Financial Results

We have just released our strong year-end audited results for fiscal 2006, covering the period from October 1, 2005 to September 30, 2006. Pyng achieved record sales of $3 million, a 7% increase over the previous year, despite the downward pressure of unfavorable exchange rates. Our gross margin continues to be strong at 68% of sales, which places us amongst the highest margin companies in our industry. We increased our operating expenditures by $180K, reflecting our increased commitment to marketing and product advancement.

Our working capital position at year-end is very strong at $840K, with cash in-flows of $414K from operating activities. Earnings before interest, taxes, depreciation and amortization were $340K, or 11.3% of sales. We have a $500K unutilized line-of-credit and, subsequent to year end, we paid off the balance of our bank loan. As of December we are debt-free.

Our unaudited first quarter sales results were very strong, reaching $970K, our strongest quarter on record for the first half of our fiscal year, more than double our prior year first quarter results. This dramatic sales increase reflects our increased activity in the Emergency Medical Services and Department of Defense markets in the US, as well as expanded international activity. We believe that the updated ILCOR (International Committee On Resuscitation) guidelines from November of 2005 are beginning to impact market awareness. These changes recommend intra-osseous infusion as the first alternative to intravenous (IV) infusion, whenever an IV cannot be started for any reason.

Full audited financial results for fiscal 2006 are available on SEDAR.

Highly Qualified CEO Joins the Pyng Team

Executive search firm Caldwell International completed their international search for a world-class medical device CEO to lead Pyng in to a new phase of growth and expansion.

David Christie is excited to be on board, bringing considerable experience in over a dozen successful medical device launches, including facilitating a major acquisition in a start-up public company, and leading the growth from zero revenue to revenue in excess of $15 million. For David’s full biography, please visit our online management team bio.

The addition of David completes the enhancement process, rounding out our management team with a full complement of credentialed, experienced, in-house professionals for all the critical functions of our business.

FAST1™ Creates a Buzz at SOMA and Medica

Pyng attended the Special Operations Medical Association annual meeting in Tampa in early December. This is the premier conference for suppliers to the US Department of Defense (DOD), and Pyng was well represented by Dr. Richard Clinchy, Director of Business Development, Cynthia Wells, Clinical Support Specialist, and David Christie, President and Chief Executive Officer. Our booth was strategically positioned beside BoundTree Medical, our DOD distributor, and the largest and strongest pre-hospital distributor in the US. With Pyng’s FAST1™ written into the DOD Standard Operating Procedures, our device is routinely deployed in the battlefield for any casualty requiring fluid and/or drug administration, without first attempting intravenous access. Commander Dr. Alan Moloff, Pyng Director and President of SOMA addressed the troops at the commemorative dinner that recognizes all those who have fallen in the line of duty. Pyng was honored to attend.

We also stepped into the European market by attending Medica, the largest medical industry conference each year in Europe, and a must-attend for new entrants to the market. Our attendance has resulted in the addition of numerous distributors, expanding our coverage and giving us a foothold in Germany, Austria, Switzerland, the Benelux countries, Scandinavia, UK, Turkey and Poland. Many of these distributors are well-positioned with the military, and in NATO countries, where we expect to duplicate the success in introducing FAST1™ that we have experienced with the UK Ministry of Defense. Pyng has ambitious plans to expand internationally, so look for more news next quarter.

CEO Interview With the Wall Street Reporter

Visit the Wall Street Reporter website for a live interview with David Christie, outlining our strategy and expansion plans for this and coming years. Expect a higher profile from Pyng as we raise awareness in the investment community, communicate our new approach, and build confidence by delivering on our commitments.

Strategic Planning Process

The Pyng management team left the premises for two days in mid-January to focus on the first of three meetings to flesh out the details of our strategic plan. This initiative is critical for us as we plan our expansion and diversification strategy. Plans include diversifying by product, clinical market, and geographic market.

Intraosseous infusion is a growing and healthy market to be in today. The FAST1™ is central to the resuscitative care of patients, and provides a logical foundation around which to build a suite of products. Our intention is to leverage our strong core product, our very successful domestic and international distribution, and become a world-class company in the field of resuscitative care, decreasing morbidity and mortality in the pre-hospital and hospital settings.

Feedback From the Field

“In early September 2006 my crew and I responded to a report of an 18 year old having a seizure. Upon our arrival we found that our patient was not having a seizure but was in cardiac arrest. Two bystanders were performing CPR and reported to us that the down time of the patient had been approximately 5-7 minutes.

The patient was pulse less and apneic with signs of cyanosis around the lips. While the monitor was being established and the defibrillator pads were being positioned I was able to place the FAST1 ™. My EMT handed me the flooded IV line with 1liter of NS infusing wide open.
Through a series of medication administrations and defibrillations the patient was revived within 5-6 minutes of being on scene.

Over the last 2 years I have had the opportunity to use the FAST1™ on multiple patients that required ALS interventions. I have found the FAST1™ to be extremely effective and user friendly. It has been absolutely amazing how rapid venous access can be established. It is especially beneficial in patients that have cardiovascular compromised physiology, or a multitude of any other extreme medical emergencies that requires intravenous medicines and fluids. The FAST1™ has saved many lives and will save many more. This has been an excellent advancement in the pre-hospital care that we can provide to patients. Everyone benefits especially the people that we are caring for and treating.”

Jason LeMoine EMT-P, RN
Alameda County Fire Department