NANOSONICS LIMITED — Capital/Financing Update 2007

May 16, 2007

17 May 2007

Companies Announcements Office Australian Securities Exchange

Nanosonics Offer Closes Oversubscribed and Lists on ASX

The Board of Directors is pleased to advise that the Nanosonics Share Offer closed heavily oversubscribed on 4 May 2007 and has raised \$27,000,000 for the further development and commercialisation of the Company's medical instrument disinfection products.

Trading in the Company's shares is expected to commence at 11.00am on 17 May 2007 on the ASX under the code NAN.

The Directors would like to take this opportunity to welcome Nanosonics' new shareholders and thank all its existing and new shareholders for supporting the Company in implementing its growth strategy.

Development of the Company's ultrasound disinfection device continues towards a launch in first half of 2008 in the European Union. In support of this objective the Company has recently acquired new premises to complete the final stages of development and to begin the initial manufacturing verification process.

Nanosonics has begun the development of its European Regulatory technical file and expects to complete the process towards the end of the third quarter of calendar 2007.

Nanosonics continues to make excellent progress with the establishment of third party channels to market in the European Union. Advanced negotiations are in progress with several parties and the Company expects to make announcements in the coming months regarding the appointment of distributors and service agents in Europe. Collaborative partnerships with industry OEMs continue to progress in a positive manner and the Company looks to advising the market of these developments in the near future.

Nanosonics recently commenced discussions with potential distribution partners in the Jor

USA and aims to launch products in this market in the second half of 2008.

The Company continues to receive high levels of world-wide interest, both in respect of its Ultrasound NanoNebulant product and other technologies in its product development pipeline.

Advancements continue to be made with the development of the Company's endoscope disinfection product. The Company also continues additional R&D on further products and innovations that are expected to enhance the Company's technology and product offerings.

The Board looks forward to keeping the market abreast of significant developments as they occur and the continued support of its shareholders.

Yours sincerely Nanosonics Limited

Maurie Stang Non-executive Chairman