Medical Ventures Corp.
TSX VENTURE : MEV

Medical Ventures Corp.

May 17, 2006 09:00 ET

Medical Ventures Reports Q1 2006 Financial Results

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - May 17, 2006) - MEDICAL VENTURES CORP. (TSX VENTURE:MEV) announces the results of operations for the first quarter ended March 31, 2006.

MEV's business highlights during the quarter include the following:

- Increased revenues in Q1 2006 to $376,501, a 684% increase as compared to Q1 2005 and a 63% increase as compared to Q4 2005.

- Increased sales of the PeriPatch™ tissue product, stemming from a new distribution agreement with ITOCHU International, Inc. for the U.S. market, and increased revenues from the manufacturing of the CorRestore® Patch.

- Submitted an application for CE Mark (European) approval of the Metricath Gemini® "measure-and-treat" balloon catheter product. Receipt of CE Mark approval will allow the marketing and sale of the Metricath Gemini for both coronary and peripheral vascular applications in the European Union.

- Completed a $7.5M private placement financing. Proceeds from the private placement are to be used to complete the commercialization of the Metricath Gemini and for general corporate purposes.

- Hired a Director of Operations to manage production capacity increases and engineer cost-saving measures to guide the Company's growth effectively.

During the first quarter, MEV undertook a comprehensive evaluation of the overall U.S. distribution strategy for the Metricath product line. The Company found the existing agreement with Possis Medical, Inc. to distribute the Metricath Libra® product in the U.S. was not achieving desired results. MEV made the decision to use a direct sales strategy to launch the Metricath Gemini and future Metricath products in this market.

Subsequent to quarter-end, MEV began implementing its direct sales strategy by giving notice of termination to Possis Medical Inc. for the existing agreement to distribute the Metricath Libra product in the U.S. MEV has hired sales and clinical personnel to expand distribution capacity and manage Gemini clinical trials.

"We are excited to be ramping up our commercialization activities based on the increased demand for our products," said Paul Geyer, Medical Ventures' President and CEO. "We are encouraged by continued growth in the cardiovascular and surgical markets, and are pleased at our progress over the past quarter. In particular, doctors around the world are beginning to realize the benefits of our tissue products for application in a wide range of surgeries.

"With our new sales team, we will also be able to directly affect physicians' awareness of the Metricath® System and its clinical benefits," Geyer continued. "Our reps will be focused exclusively on introducing Metricath, which will greatly help our efforts to penetrate this market.

"We are also looking forward to bringing the Metricath Gemini catheter to the European market," Geyer said. "Final approval is expected this year, and we will continue our efforts to expand distribution as new regulatory approvals are granted for our products."

Subsequent to quarter-end, the Company granted 20,000 stock options to a director of the Company, exercisable at a price of $0.59 per share for a term of five years.

Financial Information

The consolidated net loss for the three month period ended March 31, 2006 was $870,456 or $0.01 per share as compared with a net loss of $1,122,921 or $0.03 per share for the comparative period in 2005. Revenues for the three month period ended March 31, 2006 were $376,501 as compared with revenues of $48,041 for the comparative period in 2005, representing an increase of 684%. The increase was primarily attributable to increased sales of the PeriPatch product line upon signing the ITOCHU distributor agreement in Q4 2005 and to earning manufacturing revenues from the CorRestore Patch product.

Overall, expenses for the three month period ended March 31, 2006 decreased from $1,201,088 to $1,131,421 as compared to the same period in 2005, mainly due to a decrease in amortization expense as a result of the technology assets acquired from Angiometrx, a subsidiary company. Other costs increased in Q1 2006 with the Company's increased activity in the quarter. These activities related primarily to the development and commercialization of the Metricath System; in particular, Marketing and Sales expenses increased 109% and research and development costs increased 12%, as a result of incurring clinical trial costs for the GAAME study.

The following is a summary of MEV's financial performance for the quarter ended March 31, 2006. Full financials are available on Sedar (www.sedar.com) and the Medical Ventures website at www.medical-ventures.com.

Summary of financial information:



MEDICAL VENTURES CORP.
Consolidated Balance Sheets - Unaudited

--------------------------------------------------------------------
--------------------------------------------------------------------
March 31, December 31,
2006 2005
--------------------------------------------------------------------
--------------------------------------------------------------------

ASSETS

CURRENT
Cash and cash equivalents $ 6,957,713 $ 1,220,940
Accounts receivable 298,646 117,565
Prepaid expenses and deposits 166,213 152,929
Inventory 1,362,038 1,194,696
--------------------------------------------------------------------
8,784,610 2,686,130
NON-CURRENT INVENTORY 78,014 165,904
PROPERTY AND EQUIPMENT 914,107 905,294
--------------------------------------------------------------------
$ 9,776,731 $ 3,757,328
--------------------------------------------------------------------
--------------------------------------------------------------------

LIABILITIES

CURRENT
Accounts payable and accrued
liabilities $ 252,431 $ 267,697
Current portion of long-term
debt 34,800 34,800
Current portion of repayable
contribution agreement 50,000 50,000
--------------------------------------------------------------------
337,231 352,497
LONG-TERM DEBT 168,571 177,271
REPAYABLE CONTRIBUTION AGREEMENT 357,366 357,366
--------------------------------------------------------------------
863,168 887,134
--------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Share capital 21,768,794 14,898,734
Contributed surplus 431,700 387,935
Deficit (13,286,931) (12,416,475)
--------------------------------------------------------------------
8,913,563 2,870,194
--------------------------------------------------------------------
$ 9,776,731 $ 3,757,328
--------------------------------------------------------------------
--------------------------------------------------------------------


MEDICAL VENTURES CORP.
Consolidated Statements of
Operations and Deficit - Unaudited

--------------------------------------------------------------------
--------------------------------------------------------------------
Three month Three month
period ended period ended
March 31, March 31,
2006 2005
--------------------------------------------------------------------
--------------------------------------------------------------------

SALES $ 376,501 $ 48,041

COST OF SALES 148,451 23,570
--------------------------------------------------------------------
GROSS PROFIT 228,050 24,471
--------------------------------------------------------------------

EXPENSES
Selling 227,451 108,748
General and administration 475,183 436,828
Research and development 402,031 360,087
Amortization 26,756 295,425
--------------------------------------------------------------------
1,131,421 1,201,088
--------------------------------------------------------------------
LOSS BEFORE OTHER INCOME (EXPENSES)
AND INCOME TAXES (903,371) (1,176,617)
--------------------------------------------------------------------
OTHER INCOME (EXPENSES)
Lease - 1,883
Interest income 35,834 6,015
Interest on long-term debt (2,919) (2,858)
Interest expense - (593)
--------------------------------------------------------------------
32,915 4,447
--------------------------------------------------------------------
LOSS BEFORE INCOME TAXES (870,456) (1,172,170)
FUTURE INCOME TAXES (RECOVERY) - (49,249)
--------------------------------------------------------------------
NET LOSS (870,456) (1,122,921)
DEFICIT, BEGINNING OF PERIOD (12,416,475) (6,157,573)
--------------------------------------------------------------------
DEFICIT, END OF PERIOD $(13,286,931) $ (7,280,494)
--------------------------------------------------------------------
--------------------------------------------------------------------

BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.03)
--------------------------------------------------------------------
--------------------------------------------------------------------

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 61,812,219 34,328,886
--------------------------------------------------------------------
--------------------------------------------------------------------


MEDICAL VENTURES CORP.
Consolidated Statements of
Cash Flows - Unaudited

--------------------------------------------------------------------
--------------------------------------------------------------------
Three month Three month
period ended period ended
March 31, March 31,
2006 2005
--------------------------------------------------------------------
--------------------------------------------------------------------

OPERATING ACTIVITIES
Net loss for the period $ (870,456) $ (1,122,921)
Items not affecting cash
Amortization 26,756 295,425
Stock based compensation 43,765 30,439
Future income taxes - (49,249)
--------------------------------------------------------------------
(799,935) (846,306)
Change in non-cash operating
assets and liabilities
Accounts receivable (181,081) 4,665
Prepaid expenses and deposits (13,284) (13,478)
Inventory (79,452) (93,338)
Accounts payable and accrued
liabilities (15,266) (778)
--------------------------------------------------------------------
(1,089,018) (949,235)
--------------------------------------------------------------------

INVESTING ACTIVITY
Purchase of property and equipment (35,569) (25,972)
--------------------------------------------------------------------
(35,569) (25,972)
--------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from share issuances,
net of costs 6,870,060 -
Repayment of long-term debt (8,700) (8,700)
--------------------------------------------------------------------
6,861,360 (8,700)
--------------------------------------------------------------------
INCREASE (DECREASE) IN CASH 5,736,773 (983,907)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 1,220,940 1,320,965
--------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 6,957,713 $ 337,058
--------------------------------------------------------------------
--------------------------------------------------------------------


Medical Ventures Corp. is a medical device company dedicated to developing technologies that address clinical needs in the quickly growing cardiovascular and surgical marketplace. MEV products help doctors treat a wide range of health concerns, including cardiovascular disease, stroke, hernias and obesity. The Company develops and manufactures the patented Metricath® System catheter technology and PeriPatch™, a range of surgical tissue products. For more information please visit www.medical-ventures.com.

Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates", "believes", "may", "continues", "estimates", "expects", and "will" and words of similar import, constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; technology changes; competition; changes in business strategy or development plans; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; and other factors referenced in the Company's filings with Canadian securities regulators. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update any forward-looking statements.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information