Medworxx Inc. Files Year-End Financial Statements and Management's Discussion and Analysis

Medworxx Inc. (“Medworxx”) (TSXV:MWX), a leader in clinical patient flow, and compliance and education solutions, announced today it has filed with the Canadian securities authorities its Consolidated Financial Statements and Management’s Discussion and Analysis report for the year ended December 31, 2012. These documents may be viewed under the Company’s profile at www.sedar.com.

Highlights of the results for the year ended December 31, 2012 include:

• Revenue for the year ended December 31, 2012 was $6,071,224, representing an increase of 26.5% over revenues of $4,799,961 for the previous year. The increase is attributable primarily to growth in the Patient Flow platform of 34.4% and the Compliance and Education platform of 29.6%. Revenue for the quarter ended December 31, 2012 was $1,316,548, representing an increase of 5.4% over revenue of $1,249,655, in the same quarter last year.
• The Company incurred a net loss of $103,201 for the year ended December 31, 2012 as compared to net income of $28,144 for the year ended December 31, 2011. The loss this year is well within the Company’s budgeted results and reinforces the Company’s focus on growing revenue and investing in building sales and partner channels for the Medworxx Patient Flow platform.
• EBITDA (a non-IFRS measure), defined as Earnings before Interest, Taxation, Depreciation, and Amortization, for the year ended December 31, 2012 was $260,190 as compared to EBITDA of $355,533 for the same period last year, representing a decrease of $95,343. The losses are a direct result of the company’s plan to invest in building sales and partner channels for the Medworxx Patient Flow platform.
• Adjusted EBITDA (a non-IFRS measure), defined as Earnings before Interest, Taxation, Depreciation, Amortization, and Stock Option Expense, for the year ended December 31, 2012 was $467,096 as compared to $460,283 for the same period last year, representing an improvement of $6,813.
• On May 24, 2012, the Company completed a brokered private placement that yielded gross proceeds of $3,106,496. Net proceeds from the issuance were $2,715,379. The Company proposes to use the proceeds of the private placement for general working capital purposes, to build sales and partner distribution channels for its Patient Flow solution. Details of the private placement structure can be found in the Financial Statements and MD&A.
• Alberta Health Services elected to extend the existing provincial agreement with Medworxx to expand the licensing of the Medworxx Utilization Management System to all the acute-care beds in the province. Mackenzie Health, formerly York Central Hospital in Richmond Hill, ON licensed 370 beds on the Medworxx Patient Flow platform, including Medworxx Utilization Management (UM) and Medworxx Assessments (AS).
• As of December 31, 2012, Medworxx Patient Flow Solution serves more than 33% of Canadian acute-care hospital beds (Medworxx sells licenses on a per bed basis), including implementations at the Provincial (LHIN), regional and local levels.
• Revenue on the patient flow platform for the year ended December 31, 2012 was $3,410,872, representing an increase of 34.4% over revenues of $2,537,410 in the same period last year. Revenue for the quarter ended December 31, 2012 was $852,068, representing an increase of 25.0% over revenue of $681,552, in the same quarter last year. The number of beds under license in the Patient Flow platform has grown by 24% from 21,402 beds under license at December 31, 2011 to 26,469 beds under license at December 31, 2012.
• In October, it was announced that Royal Liverpool and Broadgreen University Hospitals NHS Trust won the national EHI Awards’ category of ‘Outstanding work in IT-enabled change in healthcare for the project titled, ‘First UK IT-enabled case management system’. This is an award by the UK’s EHealth Insider (EHI) for implementing Medworxx Utilization Management to enable and sustain greater patient flow within its busy hospitals.
• A number of significant contracts were signed in the year for the Medworxx Compliance and Education platform including Cornwall Community Hospital, ON, The Scarborough Hospital, ON, Headwaters Health Care Centre, ON, East Tennessee Children's Hospital, TN, Ontario Association of Community Care Access Centres, ON, Baycrest, ON, and Waterloo Wellington Community Care, ON.
• Medworxx sold a worldwide, non-exclusive, non-transferrable license of the Policy and Document Management Software to a major US software company to use, copy, adapt and modify for USD $800,000. In addition to the license fees received, Medworxx can earn a royalty of 13% of the Customers Net Revenue from sales of any products which are based on or incorporate any element of the Software, for a period of three years.
• Peter Ellis, CHE, AHA, was appointed Managing Director of the company’s UK practice to build on the firm’s Canadian hospital market share and focus on strategic UK and European growth for the Patient Flow Solution.
• Lori Frampton, RN, MHS, Certified Lean Six Sigma Black Belt, was hired as Vice President of Patient Flow Process Improvement and Data.

“2012 was a breakthrough year for Medworxx,” said Dan Matlow, President and CEO, Medworxx. “We have seen success on our initial entry into the UK market, as well as continued success and growth in Canada. The Company has been investing and building to support our expansion strategy for our Patient Flow Platform to other markets including Australia and the United States.”

Medworxx is also announcing that it has completed the repayment of outstanding 14% convertible debentures (the “Debentures”) in the aggregate principal amount of $410,000. The Debentures were issued on February 20, 2009 and had an original maturity date of February 20, 2011, which was extended to February 20, 2013.

The Debentures were convertible at the holder’s option into units of Medworxx, at a price of $0.35 per unit, each unit being comprised of one common share and one-half of one warrant. Each whole warrant was exercisable into one common share at a price of $0.48 per share during the conversion period. Two holders elected to convert their Debentures for an aggregate issuance by Medworxx of 90,429 common shares. No warrants were issued in connection with the conversion as they expired in accordance with their terms. The remainder of the outstanding Debentures was paid in full.

About Medworxx

Medworxx delivers health information solutions to over 350 hospitals internationally; including Canada, United States and United Kingdom. Medworxx helps hospitals meet patient flow challenges, and requirements in compliance and education. Medworxx Utilization Management – flagship of Medworxx Patient Flow that includes electronic bed board and independent assessment components – currently serves over 33% of the acute care beds in Canada. Founded in 2004, Medworxx is based in Toronto, ON, and publicly traded on the TSX Venture Exchange: MWX.

Visit: www.medworxx.com

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Disclaimer

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, such as competition, technological changes, the changing needs of hospitals, the financial condition of the Company’s current and potential customers, foreign currency exchange rates, as well as general economic conditions, which may cause the actual results, performance or achievements of the Corporation and Medworxx to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.