Licensing Deal Signals the Start of Sales of Windows 7 Compatible ECG Software Solutions
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™”) 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.”
