Ann: Appendix 4C - quarterly , page-2

Another positive 4C

Sales now look to come in @ $2.8-$3.0million
Prev. best - $2.38million

But what is exciting for the future the continuing trend to improving gross margins.

I had budgeted cost of sales @ 29% for the year
The ytd now sits at 27%

The 2% isn't huge - but it signals that it is likely to improve again next year - which means you can be confident locking away 27%

Cash burn - under $2.0million p.a.
Cash - $4.2million

My opinion - they have 12months to get FDA approval so that the next cap raise doesn't dilute the daylights out of current holders.

My other opinion - the numbers being generated now are very significant for post FDA approval performance.
IF the dolphin is given the turnover that is required - he will make money.

My last opinion - they need to double sales to start breaking even.
$5.6million at least.
at $10million sales they'll start earning 3cents per share
giving it a P/E of 5 on today's SP
It is starting to look tangible.