Attention: Business/Financial Editors
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, is pleased to announce that it is
entered into a term sheet with Ingalls & Snyder LLC of New York, along with
Sebago Capital of Boston, to raise $3,000,000 through the issue of senior
secured convertible notes (the "Convertible Notes"), which will 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 "Offering"). Medipattern has received confirmations for
the entire Offering, with closing of the Offering expected on or about March 4,
2011, subject to regulatory approval. 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. Once closed the proceeds
from the Offering will be used by Medipattern to augment operating working
capital and commercialize its Visualize:Vascular(TM) product which was cleared
for use by the US FDA on February 16.
Jeff Collins, President and CEO of Medipattern, commented "we are very excited
to be completing this Offering which will enable us to enter the vascular market
with enough funding to ensure successful commercialization of
Visualize:Vascular(TM). We anticipate that the program will begin showing
revenue during fiscal Q4 with the full commercial launch scheduled in June 2011
to coincide with the annual meetings for the Society of Vascular Medicine (SVM),
the Society of Vascular Surgery (SVS) and The Society of Vascular Ultrasound
(SVU). The product has been enthusiastically accepted by our clinical partners
in the cardiology, vascular surgery, interventional and diagnostic radiology
markets. We will begin installing sites within the Navix Diagnostix Network as
we prepare for full commercialization. Visualize:Vascular(TM) will be available
on a per report basis adding 3D reconstruction of the carotid artery to Color
Flow Duplex Ultrasound (CFDU) studies. The vascular market is very well
established with over 39 million scans performed annually in the United States
and Canada alone with a 10-15% annual growth projection over the next decade as
forecasted by industry analyst Frost and Sullivan. This is in stark contrast to
the breast ultrasound market, the target market for the Company's B-CAD(R)
product, where the number of out-of-pocket procedures such as mammograms has
decreased over the past few years. Reimbursement denials for B-CAD weaken
Medipattern's performance and as a result our fiscal Q2 2011 revenue remained
much lower than projected. We do not have these same limitations in the vascular
market. Along with strong physician interest in our vascular product we expect
to be able to increase revenue substantially over the coming months," concluded
Collins.
"The beauty of this technology (Visualize:Vascular(TM)) is that it is totally
non-invasive and can serve as an adjunct to standard duplex ultrasound.
Traditionally, we use Doppler to measure the velocities of blood flow in the
vessel. From this data we estimate the degree of narrowing to determine if there
is significant disease. Visualize affords us the ability to measure the diameter
of the residual lumen directly. Clinically this is a tremendous asset for us and
will ultimately lead to improved patient care," commented Francis J. Porreca,
MD, FACS, RPVI, Director of Vascular Surgery, Weiler Division of Montefiore, The
University Hospital of the Albert Einstein College of Medicine. "I believe
Visualize has the potential to revolutionize the way we look at ultrasound which
will have a positive impact on patient management."
The American Heart Association cites an estimated 80,700,000 American adults
(one in three) have one or more types of cardiovascular disease (CVD) and the
statistics echo throughout the population worldwide. Restrictions in the
residual lumen can cause reduced organ function and tissue degeneration.
Vascular diseases are estimated to be among the largest causes of lifestyle
impairment, including stroke, amputation and heart attack.
Vascular ultrasound is one of the largest and higher growth market segments for
ultrasound imaging today," commented Robert Kane, Senior Vice President of
Clinical Services, Navix Diagnostix, Inc. "We saw that Medipattern's technology
had the power to let us see inside vessels in an ultrasound setting. The
preliminary response from the physicians that we regularly work with is very
enthusiastic and we are committed to seeing this product roll out through all of
our NAVIX sites."
Further, Medipattern released its business highlights and financial results for
its second fiscal quarter of 2011 ended December 31, 2010.
Business Highlights of Fiscal 2010 and for the 6 months ended December 31, 2010:
-- June 9, 2010 - Medipattern announces it will introduce and preview its
3D Visualize:Vascular(TM) software at the 2010 Annual Vascular Meeting
of the Society of Vascular Surgeons and Society of Vascular Ultrasound.
-- 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.
Financial Highlights for Q2 Fiscal 2011:
-- Revenue totaled $21,739 (Q2 2010 - $16,010) for the fiscal quarter ended
December 31, 2010, a 36% increase from last year, while 6 month revenues
increased significantly in fiscal 2011 to $55,173 compared to 2010's
$18,130. Licensing fees in Q2 2011 were $10,000 (Q2 2010 - $9,963) and
totaled $26,432 for the 6 months compared to $9,963 for fiscal 2010.
Subscription rental fees in Q2 2011 increased to $11,739 (Q2 2010 -
$6,047) and for the 6 months ended December 31, 2011 totaled $28,741
versus $8,167 in fiscal 2010. No professional fees were earned in fiscal
2011 (fiscal 2010 - Nil) as the Company remains committed to focusing
its internal resources on meeting its deadlines for completion of
development and commercialization of its new 3D vascular ultrasound
software Visualize:Vascular(TM) scheduled for late fiscal 2011;
-- Operating expenses in Q2 fiscal 2011 totaled $617,064 versus $811,638 in
last years' fiscal quarter, an overall decline of $194,574 or 24%. For
the 6 months ended December 31, 2010 operating expenses totaled
$1,224,163 versus $1,531,044 in the same 6 month period in 2010, a YTD
20% decline. 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 Q2 fiscal 2011 was $595,325 ($0.01 per share)
versus $795,628 ($0.01 per share) for Q2 2010. For the 6 months ended
December 31, 2010 Medipattern reported a loss of $1,168,990 ($0.02 per
share) versus a loss of $1,512,914 ($0.03 per share) for the previous
half year, a 23% improvement;
-- As at December 31, 2010, cash and cash equivalents totaled $150,381
(June 30, 2010 - $269,329), current assets, including highly liquid
short-term investments of $544,598 (June 30, 2010 - $1,250,000), were
$1,153,639 (June 30, 2010 - $2,070,913) and current liabilities were
$265,437 (June 30, 2010 - $377,443). Working capital in the 6 month
period ended December 31, 2010 declined $805,268 to $888,202 (June 30,
2010 - $1,693,470) as cash consumed in period operating losses was
augmented by positive changes in operating working capital items.
Results of Operations:
THE MEDIPATTERN CORPORATION
UNAUDITED STATEMENT OF OPERATIONS and COMPREHENSIVE LOSS
FOR THE 6 and 3 MONTH PERIODS ENDED DECEMBER 31, 2010 AND 2009
----------------------------------------------------------------------------
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(6 months) (6 months) (3 months) (3 months)
REVENUES:
Licensing fees $ 26,432 $ 9,963 $ 10,000 $ 9,963
Professional
fees - - - -
Subscription
rental fees 28,741 8,167 11,739 6,047
-----------------------------------------------------------
55,173 18,130 21,739 16,010
OPERATING
EXPENSES
Research and
development 463,783 466,308 233,719 245,730
Administration
and product
support 407,270 551,887 206,818 290,596
Sales and
marketing 205,891 480,617 102,301 262,167
Interest on
convertible
debt 84,277 - 42,586 -
Accreted
interest on
convertible
debt 43,644 - 22,517 -
Foreign exchange
loss 7,273 13,072 2,594 3,053
Investment
income (5,008) (1,825) (2,146) (546)
Amortization of
property and
equipment 17,033 20,985 8,675 10,638
-----------------------------------------------------------
1,224,163 1,531,044 617,064 811,638
----------------------------------------------------------------------------
NET LOSS AND
COMPREHENSIVE
LOSS $ (1,168,990) $ (1,512,914) $ (595,325) $ (795,628)
----------------------------------------------------------------------------
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.
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