Ann: Quarterly Update and Appendix 4C, page-31

I emailed Philip (MD) today asking a few general questions that I had about PainChek. Very positive vibe coming from him, straightforward and to the point. He explained to me that he couldn't elaborate on a few things as it wasn't public knowledge yet.

See below for his responses:

After doing an breakdown (attached below) on the costs estimated for last quarter, compared to the actual amounts, the administration and corporate costs were $116,000 under budget, which is obviously a positive sign for shareholders, but is there a reason for the savings last quarter?



Quarter comparison

1. 1. R&D increase reflects the additional costs now that we have a revised nViso contract and we have direct access for the development of the PainChek App.
   2. Admin and corporate reflects the slower ramp up of these costs than originally projected and our ability to be more effective with the current resources.

I can see for the last few 4c’s, that the marketing budget is increasing over the last 6 months. What are the main advertising/marketing avenues you see for PainChek?

This is covered in our latest investor presentation – we are going direct to RAC with key account management and will be building direct to consumer sales and marketing channels and capabilities (e.g. digital marketing) as part of the consumer version launch.  The consumer version will be distributed via the Apple and Google Stores.

PainChek is currently waiting on the classification that it will fall under for FDA approval. Do you have a preference of which category it will be approved for?

No, they both have their benefits. We expect it to be either class 1 or a “non-medical” device. The non-medical device classification could allow faster US access but we would still need to scale up and make the right level of investments around it.

From the research I have been doing into the Dementia-Pain market, I can see the biggest hurdle in the industry is that a lot of health professionals lack specific training in pain management. Do you feel that Painchek’s ease of use as an app could potentially solve part of that problem?

Absolutely, it’s one of the key value propositions. We are also investing in on-line training materials that will allow all carers to be trained on PainChek and the art of pain assessment.

When PainChek is generating significant revenue, what sort of fee’s/perpetuity will Nviso get in return?

None. The new license agreement removes all royalty payments.  nViso have taken an equity stake in PainChek as part of the license payment.

Regarding PainChek’s revenue model, are you able to explain on average how much revenue one RAC would generate for the company?

This will vary based on the size and number of residents.  It’s a very broad range as some RAC’s are very small (100 beds) and other go up to 6,000 beds.