Cambridge Heart Reports Results for the 2006 First Quarter; Alternans Revenue up 59% over Q1 2005.BEDFORD, Mass. -- Cambridge Heart, Inc. (OTCBB-CAMH) today reported revenue of $1,419,000 for the quarter ended March 31, 2006, an increase of $409,500 or 41% compared to revenue of $1,009,500 for the same period in 2005. Sequentially, revenue increased $329,800 or 30% from the $1,089,200 reported for the quarter ended December 31, 2005. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the first quarter of 2006 was $645,300, a decrease of $292,000 or 31% compared to $937,300 for the same period in 2005. The operating loss for the first quarter of 2006 included $72,800 in non-cash stock based compensation expense resulting from the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R. The net loss for the quarter was $6,837,000 or $0.13 per share, which included a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $6,264,700 related to the change in the value of certain warrants to purchase shares of Series B Convertible Preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". (the "Series B Warrants"). These warrants were re-classified from the mezzanine mez·za·nine n. 1. A partial story between two main stories of a building. 2. The lowest balcony in a theater or the first few rows of that balcony. equity section of our balance sheet to a liability for the year ended 2004 and subsequent 2005 reporting periods. For the same period last year, the Company reported net income of $150,000 or $0.00 per share, which included a non-cash gain of $1,047,300 related to the change in value of the Series B Warrants. As of March 31, 2006, all of the Series B Warrants have been exercised and converted into common stock and accounted for as equity, and therefore, no charges or gains related to the Series B warrants will be incurred in future periods. Revenue for the first quarter from the sale of the Company's Microvolt microvolt one-millionth (10-6) of a volt; abbreviated µV. T-Wave Alternans T-wave alternans Cardiology A subtle every-other-beat variation in T waves that is prognostic of Pts at high risk for life-threatening cardiac arrhythmias and sudden cardiac death. See Alternans test. ("Alternans") products was $1,094,000, an increase of $404,000 or 59% compared to $690,000 in the same period in 2005. Sequentially, revenue from the Company's Alternans products increased $218,900 or 25% compared to $875,100 for the previous quarter ended December 31, 2005. The Company had cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at March 31, 2006 of $9.1 million. During the quarter, the Company realized proceeds of approximately $4.1 million from the exercise of certain options and warrants. Excluding these option and warrant exercise proceeds, the Company used approximately $329,000 of cash in the first quarter of 2006. Cash usage is expected to increase in future quarters as the Company implements its sales and marketing expansion plans in 2006 and 2007. Although the Company has no specific plans to raise additional capital in the near term, the Company intends to file a shelf registration statement with the Securities and Exchange Commission on Form S-3, which when declared effective, will allow the Company to offer and sell up to $20 million of securities in the future. This amount represents approximately 10% of our current, fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. . The Company's management believes that filing a shelf registration statement at this time provides Cambridge Heart with the greatest flexibility as it reviews its capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. throughout the balance of 2006 and beyond. As of March 31, 2006, the Company had a total of 60.7 million shares of common stock issued and outstanding and no shares of Series A or B Convertible Preferred Stock outstanding. In addition, at March 31, 2006, there were options and warrants outstanding to purchase 8.4 million common equivalent shares. "This quarter was an excellent one for Cambridge Heart both in quantitative and qualitative terms," stated David Chazanovitz, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Cambridge Heart. "In addition to having our best quarter in two years, we also received a very strong final National Coverage Determination from CMS (1) See content management system and color management system. (2) (Conversational Monitor System) Software that provides interactive communications for IBM's VM operating system. , which was preceded by a similar decision from Aetna." The Company will hold a conference call at 4:30 PM. eastern time Tuesday, May 2nd to discuss the accomplishments and financial results for the 2006 first quarter. The conference call phone in number is 866.700.7441 (outside the U.S. 617.213.8839), passcode 44039850. Interested parties may listen to a recording of the conference call at any time during the 48 hours immediately following the call by dialing 888.286.8010 (outside the U.S. 617.801.6888) and enter the passcode 14076230. This playback will begin approximately two hours after the call ends. The conference call will also be available by webcast on the Company's web site at www.cambridgeheart.com. About Cambridge Heart Cambridge Heart is engaged in the research, development and commercialization of products for the non-invasive diagnosis of cardiac disease. Using innovative technologies, the Company is addressing such key problems in cardiac diagnosis as the identification of those at risk of sudden cardiac arrest cardiac arrest n. Abbr. CA A sudden cessation of cardiac function, resulting in loss of effective circulation. Cardiac arrest A condition in which the heart stops functioning. . The Company's products incorporate its proprietary technology, Microvolt T-Wave Alternans, and are the first diagnostic tools cleared by the U.S. Food and Drug Administration to non-invasively measure microvolt levels of T-wave alternans. The Company, founded in 1990, is based in Bedford, Massachusetts Bedford is a town in Middlesex County, Massachusetts, United States. It is within the Greater Boston area, some 15 miles north-west of the city of Boston. The population of Bedford was 12,595 at the 2000 census. and is traded on the OTCBB OTCBB See OTC Bulletin Board (OTCBB). under the symbol CAMH CAMH Centre for Addiction and Mental Health CAMH Contemporary Arts Museum Houston (Houston, TX) CAMH Comprehensive Accreditation Manual for Hospitals . Cambridge Heart can be found on the World Wide Web at www.cambridgeheart.com. About the Cambridge Heart Microvolt T-Wave Alternans Test The Cambridge Heart Microvolt T-Wave Alternans Test measures extremely subtle beat-to-beat fluctuations in a person's heartbeat (1) A periodic signal generated by hardware for activation and/or synchronization purposes. See MHz. (2) A periodic signal generated by hardware or software to indicate that it is still running. 1. called T-wave alternans. These tiny heartbeat variations - measured at one millionth of a volt volt [for Alessandro Volta], abbr. V, unit of electric potential and electromotive force. It is defined as the difference of electric potential existing across the ends of a conductor carrying a constant current of 1 ampere when the power dissipated is 1 watt. - are detected in any clinical setting where titration titration (tītrā`shən), gradual addition of an acidic solution to a basic solution or vice versa (see acids and bases); titrations are used to determine the concentration of acids or bases in solution. of the heart rate is possible. The preparation for the test consists of placing proprietary sensors on a patient's chest. Extensive clinical research has shown that patients with symptoms of or, who are at risk of, life threatening arrhythmias who test positive for T-wave alternans are at significant risk for subsequent sudden cardiac events cardiac event Coronary event Cardiology Any severe or acute cardiovascular condition including acute MI, unstable angina, or cardiac mortality including sudden death, while those who test negative are at minimal risk. Statements contained in this press release about anticipated revenue growth, and all other statements that are not purely historical, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions under The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. In some cases, we use words such as "believes", "expects", "anticipates", "plans", "estimates", "could" and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements. Factors that may cause or contribute to such differences include customer delays in making final buying decisions, decreased demand for our products, failure to obtain funding necessary to develop or enhance our technology, adverse results in future clinical studies of our technology, failure to obtain or maintain patent protection for our technology, failure to obtain or maintain adequate levels of third-party reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for use of our products and other factors identified in our most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. under "Factors Which May Affect Future Results", which is on file with the SEC. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to do so, even if our estimates change. This press release is not an offer to sell or a solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy, nor shall there be any sale of, securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state of jurisdiction. -Financial information follows-
Cambridge Heart, Inc.
Financial Highlights
Statement of Operations Three months ended March 31,
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2006 2005
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Revenues $ 1,419,020 $ 1,009,483
Cost of goods sold 599,206 479,848
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Gross Profit 819,814 529,635
Costs and expenses
Research and development 157,752 212,777
Selling, general and administrative 1,307,309 1,254,167
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Total Operating Expenses 1,465,061 1,466,944
Loss from operations (645,247) (937,309)
Interest income 72,961 39,976
Change in valuation of Series B warrants (6,264,727) 1,047,301
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Net Loss $ (6,837,013) $ 149,968
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Net Loss attributable to common
shareholders $ (6,837,013) $ 149,968
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Net loss per common share - basic and
diluted $ (0.13) $ 0.00
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Weighted average shares outstanding -
basic and diluted 54,345,831 37,604,976
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Balance Sheet March 31, December 31,
2006 2005
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Assets
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Cash & Marketable Securities $ 9,148,295 $ 5,297,834
Accounts receivable, net 1,134,809 1,018,988
Inventory 384,313 419,938
Other prepaid assets 102,091 79,843
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Total current assets 10,769,508 6,816,603
Fixed assets, net 83,314 85,771
Other assets 102,803 112,182
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$ 10,955,625 $ 7,014,556
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Liabilities and stockholders' equity
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Accounts payable and accrued expenses $ 1,117,436 $ 774,185
Debt, current portion 1,052 1,577
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Total current liabilities 1,118,488 775,762
Debt, long-term portion - -
Series B warrant liability - 1,503,646
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Total liabilities $ 1,118,488 $ 2,279,408
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Convertible Preferred Stock - 1,504,287
Warrants to acquire Convertible
Preferred Stock 468,564 743,440
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$ 468,564 $ 2,247,727
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Stockholders' equity
Common stock $ 60,663 $ 46,301
Additional paid-in-capital 74,940,097 61,236,294
Accumulated deficit (65,632,187) (58,795,174)
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Total stockholders' equity 9,368,573 2,487,421
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$ 10,955,625 $ 7,014,556
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