BSD Medical Announces Third Quarter Fiscal 2012 Financial Results

BSD Medical Corporation (NASDAQ:BSDM) (Company or BSD) ( www.BSDMedical.com), a leading provider of medical systems that treat cancer and benign diseases using heat therapy, today reported financial results for its third fiscal quarter ended May 31, 2012, including:

• Cash and cash equivalents of $12.7 million
• No debt
• Total stockholders’ equity of $16.3 million
• Total revenues of $1,582,268 for the nine months ended May 31, 2012 compared to total revenues of $2,626,901 for the nine months ended May 31, 2011
• Total revenues of $651,387 for the three months ended May 31, 2012 compared to total revenues of $1,675,477 for the three months ended May 31, 2011
• Net loss of $2,097,854 for the three months ended May 31, 2012 and $5,887,857 for the nine months ended May 31, 2012
• Net cash used in operating activities of $4,302,625 for the nine months ended May 31, 2012

“We are pleased to report increasing revenues from sales of disposable SynchroWave antennas combined with highly profitable equipment rental fees for our MicroThermX ^® Microwave Ablation System (‘‘MicroThermX’’),” said Harold Wolcott, President of the Company. “However, revenues in the current fiscal year have been less than in the prior fiscal year primarily due to the sale of fewer hyperthermia systems. The worldwide economic downturn and the uncertainty in the U.S. medical industry resulting from potentially significant governmental healthcare reform continue to negatively impact the sales of our hyperthermia systems, the market introduction of our MicroThermX ^®, and our operating results. Our focus is on the expansion of a fee-per-use equipment rental program for our MicroThermX ^® in an effort to accelerate revenues, and we believe that program will produce successful results throughout the United States. We have a strong balance sheet, no debt, and believe we are sufficiently capitalized to continue our sales and marketing and product development efforts.”

About BSD Medical Corporation

BSD Medical Corporation develops, manufactures, markets and services systems to treat cancer and benign diseases using heat therapy delivered using focused radiofrequency (RF) and microwave energy. BSD’s product lines include both hyperthermia and ablation treatment systems. BSD’s hyperthermia cancer treatment systems, which have been in use for several years in the United States, Europe and Asia, are used to treat certain tumors with heat (hyperthermia) while increasing the effectiveness of other therapies such as radiation therapy. BSD’s microwave ablation system has been developed as a stand-alone therapy to ablate and destroy soft tissue. The Company has developed extensive intellectual property, multiple products in the market, and well established distribution in the United States, Europe and Asia. Certain of the Company’s products have received regulatory approvals in the United States, Europe and China. For further information visit BSD Medical's website at www.BSDMedical.com.

Forward-Looking Statements

Statements contained in this press release that are not historical facts, including statements relating to our MicroThermX ^® line of products, are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including the market demand for our MicroThermX ^® products and the regulatory requirements we face. These forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, except as required by law.

BSD MEDICAL CORPORATION
Condensed Balance Sheets
(Unaudited)
ASSETS				May 31, 2012						August 31, 2011
Current assets:
Cash and cash equivalents				$	12,736,998					$	17,135,968
Accounts receivable, net of allowance for doubtful accounts of $20,000					248,626						397,264
Related party trade accounts receivable					14,757						408,323
Inventories, net					2,318,260						2,406,214
Other current assets					151,363						121,148
Total current assets					15,470,004						20,468,917
Property and equipment, net					1,444,712						1,445,897
Patents, net					9,297						25,092
				$	16,924,013					$	21,939,906
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable				$	237,339					$	301,936
Accrued liabilities					199,828						332,004
Deferred revenue – current portion					99,534						42,214
Total current liabilities					536,701						676,154
Deferred revenue – net of current portion					132,521						192,158
Total liabilities					669,222						868,312
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized; no shares issued and outstanding					-						-
Common stock, $.001 par value; 80,000,000 shares authorized; 29,753,191 and 29,686,154 shares issued, respectively					29,778						29,686
Additional paid-in capital					51,529,691						50,458,729
Treasury stock, 24,331 shares at cost					(234	)					(234	)
Accumulated deficit					(35,304,444	)					(29,416,587	)
Total stockholders’ equity					16,254,791						21,071,594
				$	16,924,013					$	21,939,906

BSD MEDICAL CORPORATION
Condensed Statements of Operations and Comprehensive Loss
(Unaudited)
				Three Months Ended May 31,											Nine Months Ended May 31,
				2012					2011						2012					2011
Revenues:
Sales				$	611,730				$	647,732					$	1,165,655				$	1,506,904
Sales to related parties					13,757					1,017,845						315,163					1,058,597
Equipment rental					25,900					9,900						101,450					61,400
Total revenues					651,387					1,675,477						1,582,268					2,626,901
Cost of Revenues:
Cost of sales					435,656					90,064						934,070					808,732
Cost of related party sales					12,180					547,766						226,363					585,261
Cost of equipment rental					2,947					3,608						8,841					13,111
Total cost of revenues					450,783					641,438						1,169,274					1,407,104
Gross margin					200,604					1,034,039						412,994					1,219,797
Operating costs and expenses:
Research and development					641,457					481,994						1,760,803					992,110
Selling, general and administrative					1,667,503					1,389,175						4,580,000					3,589,573
Total operating costs and expenses					2,308,960					1,871,169						6,340,803					4,581,683
Loss from operations					(2,108,356	)				(837,130	)					(5,927,809	)				(3,361,886	)
Other income (expense):
Interest income					13,861					21,708						47,890					47,331
Other income (expense)					(2,371	)				(1,318	)					(6,950	)				(3,451	)
Total other income					11,490					20,390						40,940					43,880
Loss before income taxes					(2,096,866	)				(816,740	)					(5,886,869	)				(3,318,006	)
Provision for income taxes					(988	)				(800	)					(988	)				(800	)
Net loss and comprehensive loss				$	(2,097,854	)			$	(817,540	)				$	(5,887,857	)			$	(3,318,806	)
Net loss per common share:
Basic				$	(0.07	)			$	(0.03	)				$	(0.20	)			$	(0.12	)
Diluted				$	(0.07	)			$	(0.03	)				$	(0.20	)			$	(0.12	)
Weighted average number of shares outstanding:
Basic					29,717,000					29,612,000						29,696,000					28,553,000
Diluted					29,717,000					29,612,000						29,696,000					28,553,000

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