The object lesson of HealthSpot continued its sad revelations in a Columbus, Ohio Federal bankruptcy court Thursday (10 March) with the confirmation of liquidation under Chapter 7 rather than reorganization under Chapter 11. According to the report in MedCityNews, the bankruptcy trustee is now accepting offers for the assets valued by HealthSpot at $5.1 million. The bulk of these assets–$3.5 million–consist of 191 telemedicine kiosks of which 54 had been deployed with customers such as Rite Aid and Cleveland Clinic. The trustee has been permitted by the court to list these assets on a website. Whether there is any market for the hardware, or the intellectual property of HealthSpot, is a very open question indeed.
Some digging by this Editor has revealed a possible precipitating event to the company’s shutdown, and an obvious, non-recoupable drain on the time and funds of a teetering company. A District Court order issued 4 December on the patent infringement legal action by Nevada-based Computerized Screening [TTA 8 Jan] is now available online. It appears to have been conceded by Computerized Screening as “non-infringement on the basis of the absence of the limitation of “controller”” which is technically a win for HealthSpot. But HealthSpot then sought in September to collect attorney’s fees of a stunning $829,500 from Computerized Screening (more…)
The shock continues with HealthSpot. On Wednesday the company filed for Chapter 7 liquidation in US Bankruptcy Court for the Southern District of Ohio in Columbus. The laundry list: assets of $5.2 million, about $3.5 million in inventory, and $23.3 million in liabilities, including convertible notes of $10 million from cable/broadband company Cox Communications, $6 million from investor Xerox and an undisclosed amount from the Ohio Development Services Agency. HealthSpot had raised close to $44 million since 2011. Their bankruptcy attorney David Whittaker cited cash flow; with only $1.1 million in revenue over the past three years, according to the filing, including $600,000 in 2015, no elaboration was needed. There’s not much left in assets to sell: 191 kiosks, mostly in storage (137) and 54 operating but shuttered at customer sites. The remaining value in liquidation (a/k/a pennies on the dollar) is dependent on whether the name, the kiosks and the IP are purchased. The last is problematic due to the current legal action by Computerized Screening [TTA 8 Jan] We hope this is not a sad harbinger of digital health in 2016, though we have already sensed that the unicorns are heading Over The Rainbow or wherever they go to pasture, but it’s not reassuring. Columbus Business First, MedCityNews.
Update: Neil Versel in his Throwback Thursday took a look at HealthSpot’s steak and salad days at International CES 2013. (See comments for this Editor’s impressions of HealthSpot at ATA 2014.) Perhaps good marketing, but symptomatic of the capital burn, doomed by a lack of sales and quite possibly, a solution that would have knocked it out of the park in 2010. As the old fighter pilot said, ‘timing and luck are everything.’
Qualcomm Life, known for building partnerships with independent companies to form a continuum in transitional/chronic care management utilizing the HealthyCircles platform [TTA 19 Dec 14], yesterday announced not a partnership but an acquisition–Capsule Tech, a company that builds systems for healthcare facilities, mainly hospitals, to collect and integrate data from myriad medical devices. Their medical device information system (MDIS) is dubbed SmartLinx and is used by 1,930 hospital clients in 38 countries. Headquartered in Andover, Massachusetts, Capsule has international offices in France, Singapore, China, Australia, UAE and Brazil. Majority owner was Turenne Capital, a French PE company. Acquisition terms were not disclosed. Release. Also Forbes, Neil Versel in MedCityNews.
Update: Fortune is quite bullish on how this aids Qualcomm in narrowing the quality gap of data transmission between the home and the hospital setting.
Cox Communications, the third largest cable and internet company in the US with ad media and business data divisions, is dipping more than a tentative toe in healthcare with last week’s acquisition of Trapollo, a program design/supply chain/logistics provider that currently works with multiple telehealth, telecare and monitoring device companies. Cox is clearly seeking another type of integration of their data carriage capabilities with systems and programs; they have also invested in HealthSpot Station’s virtual visit/telehealth kiosk and formed a strategic alliance with Cleveland Clinic. Release.
Neil Versel’s columns also note IBM Watson‘s growth and development of its own Care Manager with Apple HealthKit/ResearchKit [TTA 10 Sep] and Salesforce’s entry into patient management with Health Cloud, with another big announcement rumored to be on the way.