Ann: Appendix 4C, page-6

I can tell you from experience, the easiest sales for the sales people are the first units sold at a site. These are essentially used for evaluation. As Scott said in the conference call, they need to make sure for these initial units that the surgeons and patients have the best possible experience to ensure site conversion and re-order. Whilst there is some evidence of this from the Q1 sites, we still do not have sales traction, imo.

If you think about the 12 sites that were initially involved in the trials, now over 12 months ago, these sites on their own should be generating 10's of units per month. We are not seeing this, yet.

The Australian business is doing very well but they are 18 months or so ahead. I am expecting a similar success in the US. However, I am waiting to see the signs of solid uptake. The US health care system is very different to Australia. There can be at times perverse incentives which can result in patients not receiving the best treatments due to the predominantly private healthcare system. I'm not expecting any of these roadblocks, but I am just taking a conservative line until I see true sales traction. The higher ASP this quarter is a very good sign of their confidence in achieving solid sales growth.