GYNEDIL

1. GYNEDIL Hydraulic Dilation System Audiotel doo, 11A, Miljakovacke staze street, Belgrade, Republic of Serbia Tel/fax: + 381 11 7589 387 E-mail: office@audiotel.rs Website: www.gynedil.com

2. Cervical canal dilation -problem and its traditional solution • The classical and most widely used procedure of cervical canal dilation is mechanical dilation using the metal dilators by Hegar, shaped to fit the anatomy of the cervical canal. They have a tapered and slightly bent tip. They are inserted into the canal and taken out one by one, successively, the next dilator having a larger diameter than the previous one thus widening the cervical canal gradually. • Each dilation performed in such a way, and particularly careless and abrupt one, causes damage to the muscular and collagenous fibers of the cervix, which often precedes its functional incompetence, the most often complication of this intervention later. The direct complication of the procedure (laceration of the cervix complicated by lesion of descendent branch of uterine artery; perforation of uterus) can be life-threatening for patient. • The risk associated with this, most widely used procedure in gynecology, made us to try to offer a different solution. As a result of ten-years work we successfully developed a different dilation concept, tested also in the clinical practice.

3. Set of Hegar dilators

4. New solution for dilation • Gynedil is a hand-operated pistol shaped pump, made entirely of medical plastic, intended and allowed for medical use, and it can be sterilized under the same conditions of sterilization valid for other surgical instruments. • This hand-operated piston pump makes it easy to achieve the pressure for dilation of single-use balloon, which is the most important element of this system. The instrument injects pressurized fluid into the balloon, which causes widening of the elastic membrane of the single-use balloon dilator to the size allowed by the fabric thus widening the cervical canal. • The final dimension during dilation is absolutely defined by the geometry of the high resistance polyethylene fabric, otherwise used for bulletproof jackets.

5. Gynedil – design of the instrument

6. Advantages of the new method • This method offers major advantages over the existing ones in practice for the following reasons: • The doctor can control the speed and rhythm of dilation and adjust them according to the resistance given by the cervical canal, • There is almost no risk of direct complications, • The dilator is intended for single use, so the risk of intrauterine infection is a very low one, • The instrument is small-sized, light, mobile, easy to handle, shaped as a modern surgical instrument and alreadysterilized.

7. Development of the device 1999. • The first prototype of the device was the result of joint efforts of expertsfrom the Faculty of Medicine and Faculty of Engineering in Kragujevac, Serbia. 2001. • The inventors signed the License contract with the company Audiotel, Belgrade 2002- 2006. • Audiotel developsdevice made of steel withchangeable dilation tip. Presents the device in the form of prototype at various international congresses andfairsto the well known manufacturers and distributors of medical equipment • Audiotel obtains the following patents for the device: Europatent, China patent and Hong Kong patent 2006-2008. • Audiotel initiates the development of a new device, made entirely of plastic and intended for single use. 2011. Start of industrial production is planned for 2011

8. International fairs and congresses where the device was presented • IV INTERNATIONAL SYMPOSIUM “Informatics, Telematics i Cybernetics in Surgery”, Naples, 23-26 March 2002 • The Audiotel Company was invited and took part in this International Symposium presenting the Hydraulic Dilation System within the Gynecological Section. The device aroused great interest of gynecologists, especially of the president in chief of the session Prof. Dr. C. Nappi who wanted to take it right away and try it in his hospital. • The FAIR “Eurosalute 2002” Milan, 6-9 November, 2002 • On behalf of the Lombardia Region, the Audiotel was invited to visit the Exhibition and Convention on equipment, products, services, technologies and meetings for health. Mr. Antonio Pernice who was in charge of coordination of innovative projects within the General Direction of the Lombardia Region, fixed us a meeting with dr. Giuseppe Amuso, Director of Gynecology Department in the Hospital Ospedale Alzano Lombardo in Bergamo/Italy.

9. International fairs and congresses where the device was presented • MEDICA 2004, Dusseldorf, 24-27 November 2004 • Along with our Italian distributor BMP&T Group who had a stand in this medical fair, we took the opportunity to exhibit our Device. Since this is the world’s largest medical fair with a significant share of international visitors, it was very useful being there because the Gynedil arouse a high interest among specialist trade visitors from various countries. • VISIT to Minsk, Republic of Belarus, November 2004 As a part of the Chamber of Commerce of Serbia Delegation, the Audiotel visited and presented the Device in Minsk and Gomel to some distributors of medical instruments. In that occasion we had the opportunity to meet Mr. Chapelnikau, Head of Department of Medical Equipment within the Belarus Ministry of Health. He was informed about Gynedil and its functioning principles.

10. Clinical tests • CLINICAL TEST in the hospital “CASA DI CURA VALDESE” in Turin, November 2002 • In the presence of Tyco’s representative Dr. Grasso and the Audiotel staff, dr. Marco Cammani used the Gynedil in the operating theatre on the patients. He was very satisfied with the Device, because, unlike the Hegar dilators, it did not cause any damage of the cervix tissue. He, along with the Supplies Director of the Hospital, wanted to know when it would be possible to have the Device ordered for the Hospital. • CLINICAL TEST at the Clinical Hospital Center of Podgorica 2009 • The Gynedil – hydraulic dilation system was tested at the Clinical Hospital Center of Podgorica from September 2009 to January 2010. Next two pages show the microscopic findings.

11. Histhologicalfinding of cervix after dilation by Gynedil:Covering and glandular epithelium is preservedBasal membrane is continuousThere is no bleeding in the sample

12. Histhological finding of cervix after dilation by Hegar: Covering and glandular epithelium is damaged Basal membrane is disrupted Intraepithelial andstromal bleeding occurs

13. Visits to multinational companies • MEETING with the TYCO representative in Milan, May 2002 • Further to our participation in the Naples’ IV International Symposium, we had a meeting with dr. Davide Grasso, Tyco’s Marketing Manager in Milan, and explained him the basic principles of Hydraulic Dilation System. Since he evaluated our Device as a very innovative one, interesting also in the terms of business, he informed us that he would organize a clinical test to verify its validity. • VISIT to GYNECARE Programs for ETHICON R&D in Europe, Johnson&Johnson Company in Norderstedt Germany, June 2005 • Mr. Axel Hentrich, Ph.D. in Biomedical Engineering within the Ethicon GmbH, has contacted us and a meeting was settled, along with the presentation of our product THE HYDRAULIC DILATION SYSTEM. • The presentation took place in the premises of the Ethicon GmbH, in the presence of Mr. A. Hentrich, Dr. Peter Meier, Manager Europe, and Ms. Susanne Landgrebe, Biomedical Engineer. Our Project Manager showed the instrument and explained its functioning, as well as answered the questions of the experts mentioned above. • The Device was evaluated straightaway as a very interesting one andit was suggested developing a prototype for single use.

14. Audiotel – Letter of intent • Audiotel is the exclusive owner of the trade mark and the license for the patented gynecological device Hydraulic Dilation System – GYNEDIL®, for the previous prototype, as well as for the new device which is the subject of this presentation (patent application), without time or territorial limit. • The hydraulic dilator is intended for single use and it is estimated that the annual demand in the world would be between 200.000.000 i 300.000.000 pieces. • This device completely eliminates risk for patient’s health as well as pain and tissue damage during intervention. • This medical instrument is medically tested in some gynecology clinics in Serbia and in PR of China upon invitation of the Ministry for Science and Technology of PR of China and several faculties in China – as a part of international cooperation, as well as in Turin in the hospital Casa di Cura Valdese. • The production of this device is completely organized and initial, small-quantity production series has been made.

15. Audiotel – Letter of intent • As the owners of the patent we are able to carry out a public presentation at a clinic in Serbia and to demonstrate the results obtained during many years of practice. There is a possibility of video presentation. • We are interested in finding a serious partner able to organize the production and sale of the dilator worldwide, and to control it successfully, but we would retain production and distribution rights for the Balkan countries. • We are able to organize the production of the 10.000 pieces of the dilator in one month time starting from the contract signing date, and 300.000 pieces in the first year.

16. Audiotel – Letter of intent • In relation to our partner, we are willing to: • Renounce our license rights for a compensation which would be fixed in one part and the other part would be a royalty, • Renounce our license rights as well as complete technological project for device production – KNOW HOW, • Renounce our license rights and deliver ALL THE ELEMENTS of the device in which case the partner would organize the assembly of the device under our supervision and instructions, • or to consider other forms of cooperation which would be subject of a direct agreement.