HYTERRA LTD — Annual Report 2009

May 28, 2009

BrainZ Instruments Limited Appendix 4E ARBN 116 829 675 Preliminary final report Financial year ended 31 March 2009

Rule 4.3A

Appendix 4E

BrainZ Instruments Limited ARBN 116 829 675

Preliminary final report Year ended 31 March 2009

The following information is given to the ASX under listing rule 4.3A.

1. Reporting Details

BrainZ Instruments Limited ARBN 116 829 675 (“BrainZ” or the “company”) presents the following information for the year ended 31 March 2009 together with comparative results for the year ended 31 March 2008.

All amounts are shown in New Zealand dollars.

2. Results for announcement to the market

		Reported	Variance to
		12 months	12 months
		31 March 2009	31 March 2008 % Change
		NZ$’000	NZ$’000
2.1	Operating revenue from
	ordinary activities:	1,322	(943) (41.6) %
2.2	Loss after tax from
	ordinary activities:	(1,734)	6,609 79.2%
2.3	Net loss attributable to
	shareholders:	(1,734)	6,609 79.2%
2.4	Dividends	Nil	Nil Nil
2.5	Date of dividend	N/A	N/A N/A

2.6 Commentary on results for the year

At the time of the last Annual Report the financial performance of BrainZ was disappointing. Sales growth was slow with no near term substantial reduction in cash burn foreseeable in spite of our leading brand in neonatal bedside brain monitoring with good opinion leader awareness. The Board of Directors of BrainZ sought ways of maximising the value of the assets, recognising that both capital and clinical outcomes data were likely to be necessary to achieve satisfactory sales results. Alternatives explored included (1) integrating BrainZ into a broader neonatal business in order to achieve the necessary critical mass and capital, (2)

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Appendix 4E BrainZ Instruments Limited Preliminary final report ARBN 116 829 675 Year ended 31 March 2009

appropriate OEM arrangements, and/or (3) entering partnerships with parties with an interest in specific products such as the seizure detection product RecogniZeTM.

In October 2008 BrainZ entered into an Asset Purchase Agreement with Natus Medical Inc (NASDAQ: BABY) to sell all or substantially all of its assets to Natus for NZ$1,300,000. A Special Meeting of BrainZ shareholders was held on 5 November 2008, approving the sale of all or substantially all of the Company's assets to Natus as outlined in an explanatory statement dated 16 October 2008. Under this Agreement Natus took ownership of the assets and assumed BrainZ's obligations under its then-existing customer and supplier contracts. The Asset Purchase Agreement closed on 2 Dec 2008 with some transitional services being provided to Natus and the majority of BrainZ employees completing their notice periods around the end of January 2009. The final monies outstanding from Natus under the Asset purchase agreement were collected by BrainZ in May 2009.

The total cash burn during the 2008-9 fiscal year was $1.3 million, with first half-year burn of $1.0 million. These figures incorporate funds received from Natus in the second half-year, including the $1.3m received in Dec 2008, as well as costs related to the sale and costs of final staff payments. The final payments due from Natus under the contract were received in May 2009. As previously announced to the ASX, the Directors are considering a return of capital towards the end of 2009, which may require the company to be liquidated. This timeframe is dictated by the length of time to fully wind down the business. Depending on the legal means of effecting any distribution, shareholder approval may also be required.

3. Consolidated Income Statement

Notes Revenue – sales Cost of sales Gross profit Other income- grants Sales and marketing expenses Research and development expenses Administrative expenses Other – impairment of intellectual property 4.1 Result from operating activities Finance income – interest received Finance expense – foreign exchange gain/(loss) Net finance costs Net Gain on sale of Assets 14 Deficit before taxation 3.1 Income tax (expense)/credit 3.2 Net deficit for the year	Notes	12 months to 12 months to 31 March 2009 31 March 2008 NZ$’000 NZ$’000
		1,322 2,265 (473) (613) 849 1,652 117 233 (1,835) (2,154) (1,080) (2,580) (906) (1,105) ___- (4,078) (2,855) (8,032) 81 244 __614 (540) 695 (296) 419 - (1,741) (8,328) 7 (15) (1,734) (8,343)

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BrainZ Instruments Limited Appendix 4E ARBN 116 829 675 Preliminary final report

Financial year ended 31 March 2009

3.1 The deficit before taxation was after charging:

		12 months to	12 months to
	Notes	31 March 2009	31 March 2008
		NZ$’000	NZ$’000
Depreciation on plant and equipment		(165)	(161)
Loss on disposal of plant and equipment		(9)	(4)
Operating lease costs		(97)	(120)
Directors fees		(110)	(256)
Auditors remuneration		(44)	(44)
Other fees paid to auditor		(23)	(21)
3.2 Income tax expense
Prima facie income tax credit on deficit (30%,	2008 33%) 522		2,748
Tax effect on permanent differences
Effect of non-deductible expenditure		(37)	1
Effect of non-assessable gain on sale of assets		126
Effect of tax losses not recognised		(2,119)	(1,552)
Effect of timing differences not recognised		1,508	(1,231)
Difference in overseas tax rates		7	20
Overseas tax credits lost		-	(1)____
Income tax credit/(expense)		7	(15)____

The Group now has unrecognised tax losses of $16,250,000 (2008: $5,901,000) that are available to offset against future taxable income. The future availability of these losses is dependent on the satisfaction of an income tax continuity of ownership test.

3.3 Dividends

There were no dividends paid by the company during the above periods.

3.4 Net Deficit per share Basic and diluted net deficit per share Weighted average number of shares	12 months to 12 months to 31 March 2009 31 March 2008 NZ$’000 NZ$’000
	_____ ($0.03) ($0.14) 60,000,000 60,000,000

Net deficit per share is based upon the weighted average number of outstanding ordinary shares. The company’s potentially dilutive ordinary share options have not been included in determining the weighted average number of ordinary shares.

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Appendix 4E BrainZ Instruments Limited Preliminary final report ARBN 116 829 675 Year ended 31 March 2009

4. Consolidated Balance Sheet Current Assets Cash and cash equivalents Trade and other receivables Inventories Taxation receivable Non-Current Assets Property, plant and equipment Intangible assets Total Assets Current Liabilities Trade and other payables Taxation payable Non-current Liabilities Deferred taxation Equity Share capital Other reserves Accumulated deficit Total Equity and Liabilities 4.1 Intangible Assets Intellectual Property Balance at beginning of year Amortisation for year Impairment charge Balance at end of year	Notes	31 March 2009 31 March 2008 NZ$’000 NZ$’000 2,631 3,462 412 877 - 221 26 67 3,069 4,627 - 267 - 37 - 304 3,069 4,931 ______ 251 437 - 9
	4.1 4.2 8.1 8.2
		_ 251 446 - 4 25,623 25,623 (1,301) (1,018) (21,504) (20,124) 2,818 4,481 _3,069 4,931 31 March 2009 31 March 2008 NZ$’000 NZ$’000 - 4,739 - (661) -(4,078) - -__

The impairment charge is shown separately in other expenses in the Income Statement on page 3.

Computer Software Balance at beginning of year Additions Amortisation for year Reclassified from plant and equipment Balance at end of year Total Intangible Assets	37 62 2 3 (39) (32) - 4 - 37 - 37

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BrainZ Instruments Limited Appendix 4E ARBN 116 829 675 Preliminary final report Financial year ended 31 March 2009

4.2 Share Capital Share capital	31 March 2009 31 March 2008 NZ$’000 NZ$’000	31 March 2009 31 March 2008 NZ$’000 NZ$’000
	__	25,623 25,623

The number of issued and paid-up shares as at 31 March 2009 was 60,000,000 (2008: 60,000,000).All ordinary shares have equal voting rights and share equally in dividends and surplus on winding up.

5. Consolidated Cash Flow Statement

Cash flows from operating activities Receipts from customers Receipts from grants Interest received Income tax refunded Payments to suppliers and employees Income tax paid Net cash outflow from operating activities Cash flows from investing activities Sale of plant and equipment Purchase of plant and equipment Purchase of computer software Net proceeds from sale of business 14 Net cash outflow from investing activities Net decrease in cash held Cash and cash equivalents at beginning of year Effect of exchange rate fluctuations on cash held Cash at end of year Reconciliation with net deficit for the year Net deficit for the year Non-cash items requiring adjustment Amortisation of intangible assets Impairment of intellectual property Depreciation Movement in deferred taxation Share option compensation expense Unrealised foreign exchange losses Items classified as investing activities Net Gain on sale of non current assets Loss on disposal of plant and equipment Movements in working capital Trade and other payables Taxation payable Trade and other receivables Inventories Taxation receivable Net cash outflow from operating activities		12 months to 12 months to 31 March 2009 31 March 2008 NZ$’000 NZ$’000 1,809 2,350 157 361 81 244 35 144 (4,288) (5,905) - (97) (2,206) (2,903) 11 1 (15) (168) (2) (3) 887 _ 881 (170) (1,325) (3,073) 3,462 6,970 494 (435) 2,631 3,462 (1,734) (8,343) 39 693 - 4,078 165 161 (4) (4) 28 (7) (455) 4 (787) - 9 4 (186) (113) (35) (24) 466 108 221 31 67 78____ ______(2,206) (2,903) __
		______

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Appendix 4E BrainZ Instruments Limited Preliminary final report ARBN 116 829 675 Year ended 31 March 2009

6. Dividends

There were no dividends paid by the company during the above periods. The Directors do not recommend the payment of any dividends with respect to the current year.

7. Dividend or Distribution Reinvestment Plan

Not applicable

8.1 Other Reserves

Capital reserve Share option compensation re Foreign currency translation r Total other reserves		31 March 2009 31 March 2008 NZ$’000 NZ$’000
	serve eserve	(1,325) (1,325) - 326 24 (19) _ (1,301) (1,018) __

The capital reserve represents the cost of listing the shares on the ASX on 14 December 2005.

8.2 9. 10.	Statement of accumulated deficit Balance at beginning of year Share option compensation reserve transferred to retained earnings Net deficit for the year Balance at end of year Net Tangible Assets per Security Net tangible assets Net tangible assets per security Shares on issue at end of period Control Over Entities Name of entity Date of Control	(20,124) (11,781) 354 - (1,734) _(8,343) (21,504) (20,124) 31 March 2009 31 March 2008 NZ$’000 NZ$’000 2,817 4,444 $0.047 $0.07 60,000,000 60,000,000 Principal Interest Activities Held Domicile
	BrainZ Instruments USA Inc. 15/12/2005 BrainZ Instruments UK Ltd 3/3/2006	Product Support 100% US Product Support 100% UK

10. Control Over Entities

The subsidiaries have had no material impact on the financial performance or position of the company.

11. Details of associates and joint venture entities

Not applicable.

12. Other significant information

None.

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BrainZ Instruments Limited Appendix 4E ARBN 116 829 675 Preliminary final report Financial year ended 31 March 2009

13. Accounting Standards

The financial statements of the company are prepared in accordance with NZ IFRS which is now generally accepted accounting practice in New Zealand.

14. Commentary on the Results

A commentary on the company’s results for the year ended 31 March 2009 is presented above under Note 2.6.

In October 2008 BrainZ entered into an Asset Purchase Agreement with Natus Medical Inc (NASDAQ: BABY) to sell all or substantially all of its assets to Natus for NZ$1,300,000. The net gain of $419,000 is recorded in the income statement as a result of this sale. Sale costs of $413,000 were incurred on the transaction

The net deficit per share is presented in Note3.4 above.

No ordinary share dividends have been declared for the period.

15. Audit Status

This report is based on financial statements for the year ended 31 March 2009 which are subject to audit and comparatives for the year ended 31 March 2008 which have been audited.

The company’s auditor is Deloitte, Auckland.

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