Medical Ventures Corp.
TSX VENTURE : MEV

Medical Ventures Corp.

November 14, 2006 08:30 ET

Medical Ventures Reports Q3 2006 Financial Results

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - Nov. 14, 2006) - MEDICAL VENTURES CORP. (MEV) (TSX VENTURE:MEV) announces the results of operations for the quarter ended September 30, 2006.

MEV's business highlights to date include:

- Earned revenues in Q3 2006 of $218,559, as compared to $64,434 during the same period in 2005, a 239% increase. Revenues for the nine-month period ended September 30, 2006 were $944,072, a 612% increase compared to the same period in 2005.

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

- Began the European sales rollout of the Metricath Gemini at a distributor meeting in Amsterdam. The session featured sales strategy preparation and hands-on product training for current and potential European distributors.

- Increased the number of active clinical trial sites in the GAAME study to 11, including all nine U.S.-based sites. The GAAME trial is being conducted to support the company's application to the U.S. Food & Drug Administration for coronary use of the Metricath Gemini in the United States.

- Earned Canadian licensing for the PeriPatch™ EQ Sheet surgical tissue patch. The licence grants MEV country-of-origin approval for the EQ Sheet product line, which facilitates securing regulatory registrations in additional international markets.

"Attaining European approval for the Metricath Gemini was a key milestone for Medical Ventures," said Paul Geyer, the company's President and CEO. "We have also been seeing early interest from the North American market in using Metricath to size peripheral vessels. We are encouraged by the initial evaluations and orders that have come in from our new direct sales channel.

"We are happy to report that the majority of our GAAME trial sites are now active and screening patients," Mr. Geyer continued. "We have also acted on a suggestion by the FDA to restrict the study to include only single-lesion patients. This is expected to improve the integrity of the resulting trial data.

"MEV continues to generate revenues on the tissue side of the business, and with the help of our partnership with ITOCHU International and its expanding distributor footprint, we are looking to take advantage of available opportunities in the surgical tissue patch market," he concluded.

Financial Information

The consolidated net loss for the three month period ended September 30, 2006 was $1,313,468 or $0.02 per share as compared with a net loss of $1,218,726 or $0.02 per share for the comparative period in 2005. The consolidated net loss for the nine month period ended September 30, 2006 was $3,525,979 or $0.05 per share as compared with a net loss of $3,591,527 or $0.09 per share for the comparative period in 2005.

Revenues for the three month period and nine month period ended September 30, 2006 increased 239% and 612%, respectively, from the same periods in 2005. The increase was primarily attributable to increased sales of the PeriPatch product line upon signing a distributor agreement with ITOCHU International, Inc. in Q4 2005 and to earning contract manufacturing revenues.

Expenses for the three month period and nine month period ended September 30, 2006 increased 12% and 10%, respectively, from the same periods in 2005. In particular, higher costs were incurred for the development and commercialization of the Metricath System, including costs to hire and maintain a direct sales force. General and administrative expenses increased due to greater personnel costs stemming from higher staffing levels, while R&D expenses increased over the nine month period due to clinical costs associated with the GAAME trial for the Metricath Gemini system.

Medical Ventures also announces it has granted 55,770 stock options each to two directors of the company, exercisable at a price of $0.30 per share for a term of five years.

The following is a summary of MEV's financial performance for the quarter ended September 30, 2006. Full financials and management's discussion and analysis 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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September 30, December 31,
2006 2005
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ASSETS

CURRENT
Cash and cash equivalents $ 4,346,519 $ 1,220,940
Accounts receivable 292,615 117,565
Prepaid expenses and deposits 49,994 152,929
Inventory 1,618,391 1,194,696
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6,307,519 2,686,130
NON-CURRENT INVENTORY 105,362 165,904
PROPERTY AND EQUIPMENT 982,271 905,294
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$ 7,395,152 $ 3,757,328
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LIABILITIES

CURRENT
Accounts payable and accrued liabilities $ 387,107 $ 267,697
Current portion of long-term debt 20,400 34,800
Current portion of repayable contribution
agreement 50,000 50,000
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457,507 352,497
LONG-TERM DEBT 165,989 177,271
REPAYABLE CONTRIBUTION AGREEMENT 355,968 357,366
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979,464 887,134
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SHAREHOLDERS' EQUITY

Share capital 21,801,628 14,898,734
Contributed surplus 556,514 387,935
Deficit (15,942,454) (12,416,475)
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6,415,688 2,870,194
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$ 7,395,152 $ 3,757,328
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MEDICAL VENTURES CORP.
Interim Consolidated Statements of Operations and Deficit - Unaudited

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Three month period Nine month period
ended September 30, ended September 30,
2006 2005 2006 2005
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SALES $ 218,559 $ 64,434 $ 944,072 $ 132,554
COST OF SALES 112,855 38,736 385,207 75,654
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GROSS PROFIT 105,704 25,698 558,865 56,900
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EXPENSES
Selling 440,762 107,606 1,129,040 336,641
General and
administration 635,610 407,959 1,789,344 1,317,385
Research and
development 348,102 367,235 1,191,834 1,044,458
Amortization 42,442 433,028 108,009 1,132,726
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1,466,916 1,315,828 4,218,227 3,831,210
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LOSS BEFORE OTHER
INCOME (EXPENSES)
AND INCOME TAXES (1,361,212) (1,290,130) (3,659,362) (3,774,310)
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OTHER INCOME
(EXPENSES)
Lease - 1,883 - 5,649
Interest income 50,885 17,892 142,574 27,548
Interest on
long-term debt (3,141) (2,723) (9,191) (8,398)
Interest expense - (557) - (1,833)
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47,744 16,495 133,383 22,966
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LOSS BEFORE INCOME
TAXES (1,313,468) (1,273,635) (3,525,979) (3,751,344)
FUTURE INCOME
TAXES RECOVERY - (54,909) - (159,817)
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NET LOSS FOR THE
PERIOD (1,313,468) (1,218,726) (3,525,979) (3,591,527)
DEFICIT, BEGINNING
OF PERIOD (14,628,986) (8,530,374) (12,416,475) (6,157,573)
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DEFICIT, END OF
PERIOD $(15,942,454) $ (9,749,100) $(15,942,454) $ (9,749,100)
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BASIC AND DILUTED
LOSS PER SHARE $ (0.02) $ (0.03) $ (0.05) $ (0.09)
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WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES
OUTSTANDING 71,338,886 38,199,216 68,140,791 41,651,230
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MEDICAL VENTURES CORP.
Interim Consolidated Statements of Cash Flows - Unaudited

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Three month period Nine month period
ended September 30, ended September 30,
2006 2005 2006 2005
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OPERATING
ACTIVITIES
Net loss for
the period $ (1,313,468) $ (1,218,726) $ (3,525,979) $ (3,591,527)
Items not
affecting cash
Amortization 42,442 433,028 108,009 1,132,726
Stock based
compensation 78,235 53,393 168,578 138,906
Future income
taxes - (54,909) - (159,818)
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(1,192,791) (787,214) (3,249,392) (2,479,713)
Change in
non-cash
operating assets
and liabilities
Accounts
receivable 25,914 62,817 (175,050) 40,741
Prepaid expenses
and deposits 50,029 (29,949) 102,935 (48,498)
Inventory (214,245) (132,396) (363,153) (318,870)
Accounts payable
and accrued
liabilities 89,879 (78,179) 119,410 (131,909)
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(1,241,214) (964,921) (3,565,250) (2,938,249)
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INVESTING ACTIVITY
Purchase of
property and
equipment (33,535) (11,313) (184,986) (64,572)
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(33,535) (11,313) (184,986) (64,572)
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FINANCING ACTIVITIES
Repayment of
long-term debt (8,282) (8,700) (25,682) (26,100)
Repayment of
repayable
contribution
agreement (219) - (1,398) -
Proceeds from share
issuance, net of
costs - - 6,848,895 3,949,517
Additional share
issue costs - (6,382) - (6,382)
Proceeds from
exercise of
stock options - - 54,000 -
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(8,501) (15,082) 6,875,815 3,917,035
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INCREASE (DECREASE)
IN CASH (1,283,250) (991,316) 3,125,579 914,214
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD 5,629,769 3,226,495 1,220,940 1,320,965
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CASH AND CASH
EQUIVALENTS,
END OF PERIOD $ 4,346,519 $ 2,235,179 $ 4,346,519 $ 2,235,179
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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 for use in angioplasty procedures, and PeriPatch™, a range of surgical tissue products. Medical Ventures is also a contract medical devices manufacturer. 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.

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