USCOM LIMITED — Interim / Quarterly Report 2009

Feb 26, 2009

Appendix 4D Half yearly report

Rules 4.1, 4.3 Appendix 4D

Half yearly report

Introduced 1/1/2003.

Name of Entity	USCOM LIMITED
ACN	091 028 090
Financial Period Ended	31 DECEMBER 2008
Previous Corresponding Reporting Period	31 DECEMBER 2007

Results for Announcement to the Market

			$	$	Percentage increase /(decrease) over previous corresponding period
Revenue from ordinary activities			560,628		1%
Profit / (loss) from ordinary activities after tax attributable to members			(995,650)		14%
Net profit / (loss) for the period attributable to members
Dividends (distributions)	Amount per security			Franked amount per security
Final Dividend	Nil			N/A
Interim Dividend	Nil			N/A
Previous corresponding period	Nil			N/A
Record date for determining entitlements to the dividends (ifany)
Brief explanation of any of the figures reported above necessary to enable the figures to be understood: Refer Directors’ report in Attachment 1.

The half-yearly report it is to be read in conjunction with the most recent annual financial report.

• See chapter 19 for defined terms.

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Dividends

Dividends
Date the dividend is payable	N/A
Record date to determine entitlement to the dividend	N/A
Amount per security	N/A
Total dividend	N/A
Amount per security of foreign sourced dividend **or distribution **	N/A
Details of any dividend reinvestment plans in **operation **	N/A
The last date for receipt of an election notice for participation inany dividend reinvestment plans	N/A
NTA Backing
	Current Period	Corresponding Period
Net tangible asset backing per ordinary security	7¢	8¢

Other Significant Information Needed by an Investor to Make an Informed Assessment of the Entity’s Financial Performance and Financial Position

Refer Attachment 1.

• See chapter 19 for defined terms.

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Commentary on the Results for the Period

The earnings per security and the nature of any dilution aspects :

Refer Income Statement in Attachment 1.

Returns to shareholders including distributions and buy backs :

Not Applicable. Significant features of operating performance : Refer Attachment 1. The results of segments that are significant to an understanding of the business as a whole:

Refer to Note 6 on page 15 in Attachment 1.

Discussion of trends in performance :

Refer Attachment 1.

Any other factor which has affected the results in the period or which are likely to affect results in the future, including those where the effect could not be quantified:

None.

• See chapter 19 for defined terms.

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Control Gained Over Entities Having Material Effect

Name of entity (orgroupof entities)	Not Applicable
Date controlgained
Consolidated profit / (loss) from ordinary activities since the date in the current period on which control was acquired
Profit / (loss) from ordinary activities of the controlled entity (or group of entities) for the whole of theprevious corresponding period

Loss of Control Gained Over Entities Having Material Effect

Name of entity (orgroupof entities)	Not Applicable
Date control lost
Consolidated profit / (loss) from ordinary activities for the currentperiod to the date of loss of control
Profit / (loss) from ordinary activities of the controlled entity (or group of entities) while controlled for the whole of the previous corresponding period

Details of Associates and Joint Venture Entities

Name of Entity	Percentage Held	Percentage Held	Share of Net Profit	Share of Net Profit
	Current Period	Previous Period	Current Period	Previous Period
Not Applicable
Aggregate Share of Net Profits

• See chapter 19 for defined terms.

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Audit/Review Status

This report is based on accounts to which one of the following applies: (Tick one) The accounts have been audited The accounts have been subject to review * The accounts are in the process of being The accounts have not yet been audited or audited or subject to review reviewed If the accounts have not yet been audited or subject to review and are likely to be subject to dispute or qualification, a description of the likely dispute or qualification: Not Applicable If the accounts have been audited or subject to review and are subject to dispute or qualification, a description of the dispute or qualification: Not Applicable Attachments Forming Part of Appendix 4D Attachment # Details 1 Interim Financial Report Signed By Director Print Name Paul Butler, Director and CEO Date** 26 February 2009

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

DIRECTORS’ REPORT

Your directors present the financial report of Uscom Ltd for the half-year ended 31 December 2008.

Directors

The names of directors who held office during or since the end of the half-year:

Mr Rob Phillips Mr Roman Zwolenski Mr Bruce Rathie Mr Paul Butler

Shareholdings of directors as at 31 December 2008

Name of directors	Balance 31 December 2008
Mr Rob Phillips	16,932,3501
Mr Roman Zwolenski	225,0002
Mr Bruce Rathie	45,000
Mr Paul Butler	313,2123
Total	17,515,562

1 262,350 of these ordinary shares are held by NCS Pty Ltd as Trustee for Phillips Family Superannuation. 2

All these ordinary shares are held by Z-Link Pty Ltd Super Fund. Mr Zwolenski is a trustee of this fund. 3

38,212 of these ordinary shares are held by family associate.

Review of operations

In December 2008 Uscom signed a distribution partnership with Spacelabs Healthcare for North America, Latin America, Europe, Middle East and India. Spacelabs are a top tier medical device distributor with strong established marketing channels in these regions. The USCOM 1A is an important technology for them as it provides a differentiator in the highly competitive monitoring market. The agreement covers the in hospital market and allows Uscom to develop other market opportunities outside the hospital.

This was a very important achievement for the company as strategically we were very committed to this path and management placed a lot of effort towards achieving this outcome. In addition to the distribution agreement with Spacelabs Healthcare, Uscom also completed an equity investment with Spacelabs parent company, OSI Systems. This equity deal was for two million shares priced at $0.30 which represented a slight premium to market at the time of the transaction along with a further two million options at a 25% premium. This equity investment provided Uscom with additional capital to help support Spacelabs launch the USCOM product through training and education.

First quarter sales were strong and we were on track to show good sales growth for the half year however this slowed significantly through the second quarter. This was attributable to many factors, firstly the economic environment led to many customers deferring purchases due to capital freezes that were put in place. Management attention was predominantly focused on completing the partnership with Spacelabs which resulted in fewer direct sales in North America and Australia. We are anticipating strong sales growth in North America as a result of having a strong sales force representing our product. Australian sales were low for the period largely due to a lack of resources in the region, we are reviewing options for the Australian region.

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

We continued to tightly control costs whilst maintaining core capabilities and this combined with the new equity has kept us in a strong cash position. Uscom will continue to closely manage costs whilst ensuring that we provide the optimum level of support to our distribution partners. Key developments in the half year include the release of a new hardware platform which keeps the Uscom technology up to date with the latest in technology and the enhancement of our education and training materials which will be essential in rolling the product out to a much larger sales force. Through solid financial management we were able to minimise costs and recognise foreign exchange gains at an ideal time.

Uscom continues to be well represented at international conferences and through publications and presentations on our technology. Management believes that our established product and solid scientific grounding, combined with our partnership with Spacelabs, will generate solid sales over the next period. This will position us well so that we will be able to extend into additional markets and begin to realise the strong potential of our patented technology.

Financial highlights

for the 6 months to 31 December 2008

• Revenue from sale of goods

• Costs

• Loss after income tax

• Cash receipts from sales

$285,619

$1,602,002

$995,650

$451,134

• Cash on hand at 31 December 2008 $2,215,983

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Rob Phillips

Director

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Paul Butler

Director and CEO

Sydney, 26 February 2009

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

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AUDITORS’ INDEPENDENCE DECLARATION

• To : The Directors

Uscom Limited

As lead auditor for the review of Uscom Limited for the half year ended 31 December 2008 I declare that to the best of my knowledge and belief, there have been:

• (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the review; and

• (b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Uscom Limited and the subsidiaries it controlled during the half year.

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PKF

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Tim Sydenham Partner Sydney

Dated this 26[th] day of February 2009

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726 Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia DX 10173 | Sydney Stock Exchange | New South Wales

PKF East Coast Practice is a member of PKF Australia Limited a national association of independent chartered accounting and consulting firms each trading as PKF. The East Coast Practice has offices in NSW, Victoria and Brisbane. PKF Australia Limited is a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

Uscom Limited and its controlled entities

Condensed Income Statement

for the half year ended 31 December 2008

Continuing operations Note	31 Dec 2008 31 Dec 2007 $ $
Revenues from ordinary activities 2 Raw materials and consumables used Expenses from ordinaryactivities,excludingfinance costs 3	560,628 555,407 (54,276) (68,201) (1,602,002) (1,744,315)
Loss before income tax credit Income tax credit	(1,095,650) (1,257,109) 100,000 100,000
Loss after income tax credit	(995,650) (1,157,109)
Earning per share (EPS) Basic earnings per share (cents per share) Diluted earningsper share(centsper share)	(2.6) (3.0) (2.6) (3.0)

This Condensed Income Statement is to be read in conjunction with the annual financial report for the year ended 30 June 2008 and the attached notes.

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

Uscom Limited

Condensed Balance Sheet as at 31 December 2008

Note	31 Dec 2008 30 Jun 2008 $ $
Current assets Cash and cash equivalents Trade and other receivables Inventories Tax assets Other assets	2,215,983 2,508,644 21,432 221,409 253,466 111,933 351,641 251,641 89,163 60,802
Total current assets	2,931,685 3,154,429
Non-current assets Trade and other receivables Plant and equipment Intangible assets	3,550 3,550 127,918 153,977 478,221 447,881
Total non-current assets	609,689 605,408
Total assets	3,541,374 3,759,837
Current liabilities Trade and other payables Short term provisions Lease incentives	256,464 132,897 124,848 145,100 - 4,350
Total current liabilities	381,312 282,347
Non-current liabilities Longtermprovisions	93,752 71,964
Total non-current liabilities	93,752 71,964
Total liabilities	475,064 354,311
Net assets	3,066,310 3,405,526
Equity Issued capital 4 Options reserve 5 Accumulated losses Translation reserve	17,183,367 16,644,265 937,192 864,765 (15,138,378) (14,142,728) 84,129 39,224
Total equity	3,066,310 3,405,526

This Condensed Balance Sheet is to be read in conjunction with the annual financial report for the year ended 30 June 2008 and the attached notes.

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

Uscom Limited

Condensed Statement of Changes in Equity for the half year ended 31 December 2008

	Ordinary	Accumulated	Options	Translation	Total
	share capital	losses	reserve	reserve
	$	$	$	$	$
Balance at 1 July 2007	16,644,265	(11,968,244)	755,687	64,558	5,496,266
Loss from continuing operations	-	(1,157,109)	-	-	(1,157,109)
Share-based payments	-	-	51,753	-	51,753
Exchange differences	-	-	-	(8,325)	(8,325)
Balance at 31 December 2007	16,644,265	(13,125,353)	807,440	56,233	4,382,585
Balance at 1 July 2008	16,644,265	(14,142,728)	864,765	39,224	3,405,526
Issued Capital	539,102	-	-	-	539,102
Loss from continuing operations	-	(995,650)	-	-	(995,650)
Options reserve	-	-	72,427	-	72,427
Exchange differences	-	-	-	44,905	44,905
Balance at 31 December 2008	17,183,367	(15,138,378)	937,192	84,129	3,066,310

This Condensed Statement of Changes in Equity is to be read in conjunction with the annual financial report for the year ended 30 June 2008 and the attached notes.

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

Uscom Limited

Condensed Cash Flow Statement for the half year ended 31 December 2008

	31 Dec 2008	31 Dec 2007
	$	$
Cash flows from operating activities
Receipts from customers	451,134	337,844
Grants received	1,690	2,103
Payments to suppliers and employees	(1,318,802)	(1,732,226)
Interest received	55,156	118,902
Insurance recovery	-	604
Net cash used in operatingactivities	(810,822)	(1,272,773)
Cash flows from investing activities
Purchase of plant and equipment	(1,995)	(9,847)
Purchase ofpatents and trademarks	(58,947)	(70,367)
Net cashprovided by/ used investingactivities	(60,942)	(80,214)
Cash flows from financing activities
Proceeds from issue of shares and options	600,001	-
Share issue cost	(20,898)	-
Net cashprovided byfinancingactivities	579,103	-
Net decrease in cash and cash equivalents	(292,661)	(1,352,987)
Net cash and cash equivalents at the beginning of the period	2,547,159	4,360,102
Exchange rate adjustments to cash and cash equivalents at the beginning ofthe period	(38,515)	(979)
Net cash and cash equivalents at the end of the period	2,215,983	3,006,136

This Condensed Cash Flow Statement is to be read in conjunction with the annual financial report for the year ended 30 June 2008 and the attached notes.

• See chapter 19 for defined terms.

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Attachment 1 Notes to the Interim Financial Report

Uscom Limited

Selected Explanatory Notes to the Condensed Financial Statements for the half year ended 31 December 2008

Note 1 – Statement of significant accounting policies

The half-year consolidated financial report was approved by the Board of Directors on 26 February 2009. This half-year consolidated financial report has been prepared in accordance with Accounting Standard AASB 134 and is to be read in conjunction with the annual financial report for the financial year ended 30 June 2008. This is a general purpose financial report which has been prepared in accordance with Australian Accounting Standard, including Australian Accounting Interpretations and the Corporations Act 2001.

The half-year report does not include full disclosures of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

Accordingly, it is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2008 and any public announcements made by Uscom Limited during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

The same accounting policies have been followed as those applied and discussed in the financial report for the financial year ended 30 June 2008.

• See chapter 19 for defined terms.

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Attachment 1 Notes to the Interim Financial Report

		31 Dec 2008 31 Dec 2007 $ $
	Note 2 – Revenue Sale of goods Other income Interest received Grants received Insurance recovery Exchange gains Total other income Total revenue Note 3 – Expenses from ordinary activities Depreciation and amortisation expenses Employee expenses Research and development expenses Advertising and marketing expenses Occupancy expenses Regulatory expenses Bad debt expenses Administrative expenses Total expenses from ordinary activities Note 4 – Issued capital Ordinary shares Fully paid ordinary shares Total contributed equity Movement in issued capital Shares on issue at 1 July 2008 Proceeds from shares issued to OSI Systems, Inc Share issue cost Ordinary shares at 31 December 2008 Ordinary shares Ordinary shares issued to OSI Systems, Inc Total fully paid ordinary shares at 31 December 2008 Note 5 – Options reserve Options reserve balance at the beginning of the period Expenses arising from share-based payment Proceeds from options issued to OSI Systems, Inc Options reserve balance at the end of the period	285,619 436,791 59,178 107,555 1,690 2,103 - 604 214,141 8,354
		275,009 118,616
		560,628 555,407
		54,192 71,122 671,503 846,521 262,447 235,074 276,110 298,623 66,670 69,744 29,295 46,581 41,229 20,586 200,556 156,064
		1,602,002 1,744,315
		31-Dec-08 30-Jun-08 $ $ 17,183,367 16,644,265
		17,183,367 16,644,265
		16,644,265 16,644,265 560,000 - (20,898) -
		17,183,367 16,644,265
		Number Number 38,000,000 38,000,000 2,000,000 -
		40,000,000 40,000,000
		31-Dec-08 30-Jun-08 $ $ 864,765 755,687 32,426 109,078 40,001 -
		937,192 864,765

• See chapter 19 for defined terms.

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Attachment 1 Notes to the Interim Financial Report

		31-Dec-08 31-Dec-07
	Note 5 – Options reserve (continued) Movement in option number Options at the beginning of the period Granted during the period Lapsed during the period Exercised during the period Options at the end of the period	Number Number 690,000 1,355,000 3,400,000 - (255,000) (665,000) - -
		3,835,000 690,000

Note 6 – Segment information Primary Segment information Uscom Ltd operates in the global health and medical products industry. Secondary Segment information Geographic segment revenues – sale of goods Australia Asia Europe USA Segment total	31-Dec-08 31-Dec-07 $ $ 15,225 158,275 127,249 83,695 35,309 102,761 107,836 92,060
	285,619 436,791

Note 7 – Contingent assets

There were no contingent assets as at 31 December 2008.

Note 8 – Contingent liabilities

There were no contingencies as at 31 December 2008.

Note 9 – Events after Balance Sheet date

There were no events subsequent to 31 December 2008 that are required to be reported in this note.

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

DIRECTORS’ DECLARATION

The directors of Uscom Ltd declare that:

• 1 the half-year financial statements and notes of Uscom Ltd are in accordance with the Corporations Act 2001, including:

• (a) giving a true and fair view of the company’s financial position as at 31 December 2008 and of its performance as represented by the results of its operations, changes in equity and cash flows for the half year ended on that date; and

• (b) complying with Accounting Standard AASB 134 “Interim financial reporting” and the Corporation Regulations 2001 and other mandatory professional reporting requirements.

• 2 In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay it debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the board of directors.

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Rob Phillips

Director

Paul Butler

Director and CEO

Sydney, 26 February 2009

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Uscom Limited and subsidiaries

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Uscom Limited, which comprises the balance sheet as at 31 December 2008, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration of the consolidated entity at 31 December 2008 or from time to time during the half year ended on that date.

Directors’ Responsibility for the Half-Year Financial Report

The directors of Uscom Limited are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2008 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Uscom Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the review of the annual financial report.

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726

Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia DX 10173 | Sydney Stock Exchange | New South Wales

PKF East Coast Practice is a member of PKF Australia Limited a national association of independent chartered accounting and consulting firms each trading as PKF. The East Coast Practice has offices in NSW, Victoria and Brisbane. PKF Australia Limited is a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

• See chapter 19 for defined terms.

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Attachment 1 Interim Financial Report

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Uscom Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2008 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

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PKF

==> picture [93 x 40] intentionally omitted <==

Tim Sydenham Partner Sydney

26 February 2009

Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au PKF | ABN 83 236 985 726

Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia DX 10173 | Sydney Stock Exchange | New South Wales

PKF East Coast Practice is a member of PKF Australia Limited a national association of independent chartered accounting and consulting firms each trading as PKF. The East Coast Practice has offices in NSW, Victoria and Brisbane. PKF Australia Limited is a member of PKF International, an association of legally independent chartered accounting and consulting firms.

Liability limited by a scheme approved under Professional Standards Legislation

• See chapter 19 for defined terms.

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