The Medipattern Corporation
TSX VENTURE : MKI

The Medipattern Corporation

May 31, 2011 06:30 ET

Medipattern Reports Unaudited Results for Q3 2011

TORONTO, ONTARIO--(Marketwire - May 31, 2011) - The Medipattern Corporation ("Medipattern") (TSX VENTURE:MKI), a pioneer in the development of imaging software solutions that help medical practitioners better understand lesions and critical anatomy, today announced its financial results for its third fiscal quarter of 2011 ended March 31, 2011.

Jeff Collins, CEO of Medipattern, commented "The third quarter of fiscal 2011 was significant for Medipattern as we received US FDA clearance for our new Visualize:Vascular(TM) 3D vascular ultrasound imaging product. Subsequent to successfully receiving our FDA clearance, we completed a $3 million financing to support fine tuning of the product, the initial limited launch over the summer and the scheduled full commercial roll-out into the vascular market in the fall of this year. Our focus in the near term will be to continue to capitalize on the exceptional industry response Visualize:Vascular(TM) has generated through initial testing. The technology is proving to be clinically valued by vascular surgeons, radiologists and cardiologists."

Collins also remarked, "The results from the next clinical study using the 3D rendering feature provided by Visualize:Vascular(TM)are planned to be presented at the Annual Vascular meeting which is the joint annual meeting for the Society for Vascular Surgeons and the Society for Vascular Ultrasound from June 16 to 18 in Chicago. The paper, "Three Dimensional Reconstruction of the Vessel Lumen as an Adjunct to the Cerebrovascular Duplex Evaluation" by Francis J. Porreca, MD, FACS, RPVI, Angela Rodriguez-Wong, MD, RVT, RPVI, and Joseph P. Hughes, RVT, RVS will be presented at that time. We believe the product launch will be amplified through substantiated clinical benefits and have directed our efforts toward sponsoring investigations with clinical research partners," Collins concluded.

Business Highlights for the 9 months of Fiscal 2011 ended March 31, 2011:

  • September 22, 2010 – Medipattern announces its core technology "system and method of computer-aided detection (CAD)" received United States Patent # 7,783,094.

  • February 17, 2011 – Medipattern announces it has received US FDA clearance for its new Visualize:Vascular(TM)3D vascular ultrasound imaging product.

  • March 9, 2011 – Medipattern closes its $3,000,000 Senior Secured Convertible Note financing announced on March 1st (the "Convertible Notes"), which bear interest after December 31, 2011 on a semi-annual basis, payable on March 31 and September 30 each year at the rate of 8% in 2012, 16% in 2013, and maturing on December 31, 2013. The Convertible Notes may be converted by holders into common shares of Medipattern, at a conversion price of $0.37 per share, subject to adjustment in certain circumstances. The proceeds will be used by Medipattern to augment operating working capital and will enable it to commercialize its new US FDA approved product Visualize:Vascular(TM).

Financial Highlights for Q3 Fiscal 2011:

  • Revenue totaled $57,929 (Q3 2010 - $20,735) for the fiscal quarter ended March 31, 2011, a 179% increase from last year, while 9 month revenues increased in fiscal 2011 to $113,102 compared to 2010's $38,865, a 191% increase. Licensing fees in Q3 2011 were $23,105 (Q3 2010 - $20,735) and totaled $48,591 for the 9 months compared to $38,865 for fiscal 2010. Subscription rental fees in Q3 2011 increased to $6,647 (Q3 2010 – $nil) and for the 9 months ended March 31, 2011 totaled $36,334 versus $nil in fiscal 2010. Professional fees of $28,177 were earned in Q3 2011 (fiscal 2010 - Nil) as the Company deployed R&D resources to augment cash flow. The Company remains committed to focusing its internal R&D capabilities on meeting its deadlines for completion of development and commercialization of its new 3D vascular ultrasound software Visualize:Vascular(TM), scheduled for early fiscal 2012, but will continue to consider external fee generation if resource allocation allows;

  • Operating expenses in Q3 fiscal 2011 totaled $648,011 versus $701,350 in last years' fiscal quarter, an overall decline of $53,339, or 8%. For the 9 months ended March 31, 2011 operating expenses totaled $1,872,174 versus $2,232,394 in the same 9 month period in 2010, a YTD 16% decline. Prior to incremental fiscal 2011 interest expenses (cash and accreted) on its Convertible Debt of $83,871 and $211,792 for the 3 and 9 month periods respectfully, direct non-interest operating expenses actually fell by 20% and 25% in the fiscal periods. Medipattern remains committed to preserving its cash resources and controlling all discretionary spending until operating cash flow improves in response to its ongoing commercialization of its award winning software products;

  • Resulting net loss for Q3 fiscal 2011 was $590,082 ($0.01 per share) versus $680,615 ($0.01 per share) for Q3 2011. For the 9 months ended March 31, 2011 Medipattern reported a loss of $1,759,072 ($0.03 per share) versus a loss of $2,193,529 ($0.04 per share) for the previous 9 month period, a 20% improvement;

  • As at March 31, 2011, cash and cash equivalents totaled $382,130 (June 30, 2010 - $269,329), current assets, including highly liquid short-term investments of $2,869,593 (June 30, 2010 - $1,250,000), were $3,701,261 (June 30, 2010 - $2,070,913) and current liabilities were $286,347 (June 30, 2010 - $377,443). Working capital in the 9 month period ended March 31, 2011 increased $1,721,444 to $3,414,914 (June 30, 2010 - $1,693,470) as cash consumed in period operating losses was augmented by proceeds of the March 9, 2011 Convertible Note financing.

Results of Operations:

THE MEDIPATTERN CORPORATION
UNAUDITED STATEMENT OF OPERATIONS and COMPREHENSIVE LOSS
FOR THE 9 and 3 MONTH PERIODS ENDED MARCH 31, 2011 AND 2010
March 31, 2011March 31, 2010March 31, 2011March 31, 2010
UNAUDITEDUNAUDITEDUNAUDITEDUNAUDITED
(9 months)(9 months)(3 months)(3 months)
REVENUES:
Licensing fees$48,591$38,865$23,105$20,735
Professional fees28,177-28,177-
Subscription rental fees36,334-6,647-
113,10238,86557,92920,735
OPERATING EXPENSES
Research and development695,046717,518231,263251,210
Administration and product support635,271819,451228,001267,564
Sales and marketing303,525654,75897,633174,141
Interest on convertible debt131,842-47,565-
Accreted interest on convertible debt79,950-36,306-
Foreign exchange loss (gain)8,95710,9051,684(2,167)
Investment income(7,965)(2,339)(2,957)(514)
Amortization of property and equipment25,54832,1018,51611,116
1,872,1742,232,394648,011701,350
NET LOSS AND COMPREHENSIVE LOSS$(1,759,072)$(2,193,529)$(590,082)$(680,615)
Weighted Average Shares Outstanding57,181,23356,227,57257,181,23356,227,572
Loss Per Share - Basic and diluted$(0.03)$(0.04)$(0.01)$(0.01)

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

2011 Upcoming Events:

  • Society of Vascular Medicine (SVM) Annual Meeting, Boston June 2-4
  • Society of Vascular Surgery (SVS) Annual Meeting, Chicago June 16-18
  • Society of Vascular Ultrasound (SVU) Annual Meeting, Chicago June 16-18

About The Medipattern Corporation:

  • Medipattern(R) is a pioneer in the development of imaging software solutions that help medical practitioners better understand lesions and critical anatomy. Medipattern uses its Cadenza(TM) Algorithm Technology to power Visualize:Vascular(TM)3D reconstruction of areas of interest within the vessel as well as our first-to-market, award-winning B-CAD(R) advanced breast ultrasound computer aided detection (CAD). For more information, please visit the Company's website at: www.medipattern.com.

B-CAD(R) and Medipattern(R) are registered marks of The Medipattern Corporation. Visualize: Vascular(TM) and Cadenza(TM) are trademarks 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 www.sedar.com). 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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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