Mr. Gerald Slemko reports

ANNIDIS CORPORATION REPORTS 2014 THIRD QUARTER RESULTS

Annidis Corp. has released its financial results for the three-month and nine-month periods ended Sept. 30, 2014. The unaudited condensed consolidated financial statements for the three and nine months ended Sept. 30, 2014, and the related management's discussion and analysis are available at SEDAR.

"We are pleased to announce that our accumulative revenue year to date surpassed the previous full-year performance of the company by almost 70 per cent," said Gerald Slemko, chief executive officer of Annidis. "During the quarter, our gross margin was also significantly improved, primarily due to higher average price [of] each unit [that] was sold, and lower average cost of the units, due to the rollout of our new gold machine.

"We continue to see significant opportunity in the Chinese market for our instruments," continued Mr. Slemko. "Through our distribution partner, Yimai and their affiliate NIMO, we have begun to sell our instruments in the Chinese market. We also continue to develop our international distribution strategy, and we are currently in discussion with potential partners in other countries to expand our footprint in other high-growth markets."

Highlights:

• During the third quarter of 2014, the company sold eight units compared with one unit in the corresponding quarter of 2013. While sales were less than budgeted, the company has never been better positioned to win orders from major North American and Chinese customers. During the quarter, the company received China Food and Drug Administration approval for its RHATM gold multispectral imaging instrument to be sold to eye-care professionals in the Chinese market.
• Concurrent with receiving CFDA approval, Annidis received a purchase order for 20 RHA instruments from its Chinese distribution partner, Yimai.
• The company anticipates significant demand for its technology in the Chinese market, with an estimated market size of 1,500 to 2,000 instruments.
• Annidis improved gross margin through development of the latest gold model of the RHA instrument, which the company started shipping in June. The new model incorporates a 21-per-cent reduction in manufacturing costs, as well as additional features, adding to the utility of the instrument.
• The company's new RHA platinum, targeting the ophthalmology market, is progressing well in clinical studies. Early indications are extremely positive, and continue to show results that are significantly superior to traditional technology available in the market.
• Annidis is advancing negotiations with potential partners on a number of opportunities central to Annidis's world-leading MSI technology.
• The company continues to invest significantly in the sales and marketing efforts, building relationships with buying and support groups in the eye-care space. This provides a forum to present to larger audiences and leverage the sales effort.
• The company continues to focus on building its back order position, thus moving toward profitability. The company currently has confirmed orders for 47 instruments to be delivered over the next few quarters.
• The company believes that its technology is leading edge and has obtained endorsements of the product's capabilities from key opinion leaders in both the optometry and ophthalmology fields.

                     KEY FINANCIAL METRICS
                                            Q3 2014           Q3 2013

Installed base (as at Sept. 30)                  67                38
Revenue                                    $480,218          $255,096
Net (loss)                              $(1,240,943)      $(1,113,439)

Financial highlights:

• Revenue grew by 88 per cent to $480,218 for the three months ended Sept. 30, 2014, compared with $255,096 for the same period in 2013.
• Cost of sales was $364,944 for the three months ended Sept. 30, 2014, compared with $206,295 for the same period in 2013.
• General and administrative expenses were $343,166 for the three months ended Sept. 30, 2014, compared with $221,323 for the corresponding period in 2013.
• Research and development expenses were $268,121 for the three months ended Sept. 30, 2014, compared with $222,746 for the same period in 2013.
• Net loss was $1,240,943 (one cent per share) for the three months ended Sept. 30, 2014, compared with a loss of $1,113,439 (two cents per share) for the same period in 2013.
• Net cash used in operating activities was $475,239 for the three months ended Sept. 30, 2014, compared with $765,908 for the corresponding period in 2013.
• As at Sept. 30, 2014, the company's cash position was $84,666, compared with a cash position of $1,854,534 at Dec. 31, 2013.

                      REVENUE BY SOURCE AND BY GEOGRAPHY
       
                                            Three months ended       Nine months ended 
                                                  Sept. 30,                Sept. 30,      
                                              2014        2013        2014        2013
Revenue by source
Sales                                     $375,727    $170,003  $1,540,845    $488,156
Rentals, support and maintenance fees      110,730      87,654     290,867     251,368
Incentives, rebates and other               (6,239)     (2,561)    (20,523)      7,439
Total                                     $480,218    $255,096  $1,811,189    $746,963
Revenue by geography
United States                             $264,970   $  90,020  $1,108,847    $457,877
Canada                                      47,248     123,076     198,342     247,086
China                                      168,000      42,000     504,000      42,000
Total                                     $480,218    $255,096  $1,811,189    $746,963

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