The Board of Directors of MedcomSoft Inc. (“MedcomSoft” or “the Company”) is pleased to announce that it approved a revised business plan developed over the past 60 days by MedcomSoft’s management and advisors, led by interim CEO Rob Wilson. The revised business plan will use a highly focused direct sales channel to access identifiable priority customers and strategic partners. The objective is to increase the adoption rate of the Company’s award-winning Record UE electronic medical record (“EMR”) product in the U.S. market.
In developing this revised business plan, the Company has taken steps to sharpen the focus of its sales activities in an effort to target customers with the highest probability of yielding immediate returns. “We don’t have the resources to pursue every sales lead,” noted Wilson. “Under this revised business plan, we will be more disciplined in picking the markets and customers that we target.”
The Board has retained the Health Care Investment Banking Group of Raymond James & Associates to explore funding and strategic alternatives to support the execution of the revised business plan. Management estimates that approximately $15.0 million of additional capital will be required by the Company to implement all elements of the revised plan. MedcomSoft recently completed a $1.6 million private placement financing in June of this year. “After careful evaluation of our products, our market position, and the current and forecasted trends in our industry, we believe that the targeted capital raise will position MedcomSoft to build market share in the combined practice management and electronic medical record software market,” noted Wilson.
“We selected Raymond James to assist us because of their extensive experience in and understanding of the U.S. healthcare information technology (HIT) market,” noted John Gillberry, Chairman of MedcomSoft. “We believe that under the leadership of our interim CEO Rob Wilson, and with the assistance of Raymond James, MedcomSoft will be able to access the required capital to fund execution of the revised business plan and secure a meaningful share of the ambulatory EMR market.”
In conjunction with development of the revised business plan and associated financing requirements, the Company has identified a senior management team with deep domain expertise and a track record of success in the U.S. HIT market. Subject to completion of the targeted financing and final negotiation of mutually satisfactory employment terms, this senior management team would join the Company to drive execution of the revised business plan.
Concurrent with approval of the revised business plan, the Board endorsed management’s recommendation to enter into discussions with their largest customer, Independent Physicians Network, Inc. in Milwaukee, Wisconsin (“IPN”), to renegotiate the scheduled delivery date for the Company’s MedcomSoft Clinical Data Repository (“MCDR”) product line. Wilson stated, “Ultimately the MCDR product is important to us, and certainly the IPN is one of our most important customers, so we will make every effort possible to work toward a solution to move this project forward. However, we have finite financial resources and need to focus those resources accordingly.” MedcomSoft and IPN have commenced discussions on developing a new timetable for the delivery of the MCDR product line. MedcomSoft is currently working on the next release of MedcomSoft Record UE (Version 4.6), which is scheduled for delivery late in the current calendar year. MedcomSoft Record UE Version 4.6 will include enhancements to the Medcin clinical vocabulary and has several updates designed to improve practice management functions.
In addition, the board has endorsed the decision by the Company and its customer, Puerto Rico-based Clinical Management Corporation of America (“CMCA”), to terminate their previously announced contract for the provision of up to 100 MedcomSoft Record UE licenses for use in primary care clinics to be built in Puerto Rico by CMCA. “This decision allows MedcomSoft to concentrate resources on existing areas in the U.S. where we already have an established market presence,” noted Mr. Wilson. The CMCA contract would have provided up to $750,000 in revenue during 2008 and 2009 but had been delayed due to revisions in the construction and implementation timetable for the building of the clinics in Puerto Rico. MedcomSoft and CMCA agreed to release each other from the required purchase of licenses, including a purchase commitment on the first ten licenses received by the Company in the third quarter of fiscal 2008 having a contract value of approximately $84,000, but also agreed to honor the economic terms of the agreement if CMCA chooses to use MedcomSoft Record UE products at a later date and the Company chooses to support an installation in Puerto Rico.
Founded in 1994, MedcomSoft Inc. develops cutting-edge software solutions for the healthcare industry. MedcomSoft has pioneered the use of numerically codified point-of-care clinical terminologies to create a new generation of highly interoperable EMRs, which significantly enhance disease surveillance and accelerate clinical research. MedcomSoft’s award-winning software applications include Electronic Medical Records, physician order entry systems with e-prescribing, document management, practice management and clinical data search, data mining, and disease surveillance systems. MedcomSoft is the recipient of the "Best of KLAS" award in 2007 year-end report in the Ambulatory EMR 1-5 Physicians category. In addition, a MedcomSoft practice was recently awarded the prestigious 2007 HIMSS Davies Award. www.medcomsoft.com
This news release contains forward-looking statements regarding MedcomSoft's expectations and beliefs with respect to future events and/or financial performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual events or results to differ materially from those expressed or implied in such forward looking statements. Such factors and risks include, but are not limited to: market conditions; competition, including price and product functionality; economic environment; and the ability to develop and deliver new products in a timely manner. The reader is referred to the documents that the Company files from time to time with applicable Canadian securities and regulatory authorities for a discussion on certain risks and uncertainties that could cause actual results to differ from those projected, anticipated, or implied. MedcomSoft does not undertake to update forward-looking statements.