Longport, Inc. announces financial results for fourth quarter and year end 2004

20 April 2005

GLEN MILLS, Pa., USA. Longport, Inc. (OTCBB:LPTI), a medical technology specialist in high resolution ultrasound imaging, has announced its financial results for the fourth quarter and year ended December 31, 2004.

Revenues for the year ended December 31, 2004, were $2.5 million compared to $500,000 for 2003. This increase is primarily due to the increase in sales of the Company's scanner device of over $2.0 million. In addition, the Company recorded approximately $150,000 of income from the sale of exclusive marketing rights in the wound-care market but saw a reduction of contract revenue of $248,000 as a state research grant ongoing in 2002 and 2003 ceased in mid-2003.

Total operating expenses for 2004 were $2.7 million compared to $1.4 million for 2003. This increase is primarily due to additional costs associated with the increased sales activity (cost of sales increased by approximately $880,000) as well as an increase of approximately $759,000 in general and administrative costs associated with the additional activities being conducted by the Company in 2004. The Company believed that there will be additional costs in 2005 associated with clinical research studies utilizing the Scanner for specific medical applications.

The Company recorded an impairment loss of roughly $165,000 related to an investment made in 2000. Interest expense for 2004 was approximately $178,000 as compared to around $130,000 for 2003. During the third quarter of 2004, the Company repaid all of its long-term debt. The Company had a net loss of $634,000 for 2004 compared to a net loss of $928,000 for 2003.

Michael Boyd, CEO of Longport, said, "These results show progress toward profitability, and we are continuing to develop the infrastructure and personnel to build upon the increased business activity. We have established a multi-step plan that includes the hiring of a national Sales and Marketing Director with significant sales distribution experience to further expand our sales activities. We are pursuing direct sales opportunities that do not conflict with existing distributors as well as seeking additional national and regional distributors. To support those efforts and continue raising our profile, we are attending selected national conferences."

Boyd added, "In the near future, we may seek an infusion of operating capital via the issuance of short-term debt, and obtain additional equity capital through the sale of common and/or preferred stock as well as the exercise of existing warrants and options."

Revenues for the quarter ended December 31, 2004, were $585,000 compared to just $120,000 in the same period prior year. Total operating expenses for the fourth quarter of 2004 were $673,000 compared to $344,000 in the same period of 2003. The loss for the fourth quarter of 2004 was $53,000 compared to $199,000 in the last quarter of 2003.

Boyd concluded, "In March 2005, we terminated the US MedSys distribution agreement, due to their non-compliance, including defaulting on their purchasing obligation in the fourth quarter of 2004; subsequently, Longport also failed to meet its revenue expectations in this quarter. The effects of this situation will continue to be felt in the first and second quarters of 2005, until alternative distributors are put in place. We are also in continuing discussions with US MedSys with respect to creation of new distribution agreement. At this point, I can state that Longport's first quarter 2005 revenue looks to be in the region of $375,000, but this is predominated by the recognition of payments from the former US MedSys agreement."

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