USCOM LIMITED — Investor Presentation 2011

Nov 7, 2011

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USCOM (ASX: UCM) Investor Presentation

8th NOVEMBER 2011 The Measure of Life

www.uscom.com.au

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Agenda

• Review of Operations FY 2011

• Uscom’s Market, Selling Challenges

• Uscom’s Execution Plan

• Q&A

• Resolutions

The Measure of Life

www.uscom.com.au

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2011 Review

• Exclusive distributor Spacelabs contract terminated in Nov 2010 - only PMS in Asia was left

• Market purchasing decisions were impacted globally by tighter economics/austerity measures/ committee driven buyers/US healthcare reforms

• Release of Oxycom (Little impact from lack of go-to-market strategy)

• • H2 a time to rebuild: recapitalisation, build a strategy, set accountabilities, simplify messages, establish sales proposition, narrow the focus, develop sales positioning, develop pipeline management, hire CEO.

• 6 new distributors appointed & trained (42 sales reps) in US/Canada, 1 S. Africa, 1 M.East, 3 Europe, 1 Aust

www.uscom.com.au

The Measure of Life

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Financials 2011

Revenues for the year were $834,813 similar to the previous year with COGS similar also however a much stronger Australian dollar impacted.

Margins on unit sales over COGS averaged 70%

Loss was 45% increased over the previous year due to expensed options granted t o th e ncom ng oar i i b d mem b ers o f $330 , 000 an d $476 , 880 i ncrease n sa es an i l d marketing costs to drive new sales initiatives. Capital raised $3.096m

Unit sales totalled 47 plus demo units

Sales expenditures pegged back since June whilst sales pipeline develops.

Share trading was extremely thin with 1,099,690 shares transacted for $331,257 at an average price of 31 cents.

www.uscom.com.au

The Measure of Life

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Joe Trygar – New CEO

• Gibson Consultants contacted 100 candidates.

• Brief was to identify a US based sales focused executive

• Proven track record of turnarounds, business development in medical device industry , capable of stepping up to CEO

• Shortlisted 6 candidates interviewed by Chair

• 3 interviewed by Board members panel

• Extensive referencing conducted by board member

• Joe unanimously appointed by Board panel initially as SVP Sales.

www.uscom.com.au

The Measure of Life

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Joe Trygar

• USA based (Chicago – Milwaukee)

• Successfully launched 4 start-ups

• Developed Patents/Co-Patents

• 2007 - First in category for the WI Business Plan Contest (Raised $750,000)

• 2008 – Runner up for the WI Business Plan Contest (Raised $500,000)

• 2011 – 1 of 2 Companies Chosen For Investor 25% Tax Break

• Previous Founder & President of ArcOne, LLC (Hospital, GPO, LTC, & Managed Care - Medical Equipment Sales & Distribution).

• Previous Founder & President of Dossette - Pharmacy Automation ($1.3M investment to $43M in sales & flip in 10 years

• Served as an Instrument Scientist & inventor in the Diagnostics Division of Abbott Laboratories from 1979 to June 1996. Winner of the following awards: Chairman, Science, Entrepreneurial, Quality, Sisyphus, & Prometheus

The Measure of Life

www.uscom.com.au

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US Market Opportunity

• USA is too large to ignore -17% of US GDP .

• USA Impacts many other geographies.

• .

• Haemodynamic monitors make up 8 5% of the patient monitoring equipment market worth $2.3 billion

• PAC (Swan Ganz) is approx 50% of haemodynamic monitoring market in US & declining, others are the less invasive monitors like USCOM

The Measure of Life

www.uscom.com.au

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Market Competition

Cardio Dynamics Bio Z Bio Impedence Cheetah Nicom Bio impedence Deltex CardioQ Transesophageal Edwards (54%) Flowtrac Arterial line Lidco Lidco Plus Lithium dilution PMS (30%) Picco2 Thermodilution

The Measure of Life

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Market Opportunity

• US Hospitals – 5759 (2011 American Hospital Association) 1000 are Pediatric Hospitals

• Assuming Uscom had 10% penetration with an average of 3 units - per site or approx. 1728 units = $ 17,280,000 (Based on lower margins)

• Assuming Uscom targeted 50% of the Pediatric Hospitals with an average of 3 units or approx.1500 units = $15,000,000

• Expanding this beyond Hospitals to include LTC, Home Health, Emergency Medicine, GPO’s etc. broadens the Uscom market to $100MM or at 10% = $10,000,000

• International will add an additional 25-30% = $4,320,000

The Measure of Life

www.uscom.com.au

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So...Why Are Sales So Low?

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Uscom has followed many companies launching new products as a startup (failure rate 55-60%) – fir st t ri ed d ir ect sa l es then exclusive distributorships …both failed. Uscom suffered from missing a major milestone in product launches known as Commercialization strategy

The Measure of Life

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Previous state of play at Uscom

No accountability Global travel Uncontrolled expenses N o strateg c p an i l No tactical implementation Sales team compromised Lip service to changes being established

The Measure of Life

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In addition….

• Distributors believed- Complex sale needed strong clinical support, other products simpler

• Clinicians view Uscom lower down their totem pole vs other capital items

• Sales positioning was under developed

• Distributors noted that to et ca ital urchase into a hos ital bud et is a 12 – g p p p g

• 18 month cycle

• Old leads of no use & opportunity management at rep level misunderstood by former US staff

• The strategy of opening up to IDNs GPOs, OEMs was lost on distributors & sales staff

• Unbridled drive to sign up as many distributors as possible

• There was no structured approach to designing med economics (cost /benefit analysis v alternative methods, infection costs etc

The Measure of Life

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So what are we doing differently today?

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Change… The key to future success

New Board New CEO New Distributors in USA, Canada, Europe N ew s ra egy execu t t & ti on p an w l ith mu lti p e par ners l t Tighter budgetary & monetary controls New sales culture Pipeline development & management Medical economics & outcome studies Portfolio of products Outsourcing

The Measure of Life

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The Global Strategy

• Reduced geographic coverage & increase US & Asia Pacific focus

• Focus initially on key specific sectors within hospitals- PICU, NICU, ER,

• Fix the distributor model – Listen & be proactive instead of reactive

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• Set up & manage clinical support across regions

• OEM discussions imperative embody Uscom technology into large patient monitors & explore tech. to integrate with Uscom

• Do what we say we are going to do... Not just talk about it.

(ROI Model, Partnerships, KOL, Leasing, Clinical Outcome Programs, Protocol Development, Product Portfolio Dev.)

• Exploit outside hospital opportunities using a multiple channel strategy – Buyer

• Groups, IPOs, LTCs,

The Measure of Life

www.uscom.com.au

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Simply put…

• Uscom needs to establish & build widespread distribution using strategic partnerships

• Uscom needs to integrate the device with greater capabilities

• Uscom needs to expand their portfolio of offerings.

• Uscom needs to show an economics value

• proposition & develop a price curve. (Over the top 79% margins are well above the 45%-55% norm)

The Measure of Life

www.uscom.com.au

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The Progress Snapshot

• Sales in 2011 calendar year – 31 Hospital sales, 62 Demo sales

• Over 200 opportunities logged & being qualified

• New clinical reps appointed to support sales reps

• 11 commission only based independent sales reps appointed to plug holes

• Cash burn rate dramatically reduced

• Strategic partnerships ARE developing with IDNs, GPOs, OEMs

• Several staff departures as changes were implemented –

• Accountability was hard to swallow

• Technology roadmap - new tech partners being signed, new functionality aligned with market requirements (eg wifi, flow tracer signal acquisition, minaturisation, integration with EMR & others)

The Measure of Life

www.uscom.com.au

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This is not the time to abandon US , throw in the towel and lockdown.

Our renewed/focused effort is starting to show real results The need to differentiate, collaborate, & add technology is now

The Measure of Life

www.uscom.com.au

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Questions and Discussion?

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The Measure of Life

www.uscom.com.au