Mr. Dan Allen reports,

Audiotech Healthcare Corporation (AUD-CDNX) is pleased to announce its financial and operating results for the 6 months ended March 31, 2001.

This release should read in conjunction with the company's consolidated financial statements for the period.

Complete Fiscal 2001 Second Quarter Financial Statements

Results of Operations

Revenues for the 6 months ended March 31, 2001, rose to $1.40 million, an increase of 10% over sales for the same period a year ago. Revenues derived from Audiotech's Canadian operations exhibited the strongest growth, rising 17% to $966,457, despite a change in billing procedures by a major health insurer which negatively impacted gross sales during the second quarter. Revenues in the U.S. were relatively unchanged due to the maturity of Audiotech's Idaho clinics. Subsequent to the end of the quarter, Audiotech acquired the remaining 50% interest in its Idaho clinics. This transaction is expected to contribute significantly to operating cash flow and earnings on a go-forward basis. Audiotech has also entered into a letter of understanding to complete the acquisition of a 52-per-cent interest in the shares of a well-established and profitable U.S. audiology services business operating two clinics, in March 2002, to further enhance the growth of its U.S. clinic division, American Hearing Care. Furthermore, the company continues to evaluate additional acquisition opportunities in both Canada and the U.S.

Gross profit margins for the period rose to 57.4% from 57.0% in fiscal 2000, as a result of management's initiatives to create further operating efficiencies and economies of scale.

Operating expenses increased by $170,187 or 19.4% as compared to the first two quarters of fiscal 2000, in large part due to an increase in direct wages of approximately $117,000, and rent in the amount of $36,000. These higher costs are associated with the company's clinic expansion program (including both acquired clinics and new start-ups), in Canada Management believes that these costs were a necessary short-term investment in the company's long-term growth. As recently announced, Audiotech has consolidated the operations of its Matheson's southwest Calgary clinic with its recently acquired Rocky Mountain clinic located at 8330 McLeod Trail S.E., Calgary. This move will enable the corporation to eliminate unnecessary duplicate overhead costs related to its Alberta operations, thereby significantly reducing related operating expenses and enhancing profitability. As a result of these investments, Audiotech posted a loss of $226,129 or $0.02 per share for the period (after non-cash amortization costs of $57,552).

Liquidity and Financial Resources

As at March 31, 2001, Audiotech had a healthy cash balance of $443,240 with which to pursue acquisitions and to fund further growth initiatives. Working capital at the end of the quarter was $258,278.

The majority of Audiotech's long-term debt, excluding convertible debentures, is comprised of interest-free loans from a major North American hearing aid supplier. These loans do not require scheduled installment payments but rather are reduced over time by the application of the company's bulk purchasing discounts.

Future Outlook