Singular signs software MOU, raises $3.7M

Singular Health has signed a memorandum of understanding (MOU) with Miami-based managed service organisation Provider Network Solutions for its 3Dicom software, with the two entities set to collaborate on the best path to an initial commercial pilot of the technology.

Provider has also stumped-up a $500,000 cornerstone investment into Singular as part of a $3.7 million placement, with the total funds to be used to further develop the software, implement the MOU, advance a commercialisation program and for working capital purposes.

The collaboration will define a plan for the initial pilot, a subsequent full-scale rollout of the software through PNS’s extensive network, followed by a national rollout.

Management says the two firms have already put their heads together to co-design a work plan to demonstrate the feasibility of the 3Dicom software in reducing duplicating imaging costs and provide access to imaging across multiple systems.

The 3Dicom software can convert conventional two-dimensional MRI, CT and PET scans into immersive 3D images, providing a much better and clearer image for medical personnel to assess.

With Singular’s Medical File Transfer Protocol (MFTP), it allows access to imaging data across many existing health networks, resulting in potential savings by reducing duplicate imaging costs that are estimated to cost the United States healthcare industry more than $30 billion annually.

Following many months of due diligence, preliminary technical and commercial discussions, and in-person representations, we are pleased to be able to announce this strategic agreement with Provider Network Solutions. We look ahead to the technical proof-of-concept which is expected to commence in the coming days and to solidify our relationship with PNS in the coming weeks and months.

The $3.7 million placement was eagerly sought by a range of institutional funds, wholesale investors and existing shareholders, with Marin and Sons scooping up an additional $200,000 of the company’s shares.

In total, 41,111,111 shares were subscribed for at 9 cents apiece, encouragingly this was a six per cent premium to the 15-day and 30-day volume weighted average price of 8.5c.

Management says it phase one plans are to leverage its existing functionality to enable low-risk demonstrations of the software to meet Provider’s requirements.. Singular says its technical staff have already demonstrated the effectiveness of the technology and the company anticipates deployment into work programs early next year.

The pilot project will be developed and then implemented in either the US or Puerto Rico, with this stage also including price discussions for licensing and other fees. The pilot will also involve building storage for the radiology images, integrating images with existing systems and monitoring reduced duplication of images. Once this is complete, the pilot will be scaled up across additional facilities and potentially have a nationwide rollout requiring an agreed level of payments to Singular for software licenses, network fees and development work, prior to proceeding.

Singular believes its 3Dicom software can play a significant role in other managed service organisation’s businesses within the substantial and highly competitive US healthcare market.

The company recently revealed an entry into the US veterans’ health market, announcing a tie-in with a master distributor that services veteran’s needs. Revenue is generated from the sale of licenses to its intermediary for each veteran, with Singular initially focusing on the Florida and Texas markets.

When in active service, a veteran’s healthcare is provided through the Military Health System (MHS) and doctors within the service retrieve medical records and images using the internal system. However, once discharged, veterans are often unable to retrieve and share their images, unless they request their medical records on a compact disc.

The benefit of the company’s 3Dicom software for veterans is that it allows them to upload and share medical records from their “3Dicom patient” account through online, desktop and mobile applications, greatly enhancing accessibility, portability and continuity of care.

The program also allows practitioners, such as surgeons, radiologists and dentists, to convert conventional two-dimensional MRI, CT and PET scans into immersive 3D images. The improved imaging provides a clearer look at a patient’s medical issue and enables better surgical planning.

Provider was founded in 1988 and has grown to be the leading managed service organisation in the US state of Florida, managing the health care of more than 3.7 million members. The company has expanded in recent years to Texas and Puerto Rico.

Market punters took a liking to today’s reveal, pushing the shares more than 53 per cent higher to an intra-day peak of 14c before settling back to 12c, up from yesterday’s close of 9.1c. Volumes of 5.5 million shares changed hands, which was the company’s biggest daily turnover since March this year.

Singular appears to be making the right moves in its expansion into the giant US health market, with a clear focus on improving 3D imaging for patients and targeting a reduction in duplicate costs.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au