Dear Customers and Partners of Wellan Medical:

2007 was a proud year of gains and accomplishments, which established a precedent that we must build upon in 2008. We are thankful for the contributions from our team, and especially those from our partners and customers in this first year.

The successful launch of the ultraStand™ probe positioning system was our primary accomplishment in 2007. After more than two years of development and testing, the freestanding model of the ultraStand probe positioner began shipping in March and was followed in July by a cart-mount model for Sonosite, Philips, and Zonare ultrasound systems.

Customers come first at Wellan. Our philosophy is that the best product ideas come from the people who use those products, which means clinicians. Doctors and nurses are always included as core members of our development teams, and they thoroughly test our products in simulated and real clinical environments leading to tools that are efficacious and easy to use.

Dr. Brian Sites and Dr. Brian Spence at Dartmouth-Hitchcock Medical Center are key collaborators in the design and development of the ultraStand. Their desire to make regional anesthesia more accessible and easier to administer under ultrasound guidance was inspiration for the ultraStand.

Dr. Dan McFarland also deserves our thanks as an enthusiastic early adopter, a thorough tester, and excellent source of creative methods for using the ultraStand to its fullest potential. We are also proud to support the work of Dr. Pierre Pandin with his continued effort to evaluate how the ultraStand can benefit patients, physicians, and hospitals. His white paper published on our website in December is an excellent description of how to use the ultraStand in a solo regional anesthesia practice.

In this same spirit of collaboration, our partners in the ultrasound industry have distributed product information for us, helped to educate their sales force about the ultraStand, and have hosted the ultraStand in their product displays at the American Society of Anesthesiologists annual meeting and at the American Society for Regional Anesthesia annual meeting..

Last but not least, we are pleased to highlight the collaboration we have with Dartmouth College at the Thayer School of Engineering, and with the Dartmouth Entrepreneurial Network.

We began 2008 by obtaining a CEMark and introducing the ultraStand for sale in Europe. Additional work continues with a new student team to develop the next generation ultraStand. Our sales continue to grow, which enables more development efforts. We continue to work on deepening our distribution network as well.

Sincerely,

Aaron M. Gjerde

General Manager