Excel-tech Ltd.

Excel-tech Ltd.

November 30, 2006 16:09 ET

XLTEK Responds to Recent U.S. Medicare Reimbursement Determinations

OAKVILLE, ONTARIO--(CCNMatthews - Nov. 30, 2006) - Excel-Tech Ltd. ("XLTEK")(TSX:NRV), a medical technology company that designs, develops and sells proprietary neurodiagnostic medical devices, responded today to recent Local Coverage Determinations (LCDs) trends related to restrictions on reimbursement by Medicare to physicians for automatic nerve conduction testing for the initial identification of peripheral neuropathy. Management believes the recent LCDs will result in significantly reduced billings by physicians for diagnosing carpal tunnel syndrome using automated nerve conduction instruments such as XLTEK's Front-Line Neuro instrument, the NeuroPATH. At this time, the new LCD's apply to Medicare reimbursement in several States in the US including Florida, Texas and California.

"We believe these recent determinations will have an adverse impact on our Front-Line Neuro business related to testing for carpel tunnel syndrome by physicians using our NeuroPATH product. As a result, we are taking specific steps to reduce costs while these reimbursement issues are being addressed," stated John Mumford, President and CEO.

Effective immediately, XLTEK is responding by reducing its NeuroPATH sales and marketing staff and redeploying its remaining resources to market the NeuroPATH to neurology specialists, physical medicine specialists and other healthcare professionals not expected to be impacted by these recent LCDs. In order to save costs, XLTEK is reducing to a large extent the validation studies currently underway to obtain FDA approval of its NeuroPATH as a replacement for conventional electro-diagnostic measurements. In addition, the company is reducing certain costs related to its core Advanced Neuro-Diagnostic Instrument business in order to improve its earnings. In total, these initiatives are expected to result in quarterly savings of approximately Cdn. $1.2 million. Management estimates that the company will incur a one time charge to earnings in the fourth fiscal quarter of approximately Cdn. $1.1 million largely attributable to severance and contract termination costs.

"We have been in the early stages of the rollout of the NeuroPATH business. While sales of these products were beginning to improve, we were, however, generating significant losses as a result of our investments in the business. If a more positive reimbursement environment becomes evident, we expect to reconsider the resumption of our full national rollout. With these initiatives, management believes that the company's losses will be reduced and we will direct our talents and energies toward other attractive opportunities in our advanced instruments business, including our Sleeprite product under development," Mr. Mumford concluded.


Excel-Tech Ltd. ("XLTEK") is a medical technology company that designs, develops and sells proprietary neurodiagnostic medical devices. XLTEK's Advanced Neuro-Diagnostic Instruments are used by neurology specialists at leading hospitals in the US to assist in the diagnosis and monitoring of epilepsy and sleep disorders and the monitoring of the nervous system during surgery. XLTEK's Front-Line Neuro products allow physicians to diagnose and monitor patients with certain high-prevalence nervous system disorders. XLTEK is headquartered in Oakville, Ontario, Canada. The Company's common shares trade on the Toronto Stock Exchange (Symbol: NRV.TO). Additional information about XLTEK and its products may be found at www.xltek.com.

Forward-Looking Statements:

Certain statements contained in this release containing words like "believe", "intend", "may", "expect" and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the Company's forward-looking statements include the following: market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; the timing of commercial product launches; the ability to achieve key technical milestones in key products and other risk factors identified from time to time in the Company's filings.

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