Revenue in the prior year’s comparable third quarter totaled $303,500 relating to the HDI/PulseWave™ CR-2000 Research CardioVascular Profiling System. The Company incurred a net loss of $(1,312,795) in the quarter ended March 31, 2002, or $(.22) per share, compared with a net loss of $(757,129) or $(.14) per share in the quarter ended March 31, 2001. For the nine month period ended March 31, 2002, total revenue was $419,308, compared to $1,956,804 for the same period one year ago.

Reductions in comparative revenue between fiscal year 2001 and fiscal year 2002 relate to the Company’s focus away from solely capital sales of its “research use only” HDI/PulseWave™ CR-2000 System in fiscal year 2001 to a combination of CR-2000 System sales and rental revenue from its “per-use” revenue model associated with physician use of its FDA-cleared CVProfilor^® DO-2020 System in fiscal year 2002. Although the Company continues to balance marketing the HDI/PulseWave™ CR-2000 on a capital sales basis with the CVProfilor^® DO-2020 on a “per-patient-tested” basis, it expects that its “per-use” marketing of the CVProfilor^® DO-2020 will ultimately produce the majority of the Company’s revenue.

The Company also reported that it had 86 CVProfilor^® DO-2020 System placements as of March 31, 2002 and that CVProfilor^® DO-2020 utilization by physicians continues to increase, based on the previous four quarters. The Company continues to see acceptable levels of reimbursement in several areas of the country and continues to focus on long-term reimbursement strategies. The CVProfilor^® DO-2020 System is currently being utilized in 23 States and physicians are obtaining reimbursement for the use of the technology in 10 States. “In line with our previous statements, we continue to focus our efforts on strengthening existing customer relationships and on obtaining new physician customers who specialize in treating patients with hypertension or diabetes. Although full implementation into physician clinics has taken more time and resources than originally anticipated due to time delays in verifying reimbursement and integrating the CVProfilor^® DO-2020 into clinic operations, we commenced focusing our resources on several specific regional markets which we believe are more likely to generate higher levels of acceptance of the CVProfilor^® Systems by physicians and a greater amount of reimbursements by third party payors to such physicians,” said Greg H. Guettler, President.
Efforts are also underway to focus more directly on the consumer marketplace. “Consumers are very interested in the information produced from the CVProfilor^® DO-2020 as evidenced several times by the long lines of visitors at HDI’s exhibition booths. We believe that consumer acceptance will help to accelerate CVProfilor^® DO-2020 System placements in physicians’ offices,” said Guettler.

In March 2002, the Company placed $2,000,000 in convertible debt through a private placement of 8% Convertible Notes in the principal amount of $2,000,000 and warrants to purchase 250,000 shares of its Common Stock. As of March 31, 2002, the Company had cash and cash equivalents of $2,559,701, and anticipates that these funds, in conjunction with revenue anticipated to be earned from placements of CVProfilor^® DO-2020 Systems, anticipated sales of CR-2000 Research Systems, as well as anticipated operating cost reductions, are estimated to allow the Company to pursue its business development strategy for approximately the next twelve months. The Company is currently conserving cash through reduction in selling, general and administrative expenses to improve working capital management. The Company is also seeking additional financing for working capital and is considering all possible financing alternatives.

View/download Q3 2002 Results in .pdf format

Forward-looking statements in this press release are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company wishes to caution readers not to place undue reliance on any forward-looking statements and to recognize that the statements are not a prediction of actual future results. Actual results could differ materially from those presented and anticipated in the forward-looking statements due to the risks and uncertainties set forth in the Company’s 2001 Annual Report on Form 10-KSB, under the caption “Risk Factors,” as well as others not now anticipated.

CVProfilor is a registered trademark of Hypertension Diagnostics, Inc.
  
Hypertension Diagnostics, HDI/PulseWave, PulseWave and CVProfile are trademarks of Hypertension Diagnostics, Inc. All rights reserved.

Investor Relations: Jens Dalsgaard and Tony Altavilla,
Managing Directors
Redwood Consultants, LLC
Mill Valley, CA 94941
415-380-0500

Contact: Greg H. Guettler, President