HYTERRA LTD — Capital/Financing Update 2008

Feb 13, 2008

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Investor Update

14 February 2008: BrainZ (ASX:BZI)

BRM3 monitor sales

European sales volumes of BrainZ’s core product, the BRM3 monitor, are proceeding satisfactorily. Launched in October 2007, the new monitors are winning acceptance from neonatal professionals. As outlined in the BrainZ announcement on 31 January BRM3 monitor sales in the US are lower than expected.

New clinical support programs have been launched into both markets to support the use of the company’s products. The new programs have been well received and use web based tools such as Webinars and User Forums yielding cost savings while providing customer convenience. Global thought leaders have been recruited to speak at “Grand Round” sessions on the topic of Neonatal Brain Injury and scheduled to take place quarterly.

RecogniZe™ software launch under way in Europe

RecogniZe™ has been launched as an optional feature which can be ordered at the time a monitor is purchased or as an upgrade at a later time. It is compatible with the BRM3’s predecessor, the BRM2 monitor. While it is too early to provide sales information, the RecogniZe™ software launch in Europe has been greeted with enthusiasm from customers and sales teams.

BrainZ’s RecogniZe™ algorithm was featured in a podium presentation at this year’s International Conference on Brain Monitoring and Neuroprotection of the Newborn held last month in Vienna. Data presented from studies being conducted by Washington University in St Louis indicated the clinical performance of RecogniZe™ at the bedside was better than had been expected.

RecogniZe™ in the USA

BrainZ has withdrawn its current 510(k) submission for RecogniZe™ after it was put on hold for the second time. The relatively speedy 510(k) application requires similarities with existing products to be demonstrated. The US FDA has advised that a number of the comparator devices referenced in the submission were not suitable, although their marketing materials suggested otherwise.

The company is assessing the options for resubmitting a new US filing for RecogniZe™. Part of the new submission would include data from the Washington University clinical trials which was

not available at the time of the initial 510(k) filing. If the company is required to conduct additional clinical trials this could be a protracted process with timelines currently unclear.

BrainZ focus

BrainZ will focus on sales of RecogniZe™ in Europe and other areas not impacted by the FDA as well as continue its push of BRM3 sales across all markets. There is a keen awareness of the need for better tools at the bedside to assist clinicians in managing neonatal seizures and we strongly believe the BRM monitors and RecogniZe™ will both play a primary role in meeting that need across the world.

Enquiries:

Richard Smith Chief Executive Officer BrainZ +1 443 280 2920

Rudi Michelson Monsoon Communications 03 9620 3333

About BrainZ

BrainZ (ASX: BZI) is a New Zealand based medical technology company specializing in the research, development, manufacturing and sale of bedside brain monitoring technology. The BRM2 Brain Monitor, BrainZ’s first product, is a unique bedside tool that assists in the detection of brain injury and seizure activity in neonates. It has been specifically designed to assist intensive care staff with clinical decision-making in conjunction with other clinical data and in the direction of care on a day-to-day basis.

The BRM2 monitor, and its successor, the BRM3, has received regulatory approval and is in use in 20 countries worldwide. BrainZ dominates the local Australian and New Zealand markets via direct sales channels. BRM monitors are also installed in over 40 leading US hospitals. BrainZ has secured an exclusive agreement with GE Healthcare, a leading supplier of patient monitoring systems, for the distribution of BRM Brain Monitors in the USA and UK markets.

BrainZ Instruments was established in 2001 to commercialize pioneering neonatal brain research from the Auckland University’s Liggins Institute.