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Medipattern™ Corporation Reports Results for Third Quarter of Fiscal 2010 Ending March 31, 2010



5/28/2010 1:07:11 PM

TORONTO, ONTARIO--(Marketwire - May 27, 2010) - Attention: Business/Financial Editors

The Medipattern Corporation ("Medipattern") (TSX VENTURE: MKI), a pioneer in the development of medical software solutions that help improve imaging workflow and productivity, today announced its business highlights and unaudited financial results for the third quarter and nine-months ended March 31, 2010.

Jeff Collins, CEO of Medipattern stated, "Subscription fees for B-CAD-FOR-LIFE™ (BCFL) began to increase late in the quarter as some grace periods expired, but had no significant impact on quarterly revenues as product training continues and B-CAD™ becomes integrated further into our client work flows. Our current clients are extremely pleased with the efficiency and accuracy of the BCFL software service, with one major client transitioning to a completely paperless reporting system. Our current installed base includes several organizations that the rest of the imaging industry views as the lead for technologic innovation and process enhancement. We are beginning to see some very positive trends in the breast imaging space, including increased investment by OEM's and end-users, which could positively impact our North American roll-out of BCFL."

Business Milestones for the nine-month period ended March 31, 2010 -- August 4, 2009 - Medipattern signs an agreement for B-CAD-FOR-LIFE™ with Manhattan Diagnostic Radiology. -- November 26, 2009 - Medipattern and PenRad Technologies Inc. sign a sales and distribution agreement for PenRad to incorporate Medipattern's B-CAD™ computer aided detection for breast ultrasound imaging product line. -- November 29, 2009 - Medipattern and Sentinelle Medical Inc. announce that they are entering a technology access and distribution agreement to partner in the development of Breast MRI solutions. -- December 14, 2009 - Medipattern announces the expansion of its B-CAD- FOR- LIFE™ program with Ocean Medical Imaging Centers in New Jersey. -- December 21, 2009 - Medipattern installs 150th B-CAD™ license at Weinstein Imaging in Pennsylvania. -- March 2, 2010 - Medipattern announces Doshi Diagnostic Imaging to deploy B- CAD-FOR-LIFE™ in 38 centers in the United States. Subsequent to the end of the Quarter: -- May 18, 2010 - Medipattern announces closing of $1,800,000 Convertible Note financing. Financial Highlights of the Third Quarter: -- Revenue in the third quarter of fiscal 2010 rose 9% to $20,735 (2009 - $19,025) against a 77% decrease to $38,865 (2009 - $167,460) for the nine-month period ended March 31, 2010. 2010 licensing revenue of $38,865 comprised all revenues compared to $45,117 in 2009. The balance of 2009 revenue came from one time professional fees earned as a result of software development work done to customize B-CAD for a specific customer. -- Operating expenses in the third quarter decreased 22% to $701,350 (2009 - $902,278) while expenses for the nine months ended March 31, 2010 decreased 31% to $2,232,394 (2009 - $3,216,380). Expense reductions were the product of ongoing cost cutting measures including significant reductions in discretionary spending such as advertising, promotion, travel to conference and trade shows, contract fees and non essential salaries and benefits. For the 9 month period Research and Development expenses fell 38% to $717,518 (2009 - $1,154,560), Administration and Product Support decreased 26% to $819,451 (2009 - $1,112,736) and Sales and Marketing declined to $654,758 (2009 - $977,553) a 33% decrease. -- Resulting net loss for the third quarter of the current fiscal year was $680,615 ($0.01 per share) versus $883,253 ($0.02 per share) for fiscal 2009. For the nine months ended March 31, 2010, Medipattern reported a net loss of $2,193,529 ($0.04 per share) compared to 2009's net loss of $3,048,920 ($0.07 per share); -- As at March 31, 2010, cash and cash equivalents totaled $338,357, current assets were $743,279 (June 30, 2009 - $2,213,614) and current liabilities were $ 302,615 (June 30, 2009 - $351,745). During the third quarter of 2010, working capital decreased to $440,664 as a result of ongoing operating losses. On May 17, 2010, the Company closed a $1,800,000 Convertible Note financing to fund the ongoing North American roll-out of its B-CAD-FOR-LIFE™ software-as-a-service and continue the development and approval of Vascular iQ™. "Vascular iQ continues to be a focus of our R&D and product development team now that data collection is well underway. We will be showing an early version to our luminary group at the Society for Vascular Ultrasound Annual Conference held in Boston June 10- 12 and expect to submit the product later this year to the FDA for approval," continued Mr. Collins. Results of Operations: March 31, March 31, March 31, March 31, 2010 2009 2010 2009 UNAUDITED UNAUDITED UNAUDITED UNAUDITED -------------- -------------- -------------- -------------- (9 months) (9 months) (3 months) (3 months) REVENUES Licensing fees $ 38,865 $ 45,117 $ 20,735 $ 19,025 Professional fees - 122,343 - - -------------- -------------- -------------- -------------- 38,865 167,460 20,735 19,025 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- EXPENSES Research and development (Note 15) 717,518 1,154,560 251,210 269,228 Administration and product support 819,451 1,112,736 267,564 344,639 Sales and marketing 654,758 977,553 174,141 263,535 Foreign exchange (gain) loss 10,905 (20,656) (2,167) 18,525 Investment income (2,339) (52,161) (514) (9,332) Amortization of property and equipment 32,101 44,348 11,116 15,683 -------------- -------------- -------------- -------------- 2,232,394 3,216,380 701,350 902,278 -------------- -------------- -------------- -------------- NET LOSS AND COMPREHENSIVE LOSS (2,193,529) (3,048,920) (680,615) (883,253) -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- DEFICIT, BEGINNING OF PERIOD (16,348,417) (12,146,367) (17,861,331) (14,312,034) Net loss (2,193,529) (3,048,920) (680,615) (883,253) -------------- -------------- -------------- -------------- DEFICIT, END OF PERIOD $(18,541,946) $(15,195,287) $(18,541,947) $(15,195,287) -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- LOSS PER SHARE (Note 11) $ (0.04) $ (0.07) $ (0.01) $ (0.02) -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- For further details concerning Medipattern's results, please see the Company's filings on SEDAR. (www.sedar.com).

About The Medipattern Corporation:

Medipattern® is a pioneer in the development of medical software solutions that help improve imaging workflow and productivity. Our first-to-market, award-winning B-CAD® advances breast ultrasound computer aided detection (CAD) by streamlining workflow and organizing information into a comprehensive patient record. Medipattern uses its Cadenza™ CAD Technology to power the digital conversion in medical communications. B-CAD automatically creates fully digital standardized worksheets and reports that make every practice more efficient, productive and ultimately more effective. For more information, please visit the company's website at: www.medipattern.com.

B-CAD® and Medipattern® are 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 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.


Contacts:
The Medipattern Corporation
Jeff Collins
CEO
(416) 744-0009 ext. 224
jcollins@medipattern.com
www.medipattern.com

Spinnaker Capital Markets Inc.
Kevin O'Connor
(416) 962-3300 ext. 226
ko@spinnakercmi.com


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