The Medipattern Corporation

The Medipattern Corporation

October 23, 2006 06:30 ET

Medipattern Announces Results for Year Ended June 30, 2006

Products win industry awards while Company gears up its sales initiatives

TORONTO, ONTARIO--(CCNMatthews - Oct. 23, 2006) -

Attention: Business/Financial Editors:

The Medipattern Corporation (TSX VENTURE:MKI), an award-winning developer of computer-aided diagnosis (CAD) software applications for medical imaging, today announced the business highlights and financial results for the fiscal year ended June 30th, 2006.

Highlights of the Year:

- B-CAD™ awarded Medical Imaging Product Innovation of the Year by Frost & Sullivan, the Company's second Frost & Sullivan award in less than a year (June '06);

- Appointed Kerr Spencer Vice President, Sales & Marketing (June);

- Announced strategic partnership with Confirma, Inc., the world's leading MRI CAD provider (May);

- Released B-CAD™ 2.0 in Canada, Europe, South America, and parts of Asia, significant enhancements to functionality and additional defining criteria for lesion identification (May);

- Closed private placement with Sprott Asset Management and Sebago Partners for $2.5 million (April);

- B-CAD featured in papers on advanced technical aspects and future trends in ultrasound at European Congress of Radiology, and 2 papers at the American Institute of Ultrasound in Medicine, (March);

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

- B-CAD to be integrated and customized for Orison's whole-breast ultrasound system, marking Medipattern's first project based revenue (December '05);

- Medipattern unveiled its second application, B-CAD MRI, at the Radiology Society of North America (RSNA), adding a second modality to the Company's product family (November);

- B-CAD was made available as part of Kodak's CARESTREAM™ Mammography workstation through an agreement with Merge / Cedara (TSX: MRG; NASDAQ: MRGE), Medipattern's marketing partner (November);

- B-CAD received GMA approval from Merge / Cedara, enabling B-CAD's sale in the USA, at which time Medipattern began to recognize pre-sale revenue that had been deferred since January of 2005 (November);

- Medipattern received its Full Quality Assurance System Approval Certificate allowing for CE Marking for the European market; its Canadian Medical Devices Conformity Assessment System (CMDCAS) approval, leading to the issuance of a Canadian Medical Device License by Health Canada; and registered its Quality Management System to ISO 13485:2003 standards (October); and

- Medipattern completed its Medical Advisory Board, consisting of luminaries in the North American medical imaging sector, and began beta-testing with three of the luminaries' medical facilities (August).


"Sales are the focus for the year to come, as evidenced by the hiring of an industry veteran, Kerr Spencer, as Vice President of Sales and Marketing," said Jeff Collins, President and CEO of Medipattern. "We have clinical validation from both users and industry experts, and our list of marketing and development partners is substantially expanded as a result. Medipattern's technology platform is unique -- stronger and more flexible than its identified peers -- and we will work aggressively to market our products in the coming quarters."


In the fourth quarter, ended June 30, 2006, Medipattern continued to market and develop its CADENZA™ suite of breast imaging and analysis software, including B-CAD for ultrasound and B-CAD MRI, both of which are now award-winners. Overall, Medipattern made significant strides in advancing the technology platform, and in creating marketing and technology partnerships with major players in the imaging sector.

Revenue from technology access and royalties for the year ended June 30, 2006 was $398,746 plus $76,625 in professional fees and $96,201 in interest for a total of $571,574. During the fourth quarter, Medipattern began to receive professional fees from the Orison contracts. Revenue of $24,626 in the fiscal year ended June 30, 2005 was entirely related to bank interest earned.

Net loss for the quarter ended June 30, 2006 was $537,379, an increase of $82,817 from the same quarter in the prior year. Net loss for the year ended June 30, 2006 was $1,998,918, an increase of $726,031 from $1,272,887 in the previous year. It should be noted that during most of the year ended June 30, 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 June 30, 2006 rose to $725,497 from $471,844 in the corresponding quarter of the previous year. For the year ended June 30, 2006, operating expenses reached $2,591,667 compared to $1,297,513 for the previous year. Again, the comparison to the prior year has little relevance. In both the quarter and the year, the increase in expenses related primarily to two categories: a substantial increase in research and development expenses and, administration and product support expenses. Overall, the increased expenses reflect the significantly higher level of activity directed toward research and development which increased year-over- year from $425,526 to $1,231,357 and, sales and marketing to support the Company's growing product line.

Maintaining the strong fiscal discipline which is currently in place, the Company maintained its costs slightly below the budgeted $225,000 per month for the fiscal year ended June 30, 2006. As at June 30, 2006 the company had cash and cash equivalents totaling $4,292,998.

Results of Operations:


2006 2005

Technology access fees $ 289,350 $ -
Royalty income 109,396 -
Professional fees 76,627 -
Interest 96,201 24,626
571,574 24,626
Research and development 1,231,357 425,526
Administration and product support 1,024,119 745,367
Sales and marketing 299,841 70,918
Interest expense - 35,357
Amortization of property and equipment 36,350 20,345
2,591,667 1,297,513

LOSS BEFORE UNDERNOTED (2,020,093) (1,272,887)
Writedown of deferred technology charges (8,235) -
Forgiveness of loans payable to
shareholders 5,134 -
Gain on conversion of debt 24,276 -

NET LOSS $ (1,998,918) $ (1,272,887)

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

Upcoming Events:

Medipattern's Annual General Meeting is being held on December 7, 2006 at 10:00 AM EST in the Main Boardroom of WeirFoulds, Exchange Tower, 15th Floor, Toronto, Ontario. If you wish to join us there, please let us know - call Robin Sundstrom at 416-368-8770 x223.

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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