KING OF PRUSSIA, Pa.,
Sept. 17, 2012 /PRNewswire/ --
Medical Alarm Concepts Holding, Inc. (OTCQB: MDHI.PK), manufacturer
of the MediPendant™ two-way voice personal medical alarm, sent the
following letter to all shareholders outlining recent
accomplishments and future plans.
Dear Shareholders of Medical Alarm Concepts Holding, Inc.:
It's been a very long road for Medical Alarm Concepts Holding,
Inc. (MDHI) since going public several years ago. The
Company was organized with the idea of revolutionizing the personal
medical alarm sector through the introduction of a unique two-way,
speak and listen through the medical pendant technology. For
much of our history the company has failed to realize its growth
potential. These reasons include a lack of adequate initial
capital to execute a truly robust marketing plan, and structural
balance sheet issues relating to our initial money raise that
resulted in a toxic structure of our convertible debt, which in
turn handicapped our ability to raise additional funds needed to
make the company a success.
I am writing to you today to explain what we have done to
rectify these issues and to let you know about the dramatic
turnaround our business has realized over the past few
months. What we plan to express in this shareholder letter is
not that we are planning to turn our business around, but rather
that we have already turned the business around and that we are
experiencing extremely strong sales growth rates.
Additionally, we wish to express to you that we are very quickly
approaching our revenue breakeven point. This turnaround has
been very dramatic and as we move into our busiest sales period of
the year, our confidence level has never been higher.
Here's a summary of what's happening at the company:
Debt Restructuring - Over the past 12 months, we have worked
closely with our convertible debt holders in order to negotiate an
adequate settlement that returned the debt holder's capital with a
profit, while still maintaining the integrity of our capital
structure. We are very happy to report to our shareholders
this process is now complete with all of the debt now consolidated
under a single entity that has a significant interest in the
long-term viability of the company. As a result of these
negotiations a large portion of the convertible debt has now been
outright cancelled, 165 million highly dilutive warrants have been
cancelled, and as we announced last week, all of the Series A and
Series B Convertible Preferred stock has been retired. We
strongly believe that for the first time in the company's history
there is now a workable capital structure that will allow us to
realize the growth potential we initially envisioned.
Credit Line Establishment and Balance Sheet Restructuring - We
have been able to inject new funds into the company in a manner
that very few small entrepreneurial organizations are able to
achieve. We have established an unsecured $750,000 credit line with no features for
conversion to either common or preferred stock. It is the
type of financing that only much larger companies are able to
establish and it has made a huge difference in our ability to
maneuver within our market space. With the funds from this
credit line we have paid off nearly all of our trade payables,
significantly increased our inventory levels, and implemented many
of the marketing programs that had been planned but never
funded.
Retail and International Presence - Last December we announced
the MediPendant would be offered on the E-Commerce platform of one
of the largest retailers in the country. This relationship
has progressed throughout 2012 and both parties are very happy with
the progress achieved. The company also recently announced
the initiation of shipments to our first European customer and that
we are in negotiations for several other international
contracts. These new relationships have not only resulted in
significant revenue growth, but have also attracted additional
attention and market focus to our unique product offering.
Significant Order Growth - We are very happy to report to our
shareholders that the above outlined actions and programs are
resulting in very strong growth in orders and revenues. We
believe an important aspect of this growth has been the recent
implementation of a much more aggressive pay per click Internet
campaign, which has thus far yielded strong website clicks and
order follow through. Also, we feel the medical alarm market
is now beginning to recognize the brand "MediPendant" and this is
leading to more inquiries and resulting order flow.
Returning to Fully Reporting SEC Status - Medical Alarm Concepts
is a voluntary reporting organization with the Securities &
Exchange Commission and thus we are not required to file
financials. Transparency is, nevertheless important to us, so
we are committed to filing full financials with the SEC as soon as
we are able. As we announced in a recent press release, we
have informed our accountants to begin preparing the financials in
order to return us to fully reporting status. As many of you
know, maintaining full reporting is very expensive for small
companies and thus late last year, we made the strategic decision
to suspend this reporting in order to remain solvent and to
continue to implement programs to restore growth. We are very
happy to tell our investors we believe this was the right strategy
and we believe the growth we are currently experiencing is the
result.
Breakeven Mark - It is important to remember that we not only
receive revenues for sales of MediPendant personal medical alarm
equipment, but also monthly subscription services for the
monitoring of these alarms. As we continue to accelerate
sales, our recurring monthly revenues continue to grow and we are
now quickly reaching the point where these recurring revenues are
very close to surpassing our monthly fixed expenses. The
exact timing of the company reaching its breakeven point depends on
the sustainability of the current growth rate trend, but based on
these recent trends we expect to reach profitability by the end of
the year. With that said, however, we believe the remaining
portion of 2012 represents our busiest period of growth and as a
result, we would not be surprised to see a significant up-tick in
monthly service contracts during this period. Should this
transpire, we could easily reach profitability sooner.
Profitability of the company is virtually inevitable considering
the dynamics of the recurring monthly revenue model and our current
growth trajectories.
Capital Structure - There are currently approximately
631,000,000 outstanding common shares, and as we indicated above,
the entire convertible preferred stock has now been retired as have
the vast majority of outstanding warrants. Based on the
recent closing price of the common shares, our total market
capitalization is only approximately $2.5 – $3
million. While we have suffered dilution as a result
of the conversions and settlements with convertible debt holders,
we have been able to hold this dilution to a minimum, and this will
hopefully allow existing shareholders to capitalize on our fast
trajectory to profitability.
Summary - The past few years have been very difficult for
Medical Alarm Concepts and its shareholders, but we believe the
near-term and long-term future lookouts are extremely
bright. We are happy to let you know today that a
significant turnaround in our operation has taken place, that we
are experiencing a very strong growth trend, and a rapid drive
toward profitability. As we move in to what we believe will
be the busiest growth period of the year, we believe the very real
possibility exists for further acceleration of our growth
rate. When we become fully reporting, which we estimate will
be approximately the end of this calendar year, we believe
investors will see us emerge with a clean balance sheet, a sound
capital structure free of any toxic debt or warrants, positive
working capital, strong gross margins and positive
earnings-per-share.
Considering what we believe to be an extremely low total market
capitalization of only $2.5 - $3
million, we believe all shareholders are well-positioned for
additional value creation over the coming weeks and months.
We have never been more excited about the direction of our
business and we thank you for your support.
Sincerely,
Ronald Adams
CEO
About Medical Alarm Concepts
Medical Alarm Concepts Holdings, Inc. (MAC) develops and
manufactures innovative products and practical solutions within the
framework of a vast growing marketplace. MediPendant's™ patented
two-way voice technology enables the user to speak and listen
directly through the pendant no matter where the user may be in and
around their home. MediPendant™ service also includes advanced
features such as three-way calling that enables the operator to
link loved ones directly into the emergency call in real time.
Text message alerts are also standard, and are used to inform
loved ones that the user has contacted an operator or has requested
assistance. A standard medical alarm system does not enable the
user to speak and listen through the pendant, thus limiting them to
a small area in their home. There is always the risk that the user
will not be heard by the call center operator if they are not
within a short range of the base station. For more information
please go to www.medipendant.com.
Safe Harbor Statement
Statements in this press release that are not
statements of historical or current fact constitute
"forward-looking statements." Such forward-looking statements
involve known and unknown risks, uncertainties and other unknown
factors that could cause the Company's actual operating results to
be materially different from any historical results or from any
future results expressed or implied by such forward-looking
statements. In addition to statements that explicitly describe
these risks and uncertainties, readers are urged to consider
statements that contain terms such as "believes," "belief,"
"expects," "expect," "intends," "intend," "anticipate,"
"anticipates," "plans," "plan," to be uncertain and
forward-looking. The forward-looking statements contained herein
are also subject generally to other risks and uncertainties that
are described from time to time in the Company's filings with
Securities and Exchange Commission.
Contact:
Medical Alarm Concepts Holding, Inc.
877-639-2929 Ext. 113
SOURCE Medical Alarm Concepts Holding, Inc.