Physiometrix, Inc. Announces Third-Quarter Financial Results

Physiometrix, Inc. Announces Third-Quarter Financial Results
Company continues market penetration and increased sales to end-users of its'
PSA 4000 level of sedation monitors 


NO. BILLERICA, Mass., Nov. 4  /PRNewswire-FirstCall/ -- Physiometrix, Inc.
(NASDAQ:PHYX) announced today financial results for the third quarter ended
September 30, 2004.  For the third quarter ended September 30, 2004, revenues
were $438,000 compared with revenues of $609,000 for the same period in 2003.
The net loss for the third quarter of 2004 was $(1,511,000), or $(0.11) per
share compared to the prior year net loss of $(1,124,000), or $(0.13) per
share. For the nine months ended September 30, 2004, revenues were $1,466,000
compared with revenues of $1,048,000 for the same period in 2003. The net loss
for the nine months ended September 30, 2004 was $(5,173,000), or $(0.38) per
share compared to a net loss of $(3,608,000), or $(0.43) per share for the same
period in 2003. The increase in the net loss for the nine months ended
September 30, 2004 over the same period in 2003 was primarily due to the
inclusion of a non-cash expense in the amount of $1.1 million in the first
quarter of 2004 associated with a warrant derivative related to the
registration of shares of Common Stock in connection with its' PIPE
transaction.

"Physiometrix's momentum, increased market penetration and sales of our PSA
4000 level of sedation monitor continued throughout this quarter. In fact, the
third quarter was the best yet for total sales to hospitals of monitors and
arrays through Baxter. Underscoring that momentum, during last week's American
Society of Anesthesiologists meeting, an accelerated time line was announced by
the task force on brain monitoring to publish a draft "practice parameter" as
early as March 2005. In our judgment, this finally elevates intra-operative
brain monitoring to a favorable, clinically significant role. Our shareholders
should know that Physiometrix was asked to formally present relevant issues to
the task force members," said John A. Williams, Physiometrix's President and
Chief Executive Officer. " The decline in our revenues to Baxter this quarter
resulted from Baxter's decision to focus on converting the approximately 165
hospitals that are currently in clinical evaluations, to purchases or leases. 
As a result, Baxter's requirements for new PSA 4000 monitors declined from the
preceding quarter," Williams continued.

Physiometrix will hold a telephone conference call to discuss third- quarter
2004 financial results, as well as management's comments related to the
Company's business, at 11:00 A.M. (Eastern) today, November 4, 2004. The call
can be accessed at 800-465-7133  (conf. ID # 1461954). A replay of today's
conference call will be available after conclusion of today's conference call
until 11:59 P.M. (Eastern) on November 12, 2004.  Replay callers in the U.S.
must dial 800-642-1687 (conf. ID # 1461954).

Physiometrix Inc. designs, manufactures and markets noninvasive medical
products -- based on novel gel materials, sophisticated signal-processing
electronics technologies, and proprietary software -- for use in anesthesia-
monitoring during surgical procedures.  For more information, please visit the
Company's Web site at http://www.physiometrix.com/.

Statements in this press release regarding Physiometrix's growth and future
business results of the Company are "forward-looking" statements as defined in
the Private Securities Litigation Reform Act of 1995.  Such statements are
based upon management's current expectations and are subject to a number of
factors and uncertainties.  Information contained in these forward-looking
statements is inherently uncertain, and actual performance and results may
differ materially due to many important factors.  Such factors that could cause
actual results to differ materially from any forward-looking statements made by
the Company include, among others, revenue estimates, dependence on existing
and future products, dependence upon third-party distribution and sales
arrangements, the existence of alternative technologies and the potential
emergence of new methods for consciousness monitoring, uncertainty of market
acceptance, intense competition, partnership agreements, and government
regulations, especially regulatory approvals.  These and other relevant risks
are described in the Company's Form 10-K dated March 30, 2004 filed with the
SEC.  The Company disclaims any obligation to update information contained in
any forward-looking statement to reflect events or circumstances occurring
after the date of this press release.

  Physiometrix, Inc.
  Condensed Statements of
  Operations
  (Unaudited)

                             Three Months Ended        Nine Months Ended
                               September 30               September 30
                            2004         2003         2004         2003

  Revenues              $437,791     $609,095   $1,466,108   $1,048,363

  Costs and expenses:
  Cost of goods sold     510,085      657,332    1,549,176    1,328,578
  Research and
   development           542,933      391,822    1,329,305    1,189,246
  Selling, general,
   and administrative    908,430      685,731    2,761,836    2,156,304
  1,961,448            1,734,885    5,640,317    4,674,128
  Operating loss      (1,523,657)  (1,125,790)  (4,174,209)  (3,625,765)

  Other income (expense):
  Change in fair value
   of warrant derivative       -            -   (1,046,080)           -

  Interest income, net    12,829        1,537       46,927       17,614

  Net loss           $(1,510,828) $(1,124,253) $(5,173,362) $(3,608,151)

  Net loss per share      $(0.11)      $(0.13)      $(0.38)      $(0.43)

  Shares used in
   computing net
   loss per share     13,654,266    8,422,994   13,569,233    8,422,994



  Physiometrix, Inc.
  Condensed Balance Sheet
  (Unaudited)
                                              September 30    December 31
                                                      2004           2003

  ASSETS

  Current assets:
  Cash, cash equivalents and short
   term investments                             $3,770,488     $7,626,049
  Other current assets                             466,842        966,484
  Total current assets                           4,237,330      8,592,533

  Property, plant and equipment, net               127,570        179,668

  Total assets                                  $4,364,900     $8,772,201


  LIABILITIES AND STOCKHOLDERS'
  Equity (Deficit)
  Current liabilities:
  Accounts payable and accrued expenses           $774,769       $971,281
  Warrant derivative contract                            -     11,342,730
  Total current liabilities                        774,769     12,314,011

  Total stockholders' equity (deficit)           3,590,131    (3,541,810)

  Total liabilities and stockholders'
   equity (deficit)                             $4,364,900     $8,772,201


   CONTACT:
   Daniel W. Muehl, CFO
   Physiometrix Inc.
   978-670-2422


DATASOURCE: Physiometrix Inc.



CONTACT:  Daniel W. Muehl, CFO of Physiometrix Inc., [phone]



Web site:  http://physiometrix.com/

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