Connectyx Technologies Holdings Group, Inc. (CTYX-OTCPK)
December 16, 2011 Issue
The Most Powerful Name In Corporate News and Information
Connectyx Technologies Holdings Group, Inc. with their Flagship Product MedFlash® is Bringing to Market a Solution to One of the Greatest Needs of the Consumer – a Secure Online Healthcare Records Portal
provides unique products for the healthcare market including MedFlash®, the
electronic Personal Health Manager (ePHM). The MedFlash® PHM is an easy to
use Personal Health and Lifestyle Manager that is accessible using a
powerful web portal suite. The MedFlash® PHM also features a 24/7/365 call
center, a USB flash drive and our smartphone applications with Scan code
capability. The MedFlash® PHM provides member benefits including instant
access to your Emergency Medical Profile and Personal Health Record in the
event of an accident or a medical emergency. Whether traveling, at work, or
at home, First Responders have an invaluable advantage when they have access
to this time- critical information. Far more than just an emergency flash
drive, the MedFlash® PHM can be accessed on any computer, securely and with
complete privacy. There are also lifestyle and wellness features that
provide significant health benefits to members and risk mitigation for
employers and insurers alike. Connectyx products are developed with the
needs of patients, families, doctors and First Responders in mind.
President, CEO & Board Member
Mr. Schuman, CEO for CTC, has an extensive background in healthcare business administration and executive strategic planning. He has served as Vice President of Business Development/Operations for Liberty Medical from 1997 to 1999, a $100M medical supply company, (PLMD) and was their Compliance Officer for two years. Mr. Schuman has owned and operated numerous medical equipment companies over the last 25+years. He is a registered and licensed respiratory clinician and has a bachelor's degree in business from the University of Phoenix, AZ.
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – December 16, 2011
CEOCFO: Connectyx Technologies just recently announced financial results, revenues are up, operating expenses are down; how do you continue the trend?
Mr. Schuman: Yes, we were very pleased to report our financial results for the first nine months of 2010 with revenue growth of 34% while cutting operating costs by 56%. And this financial performance is before we see the results of our one of our marketing partner’s TV ad campaign including MedFlash and our radio ad campaign. The television ads are expected to begin airing this month, so we are understandably excited about our next few quarters’ results.
From an investor’s point of view, we not only are growing rapidly, but we are managing our share structure with only 89 Million shares outstanding and a public float of 48 Million shares. As anyone in the microcap investment arena can tell you, it is one thing to have revenue. It is quite another to see revenue growth without substantial dilution to the shareholders. We recognize that managing costs is just as important as building a revenue base.
Our focus is to continue to live within our means. That means that we are going to keep a lid on our operating costs as we have transitioned to using virtual services that has helped us in controlling operating costs. Then of course, on the sales side we are continuing to bring in as many affiliate partners and campaigns to continue to drive revenues. At any moment in time, any one of these campaigns could be extremely lucrative, which could cause a hockey stick or a spike in MedFlash revenues. We are continually planning as well as discussing with other organizations on how to develop and optimize these metrics to drive revenues to the Connectyx organization.
Mr. Schuman: I have been in healthcare for over 30 years as a clinical practitioner as well as business entrepreneur, so when I was approached by my colleagues to collaborate in the healthcare technology arena I was intrigued by the opportunity. The initial strategic business plan developed in 2004 was to create a revenue cycle product. It was not until 2005-2006 that we began to migrate into the health and wellness field, and acquired the MedFlash name, which is now the company’s primary focus.
Mr. Schuman: Yes, MedFlash® is our flagship product and Connectyx made an announcement today regarding offering our MedFlash product internationally. MedFlash is an answer to a very big problem and that is as all of us are consumers of healthcare, we have not been very good stewards or have not been very proactive in managing the key elements of our healthcare records.
To be more specific, for years most of us have depended on the healthcare system to manage our health information, which in some cases has be detrimental to our wellbeing.
More importantly, as you know, our Country cannot sustain paying for the escalating healthcare costs of, what we call, a reactive medicine.
Simply put, we cannot continue to reimburse doctors and hospitals to keep their offices full of sick people. What needs to happen is that we must incentivize, as well as reimburse, the healthcare community to focus on wellness using programs that will teach all of us how to live healthy lives, reducing chronic disease, like obesity and diabetes.
I am not saying that I have the answer because it is a complex paradigm shift and to change reimbursing doctors and hospitals from keeping the waiting rooms full of sick patients to keeping people healthy is going to take time. My point is that the sooner we begin to take control of our own wellness and health monitoring, the better it will be for us individually and the nation as a whole.
The fact is, as you can see, this country is fighting with diseases directly related to obesity, heart disease, diabetes, and all these are due to the way that we live.
With that said, Connectyx and MedFlash have two important principles. One is we are educating the consumer about the importance of taking control of their health information and living a healthier lifestyle.
MedFlash is designed to help the average consumer without any healthcare
training to become proactive by taking control of the key elements of their
health information as well as teaching them with the use of online tools
that they can embrace to try to change some of the bad habits that many of
us have acquired over the years.
I am a baby boomer so I am especially sensitive to this as I am very much aware that the aging population is going to grow exponentially over the next ten to twenty years and obviously the healthcare resources will not be able to adequately manage all of us if we continue with our current lifestyles.
For instance, in my personal scenario, my parents are aging and have the luxury of all these wonderful healthcare services available. And God bless my grandparents who, when they entered into their elder years and they lived well into their 90’s, all of them spent a lot of time visiting their different healthcare specialists on a weekly basis.
But, my generation and others to follow are not going to have the same opportunity as we will not have the resources. We have to change and that is why we are passionate about MedFlash and designed it so that it is easy to use and affordable.
Does MedFlash have or contain a person’s medical records?
Lynn, it is important to note that your medical health record is a very comprehensive medical - legal document. What MedFlash offers is an easy-to-use health profile so the average person who has no in-depth medical education, can complete their own medical profile themselves.
As I said earlier, we also provide them tools, cost saving benefits and other services that are included as part of their membership. MedFlash also includes an in-case-of-emergency (I.C.E.) feature so that if you become incapacitated in any way, key elements of your health profile will become publicly available. Of course, MedFlash only releases key information that the members control, as all MedFlash customers are given a unique nine-digit number, which is part of our I.C.E. program, which we talked about earlier that gives our members access to 5 I.C.E. features.
So there is a lot more to the MedFlash than just a health record. We also allow our members unlimited storage to, what I call, a safe depository, so they can store any documents, images, pictures and can gain access through the internet via our secure portal. We educate our members about the importance of disaster recovery. God forbid any one of the disasters that we have seen in this country happens to where you live like floods, storms or blizzards. So, as a disaster recovery, our members can also store information that is important to them and they can retrieve it anywhere in the world where there is internet access.
Mr. Schuman: Your information is already out on the Internet. You would be surprised how much information is available if you look in the right places. But, on the surface, it can be a concern.
However, cyber fear is becoming less common as most people now are comfortable with operating in a secure Internet environment, whether you are doing your investments, online banking or all the other important aspects of your life. The Internet is the wave of the future. So it is becoming more common to keep information- our health profile-in a secure databank, and we have not seen any significant consumer resistance to date.
To address your case in point, perhaps early on, years back, this may have been problematic, but with the secure internet portals that are in use from the IRS to banks and your insurance and your investments, it has not been an obstacle or, what you would call a “barrier to entry”.
Mr. Schuman: I believe people are complacent and really do not have a good understanding of what really is happening right now. The healthcare system is a very complicated business cycle, and many people are becoming overloaded with a lot of information which is very confusing. Even the experts do not have a clear understanding, as healthcare reform and the many complicated polices change day by day, from HIPPA to what is classified as “meaningful use”.
As I said earlier, there is not a clear-cut solution to this problem. We understand fundamentally, what has to happen, but it is a very complicated business cycle that has to occur. In addition, it is not going to happen overnight. In response to your question, the average consumer is very confused and it is going to take a lot of education, marketing, and promotion over the next 3-5 years. The good news is that change will happen and everybody will be using some type of health and wellness tools and MedFlash will be one of them.
Every day we are seeing more about the importance of wellness on television from the insurance companies to the government to private organizations trying to, as quickly as possible, educate and empower the average consumer with some of the wonderful advantages of becoming proactive about taking care of themselves.
Mr. Schuman: We are testing a variety of different marketing channels for selling MedFlash, both independently and with our marketing partners and affiliates. We have already started testing TV, radio and print in small tranches with the resources that we have and are measuring those successes.
Recently, we announced the launch of our Affiliate Marketing program, that allows strategic partners, whether they are a health and wellness company, a benefit company or service organization, to market our MedFlash program to their customers. A great example of one of our affiliates would be the Association of Mature American Citizens (AMAC), which is a competitor of AARP. They have hundreds of thousands of members and we recently test marketed MedFlash with them through an email campaign and are having an excellent response.
We are testing other membership organizations, e-mail, Facebook, social media, and some new areas that we will announce in the near future. Circling back as I stated in a recent press release, we are going to be airing a MedFlash spot with Clear Channel Radio, testing local areas with 30 and 60 second radio spots. Moreover, as the results come in, we will measure each marketing campaign and--depending on the success--test, retest, and find out which ones were most effective in signing new members at, of course, the lowest cost to us. In other words, we will decide on future marketing efforts based on a cost/benefit analysis.
Mr. Schuman: Some of the features that people like right off the bat is the ability to really build and control their own health and wellness profile. We did an early stage analysis of our MedFlash Member age population one year ago. We looked at 3,000 or 4,000 members as an example, and we noted that our membership was a perfect Bell Curve going from zero to one hundred years. The mean age was around forty-eight years old, and was not gender-specific. Which means, as we initially projected, that all age groups are using MedFlash.
I have personally talked to folks in their nineties on customer calls. In addition, a lot of people are computer literate; more than you would expect. Our members love the idea that they can put everything in one place... Folks are getting tired of carrying around suitcases worth of documents. I hear this every day.
know that we are on-point, as the consumers want an easy-to-use place to
place to fill out their health profile and store their information.
Remember, we have five in-case-of-emergency (I.C.E) touch points: a 24/7 call center, a mobile app, the Internet, a QR Scan code and a USB Device. Some of the areas that members discover once they start exploring MedFlash is all the different tools and services. For instance, we have an online medical history tool that takes you through an online interview and, depending on your answers, will take you in different directions. Once you are done, you have a complete medical history tool about yourself that you can give to healthcare professionals when they are asking about your health history or need additional information.
So instead of sitting in a doctor’s office and filling out all of your information on that white clip board, you can actually attach a comprehensive medical history or even a preliminary questionnaire, depending upon how you feel that day, which is very helpful to the healthcare professionals. We also have an advanced directive and Living Will document in MedFlash that helps our members prepare their family and others in case they become incapacitated. Medflash has many unique features and benefits.
Mr. Schuman: Yes they are. We have medical associations that are signing up with us right now. We have a very active medical advisory board which keeps on track. Their advice is very important as the electronic medical record, commonly called EMR’s, really becomes interoperable as mandated by the healthcare reform bill. What is important to note that included in the healthcare bill is that all EMR’s must be able to communicate with the consumer - patient side of the world. MedFlash will be there as an answer to that dilemma downstream, because the patient will want to interact and gain access to their information from the EMR.
Mr. Schuman: There are a handful of early stage companies that, like Connectyx, are developing products in this new market. From a traditional competitive standpoint, the good news is that some companies have already come and gone; one of the biggest and most known is Google. They took a different approach and we now believe more than ever that we are on the right track by empowering the consumer and giving them all these tools and services. More importantly, we are moving toward a less comprehensive health record because it is now known that consumer compliance falls off as the complexity increases.
As a company, we believe we will succeed because our continued mission is to deliver affordable, easy-to-use health and wellness tools and that that is what MedFlash does every day.
Now with that said, from a business aspect it is important to remember that the market is not even defined as of yet because less than 15% of the American population has even started to use these tools on a regular basis.
We are in the area of low-hanging fruit, meaning that we do not have to conquer companies’ market share or change market position to bring in new customers. And our price point is very attractive for our target market.
The market is wide open and we believe that we are on-point and, as our strategic marketing plan expands, our membership could grow into the millions. Therefore, with 85% of the American population still open to becoming a MedFlash health and wellness client, there is a lot of opportunity for our Company.
Mr. Schuman: What is known as “Blue Button” technology was developed by the Veterans Administration (VA) and Medicare to aid the consumer with an easy-to-use access point to their medical information. We applied for, and were granted, permission to use the “Blue Button” link so our members can gain access through MedFlash to their Medicare – VA records. To make this simple, we communicated directly with veterans or Medicare beneficiaries who are already active in using and storing their medical information through those systems. So now they can easily download or integrate that information into their MedFlash portal.
That is the beginning of some of the integration steps or communication tools that we will use in the future as we start connecting with the electronic medical records that are going to be used in the hospital system and physician offices. This is part of that big word that people call “interoperability” that is still years away. What is important is that Connectyx is ready and MedFlash has started to use these tools now.
Mr. Schuman: Logan County is part of our Affiliate Member program that we discussed earlier. In this instance a community program or any qualified organization that would like to work with us as a marketer, could offer a joint health and wellness program to their community, customers or clients, and can have a unique MedFlash landing page or URL. For instance, in Logan County, if you were to visit www.medflash.com/lcpa, a landing page would present a joint MedFlash/Logan County banner and educate the consumer on the importance of using the health and wellness tool. In this situation, a portion of the revenue is donated back as a rebate to the Logan County Community. In other instances, that portion of the revenue could be used as a commissionable event or a revenue share to other groups that partner with MedFlash.
We are very excited about the Logan County program. We believe that once we have tested this campaign, we can use this model for other not-for-profit organizations as well across the country.
Mr. Schuman: With so many opportunities in front of us, we are carefully choosing what projects we can manage within our financial means.
We are focusing on the affiliate programs right now as well as some of the larger opportunities where we can generate significant revenues for the company at relatively low marketing costs such as the TV advertising campaign to launch soon with a partner who is advertising their product and using MedFlash as a premium to new clients. We underwrite no costs but receive revenue from our partner.
In addition, there is the network aspect of MedFlash where we plan to empower our members to sign via the internet where there is minimal cost involved.
With that said, we have built a very robust affiliate program where partner companies can easily sign up with us and very quickly launch a program. So, as we complete 2011 and enter 2012, we will be focusing on improving our technology platforms.
CEOCFO: You mentioned international growth, what is happening in that area?
Mr. Schuman: We introduced through Call-Center Team Inc. an opportunity to market MedFlash in Israel. Management believes that this would be a good time to test this on an international basis. We already have clients in Canada who use MedFlash, but the whole world needs to get involved in health and wellness. Now, we are now being approached from folks in other countries who like what they see in our initial MedFlash platform.
Some of these groups want to duplicate our product in their Country, so we are going to collaborate with them, using the same model that we have in the US and begin testing in 2012. This is an exciting time for us.
Mr. Schuman: Connectyx remains focused on promoting health and wellness to the consumers. Our company is going to be developing over the next twelve months some exciting products.
One will be the MedFlash program, and the other, as previously announced, is the Pet Club. These are both internet-based consumer models that will empower the consumers to get involved and use a variety of resources and tools that will benefit them and their pets. As you have seen in some other business models, the community network effect is powerful, both in building memberships quickly and also generating revenues. We are looking at the successes of some of those companies as well as learning from their failures and taking the best from both and blending them together in what we believe a win/win scenario for Connectyx. We have spent years developing our strategy and management believes that we have the right products that will lead to many successes over the next twelve to eighteen months.
MedFlash® is our flagship product and Connectyx made an announcement today regarding offering our MedFlash product internationally. MedFlash is an answer to a very big problem and that is as all of us are consumers of healthcare, we have not been very good stewards or have not been very proactive in managing the key elements of our healthcare records… MedFlash is designed to help the average consumer without any healthcare training to become proactive by taking control of the key elements of their health information as well as teaching them with the use of online tools that they can embrace to try to change some of the bad habits that many of us have acquired over the years. - Ronn Schuman
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