Healthmed Services Ltd (Pink Sheets: HEME) is a development stage company with the stated goal of releasing healthcare focused applications for Apple’s iPad. The company utilizes strong facts about its market and perceived need for the iPad applications in the medical field. These stated facts include expectations that healthcare spending will reach $4.5 trillion by 2019; anticipation that iPad sales will climb to 57 million by 2015; and forecasts that 20% of all health-care professionals will incorporate the iPad into their practice.
Responding to this need, Healthmed set out to develop applications for the iPad that would permit it to interface with desktop PCs, allowing medical records to be remotely transmitted directly into the health care professional’s computer. In other words, the goal is to create remote access client software for the iPad designed for the medical field. The applications are named Virtual Vantage and Neural Vantage. By putting all of this information together, along with catchy names, it truly paints a positive future for the company. After all, how difficult could it be to develop this software?
Well, reality is far different than the perceived facts. Healthmed just filed a form 8K with the SEC stating that the company has been ripped off by its software developer, Team TFZR, which was hired for an upfront payment of $600,000 to develop the Virtual Vantage and Neural Vantage software. The payment reflects the total value of the contract.
Interestingly, it was an oral contract and Team TFZR now demands more money for the software. Something doesn’t smell right here for sure. What kind of company would enter into an oral agreement for $600,000 without anything in writing? Furthermore, paying for software development in a lump sum is an unusual practice. It is generally paid for in stages as milestones are reached.
In addition, the CEO recently stepped down and Healthmed changed PR firms. This move paints a bleak picture for the future. The stock price plummeted to $0.04 per share on the heels of this release, and Internet message boards were alive with chatter from irate investors voicing their anger and pending class action suits.
The tank in share price didn’t last long, however. This morning the company issued a dud of a press release linking back to the company’s Web site, which is void of any information regarding its supposed product launch.
Could this be another pump and dump claim? Whether it’s a sham or not, the stock has doubled in morning trading, spiking up to 75% on the “news,” and the odds that this Pink Sheet is running a legit show are seemingly slim
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