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™ 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™. 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™ 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® 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™) 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™ 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™ 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™ 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® is a pioneer in the development of imaging software
solutions that help medical practitioners better understand lesions
and critical anatomy. Medipattern uses its Cadenza™ Algorithm
Technology to power Visualize:Vascular™ 3D reconstruction of areas
of interest within the vessel as well as our first-to-market,
award-winning B-CAD® advanced breast ultrasound computer aided
detection (CAD). For more information, please visit the Company's
website at: www.medipattern.com.
B-CAD® and Medipattern® are registered marks of The Medipattern
Corporation. Visualize:Vascular™ and Cadenza™ 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.
Contacts: The Medipattern Corporation Jeff Collins CEO (416)
744-0009 ext. 224 jcollins@medipattern.com Spinnaker Capital
Markets Inc. Kevin O'Connor (416) 962-3300 ext. 226
ko@spinnakercmi.com
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