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Signals appear to be the same on two different channels

* The stimulator creates a high impedance bridge between two catheter pins. If the stimulator is set up the pace catheter pins 1 and 2, the signal from one can be picked up on pin 2 if pin two is removed because there is a direct path through the stimulator at high impedance. This is in place to passively remove polarization from the pacing electrode.
* There is a short in the catheter connector, catheter, amplifier, amplifier cables or junction box.

Reinhard Schmidt Epmd

West Berlin, NJ (August 14, 2007)--EP MedSystems, Inc. (NASDAQ: EPMD),

Today reported its financial results for the second quarter ending June 30, 2007. Total revenues for the second quarter of 2007 increased 31% to $4,347,000 over second quarter of 2006 revenue of $3,312,000. Total revenues for the six months ended June 30, 2007 were $7,891,000, an increase of $501,000, or 7%, over the six months ended June 30, 2006. The 2006 period included approximately $705,000 of nonrecurring sales to our Japanese distributor.

Gross margin in the second quarter of 2007 increased 2 points to 64% compared to the second quarter of 2006. For the six months ended June 30, 2007, gross margin was 66% as compared to 62% in 2006. The increase in gross margin was partly attributable to higher average selling prices of our EP-WorkMate® platform sales integrated with our recently released NurseMate viewing station and MapMate interface features.

Reinhard Schmidt Ep Med Systems Signals appear for catheters that are not plugged in

* If you have no catheter plugged into 2 junction box pins and display the bipolar channel of those pins, you will get a slightly noisy signal, usually a flat line or wavy line. If a valid signal is put into the reference pin, the signal displayed for channels with no catheters can look like that reference pin signal except much noisier. If there are any other catheters plugged into surrounding channels, it can show parts of them as well. This is because the channels with nothing plugged into them are measuring voltages across infinite impedance. When you plug a catheter in, the impedance becomes 30-300 Ohms and it only shows the signals for the correct catheter and not other catheters. If you move your hand over the junction box, catheters that are plugged in will not display any induced signal where channels with no catheters will follow the motion of your hand. Thus during infinite impedance the channels are very good antennas for all noise and voltages in the proximity. In the background setup screen you can turn on the SHOW LEAD FAIL attribute to show which channels are connected and which are not.

Reinhard Schmidt Epmd


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