“The Voice of Healthcare Professionals”

1. “The Voice of Healthcare Professionals” Dominic & Irvine Research conducted a study to Pulmonary Departments of 923 U.S. Hospitals. All research results were conducted by person to person interviews by D&I Staff at their headquarters in Nashville, TN. The sample size was distributed between 3 different bed sizes as well as a group of physician Practices. All research results were achieved within the months of June-July 2004. The data is provided from the study allowing readers to see the questions and the corresponding results. Based in Franklin, TN, D&I conducts independent market research studies. Studies are completed through interactive guided phone interviews with highly trained research professionals. The interview format allows for the most accurate data with the highest level of integrity. D&I ensures accuracy by setting the new standard of 80% completion rate to all applicable facilities. Since its inception, D&I has completed more than 100 national studies in all areas of the healthcare industry and presented its findings at both national and international conventions and trade shows as well as sharing results with interview participants.

2. Research Methodology / Results: • 923 Facilities (Hospitals & Group Practices) were interviewed regarding research to PFT, Exercise & Metabolic, Sleep Lab, and Pulmonary HIS products. Research results represent input from 16% of U.S. Hospitals. • Over 200 Hospitals are represented in 3 different bed size categories along with 50 Physician Group Practices • Directors and Managers were the contact persons in 60%+ of facilities • 82% of participants (756) requested a copy of the final study The study was directed to the Directors/Managers of the Pulmonary Labs or to the appropriate title as determined by the participating Hospital.

3. Market Intelligence – PFT Systems Existing PFT equipment/testing is pushed to capacity limits due to the high number of departments operating “near or at” capacity. However, limited growth continues with Physician influence as the primary motivator. • Primary causes for growth: • #1 Physician Influence • #2 Increase in Patient Volume • #3 Expanding Facility • #4 Purchase of new equipment

4. Market Intelligence – PFT Systems Over 50% of facilities surveyed indicated that more than >80% of their PFT procedures are performed on outpatients:

5. Market Intelligence – PFT Systems • The most frequently performed procedures are Spirometry, Lung Volumes, Pre & • Post Bronchos and Diffusion Capacity • Least frequently performed are indirect Calorimetry, Exercise and Closing Volume. • Facilities plan to add methacholine challenge, full PFT with plethysmography, and • exercise tolerance in the future

6. Market Intelligence – PFT interface to Information Systems 35% of facilities currently without PFT HIS Interface plan on adding these capabilities within 18 months… 24% of Facilities already have PFT/HIS Interface or are currently transmitting “limited” PFT data to HIS

7. Market Intelligence – PFT Systems Installed Base Market Share of PFT Systems:

8. Market Intelligence – E&M Systems Installed Base Market Share of Exercise/Metabolic Systems:

9. Excellent--------------------------------------------------------------------------PoorExcellent--------------------------------------------------------------------------Poor System Performance Ratings/Ranking by Mfg: R Market Intelligence – PFT Systems Jaeger, VIASYSTM and SensorMedics are the best performing systems with the highest % of satisfied customers. R

10. Market Intelligence – Sleep Labs Sleep Labs in Hospitals - 10% of facilities planning to add… 66% of Facilities have “in-house” Sleep Labs 10% of Facilities identified as “adding Sleep Lab” within 18 months