Biosign positions itself for growth: Strengthens the Board, secures debt financing & looks to acquire additional software assets
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH UNITED STATES WIRE SERVICES/
TORONTO, March 25, 2014 /CNW/ - Biosign Technologies Inc. (TSXV: BIO) ("Biosign" or the "Company") is pleased to provide an update for shareholders and announcements on the following subjects:
In December 2013 Biosign announced the acquisition of two complimentary, revenue producing software companies, IBL Internet Business Logic Inc., a pioneer in cloud-based clinic management software and QLINE Solutions Inc., a leading supplier of enterprise software for the home care industry. The Company also announced its largest-ever software sale, a combined $6 million package divided into a one-time $3 million license fee and a separate $3 million services agreement. These transactions have now closed, and Biosign is pleased to describe the strategy underpinning our activities.
Capitalizing on Opportunities for Rapid Growth:
After extensive research, the Company has concluded that the primary unmet need in the markets we serve is the urgent requirement to connect those in need of care with service providers who deliver care using new cloud-based software solutions. For example, a typical clinic uses paper-based forms and labour intensive practices to schedule appointments, resulting in waste and inefficiency. At the same time, clients have no easy online access to information about the care they receive. Since our software is effective in streamlining the internal management of clinics, Biosign is in the unique position to connect customers to their healthcare providers in a convenient, seamless way.
The Company is pursuing two parallel paths to growth: we are creating innovative proprietary solutions that disrupt incumbent players and at the same time we are acquiring synergistic assets that increase speed-to-market and deliver profits. Biosign continues to execute both these strategies by improving our patent-pending Pulsewave® technology while simultaneously integrating QCARE & ClinicServer with additional assets into a unique and compelling platform.
Under this strategy Biosign is participating in the Qualcomm Tricorder XPRIZE competition, a $10 million innovation contest to develop a Star Trek-like software system to record all 5 vital signs and independently diagnose 15 separate diseases. A 2012 study by Parks Associates ("Digitally Fit: Healthy Living and Connected Devices") predicts that more than 32 million US consumers will actively track their health & fitness online by 2016, up from about 15 million in 2011 (~100% growth). Revenue from online / mobile wellness service adoption will increase from $337 million in 2011 to more than $2.4 billion by 2016 (~700% growth), according to the study.
Qualcomm Tricorder XPRIZE Competition
Biosign is pleased to report that we continue to be recognized as a strong competitor in the Tricorder XPRIZE competition. On March 13th 2014 Biosign was featured on the technology blog io9, part of the Gawker media platform. Gawker media has over 20 million unique visitors to its media sites per month. Out of 34 teams competing in the XPRIZE, 5 were featured by io9, and first up was Biosign. We believe Biosign's XPRIZE entry, consisting of our Pulsewave® MAX system married to a unique new invitro diagnostic (IVD) reader is on track to reach our immediate goal to qualify as a finalist in August 2014. It is anticipated that the winner of the Tricorder XPRIZE, to be announced in 2015, will be in a position to assume a leading position in the market for consumer-friendly online health platforms from 2016 onward. View the interview at http://io9.com.
Gaining the Edge through Market Coverage
Biosign management is positioning the Company for increased growth by ensuring market coverage in three inter-related ways:
|a)||Geographical coverage, pursuing customers and partners with clinic or home care locations across Canada, the United States and Europe;|
|b)||Vertical coverage, delivering solutions to be used simultaneously by both consumers and care providers; and|
Longitudinal coverage, for example by providing solutions that connect
seniors with family caregivers and then later, connecting those same
seniors with approved home care providers, bridging the gap between where family care leaves off and state / insurance funded home care
Changes to the Board:
Biosign welcomes three new members to its Board of Directors, two of whom were elected at the Annual General Meeting held on February 6th, 2014, and the third who has been appointed more recently:
Mr. Brian Neill is the current chairman of the board of Populus, a provider of Healthcare Information Systems and previous founder & chairman of public company Star Choice Communications Inc. Mr. Neill had a successful legal career and was appointed to the Queens Council in 1990. Mr. Neill was elected at the AGM.
Mr. John-Peter Bradford is founding Partner of Bradford Bachinski Limited. An experienced CEO and board member, and senior business and corporate finance advisor, he is a published scientist, and a Certified Management Consultant (Fellow), who holds a B.A (Psychology) from Fairfield University in Connecticut, an M.A. (Experimental Psychology) from University of Toronto and a Ph.D. (Psychology and Community Services) from Columbia Pacific University. Mr. Bradford was elected at the AGM.
Mr. Tony Melles is the President of Achieva Health, an Ontario based operator of Allied Health clinics, and former founder and President of Canadian Back Institute (now CBI). Mr. Melles agreed to join the Board effective February 15, 2014.
With the addition of these members, the Board now consists of Dr. Michael Gross (Chairman), Mr. Dennis Rygwalski (Audit Committee Chair), Mr. Neill (Governance Committee Chair), Mr. Bradford (Compensation Committee Chair), Mr. Melles and Mr. Robert Kaul (CEO).
The Board and Management of Biosign would like to thank previous Board members, Dr Sonny Kohli and former Chairman Mr. John Rizvi, for their exemplary service. We are pleased to note that both previous directors will continue to work with Biosign: Dr Kohli has accepted the position of Chief Medical Officer with the Company, while Mr. Rizvi has accepted the position of Managing Director, Middle East & Asia, where he will assist the Company with recently announced distribution relationships in that region. For complete biographies of the Company's managers, directors and advisors please refer to www.biosign.com.
Acquisition of Integrated Software Platform for Transactional Revenue:
Biosign has executed a Resale & Internal Use Software License Agreement with a leading software solutions provider in the insurance claims management industry. This non-exclusive, fully paid-up North American license allows the Company to utilize as well as resell a unique claims management platform, coupled to Biosign's healthcare solutions including ClinicServer and QCARE. Under a Professional Services & Support Agreement, the licensor agreed to support Biosign in the integration, setup and maintenance of the solution. Biosign paid $5 million for the license fee and $3 million for professional services, in cash.
The Company intends to deploy this licensed solution to create a unique service that automates the processing and delivery of allied health benefit claims from insurance companies. For example, by integrating employee benefit claims assessment data with our ClinicServer physiotherapy clinic management solution, Biosign can deliver customers directly to over 250 ClinicServer operators across Canada, making our software even more compelling. In doing so, we will earn a transaction fee for each claim delivered to a clinic within the ClinicServer network. Biosign intends to have the initial iteration of this automated solution ready for testing by the third quarter of 2014,
Financing for Growth:
Biosign has secured $4.75 million in debt financing in the form of a Demand Loan Agreement (the "Loan") with interest payable at Bank of England prime rate plus 3% per annum and no set repayment term. The Loan is unsecured and use of funds for the principal of this Loan include $2 million paid towards the Software License & Maintenance Agreement mentioned above and $2.75 million for working capital. Biosign is currently in discussion with potential strategic partners regarding an equity placement, which we expect to price at a premium over the market share price. These funds will be used for new product development including XPRIZE, the automated benefits assessment platform, and working capital needed to expand into available markets quickly.
Conversion of Outstanding Indebtedness and Loans to Various Parties:
Biosign announced that upon approval of the TSX Venture Exchange it has completed the share for debt transaction previously announced on December 23, 2013 by issuing 3,147,305 common shares of the company in settlement of $157,720.25 in outstanding debt. The issued common shares will be restricted from sale for a period of 4 months and 1 day. Meanwhile, Biosign has agreed to lend $166,725 to an officer of the Company, and $132,000 to a consultant to the Company, on the following terms: interest will be assessed at the Bank of Canada prime rate plus 2% per annum, and the full balance will be repaid within 12 months.
Biosign CEO Robert Kaul stated: "The ideas and events discussed in this press release are quite informative for investors. First we described our strategy for success, focusing on connecting people who need care with those who provide it in three compelling ways - geographically, within market verticals and across market categories. Next we reported increased media recognition of Biosign as a technology innovator including our status as a serious XPRIZE competitor. Like other fast-growth technology companies we confirmed our intention to disrupt incumbents with our proprietary Pulsewave® software while simultaneously acquiring synergistic assets & customers. Along those lines we reported the acquisition of a software asset that facilitates our ability to connect employee benefit claims with our network of allied health clinics running ClinicServer, leading to a new stream of transactional revenue by the end of 2014. We announced the addition of 3 thought-leaders to our board, and welcomed former board members to new roles in the Company. Finally, in our efforts to reduce shareholder dilution we secured $4.75 million in low-cost, unsecured debt and positioned future strategic equity financing to be at a premium to our market price. These steps all share a common theme: Biosign's strategy is to focus on our unique ability to deliver accurate cloud-based solutions that connect multiple parties. By doing so we work to gain media recognition, attract financing on improved terms and realize customer and revenue growth, thereby delivering on our promise of improved returns to shareholders."
About Biosign Technologies Inc.
Biosign Technologies Inc. (TSXV: BIO) provides automated, software-enabled health information solutions including the Pulsewave® Health Monitor, Healthanywhere™ Patient monitoring platform, ClinicServer™ clinic management software and QCARE™ enterprise solutions for home care. The Company also offers a number of cardiovascular screening programs for consumers under its Heart Friendly™ brand. For more information on Biosign, please visit www.biosign.com
This release contains forward-looking statements. Forward-looking statements, without limitation, may contain the words believes, expects, anticipates, estimates, intends, plans, or similar expressions. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions and Biosign's actual results could differ materially from those anticipated. Forward looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. In the context of any forward-looking information please refer to risk factors detailed in, as well as other information contained in the company's filings with Canadian securities regulators (www.sedar.com).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Biosign Technologies Inc.For further information:
Biosign Contact Information:
Chief Executive Officer
Phone: (416) 218-9800 ext. 201