Intelligent Medical Imaging, Inc. Announces Distribution Agreement With Beckman-coulter Involving IMI's Hematology Slide Master - HSM.

PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--Dec. 17, 1998-- Intelligent Medical Imaging, Inc. (Nasdaq:IMII) announced today that it has entered into a distribution agreement with Beckman-Coulter involving Intelligent Medical's blood slide maker, the Hematology Slide Master(tm) (HSM(tm)).

The non-exclusive distribution agreement has a term of ten years and allows Beckman-Coulter to obtain the HSM on a volume discount basis for re-sale to its customers. Domestically IMI will have prime responsibility for customer support, with Beckman-Coulter field support personnel providing installation and field maintenance services on a fixed fee basis. In foreign markets, Beckman-Coulter will have total responsibility for customer support. Beckman-Coulter will recommend IMI as the sole source for consumables on all HSMs it sells, domestically and overseas. Beckman-Coulter has placed an initial order for HSMs.

Tyce Fitzmorris, Intelligent Medical Imaging's Chairman, Chief Executive Officer and President stated, "We are pleased to have re-established a relationship with Beckman-Coulter. This agreement supports IMI's strategic plan to achieve worldwide distribution of IMI products and establish a recurring revenue base. In addition to revenue from HSM purchases, IMI will receive recurring revenue by serving as the recommended source for consumables used on HSMs sold by Beckman-Coulter worldwide and through maintenance fees associated with IMI providing primary customer support for HSMs placed domestically by Beckman-Coulter. We look forward to having Beckman-Coulter's service organization, which has been ranked No. 1 within the industry, provide field maintenance service for the HSM."

Annually, the blood analysis process is performed billions of times worldwide. This process involves analysis of blood in its liquid state by hematology analyzers, such as Beckman-Coulter's GenS. Based on the hematology analyzer results, a blood slide is often prepared and in turn examined under the microscope to confirm hematology analyzer results and/or provide more definitive information.

The GenS offers an integrated automated blood slide making capability that is reflexed by GenS findings. This integrated capability improves the labs' operational efficiency and eliminates the significant labor and contamination exposure associated with the manual blood slide making process. Beckman-Coulter plans to offer the HSM primarily at installations involving multiple GenSs.

Mr. Fitzmorris continued, "Total automation of the blood analysis process will involve the integration of a hematology analyzer, automated blood slide maker and automated microscopic review. The HSM was specifically designed to inter-link with the MICRO21(R) automated microscopic review system. Consequently, a MICRO21 could be readily integrated with a GenS-HSM to provide a totally automated blood analysis process. We believe this will be the inevitable market requirement for the blood analysis process because it best meets the labs' objective of reducing labor costs, improving operational efficiency and quality of results. We will be working with Beckman-Coulter to provide the totally automated blood process, the integrated GenS-HSM-MICRO21."

Intelligent Medical Imaging, Inc. developed and markets the MICRO21 System, an intelligent, automated microscope system, the HSM, an automated blood slide maker and the USM(tm), an automated urine slide maker for diagnostic use in hospitals, commercial reference, physician group practice laboratories and pharmaceutical and veterinary laboratories.

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The foregoing press release includes "forward-looking statements" within the meaning of and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company or events, or timing of events, relating to the Company to differ materially from any future results, performance or achievements of the Company or events, or timing of events, relating to the Company expressed or implied by such forward looking statements. Such factors include, among others: the potential delays in the Company's achievement of substantial market penetration and widespread acceptance of the MICRO21 system; the potential failure of the Company's sales team, Bayer Corporation and Coulter or other distributors to sell MICRO21 systems or HSMs in amounts sufficient to help the Company achieve its sales goals: the need for the Company to raise additional capital to finance operations in the near-term, through debt or equity, and the inability to provide assurances that such capital will be available or available on terms favorable to the Company; uncertainty as to the ability of the Company to achieve sales and marketing goals following implementation of the Company's cost reduction program, including reduction in sales and marketing personnel, due to the decrease in personnel and the possible adverse impact on potential customer perception of the Company; uncertainty due to industry consolidation and customer budget processes and restrictions; and the possibility that agreements with strategic partners will not result in significant improvements in results. The Company cannot assume that it will be able to anticipate or respond timely to any of the factors listed above, which could adversely affect operating results.