Mr. Osvaldo (Ozzie) Iadarola reports,

KAMLOOPS, B.C. - Audiotech Healthcare Corporation (AUD:TSX Venture Exchange) is pleased to announce its operating results for the second quarter ended March 31, 2005. The company is pleased to again report robust revenue and earnings growth.

This press release should be read in conjunction with the financial statements and related notes and management's discussion and analysis thereof for the period ended March 31, 2005.

SECOND QUARTER HIGHLIGHTS

The second quarter of fiscal 2005 was highlighted by the expansion of the company's U.S. operations. Business activity at both the Canadian and U.S. clinics remained at near record levels, resulting in strong revenue growth over the comparable period in fiscal 2004, and a significant profit.

During the first quarter of fiscal 2005, Audiotech commenced construction of a new hearing and balance center in Idaho Fall, Idaho. Construction was completed slightly ahead of schedule and on budget, and the clinic was opened in late March 2005. Audiotech's pre-existing clinic in Idaho Falls was relocated to the new facility upon completion. Management is pleased to report that the move to the new facility was accomplished with only a minor interruption to everyday business. The new hearing and balance centre will allow the company's United States division to expand the range of services it offers to the community. In addition, the new location is expected to result in a substantial increase in referrals from physicians at the regional hospital, and to be more convenient for existing and new patients.

During late fiscal 2004, land valued at approximately $105,000 was acquired for the site of the new facility. Construction of the building commenced shortly thereafter and was completed in March 2005 at a total cost of $388,065. 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. Investments have also been made in new and additional equipment for the facility, and were financed from existing working capital that had previously been reserved for expansion of United States operations, and through capital leases. The building loan, which had an outstanding balance of $372,945 as at March 31, 2005, is repayable in monthly installments of $3,834 plus interest at 8.5% per annum. Capital purchases of equipment for the new facility totaled roughly US$81,000 or CDN$98,000.

Management is encouraged by the initial response to the new clinic, not only by the patients and the referring physicians and local hospitals, but also by other parties interested in co-operating with Audiotech in the opening of additional facilities based on the same clinic model.

Audiotech's expansion of its U.S. operations came at a favorable time, with most major investments coinciding with the lowest points of value of the U.S. dollar. The company is also seeking new acquisition candidates in the U.S. and considering the opening of additional hearing clinics based on the model of the new Idaho Falls facility.

FINANCIAL RESULTS

During the 3 months ended March 31, 2005, revenues were $956,072, an increase of 20.4% over the revenues posted during the same 3 month period in fiscal 2004. Revenues from the company's Canadian operations demonstrated the strongest growth, surging 28.5% to $651,048. This growth is attributed to the recent hiring of additional audiologists, the opening of the Vernon, B.C. clinic in late fiscal 2004, and the continued success of the company's new marketing programs. Revenues from Audiotech's U.S. clinics reached $305,024, a 6.2% increase over the $287,151 in revenues posted during the same quarter a year earlier. This growth was achieved despite the interruptions associated with the relocation of the Idaho Falls clinic and the continued weakness in the U.S. dollar which bottomed during the quarter.

As a result of the solid second quarter revenue performance, year to date revenues (for the 6 months ended March 31, 2005) toped $1,969,789, an increase of 25.4% over the same 6 months of the prior fiscal year.

Statement of Income - Quarterly Data (Unaudited)

	3 Months ended March 31			6 Months Ended March 31
	2005	2004	2003	2005	2004	2003
Canadian Revenues	$ 651,048	$ 506,741	$ 393,936	$ 1,302,702	$ 949,573	$ 816,305
U.S. Revenues	305,024	287,151	314,790	667,087	621,388	683,368
Total Revenues	$ 956,072	$ 793,892	$ 708,726	$ 1,969,789	$ 1,570,961	$ 1,499,673
Operating Cash Flow*	89,422	57,260	(37,122)	127,225	83,770	(38,427)
Net Earnings **	59,817	37,397	(56,899)	63,529	46,070	(77,828)
EPS (basic & fully-diluted)	0.0044	0.0028	(0.0043)	0.0047	0.0035	(0.0058)
Total Assets	$ 2,752,025	$ 1,898,541	$ 1,966,092	$ 2,752,025	$ 1,898,541	$ 1,966,092
Total Long-Term Liabilities	$ 1,324,525	$ 734,122	$ 361,722	$ 1,324,525	$ 734,122	$ 361,722

No divideds were paid during any of the above periods.

* 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.

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 as a percentage of sales increased considerably during the second quarter to 66.6%. This level of gross margins is well ahead of the long-term average. For the year to date, gross margins as a percentage of sales were 63.1% compared to 60.4% during the first six months of fiscal 2004.

Direct clinic costs of $453,673 decreased 4.7% during the second quarter as compared to the first quarter of fiscal 2005 primarily as a result of a decrease in amortization and salaries. Direct clinic costs declined as a percentage of sales from 48.6% during the second quarter of fiscal 2004 to 47.5% this quarter. For the six months ended March 31, 2005, direct costs totaled $929,478 compared to $716,289 during the first two quarters of last fiscal year.

General and administrative expenses also declined by 2.4% to $108,943 on a quarter-over-quarter basis as a result of a small foreign exchange gain compared to a foreign exchange loss in the fist quarter, a 3.1% reduction in interest costs, and a small decrease in wage costs. The decreases in these expense categories were offset by a minor increase in professional fees and general office overhead expenses. This compares to general and administrative expenses of $95,301 during the second quarter of fiscal 2004. For the six months ended March 31, 2005, general and administrative expenses totaled $220,543 or 11.2% of revenues compared to $186,652 or 11.9% of revenues during the first two months of fiscal 2004.

Audiotech is pleased to report income from operations (income before the amortization of the debenture discount) of $74,538 or $0.006 per share for the quarter ended March 31, 2005. After the amortization of the debenture discount, net earnings were $59,817 or $0.004 per share, an increase of 60%. Both the Canadian and U.S. operations were profitable during the quarter. Operating cash flow reached $89,422 compared to $57,260 during the same quarter in fiscal 2004.

For the six months ended March 31, 2005, net earnings were $92,334 or $0.007 per share before the deduction of amortization of the debenture discount, and $63,539 or $0.0047 after this deduction.

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 the second quarter fiscal 2005 a total of $14,721 in amortization related to the debenture discount was recorded on the statement of income, thereby reducing net earnings by the same amount ($28,805 for the 6 months ended March 31, 2005).

Details of all expenses can be found in the unaudited interim consolidated financial statements for the 6 months ended March 31, 2005.

Revenues and net income for the last six fiscal quarters were as follows:

	Q203-31-05	Q112-31-04	Q409-30-04	Q306-30-04	Q203-31-04	Q112-31-03
Revenues	$ 956,072	$1,103,716	$1,092,000	$965,954	$793,892	$777,069
Net Income*	59,817	3,712	106,268	1,309	37,397	8,673
/ Share Basic	0.0044	0.0003	0.008	0.0001	0.003	0.0007
/ Share FD	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 AND FINANCIAL RESOURCES

As at December 31, 2004, Audiotech had a cash balance of $443,615, including term deposits in the amount of $15,962.

As previously disclosed, a key management objective for fiscal 2005 is to continue to reduce debt service costs through the repayment of higher-interest debt and potentially the conversion of some or all of the outstanding convertible debentures. During the second quarter, proceeds received from the exercise of stock options by management were used to repay $48,000 of the 10% convertible debentures. An additional $20,000 of these debentures was converted into common shares by the debenture holders, resulting in the issuance of 100,000 common shares. Accordingly, a total of $68,000 in convertible debenture debt was retired during the quarter. It is important to note that the conversion of the existing debentures into common shares is anti-dilutive in that the increase in earnings resulting from the reduction of interest costs more than compensates for the dilution from the additional shares that are issued upon conversion.

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 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 anticipated that equity financing will be undertaken in fiscal 2005 to accelerate the company's debt retirement goals to reduce future interest costs.

Debt repayments and other financial commitments due during the next 5 years are disclosed in the notes to the consolidated interim financial statements for the period.

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 interim financial statements for the period ended March 31, 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 remainder of fiscal 2005 in the ordinary course of its business as it acquires, expands, and opens new clinics. In addition to the capital purchase related to the construction of the new hearing and balance center in Idaho Falls and the purchase of equipment for this new facility as outlined above, an additional $23,000 in capital equipment was acquired for the company's Canadian operations during the period.

RELATED PARTY TRANSACTIONS

As detailed in note 8 of the corporations financial statements 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 $504 was paid to MediaWave Communications Corporation, 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 quarter ($1,742 for the 6 month period ended March 31, 2005).

A total of $7,236 in rent was paid to Sherwood Real Estate Corp., a company controlled by a director of the company ($16,504 for the 6 month period ended March 31, 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.

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.

SHARE CAPTITAL

As at March 31, 2005, Audiotech had 13,654,825 common shares issued and outstanding with a book value of $1,705,340. As at September 30, 2004, and December 31, 2004, Audiotech had 13,329,825 common shares outstanding with a book value of $1,635,840.

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, 2005.

As at March 31, 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).

UPDATE ON PROPOSED LOBE ACQUISITION

During the second quarter ended March 31, 2005, Audiotech entered into a letter of intent to acquire a 25% equity interest in Lobe Purchasing Group Inc. (Lobe Regroupement d'Achats Inc.), hereinafter referred to as "Lobe", the largest hearing product provider in Eastern Canada. Lobe, which is a subsidiary of Lobe Hearing Healthcare, currently manages a buying network comprised of total of 15 clinics in Eastern Canada.

The letter of intent specifies that Audiotech will issue a total of 900,000 common shares with a deemed value of $0.22 per share to acquire the 25% equity stake in Lobe. Audiotech will also pay a finders fee in conjunction with the transaction. The finders fee will be satisfied through the issuance of 100,000 common shares with a deemed value of $0.22 per share.

Management believes that the union of Audiotech and Lobe under this agreement would bring several advantages to both companies. Most notably, it creates the platform to commence the joint creation of a truly national network of hearing care clinics. Whereas Audiotech's existing geographic focus is Western Canada, Lobe's existing clinic network and managerial experience lies in Eastern Canadian markets including Ontario and Quebec. The two companies will be combining their purchasing interest, thereby immediately creating one of Canada's largest groups of affiliated hearing care clinics.

The negotiation of a definitive agreement has taken longer than originally expected due to the need to translate a larger number of documents than originally expected from French to English, the examination of alternative means of expanding the relationship of Audiotech and Lobe, and unforeseen complexities in the conclusion of one key aspect of the agreement. At present, there is no assurance that the transaction will be completed as originally proposed. The present deadline for completion of a definitive agreement, which has not yet been consummated, is June 1, 2005. Negotiations are ongoing and a press release will be issued shortly detailing the results of the negotiations.

ADDITIONAL INFORMATION

Additional information relating to the company is available 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 Quniton 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.