COMPANY
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Summit Announces Asset Sale to Velos
Nashville, TN - November 25, 1998 - Summit
Medical Systems, Inc. (NASDAQ: SUMT), today announced a definitive
agreement to sell the assets of its healthcare provider software
business to Velos Medical Informatics, Inc., a privately held
corporation headquartered in Fremont, California.
The sale is
part of Summit's announced plans to expand, and to concentrate
exclusively, on its consulting and specialty clinical research
services for pharmaceutical, medical device and biologic
manufacturers. As part of these plans, Summit had announced, on June
10, 1998, its intention to exit the healthcare provider software
market. The Company engaged an investment banking firm to identify
and solicit potential acquirers of the software business assets and
to manage the sale process.
Summit will receive up to $2
million for the assets payable over the next year, contingent upon
performance of the assets and Velos' costs to perform prepaid
support service obligations. Summit estimates that the transaction
will reduce its costs to otherwise exit the healthcare provider
software segment by approximately $2.5 to $3.5 million dollars. The
asset sale has been approved by the Board of Directors of each
company and is expected to be completed in early December after
satisfaction of certain closing conditions.
Velos will assume
responsibility for support and service of substantially all of
Summit's Crescendo!, Vista and DOS software products upon closing of
the sale. Summit currently supports over 800 customers and its
customer support staff is expected to transition to Velos.
"I
am confident that Summit customers will appreciate Velos' commitment
to this business and client base", stated Barbara Cannon, President
and CEO of Summit Medical Systems, Inc.
"Velos intends to
build upon Summit's customer base with continued client support and
additional product features", stated John McIlwain, President of
Velos Medical Informatics. Velos currently markets disease
management software for the renal dialysis, transplantation and
oncology marketplace. Velos software encompasses patient management,
clinical outcomes, patient scheduling, clinical research, case
management, billing and decision support.
This Press Release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, particularly
statements regarding estimated sale proceeds, estimated cost savings
and expectations as to closing. These forward-looking statements
include statements of intent, belief or current expectations of
Summit Medical Systems, Inc. (the "Company") and its management
regarding the asset sale. Such forward-looking statements are not
guarantees of future results and involve risks and uncertainties
that may cause the Company's actual results to differ materially
from the results discussed in the forward-looking statements. Risks
and uncertainties that might cause such differences include, but are
not limited to: (1) the performance of the software assets after
closing of the asset sale; (2) the level of costs to perform prepaid
support and service obligations associated with the transferred
assets; (3) costs associated with fulfillment of contractual
obligations in the healthcare provider software segment which are
not being transferred in the asset sale; and (4) the satisfaction of
all closing conditions. The forward-looking statements herein are
also qualified in their entirety by the cautions and risk factors
set forth in the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1998 under the caption "Safe Harbor
Statement under the Private Securities Litigation Reform Act of
1995" and in Exhibit 99 under the caption "Cautionary Statement" to
the Company's Annual Report on Form 10-K, dated March 27, 1998. A
copy of the Form 10-Q and Form 10-K may be obtained from the Public
Reference Branch of the SEC at 450 Fifth Street NW, Washington, DC
at prescribed rates.
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