The key ingredient in creating a successful product launch is the demand, affordability, and the expense to launch the product.

Demand:             There are millions of people who can benefit from this product and the entire healthcare market is needing and wanting it.

Affordability:      The product is reimbursed by Medicare, Medicaid, Private Insurance Companies & with the help of Dev Watson there is Grant Money available.

Expense to Launch:         Usually the most concerning ingredient is simply nonexistent. Every company that is marketing for RPM, RTM and ACO’s will need this product. Rather than to market directly to the doctors and patients our marketing will be to a few hundred resellers and let them carry the ball.

The necessary steps to open a new company and offer a new product without the needed funding would normally be a daunting task. Because of the help of having existing business through Test-N-Share it should be easier.

Clovis is needing to purchase 5,000 routers to lower the manufacturing cost and shipping cost. There is additional expense of the directors and the cost to have the router certified by the FCC. At this point we are unsure what the higher volume landed cost will be however we anticipate a 20% savings.

The ROI is traditionally calculated from the sale of the router however the product sale is only the beginning. Each year that the router is in the patient’s home will generate additional profit.

It is important that we finalize the marketing scheme of the Clovis Router and what services will be offered in conjunction with the sale of the router. Currently the website, financials and business plan is being finalized for promoting seed money.

I have made my suggestions and would like to hear your opinions as well.

The sister product of Clovis is not going to be launched until 2023. This product is known by our developers as the HME TV Set Top Box. The basic structure of the Clovis Router is built on the Set Top Box platform with a few added features to accommodate cellular connectivity.

We intend on marketing the Set Top Box for $125.00 wholesale and $249.00 will be our suggested retail price outside of the healthcare community. Within the healthcare community we intend on offering the Set Top box on rental only. Similar to the set top box that is supplied to the majority of residential homes these set top boxes are not available for the consumer or medical professional to buy.

The major difference in the Clovis Router and the HME TV Set Top Box is the continuous expense of the cellular component and the additional backend support affiliate with the router.

Outside of the management cost all other expenses are ala cart based on the customer and or patient needs.

The software platform, phone app and firmware source code will be supplied to Clovis for 20% ownership of the company upon the sale of the company and the usage fee of 20% added to the cost of services as they are sold. The minimum charge for the service is $2.50 per patient per month and a maximum of $6.00 per patient per month. The usage fee of $2.50 is used in the example considering that the $2.50 is expected to be the normal charge from HME to Clovis.

The only additional charges are based on the needs of the customers. HME support center charges the all-inclusive price of $4.50 per patient per month for support, welcome call, and patient engagement. Clovis can decide per customer if the service is needed and wanted.

Currently the router raw cost of parts and the assembling of the router is $110.00 based on a quantity of 200 pieces. The manufacturer is being accommodating to build such a small number of products enabling us to have samples, however we need to increase the minimum order to reach the industry standard or 2,000 pieces or more. I suggest that we raise the needed capital and purchase a container of 5,000 units.

In 2019 we were quoted $65.00 for the HME TV Box and after adding the cellular technology and sim card usage the cost increased to $85.00 with the higher volume. Currently we are paying $110.00 because of the small volume, and we are also paying a very high shipping cost via air shipments.

Considering that we maintain a cost of $85.00 with future purchases, Clovis wholesale cost of the product would be $169.95 with a markup of $40.18 per unit for Clovis.

Based two years of marketing we anticipate gathering 50,000 patients as a minimum. 50,000 Clovis Router sales would generate $5.8m. The annual usage fee for the 50,000 patients will generate $9m. Collectively the gross sales will be $14.8m. The company valuation using multiplier of 8 = $118m.

A few years ago, HME was offered $135m to sell our company assets to them if we could also include 60,000 people that were using the set top box. Very similar numbers.

I am looking forward to your responses.