Mr. Osvaldo (Ozzie) Iadarola reports,

KAMLOOPS, B.C. - Audiotech Healthcare Corporation (AUD:TSX Venture Exchange) is pleased to announce its operating results for the year ended September 30, 2005.

Fiscal 2005 was highlighted by the opening of the company's flagship American Hearing Care Regional Hearing & Balance Center in Idaho Falls. During late fiscal 2004, land was acquired for $100,996 for the site of the new facility. Construction of the building commence shortly thereafter and was completed in March 2005 at a total cost of $375,289 (building cost). Financing for the project was secured through a term loan from a major hearing aid manufacturer to assist in the land purchase, and a construction/building loan from the builder's private investors, at what management considers to be very favourable terms. A further investment of just under CDN$100,000 was made in equipment for the facility, and was financed from existing working capital that had previously been reserved for expansion of United States operations, and through capital leases. Audiotech's pre-existing clinic in Idaho Falls was relocated to the new facility upon completion.

Management is encouraged by the response to the new clinic, not only by the patients and the referring physicians and local hospitals, but by other parties interested in co-operating with Audiotech in the opening of additional facilities based on the same clinic model. The move to the new facility went very smoothly, however, road construction in the area after the move-in temporarily impacted sales revenues. Certain one-time costs associated with the expansion also impact operating cash flow from the clinic during fiscal 2005, however these costs are not expected to be incurred in fiscal 2006 and beyond.

During fiscal 2005, management also moved ahead with negotiations with respect to a number of potential acquisitions and mergers, and discussions exploring possible joint ventures related to roll-out the new regional hearing & balance center concept in other U.S. locations. Most notably, the company had announced plans to acquire a major equity stake in Lobe Purchasing Group Inc. ("Lobe"). During the third quarter, management had to make a difficult decision to cancel the proposed acquisition. Despite lengthy negotiations and the best efforts of both parties, unforeseen complexities in the introduction of Audiotech's clinics to the Lobe purchasing network created a risk profile that management could not accept under the framework of the original deal.

While the company is not yet in a position to announce the completion of a definitive agreement with respect to any other acquisition or new clinic opening, strong progress was made during the fourth quarter and subsequent to the fiscal year end on both fronts and management hopes to be in a position to make such announcements shortly as negotiations and plans progress.

Please refer to section 1.4 below for further discussion of operating results during the quarter and a comparison to prior periods.

Statement of Income - Quarterly Data (Unaudited)
		3 Months ended September 30
		2005	2004	2003
	Canadian Revenues	$ 656,837	$ 720,178	$ 484,678
	U.S. Revenues	256,463	372,831	363,465
a).	Total Revenues	$ 913,300	$ 1,093,009	$ 848,143
	Operating Cash Flow*	11,058	156,109	(151,139)
b,c).	Net Earnings **	12,560	108,812	(114,745)
	EPS (basic & fully-diluted)	0.001	0.008	(0.009)
d).	Total Assets	$ 2,587,126	$ 2,526,933	$ 1,966,092
e).	Total Long-Term Liabilities	$ 1,158,227	$ 984,149	$ 361,722
f).	Cash Dividends per Share	NIL	NIL	NIL

Statement of Income - Annual Data (Audited)
		Years Ended Sept. 30
		2005**	2004**	2003**	2002**
	Canadian Revenues	$ 2,566,952	$ 2,299,029	$ 1,737,167	$ 1,855,175
	U.S. Revenues	1,244,648	1,330,895	1,430,299	1,133,985
a).	Total Revenues	$ 3,811,600	$ 3,629,914	$ 3,167,466	$ 2,989,160
	Operating Cash Flow*	182,349	286,100	(19,974)	62,283
b,c).	Net Earnings **	78,559	153,647	(105,366)	(47,438)
	EPS (basic & fully-diluted)	0.006	0.012	(0.008)	(0.004)
d).	Total Assets	$ 2,587,126	$ 2,526,933	$ 1,966,092	$ 2,199,099
e).	Total Long-Term Liabilities	$ 1,158,227	$ 984,149	$ 361,722	$ 821,450
f).	Cash Dividends per Share	NIL	NIL	NIL	NIL

* Operating cash flow is a non-GAAP measure that includes net earnings and non-cash expenses such as amortization. While management believes this number to be an important measure of corporate activity used in the industry in which the company operates, it cannot be assured that operating cash flow, as reported, is directly comparable to operating cash flow as reported by peer companies in the industry since there is no universally accepted means of its calculation. Audiotech's calculation of operating cash flow is done in the manner believed to be consistent with the most accepted means of calculation in the industry and the accounting profession as a whole.
** there were no material extraordinary or unusual items, gains or loses on discontinued operations, etc. for any of the reporting periods.

There have been no material changes outside the general course of business that account for the fluctuation or changes in the financial results reported from period to period in the chart above, except as follows:

As mentioned in previous filings, the company has and will continue to be affected by the increase in value of the Canadian dollar relative to the U.S. dollar over the past three years. The effect of the strength of the Canadian dollar has been to reduce reported revenues (in Canadian dollars) from the corporation's U.S- based operations upon consolidation. The effect of the change on the exchange rate has generally masked the significant internal growth achieved by the U.S. clinics over this period.

Results of Operations

For the fiscal year ended September 30, 2005, revenues totaled $3,811,600, an increase of 5.0% over the sales revenues posted in fiscal 2004. Revenues at the company's Canadian clinic operations rose 11.7% to $2,566,952. U.S. clinic revenues declined modestly to $1,244,648 due to continued weakness of the U.S. dollar, minor interruptions associated with the move and start-up of the Regional Hearing & Balance Center, and most notably, due to road construction that temporarily impeded access to the company's new clinic during the fourth quarter and the loss of a key referring physician in that clinic's service area. Management is confident that the effects of these situations will be short-term.

For the 3 months ended September 30, 2005, revenues were $913,000. Revenues from the company's Canadian operations were $656,837, while the U.S. operations contributed revenues of $256,463. Canadian clinic revenues were in-line with the third quarter levels, however, they were below the results posted in the fourth quarter of fiscal 2004 which was an abnormally strong quarter. U.S revenues were significantly impacted by the aforementioned road construction and loss of a key referring physician in the clinic area. It is important to note that U.S. revenues have returned to more consistent levels subsequent to the year end.

As a result of a shift in revenue mix in the U.S. operations favoring more specialty hearing and balance diagnostic services as opposed to the sale and fitting of hearing aids, and the impact of newly negotiated discounts with hearing aid manufacturers, gross margins (sales less materials & freight costs) as a percentage of sales remained well above historical averages during fiscal 2005. In fact, gross margins increased to 65.4%, up from the 64.0% posted during the previous fiscal year. Gross margins were are extremely high at 68.6% for fourth quarter of fiscal 2005, however, due to some minor year-end adjustments with respect to product returns, inventories, and sales timing, management believes that this figure may not be representative of margins in a typical quarter, or in upcoming quarters.

Other direct clinic costs (direct costs excluding materials and freight) during the year increased by 10.7% to $1,910,349 primarily as a result of increased amortization costs on new equipment, non-recurring moving costs, and additional marketing costs associated with the opening on the new Hearing & Balance Center in Idaho Falls. Direct clinic costs of $498,675 during the quarter ended September 30, 2005, compares to $482,195 for the prior quarter. Management expects that direct clinic costs will decline from this level in upcoming quarters excluding the effect on the cost structure in the event of a new clinic opening or acquisition.

General and administrative expenses also increased from $393,000 for fiscal 2004 to $492,277 as a result primarily of the interest costs associated with the financing for the new Hearing & Balance Center, and a general increase in administrative overhead.

For the year ended September 30, 2005, Audiotech is pleased to report income from operations (income before the amortization of the debenture discount) of $124,584 or $0.009 per share. After the amortization of the debenture discount, net earnings were $78,559 or $0.006 per share. Audiotech recorded a $35,929 future income tax recovery during fiscal 2005 compared to nil in the prior fiscal year. Operating cash flow was $182,349 (see definition above as this is a non-GAAP accounting measure) compared to $286,100 during the same period in fiscal 2004.

For the 3 months ended September 30, 2005, net earnings were $18,935 or $0.001 per share before the deduction of amortization of the debenture discount, and $12,560 or $0.001 after this deduction.

Net income and operating cash flow for the quarter and year ended September 30, 2005, were negatively impacted by the factors noted above. It should also be noted that the fourth quarter of fiscal 2004 was an abnormally strong quarter from an earnings and cash flow perspective, thus a comparison of results may not be easily drawn.

During fiscal 2004, Audiotech adopted new accounting policies with respect to the valuation of stock-based compensation for all stock-based payments to non-employees as well as direct employee awards of stock. The valuation of this compensation is recorded using the fair value method. In accordance with this method, the convertible debentures issued in April 2004 were assigned both an equity and debt component. The equity component of the convertible debentures was estimated using the Black-Scholes model for convertible securities/options valuation and is based on the average volatility of Audiotech's stock price, the average exercise price of the debenture conversion over their life, and a risk-free interest rate of 2.46%. The equity component, which amounted to $176,000, was recorded as other paid in capital on the balance sheet and amortized over the 3 year term of the debentures. During fiscal 2005 a total of $46,025 in amortization related to the debenture discount was recorded on the statement of income, thereby reducing net earnings by the same amount ($29,334 for the year ended September 30, 2004).

Details of all expenses can be found in the unaudited interim consolidated financial statements for the year ended September 30, 2005.

Summary Quarterly Results

Revenues and net income for the last eight fiscal quarters were as follows:
	Q4 09-30-05	Q3 06-30-05	Q2 03-31-05	Q1 12-31-04	Q4 09-30-04	Q3 06-30-04	Q2 03-31-04	Q1 12-31-03
Revenues	$ 913,300	$ 928,511	$ 956,073	$1,013,716	$1,092,000	$965,954	$793,892	$777,069
Net Income*	12,560	2,470	59,817	3,712	106,268	1,955	37,397	8,673
/ Share Basic	0.0009	0.0002	0.0044	0.0003	0.008	0.0001	0.003	0.0007
/ Share FD	0.0009	0.0002	0.0042	0.0003	0.008	0.0001	0.003	0.0006

* there were no material extraordinary or unusual items, gains or loses on discontinued operations, etc. for any of the reporting periods.

Liquidity

As at June 30, 2005, Audiotech had a cash balance of $418,920, including term deposits in the amount of $16,169.

Management is confident that the company's working capital position is sufficient to meet its growth objectives. Investments have and will continue to be made in new and additional equipment as new clinics are opened or upgraded, and will be financed from existing working capital, capital leases, or through funding arrangements with key hearing aid suppliers as appropriate under the circumstances. It is the company's intention to undertake an equity financing in fiscal 2006 to accelerate the company's debt retirement goals to reduce future interest costs.

Details of all long-term debt and capital lease obligations as well as debt repayments and other financial commitments due during the next 5 years are disclosed in the notes to the consolidated financial statements for the period (see Note 3 and 4).

Capital Resources

The Corporation's capital assets consist of various hearing diagnostic equipment, computer and office equipment, leasehold improvements, and land and building as detailed in the notes to the consolidated financial statements for the period ended September 30, 2005 (see note 2), as well as the goodwill in acquired and developed clinics. The company intends to make additional investments in capital assets during the in the ordinary course of its business as it acquires, expands, and opens new clinics.

A total of $442,336 in capital purchases were made during fiscal 2005.

Transactions with Related Parties

As detailed in note 8 of the consolidated financial statements for the period ended September 30, 2005, entitled "Related Party Transactions," Audiotech had, in the normal course of business, several non-material transactions with related parties during the quarter:

A total of $2,909 was paid to MediaWave Communications Corp., an Internet service company controlled by a director of the company in connection with website design and hosting services and royalties on sales from HearingDepot.com during the fiscal 2005 ($3,021 for the year ended September 30, 2004).

A total of $32,800 in rent was paid to Sherwood Real Estate Corp., a company controlled by a director of the company during the year September 30, 2005 ($14,270 for the year ended September 30, 2004).

These transactions were in the normal course of operations and were measured at the exchange amount which is the amount of consideration established and agreed to by the related parties. Such consideration was no more than that would have otherwise been paid by the Corporation to purchase similar products and services from third parties.

During the second quarter of fiscal 2005, 225,000 common shares were issued upon the exercise of stock options by the Corporation's president, Osvaldo (Ozzie) Iadarola, at a price of $0.22 per share.

Proposed Transactions

At any given time, the Corporation is in active and ongoing negotiations with respect to various acquisition, merger, and joint venture opportunities as well as negotiations pertaining to the potential opening of new clinics. Management regards such negotiations as a part of its every day operations and accordingly, until a letter or intent is completed or it is deemed that there is a strong likelihood of a transaction proceeding, such negotiations are not generally announced. As of the date of this document, there are no pending proposed transactions of a material nature that have not been disclosed in this MD&A, however, negotiations are active and ongoing with respect to several potential transactions.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions regarding the estimated rate of depreciation, estimated useful lives, and residual value of capital assets, as well as average exchange rates for an accounting period, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Management is not presently aware of any of material differences between the amounts reported and actual results.

Changes in Accounting Policies

There were no changes in accounting policies during the fourth quarter of fiscal 2005.

During fiscal 2004, Audiotech adopted new accounting policies with respect to the valuation of stock-based compensation for all stock-based payments to non-employees as well as direct employee awards of stock. The valuation of this compensation is recorded using the fair value method. In accordance with this method, the convertible debentures issued in April 2004 were assigned both an equity and debt component. The equity component of the convertible debentures was estimated using the Black-Scholes model for convertible securities/options valuation and is based on the average volatility of Audiotech's stock price, the average exercise price of the debenture conversion over their life, and a risk-free interest rate of 2.46%. The equity component, which amounted to $176,000, was recorded as other paid in capital on the balance sheet and amortized over the 3 year term of the debentures.

Effective October 1, 2004, the Company retroactively adopted the recommendations of the Canadian Institute of Chartered Accountants Handbook Amended Section 3870, Stock Based Compensation and Other Stock-based Payments, ("Amended Section 3870"). Amended Section 3870 requires the Company to account for stock-based compensation awards granted to employees, officers, and directors, on or after January 1, 2002, using the fair value based method. The Company has a stock-based compensation plan as described in note 5(b). No compensation cost is recorded for all other stock based employee compensation awards. Consideration paid by employees on the exercise of stock options is recorded as share capital and contributed surplus. Under the fair value based method, stock based payments to non employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued or liabilities incurred whichever is more reliably measurable. The fair value of stock based payments to non employees is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the period and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of stock based payments to non-employees that are fully vested and non forfeitable at the grant date is measured and recognized at that date.

Under the fair value based method, compensation cost attributable to awards to employees that call for settlement in cash or other assets is measured at the intrinsic value and recognized over the vesting period. Changes in intrinsic value between the grant date and the measurement date result in a change in the measure of compensation cost. In accordance with the Amended Section 3870, the Company has estimated the fair value of stock options granted to employees and directors on or after January 1, 2002 using the Black-Scholes Options Pricing Model, and recorded an adjustment to opening retained earnings and share capital in the amount of $127,000, representing the expense for the period from January 1, 2002 to September 30, 2004. Under the fair value based method, compensation cost attributable to awards to employees that call for settlement in cash or other assets is measured at the intrinsic value and recognized over the vesting period. Changes in intrinsic value between the grant date and the measurement date result in a change in the measure of compensation cost. For awards that vest at the end of the vesting period, compensation cost is recognized on a straight-line basis; for awards that vest on a graded basis, compensation cost is recognized on a pro-rata basis over the vesting period.

Financial and Other Instruments

The carrying values of cash, term deposit, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of these items.

The fair value of the Company's long-term debt approximates its carrying value as there is a market rate of interest attached to the repayment.

The majority of the Company's accounts receivable are due from customers in Canada with the remainder due from customers in the United States. The maximum credit risk associated with the Company's financial assets is the carrying value of those assets. The Company's exposure to foreign exchange risk associated with self-sustaining foreign operations is limited to its net investment in those operations.

Share Capital

As at September 30, 2005, Audiotech had 13,654,825 common shares issued and outstanding with a book value of $1,705,340. As at September 30, 2004, Audiotech had 13,329,825 common shares outstanding with a book value of $1,635,840.

No common shares were issued during the third quarter ended June 30, or the fourth quarter ended September 30, 2005.

During the second quarter, a total of 325,000 common shares were issued. 225,000 common shares were issued upon the exercise of stock options by the corporation's president, Osvaldo (Ozzie) Iadarola, at a price of $0.22 per share. 100,000 common shares were issued to third parties on March 1, 2005 upon the conversion of $20,000 in convertible debentures at $0.20 per share.

No common shares were issued during the first quarter ended December 31, 2004.

Subsequent to the year end date, 425,000 held in escrow were cancelled, thereby reducing the number of shares issued and outstanding to 13,229,825.

As at June 30, 2005, there were 700,000 options to acquire common shares outstanding. The average exercise price of these options was $0.21 (range from $0.16 to $0.35 per share).

Additional information relating to the company is on SEDAR at www.sedar.com.

The company's shares are listed and posted for trading on Tier 1 of the TSX Venture exchange under the symbol "AUD." For more information on the company, contact Osvaldo (Ozzie) Iadarola, President & CEO, at (250) 372-5847, or Doren Quinton of QIS Capital, investor relations, at (250) 376-8989, or visit the company's website at www.audiotech.org.

AUDIOTECH HEALTHCARE CORPORATION
First Bank Building
760-175 Second Avenue
Kamloops, B.C. V2C 5W1
Phone: (250) 372-5847
Fax: (250) 372-3859
Email: info@audiotech.org

Except for historical information contained herein this document contains forward-looking statements. These statements contain known and unknown risks and uncertainties that may cause the company's actual results or outcomes to be materially different from those anticipated and discussed herein.