LMS Third Quarter 2008 Financial Results - Q3 Revenue Increases 88% to $1.0 Million - YTD Revenue Increases 87% to $2...(007. Cash cash equivalents and short-...),Health

Cash, cash equivalents and short-term investments held to maturity, as at December 31, 2007 totaled $0.5 million compared to $3.38 million as at March 31, 2007. In addition, under our contract with a distributor, LMS is entitled to receive amounts for contracts contained in our backlog, described below. As at December 31, 2007, this amount, which does not qualify as a receivable under generally accepted accounting principles, amounted to $0.6 million and will provide short term additional liquidity. As such, the total cash, cash equivalents, short term investments and accounts receivable, including this amount, amounted to $1.8 million as at December 31, 2007.

THIRD QUARTER HIGHLIGHTS:

- In conjunction with a seasonally stronger spring quarter (Q4) and

corporate streamlining of operations, we anticipate reaching a cash

flow break even for the last quarter of the current fiscal year.

- Both the backlog of signed contracts and identified sales opportunities

were maintained at $4.6 million and $25 million, respectively.

- In total, we added six new hospitals to our client base as well as four

insurance contracts during the third quarter of fiscal 2008.

- We implemented a program to streamline operations, thus substantially

reducing LMS expenses with the objective of reaching near term positive

cash flow and ensuring profitability. There are reductions in

consulting expenses and salaries in research and development and other

non core expenditures. All operational, sales and core development

activities have been maintained. Also, management has demonstrated its

commitment to the future of LMS by making a collective decision to

temporarily suspend a portion of salaried compensation for the balance

of fiscal 2008. Upon meeting certain milestones, the board of directors

will have an option to pay the suspended salarie
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