CEO UPDATE (for those didn't see it) This month's CEO update will focus on three topics: an overview of the joint venture announcement with iMedical; an overview of shares being traded by Dr. Anatoly Langer; and a review of our recent announcements for distribution of the HeartCheck PEN in the United States.
We announced this month that CardioComm Solutions has an American subsidiary called iMedical. This subsidiary was incorporated approximately two (2) years ago in anticipation of a marketing initiative to target US-based device development of new ECG monitoring products. We are fortunate to have now entered into an agreement with Sensor Mobility with the aim to develop and enable ECG monitoring, wearable devices with GSM transmitting technology. Of course, our software will form the management platform for communication with the devices as well as the interpretation environment for the review and diagnosis of ECGs received from monitored individuals. CardioComm Solutions will hold 35% interest in iMedical. Initial investors have already been identified, and it is anticipated that all seed funding will be received within this calendar year. As mentioned in our March 11, 2013 press release, while no work will start until the first $1 million has been raised, both organizations are preparing for a summer deployment of dedicated resources for initiation of their respective tasks. Once the 510K submission has been made, fundraising efforts will be undertaken to fund an iMedical IPO sufficient to raise at least five (5) years of working capital. Mr. Waqaas Siddiqui, Chairman and CTO of Sensor Mobility, and I will be contributing operational guidance to iMedical and will sit on its Board of Directors. iMedical will hire its own CEO so that the company will be able to chart its own corporate destiny. Through its involvement with iMedical, CardioComm Solutions will recognize revenue from multiple opportunities. We will have a right of first refusal for bidding on all third-party based software engineering contract work as it relates to ECG acquisition, management and interpretation. We will also benefit from the collection of royalties from the licensing of our core GEMS/GlobalCardio/Guava software intellectual property and we will receive funds from any profit-sharing or payment of dividends as a shareholder. Of the $4 million to be raised, approximately $1.9M will be paid to Sensor Mobility and $1.26M to CardioComm Solutions for services to be provided to iMedical. For those interested, you can see a copy of the agreement on SEDAR.
Now to the topic of shares being sold by Dr. Langer, a topic on which I have received many emails and phone calls. Dr. Langer is a major shareholder and also a controlling shareholder of the Company. The size of his shareholdings require him to report any intention to sell shares publicly, well in advance of his ability to do so. No other shareholders are under this restrictive guidance. He cannot time his sales like regular shareholders, which makes disposition of shares difficult. Dr. Langer has made two announcements indicating that he intended to both buy and sell shares on the open market just like any other shareholder may. In his submission on SEDAR he clearly identifies that he will be selling some, or all of 7,974,005 common shares held within one company in which he has family holdings. His ability to sell the shares is a right that any shareholder has, and what he will be selling is a small percentage of his total holdings of approximately 56,000,000 shares. His current shareholdings represent greater than 50% of the Company's issued common stock volume. By decreasing his position and introducing almost 8 million common shares into the free trading market this will help to increase trading liquidity and may offer a positive change in the overall share structure of the Company. As with any shareholder, regardless of the number of shares they possess, selling when shares are "in the money" is something any investor would find to be a prudent business undertaking. In this regard I would hope that our shareholders can recognize this and remember the significant financial efforts undertaken by Dr. Langer in the years when he invested in the Company when few would. Without his support of the Company we may very well be in a different situation today.
I would also like to comment on the Stockhouse coverage of EKG-V. I must say there are positive and not-so-positive attributes with respect to the postings made about our Company. I've been in communication with Stockhouse and have advocated for the right of people to state their opinion and to continue to provide background and due diligence on the Company. We are recognized as one of the most frequently posted-upon companies on Stockhouse, and I view this is yet another marker of our success and of the positive changes the Company has experienced over the past 16 months.
This quarter we were able to announce two (2) HeartCheck PEN distributor agreements that were executed with companies based in the United States. These agreements followed months of discussions and due diligence by these distributors. Both have initiated HeartCheck PEN orders with us. Following the two announcements, we started to receive additional inquiries from more distribution companies throughout the United States. These have come from niche market providers as well as more mainstream medical device supply groups. As we move through due diligence efforts and are successful in executing additional agreements, with orders received, announcements will be made.
In closing, I again thank all shareholders who have continued to buy and sell our stock over the past months; interest in CardioComm Solutions remains strong from those taking short and long positions. I also wish to acknowledge the significant efforts of our staff in meeting the very stringent demands imposed upon us by clients and regulatory bodies. We continue to garner increased interest from device manufacturers and organizations looking for opportunities in expanding their reach into arrhythmia and ECG monitoring markets. This is a good time for the Company and I look forward to providing continued updates to you as the news becomes available.
Sincerely,
Etienne Etienne Grimaa