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Irvine's MedCom Cuts Staff 20%, Plans Reverse Stock Split

April 18, 2001|From Dow Jones Newswires

MedCom USA Inc. cut its U.S. staff by 20%--about 24 employees--to reduce costs, and said Tuesday it may be delisted from Nasdaq because it doesn't meet the minimum price requirement.

The Irvine health care technology company had nearly 120 employees before the work force reduction and is continuing to evaluate costs.

MedCom also said shareholders approved a 1-for-4 reverse stock split to bring its trading price above $1, and said it may sell up to $20 million in stock at a discount over the next two years to a private investment fund. The transaction is subject to several conditions, including the signing of a binding agreement.

MedCom's stock, which has traded below $1 so far this year, closed Tuesday at 30 cents a share, off 3 cents, on the Nasdaq SmallCap market. A reverse stock split is designed to boost share price by reducing the outstanding shares of stock.

MedCom also said it has requested a hearing with the Nasdaq Listing Qualifications Panel.

MedCom said its shares will continue trading pending a final decision by the panel.

The company plans to use proceeds from the private investor financing to expand sales of its MedCard System and Health Information Gateway, as well as increasing its sales, medical and executive management ranks.

For the six months ended Dec. 31, MedCom reported a loss of $4.4 million on revenue of $1.17 million. In the same period a year ago, the company lost $2.8 million on revenue of $1.79 million.

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