According to the American - Heart - Association (AHA), approximately 1.5 Million people in the United States suffer a heart attack each year and approximately 400,000 of such persons die suddenly and unexpectedly from an arrhythmia-related condition.

The Electro-Cardio-Graph is a primary source or diagnostic information for the cardiologist since it non-invasively records the electrical events of the heart and noted arrhythmias, which are electrical disorders of the cardiac rhythm. Significant research indicates that most victims of sudden cardiac death showed certain signs of ventricular tachycardia, or an excessively rapid heartbeat.

Current noninvasive techniques designed to determine patients at risk include electrocardiography, stress-testing and 24-hour ambulatory monitoring. Existing systems have difficulties to satisfy the growing specification demands and still maintaining a low cost, both in initial investment and maintenance.

The price range for an ECG system is between $ 1,000 and $ 10,000 dependent on many factors such as: number of channels memory, real-time analysis capabilities and general configuration. The low end is a system with 1 channel, average price of $ 1,800, mid range are systems with 3-6 channels priced about $ 5,000 and high end with 12 channels priced between $ 6,000 and $ 9,000. For systems with interpretation the price will be increased by about $ 1,000.

Patient Monitoring market, excluding clinical information systems was about $ 1.78 Billion in 2000. The Cardiovascular market is growing at a 20% per annum. An aging population, health care policy changes and new products support this estimate. The market for telemedicine products is approximately valued at $1.5 billion currently.

Market for Patient Monitoring Devices

• The U.S. market will rise to $4.3 billion by 2008, at an average annual growth rate of 8.1%.

• The home care market has the highest growth rate of any market segment.

• Averaging 11.7% per year, the handheld monitor market will reach $1.6 billion in 2008.

• The phone or wireless telemetry monitor monitor market will reach $405 million in 2008.

Patient monitoring instrumentation is required and used in diverse clinical applications whether in the hospital, in the rehabilitation center or at patient's home. Having a unique proprietary monitor, which was developed recently using the latest digital technology in conjunction with updated clinical needs, will give the company an edge over competitors and may enable an easier market penetration.

This assumption is based on previous actual experience in marketing similar product worldwide and on the fact that we are not coming with a totally new product that requires ‘market education’. The introduction of other more sophisticated devices will be done at a later stage, utilizing the success and the initial customer base of the first product.

This strategy of a 'two-phase' product introduction will give the company many advantages, such as: easier FDA approval, low initial investment and faster market introduction, which may increase the probability of success.

Most physicians in diverse medical applications use these systems. There is an increasing interest in sophisticated computerized real-time systems, which can supply immediate real-time information not easily available by the conventional diagnostic equipment. The demand for innovation in this rapidly growing medical area is very high.

Our considerations in evaluating the potential markets for the new line around the CardioScope technology take into account the following market segments:

1. Standard Electrocardiographs.
2. Interpretive ECG.
3. Ambulatory ECG with transmission capabilities (Telemedicine)
4. Other Cardiology related diagnostic instrumentation.
5. Therapy and Rehabilitation related equipment.
6. Diagnostic imaging related equipment.
7. Educational and training related equipment.

The CardioScope technology is a nucleus for all the instrumentation mentioned above.

The CardioScope will open new markets and would extend existing markets including: private clinics, insurance related cardiac services, drug titration, cardiac and first aid diagnostic services, all this, in addition to the existing hospital and general practitioners and the home care based markets.

The market of Telemedicine is an emerging and relatively new market. There are many significant advantages in using ambulatory ECG, such as: reduction in travel, stress and waiting list, worldwide service and second opinions capabilities and obviously, cost savings.