Xscribe Sells Discovery Product to Illinois Firm
Xscribe has sold its litigation support product, known as Discovery, to Stenograph Corp., the Mt. Prospect, Ill., company that was to have acquired Xscribe in a deal that fell through earlier this year.
The sale price is about $2.5 million, Xscribe said. The company also said it has obtained forgiveness of $1.8 million of its outstanding debts. Chief financial officer Bruce D. Myers declined to disclose the name of the creditors involved.
In a statement, Xscribe President Suren G. Dutia said proceeds from “the sale of the Discovery product puts us in a good position to restructure our balance sheet and significantly reduce the company’s liabilities.”
“We are cautiously optimistic that our remaining major creditors will cooperate and assist during our efforts to restructure the company,” Dutia said.
Xscribe has been seriously hurt over the past two years by declining demand for its computer-aided transcription devices as well as technical problems and delays in getting new products to market. Xscribe’s products are used principally by court reporters.
Xscribe’s loss for the six months ended Sept. 30 was $5.3 million on sales of $6.8 million, compared with a loss of $1.2 million on sales of $7.8 million over the same two quarters last year. This year’s results reflect a restructuring charge of $2.9 million taken by the company during the second quarter ended Sept. 30.
The restructuring charge was related to continuing reductions in Xscribe personnel, a move to smaller facilities and a “reevaluation of product profitability,” among other things. The company’s current payroll numbers 50 employees, down from 150 a year ago, Myers said.
