The Company reported total revenue of $232,493 in the second quarter ended December 31, 2001, relating to sales of its HDI/PulseWave™ CR-2000 Research CardioVascular Profiling System and “per-patient-tested” revenue derived from the CVProfilor^® DO-2020 System. Revenue in the prior year’s comparable second quarter totaled $1,204,500, which related solely to sales of the CR-2000 Research System. The Company incurred a net loss of $(1,200,638) in the quarter ended December 31, 2001, or $(.20) per share, compared with a net income of $1,510 in the quarter ended December 31, 2000 or $.00 per share. For the six month period ended December 31, 2001, total revenue was $324,208, compared to $1,653,304 for the same period one year ago.

Reductions in comparative revenue between fiscal year 2001 and fiscal year 2002 relate to the Company’s planned conversion from capital sales of its “research use only” HDI/PulseWave™ CR-2000 System in fiscal year 2001 to its “per-use” revenue model associated with physician use of its FDA-cleared CVProfilor^® DO-2020 System in fiscal year 2002. The CVProfilor^® DO-2020 was launched late in the 3rd Quarter of fiscal year 2001 (March 2001) and had its first reported revenue in the 1st Quarter of fiscal year 2002 which ended September 30, 2001. 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 CVProfilor^® DO-2020 System utilization continues to gain momentum as do System placements which totaled 83 in the quarter ended December 31, 2001. As of December 31, 2001, the CVProfilor^® was being used in 23 states throughout the U.S. “In support of the CVProfilor^® DO-2020 System launch, we are continuing to build a distribution network that consists of direct sales managers and independent manufacturer representatives,” said Greg H. Guettler, President. “I am pleased to report that we now have a total of 12 U.S. independent representative organizations, four of which were added in the 2nd Quarter, including:

• Family Doc Enterprises of Bakersfield, California – a firm that focuses exclusively on the CVProfilor^® System in several southern California counties;

• Focus Medical, Inc. of Loveland, Ohio – a firm that specializes in cardiac monitoring products in southern Ohio and Kentucky;

• Loos Vascular Products of Stillwell, Kansas – a firm that specializes in vascular and diabetic products in Kansas and Missouri; and

• Mountain Medical Systems of Murry, Utah – a firm that specializes in diagnostic medical equipment serving Colorado, Idaho, Montana, Utah, Wyoming and several counties in southern Nevada, southern California and northern Arizona.”

The Company also reported that it continues to make progress regarding reimbursement for physician use of the CVProfilor^®. Of the 23 States in which the CVProfilor^® is being utilized, physicians are currently being reimbursed in 10 States and efforts to secure reimbursement are underway in the remaining States. Reimbursement will always vary considerably by the patient’s medical necessity, by physician, by provider, by geography and by provider coverage plans, making the process of obtaining reimbursement for the CVProfilor^® by current physician customers an important component in the Company’s roll-out. “Many of our physician customers are generating acceptable levels of reimbursement and we are continuing to invest considerable energy into activities such as payer advocacy and coding clarification directed at long-term reimbursement in our target markets,” said Guettler. “Our consultant reimbursement specialists will continue to assist physicians with the ongoing process of insurance billing procedures, and they are working closely with HDI’s personnel to facilitate reimbursement coverage and payment on a nationwide basis,” added Guettler.

“The Company’s number one goal remains focused on achieving a cash-flow break-even position as quickly as possible,” said Guettler. “This will be achieved quickest through adherence to marketing fundamentals: appropriate placements of product, reimbursement assistance, customer utilization support, and collection of receivables. Early in the CVProfilor^® launch, we reported plans to have CVProfilor^® System placements in 25 major U.S. markets by June 30, 2002, the end of fiscal year 2002. Given the current economic environment and current cost of capital, the Company’s investment in sales force expansion, physician marketing, consumer marketing and third-party reimbursement support will continue at more modest levels until such time as additional working capital can allow a more aggressive implementation of our business plan.”

View/download Q2 2002 Results in .pdf format

Hypertension Diagnostics, Inc. designs, develops, manufactures and markets proprietary cardiovascular profiling systems for medical applications and clinical research. These systems are marketed to physicians, other health care professionals and researchers by a direct sales force and via distributors throughout the world. In addition to providing blood pressure values, the systems non-invasively detect subtle changes in the compliance or elasticity of both large and small arteries which is a unique feature of HDI’s technology.
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