SOURCE: digiMedical Solutions, Inc.

October 03, 2007 11:54 ET

digiMedical Solutions, Inc. Updates Shareholders on Enhanced DEA Compliance, Reduced Expenses and Latin America Expansion Potential

Company Releases CEO Letter to Shareholders Discussing Improving Fundamental Financials and Upgraded Exchange Listing

DALLAS, TX--(Marketwire - October 3, 2007) - digiMedical Solutions, Inc. (PINKSHEETS: DGMS) CEO David W. Lee today released an update on the Company's progress in a Letter to Shareholders. The shareholder letter, released today and included in its entirety below, provides additional detail on the company's business plan and the company's plans for the remainder of 2007.

Dear Fellow Shareholders and Interested Investors,

It has been a busy summer at digiMedical. In my last Shareholder Letter, I updated you on our business plan, technology philosophy and plans for 2007, which included cost reduction and expansion through both acquisition and organic growth. Today, I will give you more insight into our market and update you on our progress for 2007 to include new opportunities now on the horizon after a recent trade mission to Latin America sponsored by the United States Agency for International Development (USAID) and hosted by NewMarket Technology, Inc (OTCBB: NMKT).

digiMedical and The Drug Enforcement Agency

In a day and age where the Drug Enforcement Agency (DEA) is tightening controls for both doctors and pharmacies, I find that once again technology is a great solution for managing prescription fulfillment. Looking at the various DEA actions over the last several months, one could conclude that doctors, if they have not already done so, will be seeking technology that can aid in the process of prescribing controlled drugs. The digiRX product line provides doctors a platform for meeting tightening DEA-related prescription fulfillment controls.

I would encourage our shareholders to follow the DEA's website (http://www.usdoj.gov/dea/index.htm) and watch the level of activity by their officers. Our product lines meet the current standards of the DEA, and we are constantly improving our products to exceed the DEA's expectations. This allows doctors that use the digiRX product line the comfort of knowing that we are keeping their office continually in compliance with the DEA.

Reduced Costs, Increased Revenue and Recent Acquisition

Over the last year, we have had some significant victories. We have moved the company from a private company into a public company on the OTC, and we continue to work through the steps to move toward becoming a fully reporting company on an upgraded exchange.

Additionally, we have made great strides to reduce and streamline costs where necessary. We have installed our technology throughout our pharmacies to receive digital prescriptions from our network of physicians. Significantly, leveraging our technology has benefited the company by increasing prescription count and revenue from those prescriptions, without added human resources. Overall, we have reduced staffing in the pharmacies we acquired, allowing us to reduce our monthly overhead by more than $25,000 per month. We are pleased with this reduction in overhead and will continue to look at every aspect of our spending to continue maximizing our profits.

We have also expanded our potential revenue base through the acquisition of a new pharmacy and merged it with our Ft. Myers, Florida location. Specifically, we purchased Robert's Pharmacy earlier this year, which is a pharmacy located near our Ft. Myers location in Florida. This pharmacy had over 24,000 new potential customers and we merged these assets into our existing pharmacy in Ft. Meyers. This strategic merger gave us a significantly larger patient market, with a lower cost, digitally supported single pharmacy operation. We have already yielded thousands of new prescriptions from this acquisition and merger. To manage the influx of new prescriptions from this acquisition, we developed new technology that allows our call center to interface with external pharmacy databases to extract and track the sales process as we contacted the patients. This leads to my next update: technology.

Technology Update

We have had a good year enhancing our product line with newly released software, specifically digiRXComp and digiRxStream.

digiRXComp™ 3.0 is designed to streamline medical practice processes and to eliminate the overhead of processing Workmen's Compensation prescriptions in both the physician's office or clinic and the pharmacy. The new software captures the workmen's compensation data required by law at the physician's location and transmits this data directly to any company-owned pharmacy. This new process eliminates re-collection of data at the pharmacy, eliminates pharmacist call-backs to physicians and, in extreme cases, eliminates the need for patients to re-visit the physician to collect their case.

digiRxStream streamlines the doctor's office workflow process, mass producing prescriptions, especially the schedule two prescriptions, written by the various nurses and doctors within the clinic.

Both digiRXComp and digiRXStream tie the doctors' offices to our call center, allowing our call center service to manage the patient relationship. Our call center service also allows the doctor's staff to monitor the status of a prescription and to push through reauthorizations and refills more efficiently.

Latin America, Project LAC and NewMarket Technology, Inc.

I want to close this letter with news of some exciting new possibilities for digiMedical. Recently, we were selected to participate in "Project LAC" (www.projectLAC.com) and attended the project's trade mission to Latin America. The trade mission was sponsored by the United States Agency for International Development (USAID) and hosted by NewMarket Technology. During this trip, I had several promising business development meetings in Brazil, Chile and Mexico and learned much about the regional needs as they build stronger and more aggressive economies. I learned that digiMedical's business model is valid in those countries, and that our company could thrive if we lay the proper contextual foundations. We are in ongoing business negotiations to develop a potentially substantial opportunity in South America. A video about the Trade Mission has been posted on YouTube at http://www.youtube.com/watch?v=HBn0w3ez--4.

Thank you all for your continued support of digiMedical Solutions. I appreciate everyone's support and patience. We are continuing to move forward and have built a foundation that can lift this business model to its expected heights.

Sincerely,

David W. Lee

Chief Executive Officer

digiMedical Solutions, Inc.

To be added to digiMedical's corporate e-mail list for shareholders and interested investors, please send an e-mail to ir@digimedical.com.

About digiMedical Solutions, Inc. ™ (www.digiMedical.com)

digiMedical Solutions, Inc.™ is a pharmacy and medical technology company focused on developing next generation, digital medical technology with an emphasis on digital prescriptions (d-Prescriptions) that closely align the doctor, pharmacist and patient. The company's planned growth will come from three channels: direct marketing of the company's wireless based d-Prescription technology to physicians, acquisition of independent pharmacy chains and the sale of select territories to "market partners" licensed to exploit the digiMedical Solutions™ model. digiMedical Solutions, Inc.™ currently owns and operates six pharmacies throughout Texas and Florida and is a Microsoft Independent Software Vendor (ISV). digiMedical Solutions'™ unique business model connects physicians, patients and pharmacies with next generation medical technologies.

About NewMarket Technology, Inc. (www.newmarkettechnology.com)

NewMarket helps clients maintain the delicate balance between maintaining legacy systems and gaining a competitive edge from the latest technology innovations. NewMarket provides certified integration and maintenance services to support the prevailing industry standard solutions such as Microsoft, Cisco Systems, SAP, Siebel and Sun Microsystems. Concurrently, NewMarket continuously seeks to acquire emerging technology assets to incorporate into an overall product portfolio carefully packaged to complement the prevailing industry standard solutions.

NewMarket delivers its portfolio of products and services through its network of Solution Integration subsidiaries in North America and the leading emerging markets around the world to include Latin America, China and Singapore.

NewMarket ranked Number One in Texas, Number Three in the United States and Number Five in North America on Deloitte's 2006 Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America. Rankings are based on percentage revenue growth over five years, from 2001-2005. The Company grew from less than $1 million in revenue in 2001 to over $50 million in profitable revenue in 2005. In 2006, the company continued its rapid growth, reporting $77.6 million in revenue with a net income of $5.8 million.

Forward-Looking Statement

Statements included in this press release which are not historical in nature, are intended to be, and are hereby identified as "Forward-Looking Statements" for purposes of safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. Forward-Looking Statements may be identified by words including "anticipate," "await," "envision," "foresee," "aim at," "believe," "intends," "estimates" including without limitation, those relating to the company's future business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the Forward-Looking Statements. Readers are directed to the company's filings with the U.S. Securities and Exchange Commission for additional information and a presentation of the risks and uncertainties that may affect the company's business and results of operations.

Contact Information

  • Contact:
    digiMedical Solutions, Inc.
    Investor Relations
    Whitney Price
    214-722-3029
    ir@digimedical.com