Emergis Reports Fourth Quarter Financial Results

Business Wire, Feb 2, 2005

The following securities were excluded from the calculation of diluted net earnings per share since the Company reported a net loss or a loss from continuing operations for all the periods shown below and the average market value of the underlying shares were less than the exercise price of the securities:

For the three-month    For the three-month
                              period ended           period ended
(number of shares)       December 31, 2004      December 31, 2003
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Options                          2,938,531              6,045,842

Common shares to be issued
 related to acquisitions                 -              1,792,364

Warrants                             9,284                300,000



                        For the year ended     For the year ended
(number of shares)       December 31, 2004      December 31, 2003
------------------------------------------------------------------
------------------------------------------------------------------
Options                          2,938,531              6,045,842

Common shares to be issued
 related to acquisitions                 -              1,762,364

Warrants                             9,284                300,000

4. Sale of US Health operations

In December 2003, as a result of the Board of Director's approval of the Company's plan to sell its US Health operations, the Company wrote down the value of long-term assets associated with these operations by $77.3 million. For the three-months ended March 31, 2004, the Company recorded a gain on the sale of the US Health operations of $1.7 million, which was included in the net income from discontinued operations. For the three-months ended June 30, 2004, this gain was reduced by $6.5 million as a result of working capital and disposal cost adjustments related to the sale. As a final adjustment to the working capital calculation, the Company recorded in the three-month period ended September 30, 2004 an additional loss on sale of $2.8 million. At the end of fiscal 2004, the Company finalized its calculation of the gain or loss on the sale of US Health resulting in a gain of $3.4 million relating to foreign exchange. The total loss on the sale of US Health operations for the year ended December 31, 2004 amounted to $4.2 million.The details of the sale are as follows:

(a) Sale of care management segment of US Health

On March 2, 2004, the Company completed the sale of 100% of the issued and outstanding shares of National Health Services (NHS), a wholly owned subsidiary of the Company, for a total cash consideration of US$10 million.

(b) Sale of preferred provider organization (PPO) segment of US Health

On December 31, 2003, the Company reached an agreement to sell the PPO operations component of its US Health operations for a total consideration of US$213 million, subject to certain closing adjustments. The sale of the PPO operations was completed on March 4, 2004 and involved the sale of the issued and outstanding shares of BCE Emergis Corporation, a wholly owned subsidiary of the Company. BCE Emergis Corporation carried on the PPO operations of the Company and also held options to purchase shares of a publicly traded company. These options remained in BCE Emergis Corporation at closing, but the sale agreement includes a price adjustment associated with the exercise of the options or the purchase of these options by a third party. These options are currently the subject of a dispute between the Company's former subsidiary, BCE Emergis Corporation, and the grantors of these options.