CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a healthcare technology company
revolutionizing the delivery of care, is pleased to announce that
it has signed a definitive agreement (the
“
Agreement”) to acquire IDYA4, a leading health
technology company focused on data interoperability and
cybersecurity based in the United States. Since announcing the
binding agreement in December 2020, IDYA4 has closed various new
contracts and waiting task orders to be finalized for approximately
$1.5Million (USD).
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 actively screening and protecting 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, the U.S. Department of
Justice, the U.S. Department of Homeland Security, U.S Health and
Human Services, and National Intelligence.
IDYA4’s Real Time intervention platform
(RTIP) is the technology backbone of CloudMD’s integration
of its healthcare solutions providing one, digitally connected,
patient focused platform. Initial stages of the integration are
well underway, and the Company will be deploying the unified
product offering to partners and enterprise clients within a few
months. The combined technology will also be valuable as CloudMD
continues to emphasize patient engagement through connected
technology, healthcare portals, telehealth applications, and
wearable devices.
Various RTIP modules have been operational for
last 15 years in the health, human services, homeland security and
Public safety to enable information sharing and
interoperability. The same RTIP is now also operational in
Bergen County, New Jersey to address the opioid overdose crisis.
The RTIP platform is connecting public health, social services, and
public safety systems to address the real time needs of the
individuals who have overdosed or may be at risk. This effort is
funded by the U.S. Department of Justice and a local Public Safety
agency.
IDYA4 has also launched the First Responders
Health Wellness Network to address the Behavioral Health issues
including Substance Use Disorder among the First Responders (Law
Enforcement, Fire and Emergency Management Services). The Health
and Wellness Network will provide an end-to-end solution to the
individuals who need help at any hour of the day. This network is
developed on IDYA4’s RTIP allowing the individual to access the
platform through their mobile device, desktop or laptop to check
their health and wellness on a daily basis via this application
developed by Behavioral Health experts. This program already
includes CloudMD solutions, Snapclarity, Livecare and iMD and the
company is in its initial phase of implementing a proof of concept
that is supported by the Key Public Safety Associations and funded
by the U.S. Department of Justice.
IDYA4’s team is now providing subject matter
expertise to address the interoperability issues among the Public
Safety and Public Health agencies across the U.S. to coordinate
efforts in addressing National issues like COVID-19 and the opioid
crisis. This key initiative is supported by the U.S Department
of Homeland Security, State and Local Public Safety and Public
Health agencies across the nation. IDYA4 has been engaged to
provide advice to the US Federal agencies, State and local
government, and National associations engaged in addressing the
issues that North America faces around the opioid crisis. As part
of this advisory, IDYA4 will be hosting multiple seminars to
discuss how Public/Private leaders can come together to address the
opioid crisis that American communities face.
CloudMD is fully committed to the privacy and
security of patient data, and this integrated health data platform
is both 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.
IDYA4 generated approximately US$ 4.4 million in
revenues with earnings before interest, taxes, depreciation and
amortization (EBITDA) margins exceeding 31% over the 12 month
period ending December 31, 2020. 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 health technology
solutions that will be added to IDYA4’s current product portfolio.
From IDYA4’s currently commercialized 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. See press release
dated December 17, 2020 for full terms.
The acquisition is subject to customary closing
conditions, including the receipt of TSX Venture Exchange
approval.
About IDYA4
IDYA4 is a health data integration and a data
security company working to transform businesses through improved
data management, security and integration, as well as protection
against today’s ever-changing cyber threats. IDYA4 works to achieve
the best possible outcomes for its clients while striving to build
safer and healthier communities worldwide. For more information
visit www.IDYA4.com
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’s
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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