Interim Results

Seeing Machines Limited
04 March 2008




4 March 2008

                            Seeing Machines Limited
                      ('Seeing Machines' or the 'Company')


        REVIEWED INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2007


Seeing Machines Limited (AIM: SEE) announces its reviewed interim results for
the six months to 31 December 2007.

Financial Highlights



  • Revenue for the half-year A$1.236 million (31 December 2006 A$1.393
    million);
  • Loss before tax of A$430k (31 December 2006 A$141k);
  • Concluded successful capital raising in October 2007 raising A$3,199,282;
    and
  • Cash reserves at 31 December 2007 of A$3,235,364 (31 December 2006
    A$1,685,583).



Operational Highlights



  • Release of version 2 of the Driver State Sensor (DSS) product and the
    strong commercial interest from fleet managers and the OEM manufacturers and
    suppliers;
  • Revenue in the half-year from multiple product streams;
  • Marketing clearance from the United States Food and Drug Administration
    (FDA) for the TrueField Analyzer(R);
  • Release of a significant new version of faceLAB(R) 4.5 targeted at
    precision gaze applications.



Fulton Muir, Chairman stated, 'The Company has invested significantly in product
development and commercialisation and has made excellent progress especially
with the DSS product, including the long term multi million dollar deal with
Dycom Industries Inc that was announced today.'



Extracts from the interim financial statements are set out below and a full copy
is available from the Company website www.seeingmachines.com and also is
available by request to the Company's Registered Office at Innovations Building,
Level 3, Corner Eggleston & Garran Roads, Acton ACT 2601.



--- ENDS ---



Enquiries:


Seeing Machines Limited   Grant Thornton Corporate Finance    Parkgreen Communications
Nick Cerneaz, CEO         Fiona Owen                          Justine Howarth, Erica Nelson
[phone]       [phone]                [phone]
www.seeingmachines.com





Directors' Report 



Your directors submit their report for the half-year ended 31 December 2007.



DIRECTORS


The names of the company's directors in office during the half-year and until
the date of this report are as below.  Directors were in office for this entire
period unless otherwise stated.


James Fulton Muir, AO         Non Executive Chairman
Nick Cerneaz                  Executive Director
David Gaul                    Non Executive Director
Rob Sale                      Non Executive Director
Trent Victor                  Non Executive Director
Alex Zelinsky                 Non Executive Director
William Mobbs                 Non Executive Director



REVIEW AND RESULTS OF OPERATIONS



Review of 1st half of our Eighth Year of Operations



The first half of the 2008 financial year has seen the release of a number of
products and good progress in commercialisation activities.



Operational highlights for the half-year include:



•        Release of version 2 of the Driver State Sensor (DSS) product and the
strong commercial interest from fleet managers and the OEM manufacturers and
suppliers;

•        Revenue in the half-year from multiple product streams;

•        Marketing clearance from the United States Food and Drug Administration
(FDA) for the TrueField Analyzer(R);

•        Release of a significant new version of faceLAB(R) 4.5 targeted at
precision gaze applications;

•        Reception given to the TrueField Analyzer(R) at the American Academy of
Ophthalmology Annual Meeting in New Orleans in November and the interest of a
number of OEMs in taking the product to market;

•        The appointment of Chris McKee as  Chief Financial Officer adding
significant skills to the Company's management team.



Financial Results



Revenue for the half-year to 31 December 2007 was A$1.236 million, A$156,721
lower than the period to 31 December 2006.  This decrease in revenue was due to
a decrease in contract revenue of A$285,555, the reduction somewhat offset by
increase in Product Revenue of A$128,834.  In the half-year to 31 December 2006,
the contract revenue related mainly to a particular one-off project.  Other
income for the half-year was up A$63,081, with Grant Income increasing A$61,869
across the comparative periods.



Net expenditure for the half-year was A$1,815,861 up from A$1,620,684 on the
prior half-year.  This was due to higher level of activity, both in sales
activity and research effort.



The loss for the half-year to 31 December 2007 was A$430,155 compared to a loss
of A$141,338 for the half-year to 31 December 2006.



The company raised capital of A$3,199,282, at a cost of A$104,580.  At 31
December 2007, cash on hand was A$3,235,364 compared to A$1,685,583 at 31
December 2006.  Net assets increased to A$6,328,677 at 31 December 2007 compared
to A$3,908,044 at 31 December 2006.



Operational Highlights



faceLAB(R)



faceLAB(R) 4.5 was debuted at the Driving Assessment Conference in Washington
state in July 2007.  This version of faceLAB(R) introduced a new class of
precision gaze algorithms initially developed for the Truefield Analyzer(R)
(TFA).  The algorithms bring dramatic improvements to the performance and
accuracy of faceLAB(R) when used to track gaze direction on computer and video
screens particularly for applications such as website usability analysis and
market research.



TrueField Analyzer(R)



We continued to aggressively pursue the development of the Truefield Analyzer(R)
(TFA) in order to bring this key product to market.  All streams of this project
were progressed during the half-year including:

•        Scientific trials;

•        Large scale clinical study;

•        Regulatory approval;

•        IP Protection (including trademarks in several jurisdictions);

•        Industrial design and hardware development;

•        Software development;

•        Commercialisation activities.



In August we received Marketing clearance from the United States Food and Drug
Administration (FDA) and in November the TFA was showcased at the American
Academy of Ophthalmology Annual Meeting in New Orleans.  Several opportunities
to bring the product to market with large OEMs have been progressed.



Driver State Sensor



The release of version 2 of the Driver State Sensor (DSS) brings a new level of
maturity to the product and a readiness for use in real world applications.


The Driver State Sensor allows the fully automatic measurement of the driver/
operator's fatigue and distraction levels.  Trent Victor of Volvo Technology, 
and a director of Seeing Machines, has been

working with driving monitoring systems for over 10 years at Volvo, and said of
the DSS: 'This technology has redefined the state-of-the-art. Operating fully
automatically, the DSS2 achieves a level of performance previously unseen and
the technology now becomes a real contender for serial production systems.'



Seeing Machines is pursuing several commercial opportunities for the DSS
including:



•        OEM opportunities through a Tier 1 automotive supplier for both
passenger and commercial vehicles;

•        Opportunities to sell the DSS into large truck fleets;

•        Opportunities to sell the DSS into mining and other operations
concerned with fatigue and distraction in the operator;

•        Opportunities to sell the DSS into Field Operational Trials (FOTs)
particularly in the United States and Europe; and

•        Sales to research organizations.





faceAPITM /SDK



Seeing Machines concluded the second licensing deal for its faceAPITM late in
the 2007 financial year and the first revenue from this deal was received during
the half.



The first commercial version of the API is now generally available to
application developers through a software developers kit.


Income Statement

FOR THE HALF YEAR ENDED 31 DECEMBER 2007                                   31 December 2007     31 December 2006
                                                                Note            A$                   A$
Continuing operations
Sale of goods                                                                     1,163,286            1,034,452
Contract Income                                                                      73,525              359,080
Revenue                                                                           1,236,811            1,393,532

Other income                                                  3(a)                  148,895               85,814



Cost of Sales                                                                     (329,974)            (293,320)
Employee benefits expense                                     3(b)                (783,352)            (721,379)
Depreciation and amortisation expense                         3(c )               (126,453)            (131,391)
Other expenses                                                3(d)                (576,082)            (474,594)

Loss before income tax                                                            (430,155)            (141,338)

Income tax expense                                                                        -                    -


Loss after tax from continuing operations attributable to                         (430,155)            (141,338)
members

Loss per share (cents per share)
•  basic for loss for the half year attributable to ordinary                        (0.156)              (0.070)
equity holders of the company
•  diluted for loss for the half year attributed to ordinary equity                 (0.144)              (0.055)
holders of the company


Balance Sheet

                                                                   As At                As At                As At
AS AT 31 DECEMBER 2007                                  31 December 2007         30 June 2007     31 December 2006
                                            Note             A$                   A$                   A$

ASSETS
CURRENT ASSETS
Cash and cash equivalents                    5                 3,235,364            1,375,428            1,685,583
Trade and other receivables                                      706,252              350,813              982,908
Inventories                                                      213,567              136,571              120,669
Other                                                             14,690               34,825               10,902
TOTAL CURRENT ASSETS                                           4,169,873            1,897,637            2,800,062

NON-CURRENT ASSETS
Property, plant and equipment                                    231,476              244,953              276,020
Intangible assets                                                331,586              277,962              264,802
Capitalised development costs                                  4,749,985            3,719,471            2,580,556
Other                                                              3,586                3,586                3,494
TOTAL NON-CURRENT ASSETS                                       5,316,633            4,245,972            3,124,872

TOTAL ASSETS                                                   9,486,506            6,143,609            5,924,934

LIABILITIES
CURRENT LIABILITIES
Trade and other payables                                         900,699              756,736              740,966
Deferred revenue                                               2,147,137            1,661,193            1,195,637
TOTAL CURRENT LIABILITIES                                      3,047,836            2,417,929            1,936,603

NON-CURRENT LIABILITIES
Provisions                                                       109,993               97,251               80,287
TOTAL NON-CURRENT LIABILITIES                                    109,993               97,251               80,287
TOTAL LIABILITIES                                              3,157,829            2,515,180            2,016,890
NET ASSETS                                                     6,328,677            3,628,429            3,908,044

EQUITY
Contributed equity                                             9,648,634            6,553,932            6,553,932
Accumulated losses                                           (4,035,380)          (3,605,225)          (3,279,610)
Other reserves                                                   715,423              679,722              633,722
TOTAL EQUITY                                                   6,328,677            3,628,429            3,908,044




Statement of Changes in Equity

FOR THE HALF YEAR ENDED 31 DECEMBER 2007                     Issued      Accumulated Employee Equity Total Equity
                                                            Capital           Losses        Benefits
                                                                                             Reserve
                                              Note             A$              A$              A$             A$

At 1 July 2007                                            6,553,932      (3,605,225)         679,722    3,628,429
Loss for the half year                                                     (430,155)                    (430,155)
Issue of ordinary shares during the half
year
     Issue of share capital                               3,199,282                                     3,199,282
     Transaction costs                                    (104,580)                                     (104,580)
Share based payment                                                                           35,701       35,701

At 31 December 2007                                       9,648,634      (4,035,380)         715,423    6,328,677


At 1 July 2006                                            6,528,748      (3,138,272)         522,761    3,913,237
Loss for the half year                                                     (141,338)                    (141,338)
Issue of ordinary shares during the half
year
     Exercise of options                                     15,000                         (10,184)        4,816
Share based payment                                          10,184                          121,145      131,329

At 31 December 2006                                       6,553,932      (3,279,610)         633,722    3,908,044




Statement of Recognised Income and Expense


FOR THE HALF YEAR ENDED 31 DECEMBER 2007                                    31 December 2007     31 December 2006
                                                                                  A$                  A$

Net Income recognised directly in equity                                                   -                    -
(Loss) for the half-year                                                           (430,155)            (141,338)
Total recognised income and expense for the half year                              (430,155)            (141,338)

Attributable to equity holders of the company                                      (430,155)            (141,338)
Cashflow Statement

FOR THE HALF YEAR ENDED 31 DECEMBER 2007                                 31 December 2007    31 December 2006
                                                            Note              A$                  A$

Cash flows from operating activities
Receipts from customers                                                           926,432           1,180,939
Grants received                                                                   631,513             795,317
Payment to suppliers and employees                                            (1,688,542)         (1,367,254)
Interest received                                                                  39,204              35,198
Net cash flows from operating activities                                         (91,393)             644,200

Cash flows from investing activities
Proceeds from sale of plant and equipment                                           1,241                 429
Purchase of plant and equipment                                                  (36,566)            (98,225)
Payments for intangible assets                                                   (15,498)            (56,006)
Payments for research and development costs                                   (1,092,550)         (1,226,868)
Net cash flows (used in) investing activities                                 (1,143,373)         (1,380,670)

Cash flows from financing activities
Exercise of options                                                                     -              15,000
Issue of shares                                                                 3,199,282                   -
Costs of capital raising                                                        (104,580)                   -
Net cash flows from financing activities                                        3,094,702              15,000

Net increase in cash and cash equivalents                                       1,859,936           (721,470)
Cash and cash equivalents at beginning of period                                1,375,428           2,407,053
Cash and cash equivalents at end of period                    5                 3,235,364           1,685,583




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