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VANCOUVER, British Columbia, Feb. 22, 2021 (GLOBE NEWSWIRE) -- 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.
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:
VP, Investor Relations
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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