MedcomSoft Inc. TSX: MSF

TORONTO, ONTARIO--(Marketwire - Nov. 14, 2008) - MedcomSoft Inc. (TSX:MSF) today announced its financial results for the first quarter ended September 30, 2008.

Overall Performance and Outlook

Overall revenues in the first quarter of fiscal 2009 were lower than the first quarter of fiscal 2008 levels by $35,635 or 10%, operating expenses in the first quarter of fiscal 2009 were lower than the first quarter of fiscal 2008 levels by $576,916 or 34%. The net loss for the first quarter of fiscal 2009 was $794,328 compared to $1,331,390 in the first quarter of fiscal 2008. On a per share basis, the net loss for the quarter decreased from $0.02 in the first quarter of fiscal 2008 (basic and fully diluted) to $0.01 in the first quarter of fiscal 2009 (basic and fully diluted).

After failing in its commercialization strategy in fiscal 2008, during the first quarter of fiscal 2009, the Company retained the Health Care Investment Banking Group of Raymond James Associates to explore funding and strategic alternatives to support the execution of a revised business plan that had been approved by the Board. While several investors or buyers that Raymond James had contacted in the execution of their mandate had expressed an interest in the Company's product, and specifically access to the high quality management team that had been identified to execute the business plan, there was not sufficient interest expressed in directly investing new capital in the current corporate structure as to make the prospect of raising the required funding to execute the business plan viable. Further, investors and potential buyers expressed concern about the current financial position of the Company, its public structure and its difficulty in executing the business plan, including skepticism of the proposed direct sale channel approach that was proposed in the new business plan.

On November 1, 2008, the Company's Board of directors reviewed the current financial condition of the Company and management's report on the status of and feedback from investors that were contacted during the Raymond James financing engagement, described above. In light of the fact that the Company had significant liabilities and expense obligations and the absence of an offer of investment or purchase, the Board authorized the hiring of a Trustee and the filing of a Notice of Intention to make a proposal to its creditors under the Bankruptcy and Insolvency Act (Canada) ("NOI"). The Company subsequently received the resignation of each of its Board members. On November 3, 2008 the Company commenced the filing of the NOI. The rationale considered by the Board in deciding to file an NOI included the ability for the process to stay actions against the Company and to give time to make a proposal to its creditors to satisfy their claims without bankruptcy. The NOI not only provides a forum for the Company to manage its cash resources and liabilities, it also provides a forum for interested investors or buyers to make an offer to restructure the current Company and to create a statutory driven time frame for management to deal with potential investors. The Company appointed Ira Smith Trustee & Receiver Inc., a licensed trustee, to act as trustee under the proposal.

The Company and its advisors currently continue to evaluate possible alternatives for raising capital, considering the sale of all or part of its business and possible restructuring alternatives. However, at this time, the Company does not have any concrete proposal from an interested party. Also, no assurance can be made that a proposal under the NOI will be submitted or ultimately accepted by the Company's creditors or approved by the Court; and, in the absence of a viable alternative solution, the Company may be forced to file an assignment in bankruptcy under the Bankruptcy and Insolvency Act (Canada).

As previously disclosed the Company had been notified that it does not meet the listing requirements of the Toronto Stock Exchange, the exchange on which the Company's common shares are listed. Therefore, the Company's management cannot offer assurance that it will be able to continue to have its common shares listed on the TSX.

Also, at this point in time, the Company has not set a date for its annual shareholders' meeting pending the outcome of the NOI process.

Summary Financial Information


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                                            Three Months ended September 30,
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Summary Operating Results                              2008            2007
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Revenue                                          $  307,678     $   343,313
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Total operating expenses                          1,117,847       1,684,763
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Loss from operations                               (800,169)     (1,341,450)


Interest Income                                       5,841          10,060
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Net loss and comprehensive loss for
 the period                                      $ (794,328)    $(1,331,390)
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Average number of shares outstanding            102,718,057      69,884,501
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Net earnings (loss) per share: 
- non-diluted basis                                   (0.01)          (0.02)
- diluted basis                                       (0.01)          (0.02)
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                                                          As at,
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Financial Position                       September 30, 2008   June 30, 2008
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Cash                                            $   787,810     $ 1,751,682


Other current assets                                 85,642         191,905


Capital assets and long term assets                 251,719         272,645
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Total assets                                    $ 1,125,171     $ 2,216,232
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Current liabilities                               1,491,319       1,854,170


Long term capital lease obligations                  17,520          25,894


Shareholders' (deficit) equity                     (383,668)        336,168
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Total liabilities and shareholders'
 (deficit) equity                               $ 1,125,171     $ 2,216,232
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The Company had cash of $787,810 at September 30, 2008 compared to $1,751,682 as at June 30, 2008 for a net decrease of $963,872. The net decrease was primarily due to the Company's use of cash in its operating activities, of $957,378 for the quarter.

As at September 30, 2008, the Company had a working capital deficiency of $617,867, compared to a modest working capital balance of $89,417 as at year end. The Company has not been profitable over the past seven years and its ability to continue as a going concern is dependent upon its ability to obtain the necessary financing and generate future profitable operations to meet its obligations and repay its liabilities arising from normal business operations when they come due.

For further details on these operational and business highlights as well as the financial results of the Company for first quarter of fiscal 2009, please see the Company's Management's Discussion and Analysis of Financial Condition and Results of Operations and the Company's Interim Unaudited Consolidated Financial Statements for the first quarter of fiscal 2009, which are filed on SEDAR at www.sedar.com.

About MedcomSoft

Founded in 1994, MedcomSoft Inc. develops cutting-edge software solutions for the healthcare industry. MedcomSoft has pioneered the use of numerically codified point-of-care clinical terminologies to create a new generation of highly interoperable EMRs, which significantly enhance disease surveillance and accelerate clinical research. MedcomSoft's award-winning software applications include Electronic Medical Records, physician order entry systems with e-prescribing, document management, practice management and clinical data search, data mining, and disease surveillance systems. MedcomSoft is the recipient of the "Best of KLAS" award in 2007 year-end report in the Ambulatory EMR 1-5 Physicians category. In addition, a MedcomSoft practice was recently awarded the prestigious 2007 HIMSS Davies Award. www.medcomsoft.com.

This news release contains forward-looking statements regarding MedcomSoft's expectations and beliefs with respect to future events and/or financial performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual events or results to differ materially from those expressed or implied in such forward looking statements. Such factors and risks include, but are not limited to: market conditions; competition, including price and product functionality; economic environment; and the ability to develop and deliver new products in a timely manner. The reader is referred to the documents that the Company files from time to time with applicable Canadian securities and regulatory authorities for a discussion on certain risks and uncertainties that could cause actual results to differ from those projected, anticipated, or implied. MedcomSoft does not undertake to update forward-looking statements.