Medical Ventures Corp.
TSX VENTURE : MEV

Medical Ventures Corp.

August 10, 2006 13:30 ET

Medical Ventures Reports Q2 2006 Financial Results

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - Aug. 10, 2006) - MEDICAL VENTURES CORP. (MEV) (TSX VENTURE:MEV) announces the results of operations for the quarter ended June 30, 2006.

MEV's business highlights to date include:

- Earned revenues in Q2 2006 of $349,012, a 17-fold increase as compared to Q2 2005.

- Initiated a direct sales model to distribute the Metricath® product line in the United States. Hired a new, U.S.-based sales force to penetrate this market, boosting the company's number of sales and clinical staff to ten.

- Combined the facilities of subsidiary companies Angiometrx and PM Devices within one location in Richmond, B.C., Canada, in order to streamline and simplify operations.

- Expanded the GAAME clinical trial to include ten research sites. Active patient enrolment is underway at five of the sites, up from one in Q1 2006. The Company successfully sought to revise the study's protocol to facilitate site participation. Remaining sites are on track to complete ethics review and site initiation training procedures.

- Gained recognition for the PeriPatch™ Sheet product with the presentation of an emerging technology poster abstract at a major industry research conference. Dr. Jack Pacey, of Burnaby General Hospital in Burnaby, B.C., reported favourable results after using the product for hernia repair in ten patient cases. The poster was presented in April at the Society of American Gastrointestinal Endoscopic Surgeons (SAGES) conference, held in Dallas.

- Submitted a licensing application to Health Canada for the Metricath Gemini. Licensing is expected in 2007, and will enable Medical Ventures to sell the device in Canada. Licensing will also provide the product with home-country (country-of-origin) certification, a frequent request when seeking broader international regulatory approval.

- Subsequent to quarter end, the Metricath Gemini® "measure and treat" balloon-catheter device received CE Mark (European) approval. This permits the product to be marketed and sold in the European Union for use in coronary and peripheral vascular procedures.

"This has been a very active quarter for Medical Ventures," said Paul Geyer, the company's President and CEO. "We have put significant energy and resources toward commercializing the Metricath product line, and we're happy to now be able to bring the Metricath Gemini to the European market.

"At this point, our new sales team is ramping up its efforts and is busy building relationships in order to introduce Metricath to the U.S. market. Further, the GAAME study is rolling ahead with an expanded group of clinical sites, and we look forward to completing that process toward the year's end."

Financial Information

The consolidated net loss for the three month period ended June 30, 2006 was $1,342,054 or $0.02 per share as compared with a net loss of $1,249,881 or $0.03 per share for the comparative period in 2005. The consolidated net loss for the six month period ended June 30, 2006 was $2,212,510 or $0.03 per share as compared with a net loss of $2,372,801 or $0.07 per share for the comparative period in 2005.

Revenues for the three month period and six month period ended June 30, 2006, increased 1,638% and 965%, respectively, from the same periods in 2005. The increase was primarily attributable to increased sales of the PeriPatch product line since signing the ITOCHU distributor agreement in Q4 2005 and to earning contract manufacturing revenues.

The following is a summary of MEV's financial performance for the quarter ended June 30, 2006. Full financials are available on Sedar and at www.medical-ventures.com.

Summary of financial information:



MEDICAL VENTURES CORP.
Interim Consolidated Balance Sheets - unaudited

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June 30, December 31,
2006 2005
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ASSETS

CURRENT
Cash and cash equivalents $ 5,629,769 $ 1,220,940
Accounts receivable 318,529 117,565
Prepaid expenses and deposits 100,023 152,929
Inventory 1,431,494 1,194,696
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7,479,815 2,686,130
NON-CURRENT INVENTORY 78,014 165,904
PROPERTY AND EQUIPMENT 991,178 905,294
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$ 8,549,007 $ 3,757,328
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LIABILITIES

CURRENT
Accounts payable and accrued
liabilities $ 297,228 $ 267,697
Current portion of long-term debt 34,800 34,800
Current portion of repayable
contribution agreement 50,000 50,000
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382,028 352,497
LONG-TERM DEBT 159,871 177,271
REPAYABLE CONTRIBUTION AGREEMENT 356,187 357,366
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898,086 887,134
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SHAREHOLDERS' EQUITY

Share capital 21,801,628 14,898,734
Contributed surplus 478,278 387,935
Deficit (14,628,985) (12,416,475)
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7,650,921 2,870,194
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$ 8,549,007 $ 3,757,328
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MEDICAL VENTURES CORP.
Interim Consolidated Statements of Operations and Deficit - unaudited

--------------------------------------------------------------------
Three month period Six month period
ended June 30, ended June 30,
2006 2005 2006 2005
--------------------------------------------------------------------

SALES $ 349,012 $ 20,078 $ 725,513 $ 68,120
COST OF
SALES 123,829 13,348 272,280 36,919
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GROSS
PROFIT 225,183 6,730 453,233 31,201
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EXPENSES
Selling 460,827 120,287 688,278 229,035
General
and
admini-
stration 678,622 472,597 1,153,805 909,425
Research
and
develop-
ment 441,701 317,137 843,732 677,223
Amorti-
zation 38,811 404,274 65,567 699,698
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1,619,961 1,314,295 2,751,382 2,515,381
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LOSS
BEFORE
OTHER
INCOME
(EXPENSES)
AND
INCOME
TAXES (1,394,778) (1,307,565) (2,298,149) (2,484,180)
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OTHER
INCOME
(EXPENSES)
Lease - 1,883 - 3,766
Interest
income 55,854 3,642 91,689 9,657
Interest
on long-
term debt (3,130) (2,816) (6,050) (5,674)
Interest
expense - (684) - (1,278)
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52,724 2,025 85,639 6,471
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LOSS
BEFORE
INCOME
TAXES (1,342,054) (1,305,540) (2,212,510) (2,477,709)
FUTURE
INCOME
TAXES
RECOVERY - (55,659) - (104,908)
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NET LOSS
FOR THE
PERIOD (1,342,054) (1,249,881) (2,212,510) (2,372,801)
DEFICIT,
BEGINNING
OF PERIOD (13,286,931) (7,280,493) (12,416,475) (6,157,573)
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DEFICIT,
END OF
PERIOD $ (14,628,985) $ (8,530,374) $ (14,628,985) $ (8,530,374)
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BASIC AND
DILUTED
LOSS PER
SHARE $ (0.02) $ (0.03) $ (0.03) $ (0.07)
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WEIGHTED
AVERAGE
NUMBER
OF
COMMON
SHARES
OUT-
STANDING 71,166,578 38,199,216 66,515,240 36,274,742
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MEDICAL VENTURES CORP.
Interim Consolidated Statements of Cash Flows - unaudited

--------------------------------------------------------------------
Three month period Six month period
ended June 30, ended June 30,
2006 2005 2006 2005
--------------------------------------------------------------------

OPERATING
ACTIVITIES

Net loss
for the
period $ (1,342,054) $ (1,249,881) $ (2,212,510) $ (2,372,801)
Items not
affecting
cash
Amorti-
zation 38,811 404,274 65,567 699,698
Stock
based
compen-
sation 46,577 55,074 90,342 85,512
Future
income
taxes - (55,659) - (104,908)
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(1,256,666) (846,192) (2,056,601) (1,692,499)
Change in
non-cash
operating
assets and
liabil-
ities
Accounts
receivable (19,883) (26,741) (200,964) (22,076)
Prepaid
expenses
and
deposits 66,190 (5,071) 52,906 (18,549)
Inventory (69,456) (93,137) (148,908) (186,474)
Accounts
payable
and
accrued
liabil-
ities 44,797 (52,952) 29,531 (53,730)
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(1,235,018) (1,024,093) (2,324,036) (1,973,328)
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INVESTING
ACTIVITY
Purchase
of
property
and
equipment (115,882) (27,287) (151,451) (53,259)
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(115,882) (27,287) (151,451) (53,259)
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FINANCING
ACTIVITIES
Repayment
of long-
term debt (8,700) (8,700) (17,400) (17,400)
Repayment
of
repayable
contri-
bution
agreement (1,179) - (1,179) -
Proceeds
from
share
issuance,
net of
costs - 3,949,517 6,848,895 3,949,517
Additional
share
issue
costs (21,165) - - -
Proceeds
from
exercise
of stock
options 54,000 - 54,000 -
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22,956 3,940,817 6,884,316 3,932,117
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INCREASE
(DECREASE)
IN CASH (1,327,944) 2,889,437 4,408,829 1,905,530
CASH AND
CASH
EQUIVA-
LENTS,
BEGINNING
OF PERIOD 6,957,713 337,058 1,220,940 1,320,965
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CASH AND
CASH
EQUIVA-
LENTS,
END OF
PERIOD $ 5,629,769 $ 3,226,495 $ 5,629,769 $ 3,226,495
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About Medical Ventures Corp.

Medical Ventures Corp. is a medical device company dedicated to developing products 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, hernias and obesity. The company develops and manufactures the patented Metricath® System catheter technology and PeriPatch™, a range of surgical tissue products.

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.

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