SCOTTSDALE, ARIZONA--(Marketwired - May 2, 2017) - Certive Solutions Inc. (OTCQB:CTVEF)(CSE:CBP) - ("Certive" or the "Company"), announces that effective April 28, 2017, it intends to divest itself of the assets purchased from Titan Health Management Solutions, Inc., that have been operated in the Titan Division. The founding principals of Titan Health Management Solutions, Inc. have agreed to reacquire the Titan Division's assets from the Company. It is the intention of the parties to enter into a binding divestiture and reacquisition settlement agreement on or before May 31, 2017. The Asset Purchase and Sale Agreement executed on July 3, 2014 provides for the necessary process to accomplish the transaction. Certain pre-qualifying conditions must be achieved before the transaction can become effective. Those conditions include creditor and regulatory approval and an independent valuation of the assets being sold.
On December 1, 2016, the Company issued a press release updating corporate affairs and referred to the growth in the Titan division. During the month of February, several significant and material events occurred which have caused management and the Board of Directors of Certive to reflect on the appropriateness of making additional investment in the Titan division, notwithstanding its growth and recently improved financial results. The factors considered include Titan's reliance on a few customers, lower margins on expected new business, duplication of services that can be provided by either Omega Technology Solutions LLC (the "Omega division") or other service provider partners, and additional significant cash investment that will be needed to on-board expected new customers.
While January operating results for both the Titan and Omega divisions, as reported, were very encouraging, it has been decided that the Company's deployment of capital resources needs to be focused on its most accretive division, the Omega division. The Omega division is now onboarding the previously announced large contract with a midwestern hospital system estimated at $21 million in revenue to the Omega division over five years. Regional market development has also continued aggressively with the Omega division. Focusing on the most accretive sources of revenue has become Certive management's primary objective and therefore any additional investment into Titan was deemed to be a financial expense that the Company could not afford to take at this time.
Recognizing Certive's need to expend capital on its most accretive offerings possible and thus attain positive cash flow in the near term, it was mutually determined by both the Company and the Titan principals that they would be better served by Titan reacquiring the assets originally transferred to Certive in July 2014.
It is Certive management's opinion that there has been no appreciable increase in the asset value of the Titan customer relationships since the date of the original acquistion. This opinion will is expected to be confirmed by way of independent valuation. The terms of the transaction will be disclosed when the final settlement agreement is resolved.
Subsequent to closing the divestiture and reacquisition agreement, it is contemplated that the Company may enter into a sales and marketing agreement with Titan, thus continuing to offer the Titan brand of zero balance service offerings to Certive customers. This relationship is not expected to be exclusive; the Company will also offer these services using the resources of its Omega division and other outsourced third party providers. Management believes that the use of the Omega division and other revenue cycle partners can enhance the profitability of zero balance business in certain selected situations. This is particularly anticipated in audit and collection activities.
Van Potter, CEO of Certive, noted that "Often times in business, the best possible outcome is to fully understand and respect the goals and objectives of any relationship. Our goals are to seek continuous improvement, focusing on those activities which will increase shareholder value rapidly. We have an Advisory Council and an experienced Board of Directors, each of which have offered a great deal of support and advice with respect to this decision. Although Certive would clearly embrace a continuation of the relationship with the Titan principals, it became obvious that splitting our capital resources between the Titan division and the Omega division was incongruent with our need to focus on the highly accretive Charge Accuracy Audit services (Lost Charge Recovery). We look forward to working together with Titan on projects in the future."
About Certive Solutions Inc.
Certive Solutions Inc. (Scottsdale, Arizona) provides revenue cycle management solutions to the U.S. healthcare market. Certive's claim audit and recovery services, billing services, and software solutions help providers work with payers to efficiently manage the reimbursement process and improve financial performance. Certive's highly skilled and experienced management team, combined with proprietary workflow and analytics, audit and identify, and bill and collect, underpayments in accordance with contractual obligations between the public or commercial insurance carrier and the designated provider. The healthcare market is changing. Certive works with clients to provide efficient and effective solutions aligned with reform initiatives to improve healthcare and reduce costs.
FORWARD-LOOKING AND OTHER STATEMENTS
This press release contains forward-looking statements. These statements relate to future events or future performance and reflect our expectations and assumptions regarding our growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. In some cases, forward-looking statements can be identified by terminology such as "may", "would", "could", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other similar expressions concerning matters that are not historical facts.
A number of factors could cause actual events, performance or results, including those in respect of the foregoing items, to differ materially from the events, performance and results discussed in the forward looking statements.
Factors that could cause actual events, performance or results to differ materially from those set forth in the forward-looking statements include, but are not limited to:
the ability of the Company and Titan to enter into a settlement agreement on mutually satisfactory terms and to complete the reacquisition of Titan assets;
Although the forward-looking statements contained in this press release are based on what we consider to be reasonable assumptions based on information currently available to us, there can be no assurance that actual events, performance or results will be consistent with these forward-looking statements, and our assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release. Forward-looking statements made in this press release are made as of the date of the original document and have not been updated by us except as expressly provided for in this press release. As required by securities legislation applicable to reporting issuers, it is our policy to update, from time to time, forward-looking information in our periodic management discussions and analyses and provide updates on our activities to the public through the filing and dissemination of news releases and material change reports.