TORONTO, ONTARIO - CardioComm Solutions, Inc. (TSX VENTURE:EKG) ("CardioComm Solutions" or the "Company") today announced that it has completed a software and source code licensing agreement ("SLA") for use of the Company's proprietary Global ECG Management Solution ("GEMS(TM)") and GUAVA ECG viewer by MD Primer Inc. ("MDP"). MDP is a clinical research and education organization enabling improvement in patient care through innovation. MDP is under the direction of Dr. Anatoly Langer, CardioComm Solutions' Chairman. As MDP is a related party of CardioComm Solutions, Dr. Langer abstained from voting on the SLA when it received board approval. The SLA is subject to approval by the TSX Venture Exchange.
The SLA will allow MDP to use GEMSTM and GUAVA under a worldwide, royalty free, perpetual, non-exclusive license in exchange for a one-time $500,000 licensing fee, payable in three payments: $250,000 on execution of the SLA; $150,000 on March 15, 2014; and $100,000 on April 15, 2014. Service and support agreements will be negotiated subsequent to the formal release of GEMS 4.0 to the market, which is expected prior to the end of Q1 2014. Under the SLA, MDP is licensed to use the software and the source code and derivative products in support of MDP's current research-based business activities, but not to compete with CardioComm Solutions' business. To preserve the value of the license for MDP, CardioComm Solutions has agreed not to enter into another concurrent source-code based licensing agreement. Under the SLA CardioComm Solutions has the option to repurchase the license from MDP at any time for $500,000 plus 10% interest compounded annually. At the option of MDP, the repurchase price will be payable in either cash or in units of CardioComm Solutions, with each unit valued at a price per Unit equal to a 50% premium on the closing price of CardioComm Solutions' common shares on the TSX Venture Exchange on the date of execution of the SLA. Each Unit will be comprised of one common share of the Company and one common share purchase warrant for an additional share for two years from the date of issuance at an exercise price equal to 150% of the closing price of CardioComm Solution's common shares on the TSX Venture Exchange on the date of execution of the Agreement. Any securities issued will be subject to a four month hold period from the date of issuance.
"MDP had long expressed interest in acquiring the GEMSTM software for use in their clinical and research service offerings and I am sure this purchase will provide them a unique competitive advantage. We are asked on occasion to enter into such agreements where the Company's intellectual property is licensed to assist a non-competitive organization develop infrastructure that, on their own, could not be achieved," stated Etienne Grima, CEO of CardioComm Solutions.
"This is an exciting development for CardioComm Solutions and affirms the value of the GEMSTM system for research-based cardiac patient monitoring and analysis," said Daniel Pawlik, the Company's Vice President, Sales and Marketing for the United States. "The Life Science Contract Research Service Industry, providing cardiac safety testing and arrhythmia analysis of pharmaceuticals and medical devices as a part of the market approval process is a multi-billion dollar service industry and growing. GEMSTM provides a unique and highly beneficial technology solution for more effective and less costly patient monitoring, analysis and data management. We are currently pursuing and continue to pursue similar relationships with leading US-based clinical research organizations as a part of our US service and technology licensure growth strategies."
"Interest in, and acquisition of, GEMSTM 4.0 is a strong endorsement of what this software offers," noted Simi Grosman, a member of CardioComm Solutions' Board of Directors. "At the same time, the capital infusion into the Company will allow us to build out our sales infrastructure to aggressively market GEMSTM in the US and around the globe in 2014."
About CardioComm Solutions
CardioComm Solutions' patented and proprietary technology is used in products for recording, viewing, analyzing and storing electrocardiograms (ECGs) for diagnosis and management of cardiac patients. Products are sold worldwide through a combination of an external distribution network and a North American-based sales team. The Company has earned the ISO 13485 certification, is HPB approved, HIPAA compliant, and has received FDA market clearance for its software devices. CardioComm Solutions is headquartered in Toronto, Ontario, Canada, with offices in Victoria, B.C.
FOR FURTHER INFORMATION PLEASE CONTACT:
Etienne Grima, Chief Executive Officer
This release may contain certain forward-looking statements and forward looking information with respect to the financial condition, results of operations and business of CardioComm Solutions and certain of the plans and objectives of CardioComm Solutions with respect to these items. Such statements and information reflect management's current beliefs and are based on information currently available to management. By their nature, forward-looking statements and forward-looking information involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements and forward-looking information.
In evaluating these statements, readers should: specifically consider risks discussed under the heading "Risk Factors" in the Company's Annual Information Form, available at www.sedar.com; not to place undue reliance on forward-looking statements and forward-looking information; be aware. the Company does not assume any obligation to update the forward-looking statements and forward-looking information contained in this Annual Information Form other than as required by applicable laws (including without limitation Section 5.8(2) of National Instrument 51-102 (Continuous Disclosure Obligations).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.