The Medipattern Corporation

The Medipattern Corporation

October 17, 2007 16:30 ET

Medipattern Announces Results for Fiscal 2007

Key 5-Year Sales and Marketing Agreement with GE Healthcare Caps Year

TORONTO, ONTARIO--(Marketwire - Oct. 17, 2007) -

Attention: Business/Financial Editors:

The Medipattern Corporation (TSX VENTURE:MKI), an award-winning developer of computer-aided detection (CAD) medical imaging software designed to detect cancer and permit a higher standard of care for the millions of patients at risk of cancer, today announced its business highlights and audited financial results for the fiscal year ended June 30th, 2007.

"With the signing of our sales and development agreement with GE Healthcare, Medipattern is positioned globally as a key element in breast ultrasound care," said Jeff Collins, CEO of The Medipattern Corporation. "B-CAD™ is demonstrably helpful in practice management as well as breast imaging interpretation. Our customers report dramatically reduced reading times, reduction or elimination of transcription costs, increased revenue opportunities, and more consistent reporting, which ultimately contribute to improved patient care."

Highlights of Fiscal 2007:

- July 2006: B-CAD received Product Innovation of the Year award from Frost & Sullivan, in a comprehensive review of innovators in the US CAD market. It was the Company's second Frost & Sullivan award in less than a year;

- September: Conducted first session of sales training on B-CAD with Kodak Carestream™ sales team;

- November: Appointed Janet Sterritt as Vice President, Sales and Marketing and Drew Sala as Director of International Sales;

- November: Amended sales and marketing agreement with Cedara, taking over responsibility for global end-user sales (except Japan) and selected OEMs;

- November: Agreed to develop a customized 3D version of B-CAD for Sonocine, including detection and diagnosis for breast cancer;

- November: Completed software collaboration, development, and license agreement with the US leader in MRI CAD workstations, Confirma Inc.;

- November: Participated in Radiologists' Society of North America (RSNA) conference in Chicago, demonstrating B-CAD in 3 OEM partner booths;

- December: Signed first reseller agreement with Houston-based MammoSolutions, Inc. for distribution of B-CAD in the southwestern US, beginning to build reseller network;

- January 2007: Continued to build reseller network, with 10 additional resellers covering China, Europe, Puerto Rico, and the United States;

- March: Participated in the European Congress of Radiology (ECR) conference in the Company's own booth plus displays in the booths of Carestream, Cedara, Confirma, and Sectra;

- March: Launched B-CAD 1.2 at Northwestern Memorial University Hospital in Chicago. B-CAD 1.2 associates multiple views of the same breast lesion and can track multiple lesions for the same patient in one record, automatically documenting the results;

- March: B-CAD approved for sale integrated with Sectra's breast imaging workstation. Sectra is a Swedish IT and medical technology company that is a major supplier of diagnostic imaging systems in the PACS (Picture Archiving and Communications) environment;

- May: Added global resellers based in Mexico and Korea to B-CAD distribution network;

- June: Mammography & Ultrasound Specialists of Houston demonstrate improved workflow and revenue streams using B-CAD for ultrasound; and

- June: Announced a five-year, global, collaborative sales and development agreement for ultrasound-based CAD with GE Healthcare (GE Medical Systems Ultrasound and Primary Care Diagnostics, LLC).

Subsequent to Year End:

- August 2007: Announced the successful completion of a bought-deal financing with Research Capital Corp., issuing 4,730,000 common shares at a price of $1.10 per common share for aggregate gross proceeds of $5,203,000. In addition, the underwriters exercised their over-allotment option and an additional 473,900 common shares were issued for gross proceeds of $521,290.

Financial Highlights of Fiscal 2007:

- Revenues comprised of royalty income ($210 thousand in the 12 months, up substantially from the $109 thousand posted in the previous year), professional fees ($197 thousand, compared to $76 thousand in fiscal 2006), and interest income ($109 thousand, compared to $96 thousand in fiscal 2006) reached $516 thousand in fiscal 2007, versus revenues of $282 thousand in fiscal 2006 (not including a one-time technology access fee payment of $289 thousand);

- Total expenses rose 17.4% to $3.04 million versus $2.59 million in fiscal 2006, mostly as a result of increased sales and marketing costs. The year-over-year increase was slightly offset by decreases in research and development costs in the period. Year-over-year, research and development expenses decreased to $1.16 million from $1.23 million in fiscal 2006. The Company's research and development costs were positively affected by its eligibility for a tax credit under the Ministry of Finance of Ontario's Ontario Innovative Tax Credit program. In aggregate, $285 thousand was applied to reduce research and development expenses in 2007. Administration and product support costs rose to $1.04 million in 2007 versus $1.02 million in fiscal 2006, while sales and marketing expenses reached $797 thousand in fiscal 2007 versus $300 thousand in fiscal 2006.

- Resulting net loss for fiscal 2007 rose 29.3% to $2.6 million from $2.0 million in the previous year;

- Although monthly operating cash requirements are anticipated to rise to between $325,000 and $375,000 per month in fiscal 2008, in fiscal 2007 cash requirements averaged less than $230 thousand per month. In general, the amount will increase as the Company expands its efforts in sales and marketing; and

- Cash and cash equivalents totaled $1,674,102 at the end of fiscal 2007, compared to $4,292,998 at the end of fiscal 2006.


"Medipattern is now positioned well for significant growth. We have strengthened our independent reseller channel to include more than 20 resellers globally. We have brought on key OEMs -- GE Healthcare in ultrasound and Confirma in MRI -- as partners in sales and development of future B-CAD product extensions. We have received tremendous insight from the installations in our luminary facilities at the Sally Jobe Clinic in Denver, the Lynn Sage Clinic in Chicago, the Cambridge Health Alliance in Boston, Weinstein Imaging in Pittsburg, General Hospital in Trieste, Italy, and the PLA 301 in Beijing, China, while installations at our customer sites have provided outstanding feedback for B-CAD and demonstrated that imaging centres improve their practice management and maximize their business through the use of B-CAD," said Jeff Collins, President and CEO of Medipattern. "Now, as B-CAD rolls out through GE Healthcare and B-CAD MRI™ through Confirma, we anticipate a strong market response to the expanding B-CAD product line, and we will continue to look for imaging opportunities in other modalities where our pattern recognition software can add benefit."

Results of Operations:


2007 2006
Technology access fee $ - $ 289,350
Royalty income 210,196 109,396
Professional fees 197,025 76,627
Interest income 109,272 96,201
516,493 571,574

Research and development 1,162,565 1,231,357
Administration and product support 1,038,376 1,024,119
Sales and marketing 797,440 299,841
Amortization of property and equipment 44,905 36,350

3,043,286 2,591,667

LOSS BEFORE UNDERNOTED (2,526,793) (2,020,093)

Writedown of deferred technology charges (58,701) (8,235)

Forgiveness of loans payable to shareholders - 5,134

Gain on conversion of debt - 24,276

NET LOSS $(2,585,494)$(1,998,918)

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

Upcoming Events:

Medipattern is participating in the following events:

- JFR, October 20 to 24, Paris, France.

- RSNA, November 25 to 29, 2007, Chicago, IL.

- European Congress of Radiology, March 7 to 11, Vienna, Austria.

The Medipattern Corporation

Medipattern develops computer-aided detection (CAD) solutions for medical imaging. These products enhance workflow while improving interpretive and diagnostic confidence. The Company's initial clinical applications are B-CAD™ for breast ultrasound and B-CAD MRI™. Both have received awards for innovation in the industry. The B-CAD products, part of the Company's CADENZA™ platform, use pattern recognition technology to assist radiologists in their efforts to classify and characterize lesions in images of the breast. 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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