Evome Medical Technologies Provides Market Update
NEW YORK, March 28, 2025 (GLOBE NEWSWIRE) -- Evome Medical Technologies Inc. (the “Company” or “Evome”) (TSXV: EVMT) is providing an update to shareholders today.
As important background:
Evome generates revenue from three main revenue lines:
- “DaMar”. This a business-to-business revenue line. Located in California, DaMar Plastics Manufacturing, Inc. (“DaMar”) offers contract manufacturing to a highly concentrated group of customers that then sell those products under their own brand name.
- “Biodex”. Biodex Medical Systems, Inc. (“Biodex”) is a branded medical device business with approximately 50% of revenue originating from international distributors and the other 50% from domestic dealers.
- “The Tables Business”. This a business-to-business revenue line of Biodex. This business unit is co-located in Biodex’s factory in New York. It offers contract manufacturing to only one customer that then sells those products under their own brand name.
Business Update:
- Input costs expected to rise: As for input costs, each business line may be subject to increases in raw material costs caused by potential tariffs. Additionally, Biodex expects to be subject to retaliatory tariffs on the sale of its products outside the United States. Therefore, Biodex is working to understand the effect on prices to both domestic and international customers. Biodex plans to work with customers given the impacts of these potential price increases and their effect upon demand, cash flow and the value of each business line.
- Asset-based loan lender exits:The Company’s asset-based loan (“ABL”) provider has notified Evome that it will no longer continue lending to Evome’s subsidiaries. The total ABL debt has been reduced from $6,537,209 on March 31, 2024 to the current ABL debt level of $2,9049,634 as of March 27, 2025. As a result, the total balance has fallen below the minimum debt level requirement. While the ABL lender is working with the Company and its subsidiaries to ensure a smooth transition as it retires the ABL debt, all business units are expected to face a cash flow challenge through this period. The Company has negligible working capital currently.
- New management: The Company has entrusted a new management team to navigate through these challenges. Michael Seckler (CEO and a director of the Company), Wanye Anderson (a director of the Company), Lana Newishy (a director of the Company) and Bill Garbarini (COO) have resigned, and Chris Heath, a recently appointed director of the Company, has been appointed Interim CEO through this transition period. Kenneth Kashkin, MD, will remain on the Board of Directors as Vice-Chairman.
- No funds for audit: Given the current financial condition of the Company, including its current cash position, the reduction of the ABL and the potential of negative impacts of possible tariff policy, the Company does not currently have excess funds to pay for the year end audit as it will use all funds to continue manufacturing and shipping products to customers. It therefore expects to miss the deadline of April 30, 2025 (the “Filing Deadline”) to file the Company’s audited annual financial statements and management discussion & analysis for the financial year ended December 31, 2024, and the CEO and CFO certificates, all as required by National Instrument 51-102 - Continuous Disclosure Obligationsand National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings(collectively, the “Documents”). As a consequence, the Company anticipates the imposition by the British Columbia Securities Commission of a Failure-to-File Cease Trade Order (“FFCTO”). There is no other reason known to management preventing the completion of the audit other than a lack of available funds. Accordingly, the Company is making efforts to complete an audit and file the Documents as soon as is financially feasible.
- Customers: Biodex has a back log of orders of over $6,228,854 as of May 27, 2025 from existing customers that Biodex intends to fulfill. DaMar and “The Tables” business continue to operate and ship products to their respective customers.
- DaMar Sale: As announced on May 30, 2024, DaMar is actively being marketed for sale.
The Company is currently finalizing a plan to navigate these challenges and will provide updates to shareholders through future press releases. The Company is committed to delivering high quality products to its customers and continues to make deliveries as it works with suppliers and customers to adjust to the current conditions.
“I was asked by the outgoing management and board members to come into a challenging situation, where I am a large shareholder and, with all other shareholders, at the bottom of the capital/debt stack,” said Mr. Michael Dalsin, Chairman. “With the reduction of operating debt, as well as acquisition debt, the company now faces a cash flow issue that will need to be navigated. The fact that there is currently negligible working capital makes this process very challenging. Additionally, the impact of tariffs remains uncertain at the moment. But we do anticipate that our raw material costs, largely made up of aluminum and steel, may increase and the effect on revenues is difficult to predict. As we have a large stock of inventory on hand, I feel confident we can continue to deliver products to customers and generate revenue as we look for solutions to this challenge.”
“Chris Heath and I will work to overcome the challenges,” continued Mr. Dalsin. “There is substantial debt at the operating subsidiary level, the Company’s sole assets, that ultimately stands in front of shareholders equity. Simply put, we hope to have sufficient cash flow and value in the three businesses to pay off the debt in full with additional cash left over, preserving some measure of equity value if possible.”
The Company will update the market by press release as the plan unfolds, and will not conduct one-on-one calls with any investors or market participants to avoid the perception of selective disclosure.
Michael Dalsin
Chairman
Tel: 1 (800) 760-6826
Email: info@salonaglobal.com
Additional Information
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Unless otherwise specified, all financial information is presented in Canadian dollars ( "$ ", "dollars " and "C$ ").
There can be no assurance that the disposition of DaMar will be completed or the sale price or timing of any disposition. Completion of any transaction will be subject to, amongst other things, negotiation and execution of definitive agreements, and applicable director, shareholder and regulatory approvals.
Certain statements contained in this press release constitute "forward-looking information " within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. These statements can be identified by the use of forward-looking terminology such as “expects” “believes”, “estimates”, "may ", "would ", "could ", "should ", "potential ", "will ", "seek ", "intend ", "plan ", and "anticipate ", and similar expressions as they relate to the Company, including, without limitation: the impact of tariffs on the costs ofraw materials; Biodex being subject to retaliatory tariffs on the sale of its products outside the United States; Biodex having to increase prices to both domestic and international customers; statements with respect to the issuance and timing of an FFCTO; and the filing of the Documents;the Company successfully disposing of DaMar and the use of such proceeds; and the amount of acquisition debt the Company would be able to eliminate upon the sale of DaMar. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company 's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions. The Company cautions that the forward-looking statements contained herein are qualified by important factors that could cause actual results to differ materially from those reflected by such statements. Such factors include but are not limited to the general business and economic conditions in the regions in which the Company operates; the ability of the Company to execute on key priorities, including the successful completion of acquisitions, business retention, and strategic plans and to attract, develop and retain key executives; difficulty integrating newly acquired businesses; ongoing or new disruptions in the supply chain, the extent and scope of such supply chain disruptions, and the timing or extent of the resolution or improvement of such disruptions; the ability to implement business strategies and pursue business opportunities; disruptions in or attacks (including cyber-attacks) on the Company’s information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behavior to which the Company is exposed; the failure of third parties to comply with their obligations to the Company or its affiliates; the impact of new and changes to, or application of, current laws and regulations; granting of permits and licenses in a highly regulated business; the overall difficult litigation environment, including in the United States; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the availability of funds and resources to pursue operations; critical accounting estimates and changes to accounting standards, policies, and methods used by the Company; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; as well as those risk factors discussed or referred to in the Company’s disclosure documents filed with United States Securities and Exchange Commission and available at www.sec.gov, and with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.com. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
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