The series of transactions will provide CardioComm Solutions with a recurrent and service-based royalty revenue stream
TORONTO, ONTARIO – CardioComm Solutions, Inc. (TSX VENTURE:EKG) (“CardioComm Solutions” or the “Company”) confirmed today that Toronto-based iMedical Innovations, Inc. (“IMED”) has finalized due diligence reviews and that the series of agreements involving custom software development and royalty license fees executed on September 15th are now binding and in effect. The Company previously announced the agreements and the October 17th deadline for the agreements to be deemed binding in a September 23rd press release.
Terms of the agreements include an immediate, non-refundable royalty advance to CardioComm Solutions of US$250,000 and a further US$650,000 in non-recurring engineering (“NRE”) fees associated with developing custom mobile cardiac telemetry (“MCT”) ECG management software (the “Software”) for exclusive use by IMED. The Software will be engineered to enable IMED and their GSM based, dry electrode, wearable ECG device (the “Device”) to enter into the US-based MCT ECG monitoring services market. Following the launch of the IMED MCT monitoring business, CardioComm Solutions will also be provided an ECG Royalty Fee equal to a US$20 ECG cardio-scan fee payable on a per-patient basis which aggregate royalty fee is not to be less than US$150,000 on an annual basis. In addition to an immediate infusion of cash into the Company and a recurrent revenue stream, IMED will retain CardioComm Solutions as their preferred software engineering consultants for future enhancements.
CardioComm Solutions will continue to work with their established network of ECG monitoring device/sensor manufacturers to provide device agnostic ECG software solutions. During the term of the agreements CardioComm Solutions will not engage with organizations interested in developing dry electrode, wearable and GSM-based ECG devices.
The Company had reviewed other service-based remote cardiac monitoring business relationships and identified this per ECG recurrent fee business model as most likely to gain traction in a market estimated to see 6 million users of remote patient monitoring in the USA by 2016 (MarketsandMarkets, 2013). Work on the custom Software will commence immediately with the intent to complete Software and Device FDA filings within the 2015 calendar year.
To learn more about the CardioComm Solutions’ software products please see the Company’s website www.cardiocommsolutions.com.