Mr. David Gane reports

LED MEDICAL DIAGNOSTICS INC. REPORTS 2016 SECOND QUARTER RESULTS

LED Medical Diagnostics Inc. has released its financial results for the second quarter ended June 30, 2016, reported in U.S. dollars and in accordance with international financial reporting standards (IFRS). The company's results are presented in comparison with the second quarter ended June 30, 2015. All balances are expressed in U.S. dollars unless otherwise stated.

Financial highlights

Net revenue for the three months ended June 30, 2016, was $3,661,490, which is an increase of 12 per cent from the three months ended June 30, 2015. This revenue increase was largely due to timing of when imaging orders were received and could be shipped and by increased demand for VELscope and VELscope consumable sales.

The net loss before taxes for the three months ended June 30, 2016, was $1,082,831, compared with the net loss before taxes for the three months ended June 30, 2015, of $1,205,742. The decrease of operating loss is mainly attributable to higher revenue levels and lower operating expense than in 2015. These favourable profit items were partially offset by higher stock option expense, interest expense and the absence of gains on the fair value of Canadian warrants.

Cash flow used in operations was $1,505,387 during the six months ended June 30, 2016, compared with cash flow used in operations of $3,086,535 during the six months ended June 30, 2015. There were no inflows from financing for the six months ended June 30, 2016, as compared with $2,241,516 of cash inflows from the financing activities for the six months ended June 30, 2015.

Cash and net working capital deficit balances as of June 30, 2016, are $364,362 and $1,998,588, respectively. Net working capital is defined as total current assets less total current liabilities.

Financial statements and management discussion and analysis

Please see the interim condensed financial statements and related management discussion and analysis for more details. The interim condensed financial statements for the three months ended June 30, 2016, and related management discussion and analysis have been reviewed and approved by the company's audit committee and board of directors. The company has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the management discussion and analysis. These reports have been filed on SEDAR and also posted to the company's website.

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