SPENDA LIMITED — M&A Activity 2005

Mar 9, 2005

COMPANY ANNOUNCEMENT

Premier Bionics to acquire Medic Vision Ltd. raises new capital

10th March 2005: The Directors of PBI are pleased to announce that the company has reached conditional agreement to acquire all the shares in Medic Vision Ltd. Medic Vision is an unlisted company delivering an integrated package of services and products for virtual reality-based training of surgeons. The company is expected to generate in excess of $1.2m in revenues in the financial year to June 2005. This is forecast to increase substantially in the 2006 financial year. Based in Melbourne Medic Vision is working closely with the Royal Australasian College of Surgeons ("RACS"), Medic Vision already has customers in Australia, the UK, Hong Kong and China and is currently in discussions with potential customers in Israel, Ireland, India and the US.

After commencing operations in 2001 Medic Vision has now become a global leader in the application and integration of virtual reality ("VR") technology to a variety of surgical training situations. These are generally delivered through skill centres designed by the company for the specific purpose of training surgeons in a variety of surgical techniques. Surgical and medical training institutions and facilities (such as the RACS and teaching hospitals) are the typical locations for such skill centres. Medic Vision has become a leader in the design and implementation of these medical and surgical skills training centres.

Since its inception. Medic Vision has followed a strategy of developing three distinct but closely related businesses. These comprise a design & project management consulting business in the development of skills training centres and operating theatre design and commissioning, an agency business selling 3rd party VR hardware and software products, a design & project management consulting business and a virtual reality software development business. Demand for the company's products and services has reached the stage where it requires expansion capital. This new capital will enable Medic Vision to take advantage of substantial new opportunities in several countries, building on its existing customer base. With the ability to expand operations more rapidly, and with strong interest from offshore hospitals, revenues are anticipated to grow substantially over the next 2 to 3 years and will reflect the company's ability to take advantage of the rapid development of what is a new industry.

In recognition of Medic Vision's significant presence in a new emerging market Medic Vision was recently awarded a BIF grant for the development of its own surgical simulation products in the areas of ophthalmology, spinal anaesthetics, orthopaedics and gynaecology.

Medic Vision is currently the only company globally providing an integrated approach to the training and development of surgeons using VR tools. It offers a full package of skill centre curriculum development, VR-based software & hardware products and ongoing support to surgeons. This novel approach is becoming increasingly attractive as the difficulties associated with traditional training methods using cadavers and animals make such methods unsustainable.

The FDA in America is now advising that in certain areas of high risk surgical procedures the training of surgical techniques must not be carried out on patients. This indicates that simulation is the only viable alternative.

Medic Vision will be acquired in a script-for-script transaction. An initial tranche of approximately 5.8 million new shares in Premier Bionics (representing $2.0 million) will be issued to the current shareholders of Medic Vision, with a second tranche payable upon commercial deployment of

Medic's Epidural Anaesthesia product. This is scheduled for the second half of 2005. There will be shares and options issued for this tranche, representing a maximum value of $1 million.

Ross Horley, Managing Director of Medic Vision, said "the transaction with Premier Bionics comes at an ideal time for us. It provides us with the capital, resources and exposure that are critical in enabling us to achieve immediate key business milestones. We look forward to playing a major role in the generation of substantial shareholder value for Premier."

Commenting on the acquisition of Medic Vision, Peter Marks, Executive Chairman of Premier Bionics, said "we are delighted to have reached conditional agreement with the Board of Medic Vision in relation to acquiring and substantially expanding their business, subject to execution of formal agreements and receipt of shareholder approval. Medic Vision is at an exciting stage in its development and we look forward to working with Ross Horley and his team as they accelerate Medic Vision's already impressive growth."

As part of the acquisition, additional capital will be required to fully exploit the suite of commercial opportunities available to Premier Bionics. The company is proposing, subject to shareholder approval, to raise $3.5 million pursuant to a private placement to institutional and professional investors.

Shareholders will be asked to approve these issue of shares to acquire Medic Vision as well as the capital raising at a general meeting to be held shortly. A Notice of Meeting and detailed Explanatory Memorandum will be available in due course.

Medic Vision will add a substantial and highly attractive investment to the Premier Bionics portfolio. The majority of funds to be invested in Medic Vision will be used to increase the company's sales force and boost marketing activities. The acquisition also provides a synergistic balance to the commercisalisation work currently underway across the existing PulmoSonix suite of products.

The Directors believe the acquisition of Medic Vision represents a highly attractive opportunity for Premier Bionics, one which will continue to enhance its position in the medical devices and diagnostics market.

The development and commercialisation work underway at PulmoSonix will be the subject of a more detailed update to be released shortly. However, the Directors are pleased with the substantial progress made in the AirwayClear suite of products and with the PulmoScreen (chronic obstructive pulmonary disease diagnosis) product. The latter product is nearing the stage where a prototype device will be evaluated for the first time in a clinical setting.

For further information contact:

Mr Peter Marks	Dr Martin Soust
Executive Chairman	CEO
$(03)$ 9824 8166	$(03)$ 9508 8200

Background on Premier Bionics

Premier Bionics was formed in December 2001 to invest in advanced, Australian-based research in medical devices and diagnostics. The company listed on the Australian Stock Exchange (ASX: PBI) in May 2002.

The directors of Premier Bionics identified a confluence of three factors that represented a large commercial opportunity. These factors are: The global medical diagnostics and devices market is estimated to be worth US$170 billion annually; Australian researchers have a demonstrated capacity for creative contribution to innovation in medical devices and diagnostics; and later stage Australian R&D projects tend to be relatively under-funded.

Premier Bionics' first investment is PulmoSonix Pty Ltd, a company formed to develop technology developed at Monash University's Ritchie Centre for Baby Health Research. Premier Bionics was also granted a 7-year exclusive right of first review, evaluation and commercialisation of technology produced by researchers at the Ritchie Centre in the field of respiratory disorders, sleep apnea and other sleep disorders, and chronic lung disease.

Company information:

Dr Martin Soust

CEO Premier Bionics

Tel: 03 8508 8200