Patient Home Monitoring (PHM) Announces June 2011 Growth Figures, Total INR(1) Tests Recorded for the Fiscal Third Quarter, a Private Placement for Growth Capital, and a General Business Update

SAN FRANCISCO, CALIFORNIA--(Marketwire - July 11, 2011) - PHM (TSX VENTURE:PHM) released several performance indicators today, including a revised business update presentation for the capital markets.

Annuity-Based Revenue and Monthly Growth Figures

PHM's revenue is comprised of two components:

1. Existing Patient Revenue. PHM generates a recurring monthly revenue stream from enrolled weekly testers.
2. New Patient Revenue. New patients add to the existing monthly revenue stream.

1. Existing Patient Revenue

PHM generates recurring revenue by recording INR tests on a weekly basis. There is a strong relationship between number of INR tests performed and revenue because PHM is reimbursed by Medicare and most private insurance providers after every fourth eligible INR test. These revenue-generating INR tests are a useful metric to analyze recurring monthly revenue.

Quarter Ending June 30, 2011 INR Tests Recorded

For the quarter ending June 30, 2011, PHM recorded 10,460 INR tests. This compares to 6,312 INR tests recorded for the quarter ending March 31, 2011 and represents a growth of 65.7% in INR tests recorded for the quarter.

Once enrolled, PHM ships a meter, with an expected 5 year economic life, to a patient. With this meter, PHM generates monthly recurring revenue by providing weekly monitoring services to the patient.

2. New Patient Revenue

Understanding how many meters were shipped to newly enrolled patients each month is relevant for analyzing growth, because shipment of a meter is a prerequisite to performing INR tests eligible for reimbursement.⁽²⁾

June 2011 Growth

PHM shipped 220 meters in June 2011. These new meters were shipped to patients who have been prescribed weekly INR tests. If these new patients, along with the new patients added in April and May 2011, achieve compliance levels equal to those generated by existing PHM patients, the tests would generate additional annual revenues in excess of $800,000 above and beyond the revenue reported for the quarter ending March 31, 2011. While there can be no guaranty that new patients will have the same compliance level as existing patients, or that existing patients will maintain the same level of compliance as in the past, clinical data overwhelmingly supports the health benefits for compliant patients that test weekly.

Private Placement

In anticipation of increased growth, PHM has decided to accept a small placement of $700,000 from DRM Ventures, Inc., a capital pool company listed on the TSXV. When a patient enrolls, PHM invests in a revenue generating in-home testing meter. This placement will ensure PHM has enough capital to invest in meters for patients enrolling in the coming quarters.

Michael Dalsin, Chairman of PHM, said of this news "We are excited by the strong growth we are experiencing and even more excited that the market for a safe, in-home testing solution remains robust and large. PHM's INR tests recorded for June 2011 exceeded total INR tests for Q1, 2011 and with the new management leadership, PHM seems well positioned to match the growth potential of the market."

Management Update

Since the addition of Jaime Gerber as Chief Strategic Officer and interim CEO and Leslie Becker as Executive Vice President for Revenue Growth in May 2011, PHM has increased meter shipments and experienced a significant improvement to its future customer pipeline. Shipments in June benefited from their focus upon increasing market penetration with customers that had already expressed interest. The pipeline of potential large cardiology group customers has expanded because these executives have focused PHM on revenue growth through systematic marketing and sales efforts in targeted core markets. Improvement in pipeline among new groups may be expected to appear in August.

At the time of the departure of Ed Berenblum as CEO, Mr. Berenblum had indicated a desire to continue a relationship with PHM. He has since reversed course, and has threatened to file litigation against the Company in connection with his employment and termination. Initial communications suggest he might assert a variety of theories and claims for damages, including breach of contract, breach of an alleged fiduciary duty to him, infliction of emotional distress upon him, diminished wages of his wife, and other theories leading him to assert a potential seven-figure claim. The Company believes that the allegations and the damage theories are without merit, and will vigorously defend any action that is filed. Nevertheless, there can be no guaranty of an outcome, and an unfavorable ruling could have a material adverse effect upon the Company.

PHM also released a revised business update presentation which can be found at www.phmhometesting.com/investor.

⁽¹⁾ International normalized ratio ("INR") tests are used as measures of current and future sales performance. Please refer to the "Non-GAAP Measures" section of PHM's MD&A for further discussion on these operational measures.

⁽²⁾ Management does not mean to suggest or imply that shipment of meters is equivalent to revenue. Before PHM can earn revenue, a meter must be shipped. The shipment of a meter does not ensure revenue. Revenue is achieved only after tests are recorded by a patient eligible for coverage. If patients receiving new meters do not test as frequently as existing PHM patients, revenues will not grow as fast as indicated by past meter shipments. Management does not propose meter shipments as a non-GAAP financial measurement. Instead, management is attempting to offer relevant current factual information to investors who otherwise would not be aware of actual revenue numbers until receiving financial reports for the prior quarter. Management believes that information about meters shipped is relevant, but not dispositive, information about activity and growth. Factors that could make meter shipments not correlate well with revenues include lower compliance rates or high drop-out rates by new patients, changes in reimbursement rates, meter shipment for replacement, or a sudden drop in patient testing after shipment because of a move to alternative treatment. There is no simple reconciliation between meter shipment and GAAP revenue.

About PHM

PHM is a healthcare services company focused on providing in-home testing for patients on blood thinner medications such as Coumadin® or warfarin. Medicare recently expanded reimbursement for in-home patient self testing (PST) of blood coagulation levels. PHM has a unique value proposition to cardiology groups that manage patients on blood thinners, focusing on systemization to enroll patients in PST. Current enrollment compliance levels may not be predictive of future enrollment compliance levels. This unique, systemized approach creates an opportunity for physician groups to operate more efficiently, increasing revenue to their clinic while providing a higher standard of care for patients.

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of PHM and anticipated events or results, are assumptions based on beliefs of PHM's senior management as well as information currently available to it. While these assumptions were considered reasonable by PHM at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue operations, decline of reimbursement rates, changes in US healthcare laws, coverage or budgets, dependence on few payors, possible new drug discoveries, a novel business model, dependence on key suppliers, granting of permits and licenses in a highly regulated business, competition, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected.