The Medipattern Corporation

The Medipattern Corporation

May 19, 2006 06:50 ET

Medipattern Announces Results For Q3 Ended March 31, 2006

TORONTO, ONTARIO--(CCNMatthews - May 19, 2006) -

Attention: Business/Financial Editors:

Strengthens product line, builds revenue potential, and continues focus on R&D

The Medipattern Corporation (TSX VENTURE:MKI), an award-winning developer of computer-aided diagnosis (CAD) software applications for medical imaging, today announced business highlights and financial results for the third quarter ended March 31st, 2006.

Highlights of the Quarter:

- B-CAD MRI™ awarded Medical Imaging Innovation of the Year by Frost & Sullivan;

- B-CAD featured in paper on advanced technical aspects and future trends in ultrasound at European Congress of Radiology;

- Medipattern Luminary Cindy Rapp presented findings of two well-received studies on performance of B-CAD to American Institute of Ultrasound in Medicine Annual Conference;

- Medipattern received increased revenue commitment from Orison for whole-breast imaging project;

- Sprott Asset Management and Sebago Partners agreed to private placement for gross proceeds of $2.5 million (which closed on April 12, 2006); and

- Subsequent to the quarter's end, Medipattern released B-CAD™2.0, with significant enhancements to functionality and additional defining criteria for lesion identification.

In the third quarter ended March 31, 2006, Medipattern maintained its strategic focus on building its CADENZA™ suite of breast imaging and analysis software, including B-CAD for ultrasound and B-CAD MRI™. Overall, Medipattern made significant strides in advancing the technology platform, while holding costs slightly below budget.

Revenue from operations for the quarter ended March 31, 2006 was $36,921 plus $23,374 in interest for a total of $60,295. For the nine-month period, revenue from operations was $350,911 plus $61,955 in interest, for a total of $412,866. During the quarter, Medipattern received an increased revenue commitment from Orison Corporation of Johnston City, Tennessee, relating to their whole-breast imaging platform. Professional fees from the Orison contracts will commence in the fourth quarter. Revenue in the third quarter ended March 31, 2005 was entirely related to bank interest earned.

Net loss for the quarter ended March 31, 2006 was $557,905, an increase of $80,053 from the same quarter in the prior year. Net loss for the nine months ended March 31, 2006 was $1,461,539, an increase of $643,614 from $817,925 from the same period in the previous year. It should be noted that during much of the nine months ended March 31, 2005, operations were held to a minimum pending appropriate financing. As a result, the period-over-period comparison has little relevance.

Expenses in the quarter ended March 31, 2006 rose to $618,200 from $484,758 in the corresponding quarter of the previous year. For the nine-month period ended March 31, 2006, expenses reached $1,874,404 compared to $825,669 for the same period in the previous year. Again, the comparison to the prior year has little relevance. In both the quarter and the nine-month period, the increase in expenses related primarily to two categories: a substantial increase in administration and product support expenses, and increased research and development expenses. In the nine months, R&D expenses reached $897,481 (compared to $332,259 in same period of the prior year) because of higher staffing levels and increased consulting and contract programming expenses. Overall, the increased expenses reflect the higher level of activity required to support the Company and its growing product line.

The Company has continued to maintain its costs slightly below the budgeted $225,000 per month. With the launch of B-CAD MRI, Medipattern's second clinical application, and the marketing of B-CAD 2.0, these costs may rise, but the Company will stay focused on identified, strategic opportunities rather than scattergun marketing.

Recent Events:

On April 12, Medipattern closed its previously announced non-brokered private placement for $2.5 million with Sprott Asset Management and Sebago Capital, bringing its cash and cash equivalents to approximately $4,850,000, which roughly doubled cash on hand. Attracting investors of the calibre of Sebago and Sprott is a real accomplishment for a company the size of Medipattern, and the additional capital will be used for both R&D and sales support, enabling the Company to intensify its commercialization efforts. Current resources should see the Company through to September 2007. In May, the Company released v2.0 of its B-CAD, with increased analytic support, more automatically detected features, and new Voice-to-Text commentary. This release will strengthen Medipattern's offering for both OEMs and end-users.


"Medipattern continues to push both product development and sales support, and is increasing its sales and marketing efforts," said Jeff Collins, President and CEO of Medipattern. "With increasing clinical validation from our Luminary partners, as well as expanded consulting contracts with existing clients, Medipattern's platform and approach are demonstrating their effectiveness. We will continue to build strong clinical validation and expand our marketing efforts to create increased demand for all our products."

For further details concerning Medipattern's results, please see the company's filings on SEDAR (

The Medipattern Corporation develops computer-aided diagnosis (CAD) software applications for medical imaging. These applications enhance workflow while improving interpretive and diagnostic confidence. The Company's initial clinical applications are B-CAD™ for breast ultrasound and the award-winning B-CAD MRI™. The B-CAD products use pattern recognition technology to assist radiologists in their efforts to classify and characterize lesions in images of the breast. For additional information, please visit the company's website at:

B-CAD™ and B-CAD MRI™ are trademarks of The Medipattern Corporation.
Medipattern® is a registered mark of The Medipattern Corporation.

Forward-looking statements

This document contains forward-looking statements relating to Medipattern's performance, operations, or business environment. These statements are based on what we believe are reasonable assumptions given currently available information and our understanding of Medipattern's current activities. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates,'' "believes,'' "estimates,'' "expects,'' "plans,'' "intends,'' "potential'', and similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict or control. A number of factors could cause actual outcomes and results to differ materially from those expressed in forward-looking statements. These factors include but are not limited to those set forth in the Company's corporate filings, (posted at In addition, these forward-looking statements relate to the date on which they are made. The Company disclaims any intention or obligation to update or revise any forward-looking statements for any reason. Readers should not rely on forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release and has neither approved nor disapproved of the contents of this release.

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