CABG Medical Announces 2005 Results

MINNEAPOLIS, Feb. 27  /PRNewswire-FirstCall/ -- CABG Medical, Inc. (NASDAQ:CABG) today reported results for the year ended 2005.  Net loss for the year 2005 was $9.7 million, or $0.52, per share compared to a net loss of $3.5 million, or $0.34 per share, for the year ended 2004.  The 2005 net loss included research and development expense of $8,822,000 of which $4,363,000 was related to the Company's March 22, 2005 paclitaxel license agreement with Angiotech Pharmaceuticals, Inc.  The license agreement expense included a non-cash charge of $4,335,000 related to the issuance of equity securities to Angiotech.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20050114/CGF013LOGO )

As previously announced, the Company has ceased research and development activities associated with the Holly Graft System, terminated seven of its eleven full-time employees and has initiated the process for the formal liquidation and dissolution of the Company.  In parallel with the formal dissolution process the Company continues to evaluate strategic alternatives through its engagement with Goldsmith, Agio, Helms, a Minneapolis investment bank.  To date there have been no discussions with a potential acquirer that management believes could reasonably lead to an acquisition offer; and there is no assurance that an agreement resulting in an acceptable transaction will be entered into prior to shareholder approval of a dissolution.

The Company anticipates that in the event of a liquidation and dissolution, it will be able to distribute a total of approximately $1.20 per share to $1.47 per share in cash to shareholders.  Any such liquidation and dissolution would be subject to shareholder approval prior to the distribution of funds to shareholders.  It is anticipated that a special meeting of shareholders to approve a dissolution of the Company will be held on or about April 27, 2006.

The $1.47 per share amount represents the Board of Directors' estimate of the amount that could be distributed to the shareholders if: (i) the dissolution is approved by shareholders on or about April 27, 2006, (ii) there are no significant legal actions brought against us prior to effecting the dissolution and (iii) there are no other significant contingent obligations arising prior to the effective date of the dissolution.  The $1.20 per share amount represents the Board of Directors' best estimate of the distributions the shareholders could reasonably expect to receive in the event the dissolution process does not proceed as currently anticipated.  Currently, unforeseen patient or other legal claims, contingent obligations, larger than anticipated impairments and discounts on the sale of illiquid assets and larger than expected operational expenses may reduce the amount of cash available for distribution to a greater extent than we anticipate, and depending on their magnitude, could reduce the actual cash distribution to significantly lower than $1.20 per share.

                            CABG Medical, Inc.
                         Statements of Operations

                               (unaudited)

                            Three Months Ended
                               December 31,               Year Ended
                             2004        2005         2004         2005
                           (In thousands, except share and per share data)

  Revenue                    $21          $70          $21         $104
  Expenses:
    Research and
     development           1,007        1,312        2,647        8,822
    Marketing,
     general and
     administrative          400          605          996        2,105
  Total                    1,386        1,847        3,622       10,823
  Interest income             46          321           71        1,099
  Net loss               $(1,340)     $(1,526)     $(3,551)     $(9,724)
  Basic and diluted
   net loss per share     $(0.11)      $(0.08)      $(0.34)      $(0.52)
  Weighted average
   shares outstanding
   - basic and
   diluted            11,773,524   19,493,785   10,298,639   18,624,697



                            CABG Medical, Inc.
                              Balance Sheets

                               (unaudited)

                                                 December 31,   December 31,
                                                    2004            2005
                                                       (In thousands)

  Assets

  Current assets:
  Cash and short term investments                  $28,936        $32,648
  Other current assets                                 291            615
  Total current assets                              29,227         33,263
  Property and equipment, net                          199             70

  Total assets                                     $29,426        $33,333

  Liabilities & Stockholders' Equity

  Current liabilities:
  Accounts payable                                    $841           $647
  Accrued liabilities                                   19             48
  Total current liabilities                            860            695
  Total stockholders' equity                        28,566         32,638
  Total liabilities and stockholders' equity       $29,426        $33,333


First Call Analyst: 

FCMN Contact: [e-mail] 

http://www.newscom.com/cgi-bin/prnh/20050114/CGF013LOGO

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DATASOURCE: CABG Medical, Inc.



CONTACT: Manny Villafana, Chairman & CEO, or, John L. Babitt, President &

CFO, both of CABG Medical, Inc., PHONE, [phone], FAX, [phone]



Web site:  http://www.cabgmedical.com/

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