Medipattern™ Corporation Reports Results for Third Quarter of Fiscal 2009

TORONTO, ONTARIO--(Marketwire - May 26, 2009) - 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, 2009.

“Despite the current economic conditions, Medipattern has successfully advanced a number of new initiatives that position the Company to generate multiple revenue streams and improve profitability in the coming quarters,” said Jeff Collins, CEO of Medipattern. “B-CAD-FOR-LIFE™ has already produced more than 50 subscribers doubling the installed base for B-CAD® since its launch in February of this year. We see the managed service model as a win-win for Medipattern and our customers as they access all of the functionality of B-CAD through a monthly payment plan, while Medipattern benefits from the recurring revenue stream. We are very optimistic that the current sales trend with B-CAD-FOR-LIFE will continue. Combined with on-going collaborative projects with GE Healthcare in the breast and vascular markets, as well as global sales opportunities for B-CAD as proven by recent shipments to China, we are expecting significant improvement in our top and bottom line performance beginning in the second half of 2009.”

Business Highlights in Calendar 2009:

- January 29, 2009 - Medipattern announces that the Company has extended their collaboration and development agreement with GE Healthcare to create ultrasound-based Vascular Imaging Quantification Tools as an application: Vascular iQ™.

- February 12, 2009 - Medipattern announces B-CAD-FOR-LIFE™, a new sales model for accessing the benefits of B-CAD. All of the components to tailor the installation for each customer including B-CAD software, seat licenses and hardware, as well as training, installation and maintenance fees, are bundled under one flat monthly fee.

Subsequent to the end of the Quarter:

- April 30, 2009 - Medipattern announces the signing of an Enterprise Wide B-CAD-FOR-LIFE managed service contract with Zwanger-Pesiri Radiology, Long Island, New York’s largest private medical imaging practice.

- May 8, 2009 - Medipattern announces the signing of another Enterprise-Wide B-CAD-FOR-LIFE managed service contract with Metropolitan Diagnostic Imaging Group who service the metropolitan New York area with locations in Manhattan, Forest Hills, Queens, Brooklyn and Long Island. The contract marks the 100th B-CAD license agreement.

- May 22, 2009 - Medipattern commences shipments to the China Primary Health Care Foundation (“CPHCF”) as part of the CPHCF’s purchase order for two hundred (200) B-CAD systems, as previously announced in December 2008. The CPHCF is purchasing the equipment for a pilot breast-screening program in hospitals throughout rural China.

Financial Highlights of the Third Quarter:

- Revenue in the third quarter of fiscal 2009 was $19,025, versus $162,114 in the same quarter of fiscal 2008. For the nine-month period ended March 31, 2009, Medipattern reported revenues of $167,460 versus $450,347 in the corresponding period in fiscal 2008. Most of the revenue came from professional fees earned as a result of software development work done to customize B-CAD for a specific customer. Licensing revenue totaled $45,117 compared to $224,222 in the nine-month period ended March 31, 2008 of which $123,069 was the amount of deferred revenue recognized;

- Operating expenses in the third quarter of fiscal 2009 totaled $902,278 versus $1.03 million in the third quarter of fiscal 2008. Medipattern undertook numerous cost cutting measures in response to the overall economic decline including significant reductions in discretionary spending such as advertising, promotion, travel to conference and trade shows, and contract fees. For the nine months ended March 31, 2009, operating expenses were $3.22 million versus $2.86 million in the same nine-month period in fiscal 2008;

- Resulting net loss for the third quarter of the current fiscal year was $883,253 ($0.02 per share) versus $876,710 ($0.02 per share) for the same period in the previous year. For the nine months ended March 31, 2009, Medipattern reported a net loss of $3.05 million ($0.07 per share) compared to a net loss of $2.41 million ($0.06 per share) in the same period in fiscal 2008;

- As at March 31, 2009, cash and cash equivalents totaled $1.01 million, current assets were $1.48 million (June 30, 2008 - $4.1 million) and current liabilities were $751,354 (June 30, 2008 - $452,285). During the third quarter of 2009, working capital decreased to $751,354 as a result of ongoing operating losses during the three-month period of fiscal 2009. Also effecting working capital was an increase in current liabilities as the result of the issuance of a convertible debenture in the amount of $357,000, which matures in December 2009.

Results of Operations:

 THE MEDIPATTERN CORPORATION UNAUDITED STATEMENTS OF OPERATIONS AND DEFICIT FOR THE 9 AND 3 MONTHS ENDED MARCH 31, 2009 AND 2008 ---------------------------------------------------------------------------- March March March March 31, 2009 31, 2008 31, 2009 31, 2008 UNAUDITED UNAUDITED UNAUDITED UNAUDITED ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (9 months) (9 months) (3 months) (3 months) Restated Restated REVENUES Licensing fees $ 45,117 $ 224,222 $ 19,025 $ 67,671 Professional fees 122,343 226,125 - 94,443 ------------- ------------- ------------ ------------ 167,460 450,347 19,025 162,114 EXPENSES Research and development 1,154,560 1,076,963 269,228 362,299 Administration and product support 1,112,736 1,114,327 344,639 447,401 Sales and marketing 977,553 776,746 263,535 257,929 Foreign exchange (20,656) 10,984 18,525 5,128 Investment income (52,161) (150,089) (9,332) (46,578) Amortization of property and equipment 44,348 32,427 15,683 12,645 ------------- ------------- ------------ ------------ 3,216,380 2,861,358 902,278 1,038,824 ------------- ------------- ------------ ------------ NET LOSS AND COMPREHENSIVE LOSS $ (3,048,920) $ (2,411,011) $ (883,253) $ (876,710) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Note: The March 31, 2008 results were restated from last year’s interim filing due to adjustments made during the year-end audit. The fair value of the stock options issued during fiscal 2008 were recomputed at a higher volatility resulting in an increase to stock compensation expense of $95,890 for the 9-month period and $49,195 for the 3-month period thereby increasing the net loss by these amounts. 

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

2009 Upcoming Events:

- BIC (Breast Imaging Conference), partnered with GE, September 4-5, 2009 in Nashville, TN

- RSNA (Radiological Society of North America), November 29 to December 3, 2009, Chicago, IL

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.

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.