medical billing transcription supplier information

TRANSCEND SERVICES, INC. (NASDAQ:TRCRC) announced the sale of its Northeast-based medical transcription operations to MedQuist Transcriptions, Ltd., a subsidiary of MedQuist, Inc. (NASDAQ:MEDQ) The purchase price was $4.4 million in cash and a $231,500 note.

The sale completes the first phase of the overall restructuring plan by Transcend designed to improve the Company's capital structure, meet Nasdaq's continued listing requirements, and to focus its operations and growth on its internet-based transcription service strategy. In this phase, the Company sold transcription operations that do not operate on the Company's internet platform. In addition to the Northeast-based operations, the Company previously sold its Utah-based operations and assigned four contracts associated with other transcription operations. In connection with these sales, Transcend signed three year non-compete agreements with MedQuist Transcriptions, Ltd. prohibiting the Company from providing transcription services in the states of Utah, New Jersey, New York, Rhode Island, Connecticut, Massachusetts, Vermont, New Hampshire and Maine, subject to certain exceptions.

The combined revenue for the operations sold was approximately 15% of total current revenues and 28% of transcription revenues. Total sales price from these three transactions was $7.7 million, or $.32 per share. In addition, the Company could realize up to an additional $750,000 in earn-out payments under the contract assignment agreement over the next two years.

These transactions will result in a gain on sale, which will improve the Company's tangible net worth, as calculated by Nasdaq. The Company's common stock is currently listed on the Nasdaq SmallCap Market under an exception granted by Nasdaq through January 14, 2000. In addition to tangible net worth requirements, Nasdaq requires that the Company's stock price exceed $1.00 per share on January 14, 2000. The Company has called a special meeting of its shareholders on December 30, 1999 to vote on a proposal to effect a 1 for 5 reverse stock split in order to comply with Nasdaq listing requirements. Should the shareholders approve the reverse split, the Company will monitor how the stock trades on its own and may defer making the reverse stock split effective.

# posted by Medical Information : 3:04 AM