|Needs of growing elderly population could net substantial profits for ActiveCare|
|Wednesday, 16 June 2010 16:30|
A crisis in aging, fueled by a decreasing work force to care for the country's aging population, threatens the ability of those older adults to remain at home. Last week, we alerted readers to ActiveCare Inc. (OTC: ACAR.OB) which offers useful communication and emergency alert services for aging adults- while giving a sense of ease to relatives and loved ones who care for them.
Credible industry sources told us that the company is expecting to make some announcements that will have positive profit and earnings implications going forward. We reached out directly to the company for an interview (transcript follows):
BioMedReports: What can you tell us about your company and its history?
Bryan Dalton VP of Operations, ActiveCare: We've coined the phrase “ActiveCare.” We like to consider ourselves a virtual assisted living and that's through products and services delivered to our customer which is typically a senior citizen over the age of 65.
Our mission is to keep them in their home for an additional 1 to 5 years and allow them to age in place. “Age In Place” is a phrase which has been coined in the industry it means just what it says. People do not want to go into nursing homes when they reach that certain age where they don't want to go into assisted living because of cost or because of the stigma attached to that for a variety of reasons. We provide technology and services to allow them to do that.
The first product that we’ve put into market is the ActiveOne. The ActiveOne is the product that is simple and easy to use. It’s a multi- button cell phone device with fall detection and speaker phone. If the user has an emergency or if they just want to talk to their daughter or their son, all they have to do is push a button on the device and they are immediately connected to our care center, a 24 hours 7 day a week center that can assist them with services from driving directions to transportation arrangements, road side assistance and of course emergency services.
The care center has all of their history on file, all medical history on file, so we know who they are and where they live, we know their hobbies, we know their next of kin, we know phone numbers, addresses, basically everything about that person, medical history, medications they are currently taking, doctors, hospitals, all those types of things, medical allergies and we can communicate that information in an emergency. A phrase I like to use is it's truly an “OnStar for senior citizens.” So wherever they are we can provide services no matter what that is. Also a unique feature the device has is a fall detection feature. So if the person say has a heart attack, they lose consciousness and they fall over the device senses zero gravity and as well as impact and can sense a fall, as soon as it senses a fall the device itself will initiate a call into the care center and if for some reason they are unconscious, we can locate them with GPS and send help whether that's their daughter or an ambulance. It's a one of a kind technology in the market place and it is the next step beyond the personal emergency response systems that are available today. You know there are probably a million other things that I could tell you about it and there's a lot of information.
BioMedReports: How long have you been a company and how long have you been a publicly traded company with this technology?
Michael G. Acton, CFO, ActiveCare: We were a spinoff of another publicly traded company RemoteMDx Secure Alert. January 2009 is when we initially did the spin off from RemoteMDx. They gave their existing shareholders a dividend of ActiveCare stock so that's how we became public. We were approved to trade by FINRA in January 2010 and just slowly making our way through the process. Our stock symbol is ACAR and we are traded on the OTCBB exchange. About our share structure, we have 13.9 Million shares outstanding there are approximately 4 1/2 - 5 1/2 million shares in the float.
BioMedReports: Although the stock is trading under $1.50, we understand that within a very short period of time it's possible that it could be trading much, much higher, especially as one considers that you're expecting strong earnings during the next 12 months. Do you agree?
Jim Dalton CEO/President ActiveCare: From a technology point of view we didn't just think up this product idea over night. The reason I brought up RemoteMDx and Secure Alert is we've all been with them since the inception of that company and the initial product for RemoteMDx and Secure Alert was actually a single button GPS cell phone for emergency situations. Now we didn't focus primarily on the senior market but we built that technology with Masashita out of Japan and we sold close to 10,000 of those devices. Now the problem was at the time, the technology was analog and it was switching over to digital and also at that time, we were introduced to the GPS offender tracking market (which is real-time monitoring by police of units worn by registered offenders) and we built the technology for that along with the monitoring center, 24 hours a day 7 days a week. Secure Alert is still in that line of business.
We've always been interested in the senior market and this type of technology and sometime in 2009 we decided to spin it off. Jim, Mike and I along with a few other people have moved from Secure Alert over to ActiveCare. We've been in this business for quite a long time. We understand the technology, we understand how to build a monitoring center, we understand how to build a service platform and the infrastructure has been built right and can handle a substantial amount of growth and we're excited about alot of the programs that we are developing.
We've started a multi-million dollar marketing campaign with the company with a very robust plan for on-line, radio, TV, print and all different types of direct response advertising to drive leads to us and we built the program so that by the end of 2012 we expect to have around 35,000 customers, and that’s just one of the programs that we're running. That program is simultaneously reaching the retail market.
Right now we're in talks with 3 regional pharmacies, one in North Carolina, another one in upstate New York, and another in West Virginia. We don't have anything publicly with them yet, but we're also in discussions with Bartell Drug, Kenny Drug and Kerr Drug. It's a great model for them, it makes sense, we'll basically have a nice store display, we'll train their personnel how to sell this technology. It's very simple, it's a business model that really works for them.
They require points for the products they sell. You know, one time products like vitamins, they need to make something like 40 points on them. We can pay them 20 points per month as well as having a great wrap around service for filling prescriptions and prescription refill reminders to get these people back into their pharmacies on a monthly basis, I mean that's how they make money and we can provide a great revenue stream as well.
Probably the most exciting development is that we're in talks with the largest insurance services company to the senior citizen market. A contract with them could net us, and I'll be conservative, 50,000 customers in a very short period of time. Bringing us numbers of 50,000 customers and making $10 a month, that's $500,000 a month in pure profit- that’s a net number. It's a great business model, we have great opportunities, we have been presented with an enormous opportunity with this insurance company.
BioMedReports: Where do you guys, from a marketing stand point, other than the pharmacies, where do you guys see kind of that aspect of the business going to in order to grow it?
Jim Dalton CEO/President ActiveCare: What we're trying to do, our focus is the insurance contract would be enormous for us and it would be a great revenue stream, but also it's not our core business and I think the ideal way to handle that would be to have us run with direct to consumer type program, the on-line marketing, the retail as well and have the insurance branch or segment be managed by them and a separate team because I think, for them, they are going to get the technology and put it in their own network and sell it. Of course, it has to have a team that's dedicated to doing that but I don't believe it will be as energy intensive as the full marketing plan that we'll be running shortly. We have a very robust plan which almost has 2 different types of customers. You have the actual end user themselves who could buy it for themselves and you have the the care provider (the son or daughter) who will be purchasing the product as well. So there are 2 targeted advertising or marketing campaigns for that. Some targeted to the end user and others targeted to the son or daughter of that particular person.
BioMedReports: Do you have that website up now?
Yes. It's real easy it's at ActiveCare.com. The kick off of this new program was on the15th of last month.
Jim Dalton CEO/President ActiveCare: If you pull up the website you'll see the business, you'll see the technology and it will pretty much answer your questions about where we're going from a retail approach. Let me go back to the insurance business model and one of the opportunities that is in front of us. This is the largest insurance provider in the country in the elderly market and we have an opportunity to put 150,000 of these units into the market by December. That would give us a revenue stream of $14-16 million dollars and that deal is moving along rapidly. That will give us a great foundation and then we can pursue other sides of the business.
BioMedReports: The way we see it, is you’re basically selling a widget. Your widget is cute. It's got very nice technology and all that, but in reality the cost, the ability to have this service center, is really the home run. It sounds like you can up sell with it. You can have food delivered. You can arrange to have a nurse come to you. No?
Jim Dalton CEO/President ActiveCare: This is 24 hour companion to the elderly. It makes their life that much better. There is no technology like this for the elderly market. There are already hundreds of people that have the product now that are using it, that are paying for it, that are members and we have numerous testimonials. A man fell down in Beaumont, Texas and the impact of the fall detonated a call to the Care Center, they got the man's medications faxed to a hospital where doctor learned what kind of medication he was on. It helped save the man's life. There are many other experiences like this, so we’re very excited about it.
The care centers are the nuts and bolts of the business. We’ll develop other products like the wrist device, the companion device, the heart monitor and other things as we move down the road in the future.
We have 36 million Americans above the age of 65, a growing market, 10 million living alone, I hate to say we're in a can't miss situation but I'm going to say it anyway. I feel very confident about where we are plus the fact that we only have 13 million shares out there. It’s a great story, it's a very compelling story, with people reaching out for us, so I feel very confident in what we have.
There is a proven market for this type of product that somebody can put in their pocket and if they have an emergency situation all they have to do is push a button. We can connect them to a 24/7 care center who immediately knows who they are, they know their doctor, they know their next of kin, they can immediately connect them with the doctor, they can connect them with the ambulance driver, if we need to, we can connect them with the hospital, we can do a myriad of real time speed related emergency assistance that is not available in the market today. And from a price point of $59 to $99 to $199 and all the services in between, I honestly can build a strong case on why we can be a $150 million dollar company.
Michael G. Acton, CFO, ActiveCare: This is actually the “portable medical record” and it's beyond that. If you think about it, it's all in one location, you have it with you. There are 5 million people with maculate generation, my father is one of them, they can hardly see and they can't live by themselves, they know their house, but the problem is they basically can't see the numbers on the phone so therefore the cell phone doesn't work for them. This device has 4 buttons you can assign to call anyone, so eventually he is going to connect with someone, so that is phenomenal function in it's own right. This helps that person live alone and that makes this an amazing use of cell phone technology which enables us as human beings to live a better life as we age.
Bryan Dalton VP of Operations, ActiveCare: We're implementing the MicroSoft help phone as we speak now, we truely can have that very easily and you know you have the ability to have the portable medical records very easily with our service. We're really an aggregator of information whether its their daughter's cell phone or their heart medication, I mean we know everything about this person and who they are and provide any type of service that they need.
Jim Dalton CEO/President ActiveCare: I can predict huge earnings for this company right off the bat, and as people really understand it, it's almost impossible for people not to see how huge the market is.
Bryan Dalton VP of Operations, ActiveCare: I think our services are good enough and the market is right and we're going to build 35,000 customers in a 20 month period of time on a conservative basis on our own, but as Joe said this contract with this company, it truely provides for the public market and the whole market it provides validation of our idea and of the technology that accompany this insurance services company that's a 2.5 billion dollar company, they have 1400 career sales agents, national employees of the company throughout the US and about 4500 broker agents, people on the street, and getting them behind us, then out there on the streets face to face selling our products, I mean what an amazing opportunity. We say 50,000 but I believe that's conservative if they can really get running with this technology and they're incredibly excited about it. But we're still going to focus on what our core business is that is going out and telling people about Active Care and I believe a huge powerful partner like the insurance company that we're talking to can push it through their own network, it's just a matter of execution right now.
Disclosure: Long ACAR