CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a healthcare technology company
revolutionizing the delivery of care, is excited to announce that
it has signed a binding term sheet (the
“
Agreement”) to acquire IDYA4, a leading data
integration and cybersecurity company based in the United States.
Focused on the health and wellness sector, IDYA4
has built a proprietary technology platform that provides
improvements in data access, management, security and integration,
as well as proactively providing protection against today’s
ever-changing cyber threats. Built on over 20 years of experience,
the IDYA4 team has been at the forefront of the development of
information sharing and interoperability solutions across all 50
states for clients including, U.S. Department of Justice, the U.S.
Department of Homeland Security, U.S Health and Human Services, and
National Intelligence. Global legislations are evolving to ensure
patients have access to their own healthcare data and are
empowering them to take control of their healthcare journeys.
IDYA4’s health data platform already leverages critical national
and international technology standards and allows providers and
patients access to sensitive and private health data in an
efficient and intuitive manner with adherence to privacy and
security regulations.
The IDYA4 platform is designed to allow various
health technology solutions like Electronic Medical Records (EMR),
Apps, telehealth solutions and medical devices to connect and share
data with all the relevant privacy and data security rules applied
that can vary state to state or program to program. The IDYA4
software and team will also immediately help accelerate CloudMD’s
integration of its healthcare technology solutions to provide one,
digitally connected platform to enable team-based, continuity of
care and an ecosystem of healthcare providers focused on the
overall health and wellness of the patient. The integrated
technology will also be valuable as CloudMD continues to emphasize
patient engagement through connected technology, healthcare
portals, telehealth applications, and wearable
devices.
In addition to accelerated integration, CloudMD
will be able to leverage IDYA4’s already existing relationships and
cross-sell its suite of healthcare solutions and enterprise
healthcare platform to these clients. This includes offering
solutions such as Livecare, Benchmark, Snapclarity and iMD Global
Health to IDYA4’s existing and prospective clients to provide an
enhanced health and wellness offering.
Using their standard-based interoperable
platform, IDYA4 has developed several applications which have been
commercialised and continues to develop and add to their portfolio
of solutions to address the evolving healthcare landscape and the
unmet demand for innovative and secure healthcare solutions. The
recently launched Health and Wellness Platform will be deployed to
assist First Responders initially and will be rolled out to Public
Health, Professional Sports and other communities. This program
will address the issues of Behavioural Health including Mental
Health and Substance Use Disorder heightened by the COVID-19
pandemic across North America, and will be the core component of
CloudMD’s enterprise health solutions.
CloudMD is committed to the privacy and security
of patient data, and this integrated health data platform is Health
Insurance Portability and Accountability Act (HIPAA) compliant and
is enabled for continuous monitoring to ensure the protection and
privacy of sensitive data. The platform has been architected to
support U.S. and International security standards like the National
Institute of Standards and Technology (NIST) Cybersecurity
Framework to address internal and external cyber threats.
Amit Mathur, President of
CloudMD commented, “Earlier this year we entered into a
vendor resale agreement with IDYA4, but after working closely
together for a number of months, it’s evident that the synergies
between both companies will be instrumental in accelerating the
integration of CloudMD’s solutions, continuing the growth and
expansion across North America and lastly, ensuring state of the
art intelligence and cybersecurity across the platform.” He
continued, “The future of healthcare delivery is patient-focused,
team-based and digitally connected. This is an exciting inflection
point for our Company, as the acquisition of IDYA4 provides CloudMD
with a backbone of innovative, proprietary data integration and
security technology that will position us as leaders in the
healthcare technology sector.”
“Healthcare data integration and security is a
complex and critical problem that must be addressed on a global
basis. IDYA4 has prioritized this issue to help government
agencies and private health care entities to establish secure
integration using a globally recognized standards-based integrated
health data platform. Changes are occurring rapidly in current
global healthcare legislation to empower patients and ensure their
ability to access personal healthcare records and share what is
needed with confidence and assurance of its safety. Our
team’s capabilities and depth of knowledge on standards for sharing
information, combined with the expertise offered by CloudMD, will
provide a holistic, patient-centric approach to care, based on one
single and connected platform, transforming the way healthcare is
being delivered. We look forward to working jointly with
CloudMD, and through our combined knowledge, expand and grow the
capabilities for the critical healthcare
environment,” commented, Ashwini Jarral Co-Founder,
Chief Operating Officer of IDYA4.
IDYA4's current annualized revenue run rate,
based on the 9-month period ending September 31, 2020, is
approximately US$ 4.1-million with EBITDA (earnings before
interest, taxes, depreciation and amortization) margins of 36%.
Upon closing, the acquisition of IDYA4 will be immediately
accretive to CloudMD with synergies the Company believes will drive
further revenue and increased EBITDA margin through cost savings
achieved through the scaling of operations and by tapping into
CloudMD's current health technology solutions that will be added to
IDYA4’s current product portfolio. From IDYA4’s currently
commercialised products, the Company expects to achieve an annual
Revenue growth rate greater than 45%, calculated based on expected
revenue from currently committed and/or high probability contracts
forecasted to generate annual gross revenue greater than US$ 6M and
US$ 8.5M in calendar years 2021 and 2022, respectively. A total of
30% of the total consideration for the acquisition amounting to US$
4.44 million is based on two performance based earnouts, 15% each,
that are contingent on meeting these forecasted revenue
targets.
Terms of agreement
In consideration for the purchase of 100% of the
issued and outstanding IDYA4 Securities, CloudMD has agreed to pay
aggregate consideration of US$14.8 million payable as follows: (i)
US$ 3.7 million in cash, subject to a working capital
adjustment; (ii) US$ 6.66 million in common shares of the
Company; and (iii) a performance based earnout of US$ 4.44 million,
of which US$ 0.44 million is payable in cash and US$4 million is
payable in common shares of the company in equal annual issuances
over a period of two years. All common shares issued pursuant to
the acquisition are issued at a deemed price of $2.16 per share and
are priced by calculating the 10-day volume-weighted average
trading price of the Company's shares for the 10 trading days prior
to the execution of the binding term sheet. The shares will be
subject to certain contractual restrictions on trading for a period
of 30 months from the date of issuance.
The acquisition is subject to customary closing
conditions, including the execution of a definitive acquisition
agreement and receipt of TSX Venture Exchange approval.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare
by providing a patient centric approach, with an emphasis on
continuity of care. The Company offers SAAS based health technology
solutions to healthcare providers across North America and has
developed proprietary technology that delivers quality healthcare
through a holistic offering including hybrid primary care
clinics, specialist care, telemedicine, mental health support,
educational resources and artificial intelligence (AI). CloudMD
currently services a combined ecosystem of over 500
clinics, almost 4000 licensed practitioners and 8 million patient
charts across North America. For more information visit:
www.cloudmd.ca.
ON BEHALF OF THE BOARD OF
DIRECTORS “Dr. Essam
Hamza, MD"Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
Julia BeckerVP, Investor
Relations julia@cloudmd.ca
Forward Looking Statements
This news release contains forward-looking
statements that are based on CloudMD’s expectations, estimates and
projections regarding its business and the economic environment in
which it operates, including with respect to its business plans.
Although CloudMD believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and
involve risks and uncertainties that are difficult to control or
predict. Therefore, actual outcomes and results may differ
materially from those expressed in these forward-looking statements
and readers should not place undue reliance on such statements.
These forward-looking statements speak only as of the date on which
they are made, and CloudMD undertakes no obligation to update them
publicly to reflect new information or the occurrence of future
events or circumstances, unless otherwise required to do so by
law.
Non-GAAP and Non-IFRS Measures
This press release refers to “EBITDA” and
“EBITDA margins” which are non-GAAP and non-IFRS financial measures
that do not have a standardized meaning prescribed by GAAP or IFRS.
The Company’s presentation of these financial measures may not be
comparable to similarly titled measures used by other companies.
These financial measures are intended to provide additional
information to investors concerning the Company’s and IDYA4
performance. EBITDA is defined as earnings before interest, taxes,
depreciation and amortization and EBITDA margins is defined as
EBITDA as a percent of total revenue. EBITDA and EBITDA margins are
Non-IFRS measures the Company uses as an indicator of financial
health and excludes several items which may be useful in the
consideration of the financial condition of the Company and IDYA4,
as applicable, including interest expense, income taxes,
depreciation, and amortization.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
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