Financial Highlights:

Cost of Sales and Rental Income

For the Q1 2009, cost of sales and rental income was CAD5.8 million against CAD3 million for the same period in 2008, up CAD2.8 million or 93%. By excluding the CAD1.2 million impact of the reversal of a write-down to net realization value when there is a subsequent increase in the value of inventory as required by the implementation of CICA standard 3031 that was booked last year, the increase in cost of sales and rental income would be CAD1.6 million. The remaining increase is tied to the increase of sales and rental income and unfavorable foreign exchange fluctuations of CAD0.7 million.

Selling and Administrative Expenses

Selling and administrative expenses were CAD5 million for the Q1 2009, against CAD5 million for the same period in 2008. An increase of CAD0.3 million from bad debt expenses and unfavorable foreign exchange fluctuations of CAD0.6 million, were offset by CAD0.2 million due to lower recruiting costs, CAD0.1 million due to lower pension plan expenses, and CAD0.6 million decrease of salaries and fringe benefits due to the transition.

Research and Development Expenses

Research and development expenses were CAD0.8 million for the Q1 2009 against CAD0.9 million for the same period in 2008, down of CAD0.1 million or 11%. The decrease was due to an organizational restructuring which led to an overall decrease of salaries, fringe benefits, and less reliance on consultants for total amount of CAD0.2 million, partially offset by unfavorable foreign exchange fluctuations of CAD0.1 million.

Financial Expenses

Financial expenses were CAD1.1 million for the Q1 2009 against CAD0.7 million for the same period in 2008, up CAD0.4 million or 57%. The increase is related to higher average levels of indebtedness against last year, primarily from the issuance of new convertible notes in Q3 and Q4 of 2008.

Stock-based Compensation

Stock-based compensation expense, a non-cash item, was CAD0.1 million for the Q1 2009, same as the three-month period ended March 31, 2008.

Foreign Exchange Loss (Gain)

The foreign exchange gain for the Q1 2009 was CAD0.2 million against a CAD2.4 million loss for the same period last year. The gain was mainly due to the weakening of the Canadian dollar versus the Euro, particularly as it relates to translating our net monetary liabilities at current rates.

Income Taxes

The income tax expense for the Q1 2009 was negligible, as was the case for the tax credit for the same period last year.

Loss from Discontinued Operations

The losses from discontinued operations were CAD0.2 million against a loss of CAD1.7 million for the same period last year, a decrease of CAD1.5 million. The decrease in losses is mainly due to the exit from these discontinued operations, and the favorable impact of foreign exchange fluctuations of CAD0.3 million.

In the first quarter of 2009, Adaltis has achieved solid revenue growth from continuing operations, said Peter Bambic, president and chief executive officer of Adaltis. Revenue grew 35% against the first quarter of 2008, primarily on the strength of our infectious disease microplate product-line and Eclectica(tm) instruments in all focus geographies as well as a positive foreign exchange impact.

Bambic added The controlled re-launch of Eclectica(tm) continues to meet our internal expectations and preliminary results from our external evaluations are positive. First quarter revenues also benefited from the realization of multiple infectious disease tenders awarded to the Corporation throughout 2008. We are confident these trends will continue during the remainder of the year.

Bambic concluded that We believe first quarter results indicate that the Corporation’s strategy of focusing on high quality immunoassay and infectious disease IVD products, manufactured in a low-cost environment, and promoted by direct and distributor sales teams is beginning to see traction in the emerging markets that comprise the focus of our efforts.