New Mexico Software, Inc. (OTCBB: NMXC) announced today that it is continuing to gain new orders in its rapidly expanding Telemedicine business. The new surge of business is offsetting losses associated with the termination of a client. The result of the termination was a second quarter drop in teleradiology cases that adversely affected second quarter financial results. Preliminary unaudited numbers for the second quarter show that revenue for the quarter dropped from $902,000 to $788,000. For the first six months, unaudited preliminary numbers show revenue of $1,694,000 versus $1,828,000 in the first six months of 2009. For the quarter and the first six months, the company expects to report a small loss but positive cash flow. New Mexico Software CEO Dick Govatski said, “The transition from our unfortunate association with Premier Medical and the transition from customers dealing directly with us instead of through a middleman customer, caused a temporary dip in case load in the second quarter. However in July, 2010 our case volume increased nearly 30% from May, 2010. In addition, we are seeing a doubling of the number of cases in our emerging Ultrasound segment, which carries a higher margin. We are still working on the technical issues with our cardio system but we are starting to see growth in this new area as compared to the second quarter. This is similar to the experience we had when TeleRad started over two years ago. “Over the rest of the summer, we expect to add cases from Arizona, California, Florida, Indiana, Kentucky, Maryland, Nevada, New York, Ohio, Tennessee, Texas, Utah, Wisconsin and West Virginia. This represents an important uptick in daily revenue. “As a result, we expect the second half of 2010 to produce good revenue numbers for our company and increasing profitability,” Govatski said. The company expects to formally release audited financials for the second quarter prior to August 16, 2010.