3 data and comment 3, page-7

Part 1: Cash and shares on Jan.1, 2004.

June 30, 2003: Tax losses were increased by $11 mill. to $42 mill.but I expect this rate to be higher in the next 2 years.

Costs: $14.5 mill. They did have the benefit of selling E health and some assets; this time they would have some interest say $1.8 mill. This brings the net costs down to about $12.7 mill. Some research on coatings and other and the total net costs could be about $13 mill. or $1.08 mill/month.

The European trial in cal. year 2004 as well as the US trials in cal. year 2005 will be costed quite separately.

On 1/9/2003 after the placement, VCR would have $44 mill. 5 Sept. 2003: VCR declares a 1 for 12 at $2.25. That would bring in a total of $33.18 mil (before costs) and the shares will increase by 14.75 mill to 191.45 mill. say 192 mill. by 1 Jan. 2004.

Deduct $1.4 mill for costs. Also allow for $0.8 cost arising from the placement. So, provisional net cash is $44 mill+ $33.18 mill-$2.2 mill. or net cash will be $74.98, say $75 mill.

The trials in Europe are to start on 1 Jan. 3004. I did mention a normal operational cost of $1.08 mill./month at present.

Deduct costs for Sept.-Dec or 4*1.08 mill leaving VCR with net cash of $70.6 mill., say $70.5 mill. (subject to cost of Aussie trial) and 191.5 mill. shares on 1 Jan. 2004.

Gerry