Conference Call Summary 3/31/2010
We spent the last year as post-merger Favrille and the last 4 years as pre merger MMR evolving into post-merger Favrille dealing with a tremendous amount of challenges and just had a belief that MMR had a solution that was better and made more sense to consumers and physicians than anybody else. I believe with a great deal of enthusiasm and excitement about this business that we were right and from the standpoint of an investment horizon – I think everyone that has supported this company has “picked the right horse”.
We closed our year successfully and although our numbers are not big, our revenues did increase 37.2% compared to the previous year. Our cost of sales only increased by 11%. This shows how scalable our business is.
We had no material weaknesses to report in 2009 which MMR had been unable to do in prior years.
68% of debt has come out of directly or indirectly last year’s efforts to really launch MMR Pro and/or post merger related transactions. Out of $5.2M - $1.6M was equity transactions used to raise cash to operate the company. This company cannot operate without cash. We’ve found some unique ways of raising money for the company which we’ve tried to do in the most responsible way to avoid as much dilution as possible to the shareholders. The company has authorized shares of 650M and the outstanding shares are in the area of 200M. We believe that the way we’ve distributed the equity that it has enabled the company to grow and maintain enough liquidity to operate and compete in a very competitive marketplace.
$1.5M was strictly Favrille merger related in order to complete the merger, $1.1M was increases in deferred compensation. Some of our key partners because they believe in this company have taken equity positions and options warrants. Many of our employees, directors, have not been paid. They have received options and/or warrants and have deferred monies that are due to them because of their belief in the company.
We have relied heavily on consultants because there are not many employees in the company. There is a lot of wood to chop and you need arms and legs in order to do so to grow this company.
One of the things we have started to do this year is recruit people for specific pieces of revenue and in order to do that we have actually expanded the qualified option plan subject to a shareholder vote. We need the equity so that we can cost effectively bring on more and more management and better and better people in the most responsible way with the least amount of dilution to shareholders.
Questions
Are there any plans to partner with or enlist similar resellers like Kodak specifically looking as viable international partners where Kodak may not be a key player?
Kodak is going to be a key international partner starting in China and we believe they will be a key international partner in other parts of the world. We look for the Capture Pro software in order to find a beneficial partner. We will enter into an agreement with Sharp where we will load the MMR Pro application on Sharp copiers in conjunction with Capture Pro and offer Pro through the Sharp distribution channel. MMR Pro is not limited to Kodak hardware, but it does rely on the Capture Pro O/S at this particular point, but Capture Pro can be put on pretty much any high speed scanner provided there is a PC attached to it. The reason we selected Kodak is that it is the only scanner of its kind that has a PC built directly into the scanner, so it is one self contained solution. We will exploit the Kodak relationship internationally, but we will be open to using other manufacturers too.
Increase in shares by 76M
This increase didn’t all happen since the last report. At the end of the 3Q the O/S were 150M+ and now they are about 200M. The company has generated several millions of dollars of liquidity through convertible notes and that additional dilution is a combination of those convertible notes due to the financing activities and going to partners and asking them “Do you want equity to reduce the cost of your services so that you participate in the upside., and also recruiting management and/or rewarding management for going along with the deferral program put in place.
Dutchess Financing still available?
In January we terminated the relationship with Dutchess. At this point there is no agreement with Dutchess. Having said that the company needs to grow, the company needs to recruit management, so all financing options are always on the table for this company. As you see by some of the contracts this company has signed and some of the products this company has created – every dollar that we’ve spent has translated into a significant increase in value and/or equity. I believe that trend will continue. Whether it’s a Dutchess or a convertible note, its much better than not having the cash to compete in this marketplace. This company just signed what I believe to be the biggest deployment of a Personal Health Record anywhere in the world. We didn’t do it on smoke. We did it on a lot of hard over 2.5 years and those type of efforts cost money. I wouldn’t look at dilution as the enemy – I would look at having access to capital as your best friend.
Projected Dilution for 2010
There’s no way to project it. When I get up in the morning and I come to the office I don’t think to myself …”how can I dilute myself?” When there is dilution it impacts me more than anyone else. If there is dilution you are going to know about it. With money this company is going to generate a lot more money to shareholders than coming to work everyday without the resources compete and at the same time have to pay rent. That’s what it boils down to. The more support the company gets and the more excitement around this company in the market, then the easier it is to get liquidity. We’ve had 650M shares available to us since last June and we’ve used 50M of them. I don think in any way that signals reckless dilution.
Being here is kind of like a Cinderella story. There times when I come in and Im wondering if the screenplay writes are going to be worth something one day because of all of the excitement and all the events who have taken place. To anyone who has invested in this company has invested in a company that is poised to take advantage of the biggest change in healthcare in almost any of our lifetimes and no one would have known that 32M people were going to be added insurance rolls based on federal mandate as of last week. That’s some exciting things and it takes money to meet that excitement. It takes a lot of commitment on shareholders part to wait for the end game and we appreciate it.
How are sales with MMR Pro
Every place we present MMR Pro to an individual doctor or healthcare professional looks at it and says wow that’s simple and when can you install it? Once they say that there is a lot needed to get it in, but the reception has been remarkable. Its extraordinarily well received. We have a commitment with Kodak for 1,000 units over the next 12 months and we wouldn’t have negotiated pricing on 1,00 units if we did not believe we weren’t going to be successful in this product.
When is the shareholders meeting
June 15th
In the PR Chartis speaks of providing and authorizing its customers. Explain
Chartis is paying for the service. Chartis is not offering the service at this point in time for resale. Chartis’ plan is to embed this service in policies and the roll the service out as policies renew in many many countries around the world. Its very different than a lot of our other affinity programs. These will be embedded accounts and we have negotiated a unique and very special agreement with Chartis where Chartis will actually be providing these services out to their policyholders.
MMR Pro Sales Activity
We do not report sales. We do not project sales. We’ve negotiated sales with Kodak for 1,000 units and its very complex in a doctors office. Every doctor has a different workflow, systems, forms, personalities, and so we’re trying to create MMR Pro as a one size fits all and the reception from the resellers & doctors has been great. The product works great and we r every excited about it without projecting it.
Will we hear of any large MMR Pro contracts in larger settings?
An MMR Pro contract to a doctor is a $22K-$23K sale. It is possible and we have met with hospitals where we’ve said OK you have 400 physicians working here – it would be better for the hospital to have all documents coming in to physicians in a digitized manner and why don’t you consider buying 400 MMR Pro systems and giving one to each physician. If that happens you will know about it. In terms of day to day sales of MMR Pro we are pleased at the pace its going. We actually have 2 systems being installed today. I think you are going to be pleased with MMR Pro.
Any plans to get off the OTC and get on a bigger board?
I would love to do that. I cant say its anything we have a definitive plan for. It really depends on the volume and price of the stock and the liquidity of the company. It depends on our ability to accumulate cash. There are so many factors involved in that. Its not something I can make definitive comments on. The OTC has been great, but there are places we’d rather be. My goal is to return as much value to shareholders and we probably at some point in time can do a better job of that in a different market.
Will MMRF get any financial benefits from the Chartis deal or will we have to wait until Chartis members sign on to the program?
Selling this product is the good news. Executing is a whole other process. There will be some financial income to the company during the startup phase of this process. Whereyou will really start to see financial benefits from Chartis is after deployment in local operating countries around the world. From a timing standpoint we could be realizing obvious financial benefits this year. Clearly no later than the beginning of next year, but I don’t want to suggest that this is easy. Long term this is a relatively long agreement. It does not start until we start generating revenue. This is a very valuable agreement to the company.
When you look at this company its kind of like going out and building a house. Rather than looking at the house you can walk into you stand there looking at, in this case, the foundation. Two years ago you were looking at the dirt and now you are looking at the foundation. Its not just 6x8’s – I think we have some really solid things going on with reinforced steel, but when you look at the numbers and you look at the balance sheet you don’t get that. When you read about the company, follow the company, understand the company, and even used the company’s product and watched the videos you really get where this company can go to.
Ingrid
You can look at the financials or you can look at the Cinderella story Bob has talked about and see that this company has taken a turn in the right path. You can look that we had a $10M loss this year, but if you look deeper you can see the non-recurring activities and just having the opportunity many of you have done the due diligence in the company then you know Bob’s history. You know this company is headed in the right direction. My personal belief in Bob and I’ve known him for over 18 years. I know how he works. He reaches his goals and I am quite excited about the process.
Bob
We spent 10M and that may seem like a gigantic number. Revolution spent 100’s of millions of dollars with some of the smartest celebrity entrepreneurs in the world and shut down several months ago and they didn’t have candidly anywhere near a PHR that does what our PHR does. What we’ve built for the amount of money that’s invested in this company is pretty unbelievable. The best PHR with a totally integrated telecommunication solution and a Pro product that can be easily deployed in doctors offices, hospitals, healthcare professionals, law offices, banks, and pretty much anywhere in the world. Its very exciting and if we were to walk in to GE (not to take a shot at GE – they are doing a wonderful job advertising indirectly our business) and look for a PHR that will talk to any doctor anywhere in the world and can sign up for it in less than 60 seconds and you can’t get that anywhere else except in MMR. That’s what’s great about this company. That’s what people need to really look at. The Return on Investment for what we have in terms of technology for what we’ve spent, for the amount of time we’ve been here is really good and really exciting and I hopefully think everyone is starting to see.
What can MMR Pro do in places outside a physicians office? What is being done to enter other industries?
MMR Pro can work in the legal profession, the banking profession, and the insurance profession. This company has got to pick something and we picked healthcare. Last time I looked the projections for healthcare were that it will be a trillion dollar business and backing up files for lawyers is not a trillion dollar business right now. Having said that this product can go pretty much anywhere where people manage paper and files. Theres no question in my mind that at some point we will identify product management individuals to take Pro to places other than a physicians office and it already is. Its in physicians offices, its being presented to hospitals, its being presented to various aspects of govm’t , its being presented to the VA, its being presented to organizations and associations – I’m not suggesting there is contracts with these people and in many cases it’s a very early stage sales process, but there is a lot of other industries and a lot of other places for us to go. Not only MMR Pro, but MyMedicalRecords and Esafe.
Thanks to Kira for her videos and sales effort
We’ve redesigned the website, we’ve produced the videos, and we’re producing more videos for MyEsafe. We’re designing videos for customers of Chartis, Kodak, and slo training videos for inside the doctor’s office. We hired Eric and Christie and they have taken apart our websites and put it back together in a way that takes advantage of the latest technology. Kira is a wonderful choice as a spokesperson and talk about reverse dilution: we don’t have to go out and spend 100’s of 1,000’s of dollars on a spokesperson with a household name to do this because Kira does this because she supports this company.
Am I voting for Buzz Aldrin on Dancing with the Stars?
It was not worth my .75 cents. LOL. I’ve been Tivoing it and I have been waiting for him to say MyMedicalRecords.com and I can’t guarantee, but hopefully he will at some point.
Sugar Ray Leonard
He is available at the right time and the right place as we become more noticeable to the public and most of that is due to shareholders. I truly appreciate all of the support the company has been getting over the past couple of weeks. You’re going to see more Buzz.
What about unrestricting the stock?
The shares became unrestricted as of February. This demonstrates the support that is with this company because for a year I have been getting calls saying “Oh my gosh, February is coming and 60% of the shares are restricted. With all these people out there what is going to happen? Well surprisingly everyone started paying attention to their stock and apparently instead of them selling it, they or people they know started buying it. To the extent that there are restricted shareholders out there – they are no longer restricted. More and more people are buying because of the growth and the pattern of how the stock has been going up and holding its value. Even when it was in the .08, .09, .10 range there was a lot of support to the stock and at that point in time the shares were becoming unrestricted and a lot of people were not hitting the bid.
Gene Barduson - what is his job exactly?
Gene is kind of like a mentor to me. Gene has a tremendous amount of experience in healthcare. Gene’s focus is talking to EMR companies and convincing them to use our PHR on the backend of their EMR. That is still a strategy of this company because we feel that if there is an EMR company that has 200 doctors that if you multiply 200 doctors by 2,000 patients that’s 400,000 patients and if everyone of those is offered a MMR PHR just because the doctor is using another EMR – patient upgrades in what we expect to be in the 2-5% range would be a significant amount of usage to the company. So that’s Gene’s primary focus. What we’re finding is that there are EMR companies that already have 30,40, 50 doctor groups and they don’t have even a PHR window to look what is being done for the patient on the backend and to those companies that don’t have the significant resources to build a PHR they will hopefully see the value in MMR. We could be looking at announcements with those type of companies over the next couple of quarters.[/b] Those integrations would be 3-6 months though because we would be integrating in to the back end of another EMR system
What is the current O/S?
As of March 20, 2010, the registrant had 202,314,696 shares of common stock outstanding.
Is MMR in any talks with the govm’t to receive stimulus funds?
MMR as a business is not a candidate for stimulus funds. We are a PHR service which is getting more and more attention and there may be a time in the future for stimulus funds for a company like us. Having said that, I go to Washington regularly, Hector Barreto is very very active, Dick Gephardt and Asa Hutchinson are active and we know there is a lot of activity and I believe that if I could get the Obama’s to open up a PHR for their family that they would think it’s the best tool to have to handle their emergency health care wherever they were in the world. My job now is to get as much attention to this product and get as many govm’t officials aware of this product and participate for as many request for proposals as I can. We’re also focused on working with govm’t level companies like Northrop, SAIC and other major players that build high end systems for the VA and other govm’t organizations where we could be a module that integrates in to those pieces.
One of the things that we are looking at today that we would have never even talked about a year ago is the phenomenal leaps in technology as a result of devices in the home that need to communicate with a PHR. Hospitals only get money for patients in a hospital. They are starting to send smartbeds into these peoples homes and this may have a monitor on it for blood pressure, temperature gages, any type of device to monitor that patient – we believe that sending those signals to a cellular telephone over bluetooth and having those readings received in an MMR Pro Patient View account with the idea that if there was some type of movement outside of a safety zone that MMR has the capabilities today to send multiple messages out to doctors, nurse practitioners, family members, amd monitor a patient. These tools are already in the product. As the company evolves and as we identify opportunities like that – we are going to push back on getting those opportunities through govm’t contacts and with companies like Lucent technologies which we have been talking to for several years and their products are just becoming commercial for their monitoring purposes. I’m not suggesting there are any contracts now, but we are focused on govm’t, the major contractors of govm’t because they are already in there.
Is UNIS on track to deploy MMR Pro into the Chinese EMR system for China’s 18K hospitals? Is there a timeline for that deployment? Any resistance from the Ministry of Health?
With UNIS we have identified one province in China that is in various stages of a request for a proposal for the hospital system in that province. It happens to be a province where a UNIS HQ is located and UNIS is very optimistic that we have a real opportunity there. This province has 130M people, so its bigger than half of the US and it’s a small province of the country. This is a complicated and costly proposal which requires a tremendous amount of materials and development just t make the proposal. We talk to UNIS daily. We are actively involved with them daily. We are actually at a point that despite the fact that UNIS is in the digital imaging business that they are probably going to privately label the brand of Kodak scanners that will support MMR Pro. To the extent that you can describe being on track – I’d say we are very on track. Unfortunately when you are dealing with China you are dealing with people that speak little or no English and everything takes twice as long because translators are added in. As a result of the UNIS relationship we are developing other relationships in China and we are excited and optimistic. One province and one state is like the size of half the USA, so if you are looking at just one proposal than you are looking at a tremendous amount of revenue over in China.
It would be great if you could make a SWOT analysis of MMR Global
I think MMR Global is a great launching pad for the future of this company. We are MyMedicalRecords and we are selling them globally to private individuals, organizations, doctors, and hospitals and that’s what we do. Its one of those names that makes the hairs on the back of your neck stand up and you say that’s right. It’s the launching pad to a very very exciting future for this company.
We had our first SOX analysis of this company earlier because we thought it was going to be a mandated item in the annual report, but the SEC changed their mind and said that small companies like us did not have to undergo that rigorous analysis. We did it anyway. We spent a lot of time and money. If you read our annual report it was like 90% report and 10% material weaknesses. The good news is that there are no more material weaknesses. We are operating on all cylinders and that was a big hurdle to get over. To get from private MMR to public FVRL/MMR was a big deal. Its taken a year and costed us millions of dollars, but that’s behind us now and so that’s why we said when we opened up the call we said you can look at the numbers, but there is a lot of stuff that needed to be done to get to where we are. When you look at the $10M - $2M has gone to merger related expenses and a lot of it has gone to preserving cash and a couple of million is not even cash – it is a derivative of the way we issue equity. This team has created with the amount of money that’s been spent probably one of the best products out their in healthcare for a patient or physician office that does not have a full blown EMR today. For that we can all be excited.
Someone said there are no more questions, so the call will be ended….
Happy Birthday to Ingrid’s daughter Sophia!
