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 closed the acquisition of IDYA4, a leading health technology
company focused on data interoperability and cybersecurity based in
the United States.
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 US Department of Justice, the US Department
of Homeland Security, US Health and Human Services, and National
Intelligence.
IDYA4 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 IDYA4 is already integrated with
Snapclarity, Livecare and iMD Health. The Company will be deploying
a fully unified product offering to partners and enterprise clients
within the next 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.
Real Time Intervention Platform for
Substance Use Disorder
Upon closing of the acquisition, the Company can
now focus on the continued expansion of IDYA4’s Real Time
Intervention Platform (“RTIP”) for Substance Use
Disorder (“SUD”) across North America to help and
support the growing addiction crisis.
The COVID-19 pandemic has affected communities
across North America and the number of Substance Use Disorders is
on a rise resulting in fatal overdoses. Over 81,000 drug overdose
deaths occurred in the United States in the 12 months ending in May
2020, the highest number of overdose deaths ever recorded in a
12-month period according to recent provisional data from the
Centers for Disease Control and Prevention
(“CDC”)1. Canada is facing similar challenges
where between April and June 2020, there were over 1,628 opioid
toxicity-related deaths, resulting in a startling 54% increase from
the year before. Nearly 97% of these deaths were found to be
accidental2.
In mid-August 2020, the CDC revealed the results
of a survey conducted in late June 2020 that opens a window into
just how serious the psychological and emotional impact of the
Coronavirus pandemic is for Americans. The survey shows that
reports of anxiety disorder symptoms were about three times those
reported in the second quarter of 2019 (25.5% versus 8.1%), and
depressive disorder was about four times that reported in Q2 2019
(24.3% versus 6.5%). CDC also said 13.3% of respondents reported
starting or increasing substance abuse (including drugs and
alcohol). In addition, more than twice as many respondents reported
serious consideration of suicide in the previous 30 days than did
adults in the US in 2018, referring to the previous 12 months
(10.7% versus 4.3%).
The RTIP for SUD is an innovative, health data
integration and security technology solution leveraging various
information sharing standards and is already operational across 38
states and local agencies to address the opioids crisis. Some of
these agencies include Bergen County Prosecutors Office, New
Jersey, Passaic County Prosecutors Office New Jersey, and the
Executive office Public Safety and Security at Commonwealth of
Massachusetts.
These state level agencies have received funding
from the US Department of Justice, CDC, Center for Medicaid
Services (“CMS”) and the Office of the National
Coordinator for Health Information Technology
(“ONC”) to implement RTIP in keeping their
communities healthier and safer. The Company plans on expanding and
scaling the platform further across the United States and in
Canada.
RTIP for SUD enables broader collaboration among
behavioral health, human services, and justice professionals to
share information within the bounds of policies and laws like The
Health Insurance Portability and Accountability Act of 1996
(HIPAA), Criminal Justice Information Sharing and the ONC’s
Interoperability Rule to enable access to patient health data and
to view individual's historical data to help them get the right
treatment and services for successful rehabilitation process. The
platform provides real time analysis on the needs of the
individuals to ensure successful rehabilitation.
Dr. Amit Mathur, President of
CloudMD, “We are very excited to close the acquisition of
IDYA4 as it provides us with the technology backbone for our
integrated health services platform which connects all our
healthtech solutions into one seamless experience. Equally exciting
is our ability to scale across North America with programs like the
Substance Use Disorder platform and already established
partnerships at the highest level of Government agencies. We will
use the RTIP platform to provide similar solutions in Canada to
assist in addressing the enormous issue of opioid and substance use
made even worse as a result of the COVID-19 pandemic.”
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. Since announcing the
binding agreement in December 2020, IDYA4 has launched a number of
national programs and closed various new contracts that will
generate US$1.5 million.
From IDYA4’s currently commercialized products,
the Company expects IDYA4 to achieve an annual pro forma revenue
growth rate greater than 45%, calculated based on expected revenue
from currently committed and high probability contracts forecasted
to generate annual gross revenue greater than US$6 million and
US$8.5 million in calendar years 2021 and 2022, respectively. A
total of 30 per cent of the total consideration for the acquisition
amounting to $4.44-million (U.S.) is based on two performance-based
earnouts, 15 per cent 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 paid US$14.8
million 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.
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
7,000 psychiatrists, approximately
4,500 therapists and counsellors, approximately
4,000 psychologists, over 22,000
family physicians, over 34,000 medical
specialists, over 1,500 allied health
professionals, over 500 clinics, and 8
million patient charts across North America. CloudMD’s
Enterprise Health Solutions Division includes one of the top 4
Employee Assistance Programs in Canada and offers one
comprehensive, digitally connected platform for corporations,
insurers and advisors to better manage the health and wellness of
their employees and customers. 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.
__________________
1
https://www.cdc.gov/media/releases/2020/p1218-overdose-deaths-covid-19.html2
https://thefulcrum.ca/features/the-epidemic-within-a-pandemic-opioid-overdoses-continue-to-make-an-impact-during-covid-19/
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