Xilas Medical, Inc. Announces Completion Of $1.0 Million Financing.

SAN ANTONIO -- Xilas Medical, Inc., a medical device company focused on diabetic foot care, today announced that it has completed a $1.0 million Series B financing. The Company has now raised a total of $1.5 million from private investors as well as Company insiders.

"We were able

to achieve our objective in 2004 of moving the Company from research and development into full commercialization of our products for people with diabetes that are high-risk to experience foot problems," commented Don Lawson, CEO of Xilas. "We are particularly pleased that XLHealth, the firm conducting a disease management demonstration project for more than 10,000 Medicare beneficiaries throughout Texas, chose Xilas to provide its products."

The federal project, run by The Centers for Medicare and Medicaid Services, is taking place over a three-year period. CMS views the pilot as a way to help determine the benefits of disease management programs and what avenues exist to make these services available for Medicare beneficiaries who are chronically ill.

Xilas has begun to ship its products. Said Lawson, "It is our belief that the significant results we have achieved in our clinical trials will translate into improved healthcare for the participants. I am also very pleased that both our new and existing investors have recognized the importance of our products in preventing diabetes related foot amputations and the opportunity therein."

Xilas Medical, Inc., (www.xilas.com) based in San Antonio, Texas, has developed and is now commercializing a family of clinically tested, proprietary medical device products for the diagnosis and prevention of foot-related medical problems especially those pertaining to people suffering from diabetes. The Company has released a family of patented products that address three key areas of foot management for the diabetic patient: temperature measurement, neuropathy or nerve damage assessment, and plantar stress reduction. The Company has previously received $2.7 million from the National Institutes of Health for product testing and clinical trials. Xilas has five patents on its products and one 510(k) approval from the Food and Drug Administration.