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Authentidate Cutting Jobs

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Authentidate Holding
Corp. (Nasdaq: ADAT), a provider of web-based software applications and
telehealth products and services for healthcare organizations, announced today
that the Department of Veterans Affairs (VA) has informed the company that it
does not intend to exercise the fourth and final option year under its Care
Coordination Home Telehealth Program contract for devices and services. The
company's agreement with the VA, which was originally awarded in April 2011,
consisted of a base year and four one-year option years that were exercisable
at the VA's sole discretion. The current option year under the contract
expires on May 15, 2015 and the company anticipates that it will complete its
transition process with the VA by that date.

Ian C. Bonnet, Authentidate's recently appointed Chief Executive Officer
stated, "The VA contract contained no minimum purchase requirements and the
company was never able to realize the level of growth and profitability
anticipated from the VA relationship, despite its best efforts and the
commitment of substantial resources. Although we are obviously disappointed
with the VA's decision, the expiration of this contract will allow us to
reduce our operating costs in excess of the average monthly recurring revenue
and equipment margins previously generated from the VA project. This will
allow us to repurpose our investments to focus on offering a broader array of
solutions to the healthcare market than we already have available and to
increase our sales efforts on the commercial market opportunities for our
products and services, which we believe have greater potential."

In response, the company will immediately implement plans to reduce its
operating costs to better align its resources with its anticipated revenue
over the next several quarters and the growth opportunities that it intends to
pursue. These changes include a reduction in staff and the use of external
resources and other costs. The company also expects to report significantly
reduced revenues over the next several quarters due to the non-renewal of the
VA contract.

Mr. Bonnet concluded, "Authentidate has invested considerable time and
significant resources developing state-of-the-art products and services, and
we believe our proprietary software offers unique advantages to a healthcare
industry that relies increasingly on technology to reduce costs, improve
efficiencies and enhance patient outcomes. The VA has extensive requirements
not necessary in commercial sectors. While some of those requirements have
innovated our offerings, others are simply not value add to commercial
customers. By no longer building legacy products to those specifications, we
will be able to dedicate more resources to more meaningful efforts for our
customers and shareholders, exploit the key advantages of our products and
services and focus our product development and sales efforts on healthcare
organizations with the greatest demand for telehealth and Inscrybe solutions.
As part of this strategy we intend to pursue strategic relationships with
industry partners to supplement our marketing efforts."

Posted-In: News Press Releases

 

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