TearLab (TEAR) 8-K OccuLogix Reports Fourth Quarter and Full-Year 2005 Financial Results

News Release

For Immediate Release

OccuLogix Reports Fourth Quarter and Full-Year 2005 Financial Results

TORONTO, ON—March 9, 20056 OccuLogix, Inc. (NASDAQ: RHEO; TSX: RHE) today reported its consolidated financial results for the three months and year ended December 31, 2005. All dollar amounts are expressed in U.S. currency, and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).

For the fourth quarter of 2005, net revenues were $206,000 compared to $780,000 in the fourth quarter of 2004. Under current accounting standards, the Company periodically evaluates changes in events and circumstances related to its business for any potential impairment of goodwill and intangible assets. On February 3, 2006, OccuLogix announced that a preliminary analysis of MIRA-1, its recently completed pivotal (phase III) clinical trial using its RHEO™ System to treat the dry form of age-related macular degeneration, had indicated that the study did not demonstrate a statistically significant difference in the mean change of Best Spectacle-Corrected Visual Acuity applying the Early Treatment Diabetic Retinopathy Scale between the treated and placebo groups at 12-months post-baseline. The resulting decrease in the share price of the Company’s common stock was identified as an indicator of impairment leading to an analysis of our intangible assets and goodwill and resulting in our recording a non-cash impairment charge to goodwill of $147.5 million. Including this non-cash impairment charge, the Q4-05 net loss was $153.7 million, or $3.65 per share.

For the full year ended December 31, 2005, OccuLogix’s net revenues were $1.8 million compared with $969,000 for the full year 2004. Net loss for 2005, which included the aforementioned non-cash impairment charge to goodwill of $147.5 million, was $163.0 million, or $3.89 per share. This compared to a net loss of $21.8 million, or $2.96 per share, for 2004. Pro forma net loss per share for 2004 was $0.52 after giving effect to the 41.8 million common shares that were outstanding following the company’s reorganization and initial public offering in December 2004.

As of December 31, 2005, the company had cash and cash equivalents of $41.3 million.

About OccuLogix, Inc.

OccuLogix is a health care company that brings innovative and evidenced-based medical therapies to market. OccuLogix's common shares trade on the NASDAQ National Market under the symbol 'RHEO' and on the Toronto Stock Exchange under the symbol 'RHE'. Visit us on the internet at www.occulogix.com (corporate) and www.rheo.com (healthcare professionals, patients and caregivers).

Forward-Looking Statements

This press release may contain forward-looking statements. These statements relate to future events and are subject to risks, uncertainties and assumptions about the company. These statements are only predictions based on our current expectations and projections about future events. You should not place undue reliance on these statements. Actual events or results may differ materially. Many factors may cause our actual results to differ materially from any forward-looking statement, including the factors detailed in our filings with the Securities and Exchange Commission and Canadian regulatory authorities, including our Registration Statement on Form S-1. We do not undertake to update any forward-looking statements.

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OccuLogix, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

[expressed in U.S. dollars except number of shares]

	Three months ended December 31,
	2005			2004
	$			$
Revenue
Sales to related parties		—			542,384
Sales to unrelated parties		206,380			237,600
		206,380			779,984
Cost of goods sold
Cost of goods sold to related parties		—			503,793
Cost of goods sold to unrelated parties		2,328,102			133,710
Royalty costs		25,000			55,327
		2,353,102			692,830
Gross margin		(2,146,722	)		87,154
Operating expenses
General and administrative		2,124,234			11,853,380
Clinical and regulatory		1,456,205			1,902,501
Sales and marketing		1,074,734			197,102
Impairment of goodwill		147,451,758			—
		152,106,931			13,952,983
Loss from operations		(154,253,653	)		(13,865,829	)
Other income (expenses)
Interest income (expense)		405,974			47,865
Other		1,446			(129,523	)
		407,420			(81,658	)
Loss from operations before income taxes		(153,846,233	)		(13,947,487	)
Recovery of income taxes		169,249			23,771
Net loss for the year		(153,676,984	)		(13,923,716	)
Weighted average number of shares outstanding
- basic and diluted		42,070,457			14,077,993
Net loss per share	$	(3.65	)	$	(0.99	)

OccuLogix, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

[expressed in U.S. dollars except number of shares]

	Years ended December 31,
	2005			2004
	$			$
Revenue
Sales to related parties		81,593			731,757
Sales to unrelated parties		1,758,696			237,600
		1,840,289			969,357
Cost of goods sold
Cost of goods sold to related parties		43,236			688,102
Cost of goods sold to unrelated parties		3,250,866			133,710
Royalty costs		100,000			135,457
		3,394,102			957,269
Gross margin		(1,553,813	)		12,088
Operating expenses
General and administrative		8,729,456			17,530,019
Clinical and regulatory		5,250,492			3,994,967
Sales and marketing		2,165,337			219,556
Impairment of goodwill		147,451,758			—
		163,597,043			21,744,542
Loss from operations		(165,150,856	)		(21,732,454	)
Other income (expenses)
Interest income (expense)		1,593,366			35,735
Other		(57,025	)		(145,925	)
		1,536,341			(110,190	)
Loss from operations before income taxes		(163,614,515	)		(21,842,644	)
Recovery of income taxes		642,529			23,771
Net loss for the year		(162,971,986	)		(21,818,873	)
Weighted average number of shares outstanding
- basic and diluted		41,931,240			7,369,827
Net loss per share	$	(3.89	)	$	(2.96	)

OccuLogix, Inc.

CONSOLIDATED BALANCE SHEETS

[expressed in U.S. dollars]

	As at December 31,
	2005 $			2004 $
ASSETS
Current
Cash and cash equivalents		9,599,950			17,530,552
Short-term investments		31,662,845			42,500,000
Amounts receivable		554,966			472,156
Due from related party		—			8,226
Inventory		4,701,464			1,086,339
Prepaid expenses		803,268			480,813
Deposit		4,891			8,996
Total current assets		47,327,384			62,087,082
Fixed assets, net		470,561			367,589
Patents and trademarks, net		135,232			104,654
Intangible asset, net		23,927,195			25,643,862
Goodwill		65,945,686			213,397,444
		137,806,058			301,600,631
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable		522,520			221,063
Accrued liabilities		2,226,619			2,791,291
Deferred revenue and rent inducement		—			485,047
Due to related party		5,065			—
Due to stockholders		158,233			516,756
Total current liabilities		2,912,437			4,014,157
Deferred tax liability		8,853,062			9,488,229
Total liabilities		11,765,499			13,502,386
Commitments and contingencies
Stockholders' equity
Capital stock
Common stock		42,086			41,807
Par value of $0.001 per share;
Authorized: 75,000,000; Issued and outstanding:
December 31, 2005 - 42,085,853;
December 31, 2004 - 41,806,768;
Additional paid-in capital		336,977,578			336,063,557
Accumulated deficit		(210,979,105	)		(48,007,119	)
Total stockholders' equity		126,040,559			288,098,245
		137,806,058			301,600,631