operational update and future revenue streams

Operational Update 19/02/08

During the last 6 months the Company has continued focus on the sale of medical simulators in Australia, UK
and Asia. The Company's strategy to capitalise on its industry relationship to install and operate medical skills
training centres globally has commenced and revenue is beginning to flow and will continue to grow.

Market opportunities for the Company's suite of services are developing in Ireland, Russia, India and Taiwan.
The Company has been active in promoting, demonstrating and developing close relationships with key buyers
in those regions.


Operations can be summarised as follows:

Simulator Sale
Working closely with Immersion Medical through the Master Distribution Agreement the Company continues
to sell simulator into the UK, China and Oceania market. Medical training institutions around the world
increasingly recognise training simulators as a tactile, repeatable, low cost solution to training health
professionals. The simulators provide immediate feedback and analytical performance based review for
increasingly complicated medical procedure.

The Company recently launched the Mediseus® Temporal Bone Simulator in Australia, UK and China. The
simulator as been well received by major organisations working in the field and commercial production is underway. The Company has continued development on the Mediseus® Epidural Simulator and with the
introduction of new technology has increased the users experience while reducing the cost of the unit.

The Company is involved in the HTD project (Health Technology Device), a UK grant funded project for the
development and validation of a virtual reality simulator for training in interventional radiological visceral
needle puncture procedures. This project is currently in its first year of development. Planned
commercialisation of the device is 2010. The UK partners include Imperial College, London, University of Wales,
Bangor, University of Hull, University of Leeds, Royal Liverpool University Hospital Manchester Business School
and Manchester Children's University Hospital.


Medical Training Centres
This year the Company has taken mayor strides in its development of the Medical Training Centre global
operations. During the period the Company has completed or close to completion, the systems integration for
Operating Theatres at Peter Mac Hospital (Melbourne) and Mater Hospital (Brisbane). The Company has also
acted as design consultant for Royal North Shore Hospital and Sydney skills training centre. In the UK the
Company continues its design consulting to Royal College of Surgeons of England and Torbay Skills training
centre. The Company has also established its own training facility at the Royal Free Hospital in London.

The Company signed a MOU (Memorandum of Understanding) with Apollo group, India's largest private
hospital owner to design training facilities that will allow amalgamation of all hospitals in the deployment of
medical and surgical education curriculum throughout Apollo hospitals. MOU with the Chinese Medical Doctor
Association (CMDA) and Huaxi Hospital, Sichuan University to develop and manage at Huaxi Hospital one of the
first training and assessment demonstration base in China.

The Company has been invited to participate on an EU grant funded project called `'Competence Assessment
for Spinal Anaesthesia'. Partners include Cork University, Ireland, University of Limerick, Ireland, University of
Graz and Austria & University of Pecs, Hungary. The grant was successful and is the first EU grant the Company
has been awarded.