USCOM LIMITED — Management Reports 2011

Apr 6, 2011

Uscom Limited ABN 35 091 028 090

Level 7, 10 Loftus Street Sydney NSW 2000 Australia T +612 9247 4144 F +612 9247 8157 www.uscom.com.au

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Shareholder Address

7th of April 2011

Dear Shareholders,

It is now three months since commencing with Uscom as Executive Chairman and I would like to take this opportunity to give you an update on our progress.

As you will be aware, we successfully completed the private placement in December and a subsequent Share Purchase Plan which was offered to all existing shareholders in February and raised a total of $3.17million. An Extraordinary General Meeting was held on February 24th 2011 to approve the private placement. These funds are to be deployed primarily in developing and executing our sales and marketing strategies to ensure we generate sales results.

To date Uscom has created an enormous amount of scientific evidence and conducted multiple research studies which have been published in highly reputable journals. It has also cultivated the support of eminent key opinion leaders who publicly support Uscom. However be a successful company it is imperative that Uscom now becomes less scientific in its approach and more sales oriented.

The adopted sales strategy is to build a global distribution network rather than a direct sales structure which network primarily focuses on specific applications for the deployment of the Uscom monitor in the hospital market. This is a major departure from the previous sales strategy which targeted multiple applications and relied heavily on a single large global distributor covering all but Asia Pacific. With a more focused approach to hospital applications in paediatrics and neonatal critical care, intensive care, and emergency, we believe we will more easily achieve scale from which we can then broaden the sectors to build longer term sustainable revenues.

After an extensive analysis of potential distributors, we have selected seven distributors in North America who understand how to sell new technologies into early adopter client hospitals, have connections with clinical staff and department heads of the sectors we are targeting in hospitals and have excellent credentials in the sale of patient monitoring equipment.

Since the beginning of the year, we have successfully signed up 4 distributors in North America and have agreement in principle from 3 others to complete contracts in April. This will give us complete coverage of all territories in the US and Canadian markets. In the last four weeks I have been in the US and have personally met with the principals of all these companies and have set non binding targets which they have willingly agreed to accept as sensible to aim for initially. The targets are low for the first 6 months of their commencement to allow them to develop their pipeline of opportunities but quickly ramp in the 3rd and 4th quarters of the calendar year. They are excited about the opportunity to become associated with Uscom, and all view the opportunity with a high degree of optimism.

Importantly these distributors have competent sales representatives working for them in their territories. It has also been important to appoint distributors who are not so large that Uscom sales revenue only represents a small fraction of their overall revenues. We are hopeful that within a two year period Uscom sales will account for between 10%- 25% of each of their sales revenue which will keep them focused and should translate to Uscom achieving our target for Calendar 2011/12. Geographically over the next 12 months we expect to generate 70% of our unit sales in North America, 20% in Asia Pacific and 10% in Europe.

The next challenge in developing the global distribution model is to train the sales representatives, support them with adequate sales collateral & training and monitor their results. Initially, we will also be involved in post sales support at hospitals providing comprehensive training to the users. All this has

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required a major overhaul of the education material and redevelopment of training manuals, establishment of a distributor portal and redesign of the website, implementation of a pipeline management and CRM system, and a comprehensive review of our pricing structure. Much of this is work in progress but I am pleased to say that of the US distributors who have signed our revamped distribution agreement all have already been trained and are now prospecting for sales. We have established a core team of clinical support specialists in North America who are now full time staff providing training and support to the sales reps, end user training to customers and are very focused on achieving results.

In addition to the North American signings, internationally we are also making good headway. I have recently met with two important strategic partners in Europe and we now have agreement in principle with a distributor covering the emerging markets of Eastern Europe and will shortly be announcing the appointment of a new distributor in the UK. We have successfully appointed distributors in Australia, Spain, Russia & Iran and we have strong interest from South Africa. We see excellent prospects in the emerging markets of Asia Pacific and are currently reviewing the distribution model with our partner, Pacific Medical Systems to focus more extensively on the large potential volume of sales in China, and review the effectiveness of sub distributors in other regions.

On the development front, we are aligning the future development plans of the Uscom 1A monitor with input from the field which will help prioritise the development workload to ensure we are going to market with a product which addresses the latest market requirements.

None of the above happens without a major commitment by staff and other resources to work above and beyond to achieve our much focused objective of driving sales which will drive shareholder value.

I’d like to thank you all for your continued support and patience in the business during this foundation building period and whilst we are generating plenty of great momentum over the last 3 months we will not start to see the fruits of all this in tangible sales until the latter half of this calendar year.

I’d like to conclude by saying that at the recent global symposium, the Paediatric Critical Care conference held in Sydney this month, Uscom was regarded by many as the standout device with the backing of some of the most eminent leaders in the medical profession. I am please to say we generated many sound leads. Uscom is finally in the right place at the right time with a unique device that is changing the standard of care of patients forever.

Phil Kiely

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Executive Chairman

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