Medical Ventures Corp.
TSX VENTURE : MEV

Medical Ventures Corp.

March 28, 2007 20:54 ET

Medical Ventures Reports Q4 and Year End 2006 Financial Results

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - March 28, 2007) - MEDICAL VENTURES CORP. (TSX VENTURE:MEV) announces the results of operations for Q4 2006 and the year ended December 31, 2006.

Business highlights for fiscal 2006

- Increased revenues by 198% in 2006 to $1,082,830, from $363,958 in 2005.

- Increased PeriPatch™ tissue and surgical product line sales by 250% in 2006 to $895,776, from $256,264 in 2005.

- Expanded the company's network of distributors for the surgical and tissue product line through its master distributor, Itochu International.

- Increased Metricath® sales by 74% in 2006 to $187,054, from $107,694 in 2005.

- Initiated a direct sales strategy to distribute the Metricath product line in the U.S. and Canada and began securing clinical evaluations of the product in the U.S. and European Union.

- Conducted a European beta product rollout of the Metricath Gemini® dual-balloon catheter and expanded the international network of distributors for Metricath in Europe.

Product Approvals and Trials

- Earned European CE Mark approval in Q3 2006 for the Metricath Gemini for both coronary and peripheral vascular procedures.

- Earned European CE Mark approval for the new large Metricath Libra® catheter (4-8 mm size), intended specifically for use in the peripheral arteries.

- Received a Health Canada license for the PeriPatch™ EQ (equine tissue) Sheet, facilitating approval processes in markets where bovine materials are restricted.

Subsequent to year-end,

- Received a medical device license from Health Canada for coronary use of the Metricath Gemini catheter. The country-of-origin license will also facilitate regulatory approval processes in international markets.

- Received U.S. FDA 510(k) marketing clearance for the PeriPatch™ Aegis, a new PeriPatch sleeve product. The new sleeve design is intended for use with endovascular surgical staplers, used in procedures such as minimally invasive stomach and lung volume reductions. Introduction to the U.S. market is planned for later in 2007.

GAAME clinical trial

- Received positive interim feedback from doctors participating in the GAAME trial on the Metricath Gemini's performance. Results from questionnaires showed the Metricath's sizing information had influenced the doctors' course of treatment in a significant number of cases.

- Acted to increase the rate of enrolment by expanding the trial's scope from seven to 13 sites. Currently, patient enrolment is active at 12 sites (eight in the U.S.; four in the Netherlands). In Q4 2006, the Company applied for and received approval from the U.S. FDA to add three additional sites to the trial.

- Amended the GAAME trial protocol to incorporate suggestions made by the U.S. FDA, including the decision to include only single-lesion patients in the trial. The single-lesion provision improves the integrity of the resulting trial data, but means the screening protocol is strict and numerous patients must be screened to identify those suitable for enrolment.

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 2006, Medical Ventures made a great deal of progress in our efforts to bring our products forward to commercialization," said MEV's president and CEO, Paul Geyer. "We secured an important milestone in getting European approval for the Metricath Gemini, and we have already seen clinical use rise as of our product rollout over the last quarter of 2006.

"Introducing a direct sales strategy for Metricath in North America was a significant undertaking that has already made a difference to our bottom line. We are steadily receiving quality feedback from doctors in the field about the Metricath's utility in a clinical setting. We anticipate interest will continue to grow as the product line becomes more established," Mr. Geyer continued.

Financial Information

Revenues for the year ended December 31, 2006, were $1,082,830 as compared to $363,958 from the same period in 2005. Of this amount, tissue and surgical product revenues accounted for $895,776, as compared to $256,264 in the same period in 2005. The increase was primarily attributable to increased sales of the PeriPatch product line and an increase in contract manufacturing revenues. Metricath sales increased in the year ended 2006 to $187,054 from $107,694 in the same period in 2005, as MEV's direct sales force introduced the product to selected U.S. customers. Revenues for the three month period ended December 31, 2006 decreased to $138,758 as compared to $231,405 during the same period in 2005. The consolidated net loss for the year ended December 31, 2006 was $5,483,962 or $0.08 per share as compared with a net loss of $6,258,902 or $0.14 per share for the comparative period in 2005. The consolidated net loss for the three month period ended December 31, 2006 was $1,957,984 or $0.03 per share as compared with a net loss of $2,667,374 or $0.05 per share for the comparative period in 2005.

The following is a summary of MEV's financial performance for the quarter and year ended December 31, 2006. Full financials are available on Sedar and at www.medical-ventures.com.

Summary of financial information:



MEDICAL VENTURES CORP.
Consolidated Balance Sheets

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

ASSETS

CURRENT
Cash and cash equivalents $ 2,748,735 $ 1,220,940
Accounts receivable 201,082 117,565
Prepaid expenses and deposits 88,188 152,929
Inventory 1,291,658 1,194,696
------------------------------------------------------------------------
4,329,663 2,686,130
NON-CURRENT INVENTORY - 165,904
PROPERTY AND EQUIPMENT 956,894 905,294
------------------------------------------------------------------------
$ 5,286,557 $ 3,757,328
------------------------------------------------------------------------
------------------------------------------------------------------------

LIABILITIES

CURRENT
Accounts payable and accrued liabilities $ 208,702 $ 267,697
Current portion of long-term debt 20,400 34,800
Current portion of repayable contribution
agreement 35,000 50,000

------------------------------------------------------------------------
264,102 352,497
LONG-TERM DEBT 160,889 177,271
REPAYABLE CONTRIBUTION AGREEMENT 368,591 357,366
------------------------------------------------------------------------
793,582 887,134
------------------------------------------------------------------------

SHAREHOLDERS' EQUITY

Share capital 21,607,856 14,898,734
Contributed surplus 785,556 387,935
Deficit (17,900,437) (12,416,475)
------------------------------------------------------------------------
4,492,975 2,870,194
------------------------------------------------------------------------
$ 5,286,557 $ 3,757,328
------------------------------------------------------------------------


MEDICAL VENTURES CORP.
Consolidated Statements of Operations and Deficit

--------------------------------------------------------------------------
For the For the
quarter quarter For the year For the year
ended ended ended ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
--------------------------------------------------------------------------

SALES $ 138,758 $ 231,405 $ 1,082,830 $ 363,958

COST OF SALES 228,012 249,354 613,219 325,008
--------------------------------------------------------------------------
GROSS PROFIT (89,254) (17,949) 469,611 38,950
--------------------------------------------------------------------------

EXPENSES
Selling 596,785 270,198 1,725,825 606,839
General and
administration 480,641 990,535 2,269,985 2,307,919
Research and
development 787,457 670,614 1,979,291 1,715,072
Amortization 37,492 36,585 145,501 1,169,311
--------------------------------------------------------------------------
1,902,375 1,967,932 6,120,602 5,799,141
--------------------------------------------------------------------------
OTHER INCOME
(EXPENSES)
Lease - 628 - 6,276
Interest income 36,638 8,478 179,212 36,027
Interest on
long-term debt (2,992) (2,815) (12,183) (11,212)
Interest expense - (22) - (1,857)
Write-off of
investment - (40,701) - (40,701)
--------------------------------------------------------------------------
33,646 (34,432) 167,029 (11,467)
--------------------------------------------------------------------------
LOSS BEFORE
INCOME TAXES (1,957,983) (2,020,213) (5,483,962) (5,771,658)
FUTURE INCOME
TAXES - 647,061 - 487,244
--------------------------------------------------------------------------
NET LOSS (1,957,983) (2,667,374) (5,483,962) (6,258,902)
DEFICIT,
BEGINNING OF
PERIOD (15,942,454) (9,749,101) (12,416,475) (6,157,573)
--------------------------------------------------------------------------
DEFICIT, END OF
PERIOD (17,900,437) (12,416,475) $ (17,900,437) $(12,416,475)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

BASIC AND
DILUTED LOSS
PER SHARE $ (0.03) $ (0.05) $ (0.08) $ (0.14)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 71,338,886 52,228,886 68,946,886 44,317,379
--------------------------------------------------------------------------
--------------------------------------------------------------------------


MEDICAL VENTURES CORP.
Consolidated Statements of Cash Flows
For the year ended

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

OPERATING ACTIVITIES
Net loss for the year $ (5,483,962) $ (6,258,902)
Items not affecting cash
Amortization 145,501 1,169,311
Stock based compensation 203,848 172,376
Future income taxes - 487,244
Repayable contribution agreement - 409,363
Write-off of investment - 40,701

Change in non-cash operating assets and
liabilities
Accounts receivable (83,517) (67,056)
Prepaid expenses and deposits 64,741 (134,161)
Inventory 68,942 195,370
Accounts payable and accrued liabilities (58,995) 67,039
--------------------------------------------------------------------------
(5,143,442) (3,918,715)
--------------------------------------------------------------------------

INVESTING ACTIVITIES
Purchase of property and equipment (197,101) (87,648)
--------------------------------------------------------------------------
(197,101) (87,648)
--------------------------------------------------------------------------

FINANCING ACTIVITIES
Proceeds from share issuances, net of costs 6,902,895 3,943,135
Repayable contribution agreement (3,775) (1,997)
Repayment of long-term debt (30,782) (34,800)
--------------------------------------------------------------------------
6,868,338 3,906,338
--------------------------------------------------------------------------
(DECREASE) INCREASE IN CASH 1,527,795 (100,025)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,220,940 1,320,965
--------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 2,748,735 $ 1,220,940
--------------------------------------------------------------------------
--------------------------------------------------------------------------


About Medical Ventures Corp.:

Medical Ventures Corp. is a medical device company dedicated to developing products that address clinical needs in the quickly growing vascular and surgical marketplace. MEV products help doctors treat a wide range of health concerns, including vascular disease and obesity. The Company develops and manufactures the patented Metricath® System catheter technology and PeriPatch™, a range of surgical tissue products. Medical Ventures is also a contract medical device 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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