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DOBI Medical International Reports 2005 Year-End Results

Posted on: Tuesday, 14 February 2006, 09:01 CST

DOBI Medical International, Inc. (OTCBB:DBMI) released company highlights and its financial results for the year ended December 31, 2005.

Company Summary of Year-End Highlights

-- The Company released the ComfortScan(R) Version 2.0 Software

Suite. The suite currently consists of three individual

elements, including: ComfortScan acquisition software for

patient data acquisition; ComfortNet(TM) for image database

management; and ComfortView(TM) software for image processing

and display, allowing reading and diagnostic interpretation by

physicians. Highly sophisticated imaging processing and

display capabilities make the image data available to

physicians for reading in near real time.

-- The Company expanded the number of clinical sites

participating in the FDA Premarket Approval (PMA) clinical

trial to 23 sites. To date, we have enrolled more than 1,200

patients.

-- A number of clinical studies are being conducted in

international locations for the purpose of submitting these

for local regulatory approval of the ComfortScan system.

Furthest along in these efforts is our clinical study in

Beijing, China, where the patient recruitment and data

collection process was recently completed. Following this, we

provided detailed image interpretation training for three

Chinese physicians who participated in a blinded read of all

the cases. The initial documentation of this study has been

submitted for review by the Chinese State Food and Drug

Administration (SFDA), China's medical device approving

authority.

-- DOBI Medical has successfully completed four of the five

required steps in the PMA process, and anticipates submitting

updates to the first four modules in conjunction with the

submission of the pivotal PMA clinical trial research study to

the FDA.

"This has been a year of advancement, in which we have made steady progress toward the completion of our PMA clinical trial, expanded our clinical presence outside the United States, and released ComfortScan version 2.0 to a growing international clinical community," commented Robert B. Machinist, Chairman of the Board of Directors of DOBI Medical. "These achievements are each critical to the company's growth. We are excited about our prospects on these fronts in 2006."

The DOBI Medical ComfortScan system is a noninvasive, nonionizing device that uses light-emitting diodes and gentle external pressure to identify tumor angiogenesis, the growth of new blood vessels in the breast. Tumor angiogenesis has been scientifically linked with malignant tumors as a key element in their growth and development. Because most common imaging technologies do not detect angiogenesis, the ComfortScan system, in conjunction with screening mammography, can potentially improve a physician's ability to accurately diagnose breast cancer.

Company Year-End Financials

Revenues for the full year were approximately $303,000 in 2005 as compared to $321,000 in 2004. The net loss applicable to common stock for 2005 was approximately $10,921,000, or $.18 per share, compared with a net loss of approximately $8,022,000, or $.21 per share, in the prior year.

Total operating expenses in 2005 were $10.28 million compared to $6.95 million in 2004. The increase relates to costs incurred in development of the ComfortScan system, initiation of clinical testing associated with the Company's FDA PMA application, expansion of the Company's international distributor network, and other operational expenses. DOBI Medical International, Inc. and Subsidiary (A Development Stage Company) Condensed Consolidated Statements of Operations Year ended December 31, ------------------------- 2005 2004 ------------ ----------- Revenue $ 303,394 $ 321,266 Cost of sales 850,595 383,832 ------------ ----------- Gross loss (547,201) (62,566) ------------ ----------- Research and development expenses 2,339,724 1,957,256 General and administrative expenses 3,236,480 2,147,228 Clinical program expenses 3,357,672 928,512 Sales and marketing expenses 1,348,521 1,918,824 ------------ ----------- Total operating expenses 10,282,397 6,951,820 ------------ ----------- Operating income (loss) (10,829,598) (7,014,386) Other income (expense) Interest expense (8,397) (7,495) Interest income 127,265 11,443 ------------ ----------- Loss before income taxes (10,710,730) (7,010,438) Income tax benefit 279,664 - ------------ ----------- Net loss (10,431,066) (7,010,438) Deemed dividend on preferred stock (136,940) (805,393) Preferred stock dividends (353,410) (206,454) ------------ ----------- Net loss applicable to common stock $(10,921,416)$(8,022,285) ============ =========== Basic and diluted loss per common share $ (0.18)$ (0.21) ============ =========== Weighted average common shares, basic and diluted 60,469,907 37,924,009 ============ ===========

The financial information included in this document is intended only as a summary provided for your convenience, and should be read in conjunction with the complete consolidated financial statements of the Company (including the Notes thereto, which set forth important information) contained in its Annual Reports on Form 10-KSB and filed by the Company with the Securities and Exchange Commission (SEC).

About DOBI Medical International, Inc.

DOBI Medical is a developmental stage, medical imaging company working to create a new means for the improved diagnosis of malignant breast disease through the identification of abnormal vascularization ("angiogenesis") associated with tumors. The Company's first application of the technology is the ComfortScan(R) system, a gentle, noninvasive, and nonionizing, optical imaging system designed to assist physicians in the identification and management of breast cancer as an adjunct to screening mammography. The ComfortScan system is intended to achieve this by providing new, physiology-based imagery of abnormal vascularization in the breast that is not readily available today. The ComfortScan system has CE Mark and UL designations, and DOBI Medical is a certified ISO 9001:2000, ISO 13485:2003 and CAN/CSA:ISO 13485 company. The ComfortScan system is not yet commercially available in the U.S. as it is limited by U.S. law to investigational use until approved by the FDA, which cannot be guaranteed. Sales of the ComfortScan system to international distributors are limited to sales for investigational use for installation at clinical trial sites. For more information on DOBI Medical International or the ComfortScan system, visit www.dobimedical.com.

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

Statements contained in this press release may contain information that includes or is based upon certain "forward-looking statements" relating to our business. These forward-looking statements represent management's current judgment and assumptions, and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are frequently accompanied by the use of such words as "anticipates,""plans,""believes,""expects,""projects,""intends," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, including without limitation, those relating to our ability to timely and successfully complete our U.S. Food and Drug Administration ("FDA") patient Pre-Market Approval ("PMA") clinical trials, as well as our other clinical trials being conducted around the world; our ability to timely and successfully complete and submit to the FDA our PMA application of the PMA clinical trial results; the timely and final approval by local foreign governments of our ComfortScan system as an adjunct to mammography in various international markets; the success and continued improvements of our product development and research efforts, including without limitation, our ability to timely and successfully release version 2.0 and subsequent versions of our ComfortScan system; our ability to timely meet U.S. and foreign government laws and industry standards; our ability to meet U.S. and foreign medical device quality regulation standards required to maintain our CE Mark, and ISO, UL and FDA export certifications; our ability to timely deliver our products into international markets; the acceptance, adoption, and use of our ComfortScan system by physicians, imaging clinics, and patients; and our ability to obtain third-party reimbursement from U.S. and foreign governments and private payers.

Any one of these or other risks, uncertainties, other factors, and any inaccurate assumptions, may cause actual results to be materially different from those described herein or elsewhere by us. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. Certain of these risks, uncertainties, and other factors are described in greater detail in our filings from time to time with the Securities and Exchange Commission, which we strongly urge you to read and consider, including the "Risk Factors" as set forth in our 2005 Annual Report on Form 10-KSB, which may be accessed from our website at www.dobimedical.com. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and elsewhere in our reports filed with the Securities and Exchange Commission. We expressly disclaim any intent or obligation to update any forward-looking statements.

Source: Business Wire

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