Proxymed (PILL) Update on Name Change

Yesterday, Proxymed (PILL) announced that they would be changing the corporate name from Proxymed to MedAvant Healthcare Solutions, or MedAvant for short.

In addition to the name change, MedAvant announced the launch of  the Envision Portal for Providers(TM). Envision is  "a secure website for providers that supports real-time and batch claims processing and delivers enhanced visibility and greater control over healthcare transaction processing".

Well, what´s a shareholder or potential shareholder to make of this announcement? As mentioned in previous posts, I´ve taken a tax loss on my PILL holdings (for reasons unrelated to the long-term viability of PILL), but I still find PILL, or MedAvant to be a very interesting situation and I´m watching it closely. I´ve noted in the past, that PILL or MedAvant, meets many of my investment criteria. In fact, with today´s announcement the company meets two more criteria: a name change and a new product.

So what´s the problem? I´m still not ready to gamble on PILL since the company´s financial situation is still, in my mind, quite poor. The company is embarking on an ambitious new plan to revolutionize healthcare processing, but it has only $6.7 million in cash and nearly $25 million in debt ($13 million in convertible debt). In addition, the company´s core business continues to decline at an alarming rate. So no matter how well intentioned its new efforts seem, I cannot see how PILL or MedAvant can pull off the proposed new growth plan without some serious financing. I´ve learned in the past to stay away from companies that need financing, since small shareholders will inevitably get screwed. Interestingly, the company is hosting a conference call tommorow to discuss the new corporate strategy. I´ll be sure to tune into the call to find out about the financing issue. Stay tuned...