Covalon Releases 2008 Q2 Financial Results

The Company's financial highlights for the second quarter ended March 31, 2008 are as follows:

- Total revenues increased by 42% or $193,114 over the second quarter of 2007 to $654,625;

- Gross profit as a percentage of sales was 52.0% in the second quarter of 2008, a 4.9% improvement compared to the same period last year;

- Research and development investments increased by $144,595 or 68% over the second quarter of 2007 to $356,396;

- Increased investments in expanding the product applications for the antimicrobial coatings and the collagen technology platforms resulted in a net loss increase by 89% over the second quarter of 2007 to $957,576;

- Regulatory investments increased by $127,880 or 97% over the second quarter of 2007 to $260,368;

- Loss per share of $0.01 was the same as the second quarter of 2007.

"Now that we have published Covalon's financial results for the second quarter, I am pleased to say that our financial results for the six-month period ended March 31, 2008 are in line with our expectations. Our strong balance sheet with $14.5 million in cash and/or equivalents provides Covalon with the financial resources to support the execution of our exciting strategy. " said Mr. Francis Lindayen, Chief Financial Officer.

Dr. DiCosmo, President and Chief Executive Officers states that "I am very pleased with the progress our strong team continues to make. I have spent a great deal of time during this past quarter on the road, meeting the customers of our major partner and distributor, Smith & Nephew to strengthen our presence in the healthcare arena and marketplace. Covalon continues to make strong investments in the R&D and product pipeline. In marketing our major partner distributor, Smith & Nephew receives top-level support on all fronts and I am encouraged with the very positive feedback I have received from the executive team, doctors and healthcare specialists. In antimicrobial coatings, our business unit and scientists have identified innovative applications to various products that increasingly offer promise in reducing catheter-related hospital-acquired infections. Our talented teams continue to make great strides in new products."

Mr. William Jackson, Chief Business Officer adds, "We have identified 22 product opportunities for Covalon's two existing product platforms. In takes a considerable amount of time to negotiate major contracts with large medical companies but I am extremely encouraged with the progress to date and look forward to ongoing positive outcomes as the year progresses. We have both the technological credibility and financial resources to be taken seriously and get to see the right people within the medical industry about our revolutionary product line."

The Company's consolidated financial statements and MD&A for the three and six month periods ended March 31, 2008 are available on SEDAR at www.sedar.com and on the Company's website at www.covalon.com.

About Covalon Technologies Ltd.

Covalon Technologies Ltd. is a developer of advanced medical products which has patented therapeutic biomaterials for wound care and surgical applications, and coatings for medical devices. Polymer chemistry and surface coating technology have been combined to create a range of time-release drug delivery platforms that can be applied to many medical devices. A variety of applications for this technology have been identified and specific products have been developed. These products feature solutions to many of the problems caused by the material properties of the medical devices currently offered by most manufacturers and suppliers.

Caution Regarding Forward-looking Statements

The MD&A contains forward-looking statements which reflect the Company's current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan, "estimate", "expect", "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including the difficulty in predicting product approvals, acceptance of and demands for new products, the impact of the products and pricing strategies of competitors, delays in developing and launching new products, the regulatory environment, fluctuations in operating results and other risks, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industry; others are more specific to the Company. Investors should consult the "Risks & Uncertainties" section of this MD&A as well as the Company's ongoing quarterly filings for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. Management assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.

Additional information can be found at www.covalon.com.

This document contains forward-looking statements. These statements relate to future events or future performance. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of any of these terms or comparable terminology. Such statements reflect the current views of management of the Company with respect to future events. Actual events or results may differ materially. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.

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The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has neither approved nor disapproved of the contents of this release. Website: www.covalon.com