President of Access HealthNet Leaves Firm
The president of Access HealthNet Inc., a Westlake provider of communications systems for the health-care industry, has abruptly left the company amid reports of unexpected losses and an infusion of cash from directors and others.
Access expects to post losses totaling about $5 million for the six months that will end Dec. 31, the company has announced.
In a press release, the losses are blamed on “changes in operations” that required Access to assume obligations “in connection with product sales that were performed previously by its distributors.”
Access said Keith M. Berman, its president, “has ceased to be employed by or affiliated with the company in any capacity.” Berman also resigned from the board, the announcement said.
No reason was given for Berman’s sudden departure. His duties are being assumed by Steven E. Levy, chairman and chief executive.
The company said it has had to delay reporting its most recent revenues and will have to restate its financial results for the three months ended June 30.
For the quarter ended June 30, the company originally reported net income of $107,000 on revenues of $2.9 million. Profits were down from $360,000 a year earlier, but sales were up from $2.2 million.
In another development, Access announced an investment of at least $2.5 million by board members and others. Directors or their affiliates will buy 666,000 units of convertible preferred stock and warrants at $3 a unit. If the warrants are exercised, the infusion will total $4.3 million.
In addition, Threshold Technology Partners L.P., a stockholder, has invested $500,000 in the company in return for a promissory note and stock warrants.
Levy said Access is trying to raise even more capital. He promised to provide shareholders with a detailed account of recent developments.
“That the board of directors moved so quickly to satisfy the company’s capital requirements is clearly a show of their character . . . “ he said.
Access’ problems surfaced just a week after it said it landed one of the largest customers in its history.
The company, which produces information management and communications systems that hook up health-care professionals, said it will provide its software to 900 physicians, several hospitals and 25 clinics in the Oakland area.
Access claims it is one of the leading providers of such systems. The company says the field now totals $800 million annually and is expanding at a rate of 35% a year.
