VIRTUAL MEDICAL CENTRE INC

Advertising Revenue
Advertising revenue came from advertising and sponsorship for both our medical consumer services (content aimed at general
consumers) and medical professional services (content aimed at medical professionals).
Advertisement placements appeared on both the VMC website and our bi-weekly e-newsletters. Sponsorship included providing
educational information relevant to the disease and product area, creating interactive screening and monitoring tools, and promoting educational
videos and brochures.
Advertising revenue came from advertising and sponsorship for both the medical consumer and medical professionals market.
Earnings from the medical consumer market were primarily a result of increased revenues from VMC’s joint venture with Telstra Australia’s
ISP company, BigPond.
Increases in the medical professional market were attributable to contracts for 12-month advertising and educational sponsorships
with new clients, St. Jude Medical, Orphan Australia and Novogen Consumer Healthcare. VMC’s significant growth in revenue in this market as
compared to the same periods last year were due to VMC continuing to develop our relationship and reputation within the pharmaceutical
industry and also to evolve our product offering to better respond to clients’ needs. VMC intends to continue to enhance its product offering to
the pharmaceutical industry in an effort to further increase revenue.
Operating Expenses
Our operating expenses were $2,555,850 and $1,853,481 for the fiscal years ended June 30, 2010 and 2009, respectively. The increase
in our expenses was primarily due to the costs incurred relating to the Exchange Agreement and capital raising activities undertaken by us.
Capital raising costs increased our expenditure by $150,862. In addition, we incurred additional costs relating to the audit and the conversion of
our financial statements into U.S. generally accepted accounting principles (“GAAP”), in relation to the Exchange Agreement.
Employee Expenses
During the fiscal year ended June 30, 2010, our employee expenses increased to $1,121,854 from $851,963 for the fiscal year ended
June 30, 2009. This increase in employee expenses was due to the hiring of additional staff to assist in the Company’s increased operating
activity in 2010.
Travel expenses
Our travel expenses for the year ended June 30, 2010 increased to $130,234 from $79,311 for the fiscal year ended June 30,
2009. During the fiscal year ended June 30, 2010, we incurred significant travel to the U.S. in relation to the Exchange Agreement. In addition,
we expect to continue to incur significant travel costs over the next 12 months as we pursue additional funding and expand our U.S. operations.
Professional Fees
Professional fees increased from $329,768 for the fiscal year ended June 30, 2009 to $562,622 for the fiscal year ended June 30,
2010. This is due to increased legal and accounting fees relating to the audit of the Company’s financial statements, the conversion of the
Company’s financial statements into GAAP and the structuring and execution of the Exchange Agreement.
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