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SMALL BONE INNOVATIONS, INC. ANNOUNCES ESTABLISHMENT OF SMALL BONE INNOVATIONS DEUTSCHLAND GmbH & COMPLETES REORGANIZATION OF INTERNATIONAL OPERATIONS

• Formation of Small Bone Innovations Deutschland GmbH increases SBi’s market presence in Germany, one of Europe’s largest SB&J markets
• Addition to senior management team enhances SBi’s ability to realize the significant opportunity in international SB&J markets
• Completes the sale of all manufacturing facilities & reduces operating costs

NEW YORK, NY: February 17, 2009 - Small Bone Innovations, Inc., (SBi), a single-source provider of innovation, products, technology and education for the small bone & joint (SB&J) sector of the orthopedics industry, announced that it has taken several steps to expand and strengthen its international presence.

Acquired German Distribution Channel
SBi recently acquired its German distributor and established Small Bone Innovations Deutschland GmbH (SBi Deutschland). It is based in Donaueschingen, which is conveniently located less than 80 miles from both Stuttgart and Zurich. SBi is in the process of re-launching the Scandinavian Total Ankle Replacement (S.T.A.R.) under the SBi brand, and has already scheduled the first surgeries in Germany and Italy. SBi Deutschland has acquired new customers for S.T.A.R. as well as other SBi products. It has also expanded its distribution network in Germany by contracting with an additional independent sales agent.

Anthony G. Viscogliosi, Chairman & CEO of SBi, said: “With our business in France continuing to grow strongly and becoming further entrenched, we are now focusing our efforts to further raise our market presence in Germany.”

Strengthened Executive Management Team
SBi has expanded and solidified its executive management team and strengthened its international management team by appointing Mr. Florian Kemmerich as President of Small Bone Innovations International, S.A.S., which is based in Bourg-en-Bresse, France. He is responsible for international sales and for developing new international markets. Mr. Kemmerich has extensive experience in the orthopedics markets in Europe, the United States and Latin America. Prior to joining SBi, Mr. Kemmerich was Managing Director of B. Braun Melsungen AG and Vice President, Sales, Latin America for another B. Braun company, Aesculap, AG & Co. KG. Mr. Kemmerich speaks five languages.

Mr. Viscogliosi said: “Florian Kemmerich’s addition to our executive management team highlights the growing importance of our international business and enhances SBi’s ability to realize the emerging opportunity in international markets.”

Established German Management Team
SBi Deutschland’s plans to enhance its distribution network and better serve the German market, with the company’s extensive product portfolio, will be strengthened by the appointments of Dirk Dembski, International Marketing Director, Gudrun Klein, Product Manager for Germany, and Vincent Friso, International Foot & Ankle Product Specialist.

Mr. Dembski has more than ten years of management and marketing experience and is responsible for managing SBi Deutschland and international marketing. Prior to joining SBi, he worked in business development at the German organization of one of the world’s largest orthopedic companies. He will report directly to Mr. Kemmerich.

Ms. Klein has more than 25 years of healthcare experience including more than ten years in medical device sales. She is responsible for product marketing in Germany and will report to Mr. Dembski.

Mr. Friso will participate in driving international sales of the S.T.A.R. system as well as the rest of SBi’s extensive lower limb product portfolio. Mr. Friso has been promoted internally from his prior role as a direct sales representative for SBi in France.

Mr. Kemmerich said: “Germany is one of the largest SB&J markets in Europe and an important market for the S.T.A.R. ankle, our three-piece, mobile-bearing, uncemented ankle prosthesis. With the infrastructure and team now in place, we are well positioned to take advantage of the opportunity in this key SB&J market.”

Completed Divestiture of French Manufacturing Operations
SBi recently divested its French manufacturing operations to an entity owned by a former executive of the company.

“This transaction was the final step in the reorganization of SBi’s international business from one based on manufacturing to one focused on sales, product development and educational services for our surgeon customers,” Mr. Viscogliosi stated.

The initial phase of this company-wide strategic initiative began with the divestiture of the U.S. manufacturing operations in early 2007. This latest agreement to transfer ownership of SBi’s French manufacturing operations is designed to reduce operating costs, and support the company’s focus on driving sales growth and providing the highest level of customer service.

Mr. Viscogliosi noted that the transaction had been effected successfully by transferring all manufacturing employees to the acquiring entity. As an integral part of the sale agreement, the new owner has committed to a multi-year guaranteed supply agreement with SBi that will ensure continuity of supply for the company’s customers throughout Europe, North America, Latin America, Middle East-Africa, and the Asia-Pacific region.

“We remain committed to maintaining and expanding our international presence while preserving a secure global manufacturing and supply source in Europe,” Mr. Viscogliosi said. “At the same time, we have avoided the loss of employment for the staff in the Bourg-en-Bresse facility, and expect this transaction to result in better service and quality of products, while allowing SBi to focus on serving surgeons and their patients,” he added.

Establishes Regional Hub Strategy
SBi has established its first regional hub in France to serve the European market. Anthony Viscogliosi commented that “Mr. Jean-Jacques Martin, Managing Director of Small Bone Innovations International, S.A.S., has been instrumental to our international success having founded Fixano, S.A.S. in France, our predecessor European-based company. With a more established foundation in Germany, we are well positioned to increase our presence in this key market and also continue our strong growth throughout Europe.” SBi’s regional hub strategy to focus on key countries within geographical regions of the world will be executed by locally-based management. SBi plans to create additional regional hubs throughout the world.

About Small Bone Innovations, Inc.
Small Bone Innovations, Inc. (SBi) was founded in 2004 by Viscogliosi Brothers, LLC, (VB), a New York-based merchant banking firm that specializes in the musculoskeletal/orthopedic sector. VB created SBi as the first company to focus purely on small bones & joints. By integrating established companies and professionals in the field, SBi offers a broad, clinically proven portfolio of products and technologies to treat trauma and diseases in small bones & joints. Today, SBi has more than 140 employees at facilities in New York, NY, Morrisville, PA, and Bourg-en-Bresse, France, among other locations worldwide.

For more information on SBi, please visit: www.totalsmallbone.com

About Viscogliosi Bros., LLC
Established by Marc R. Viscogliosi, John J. Viscogliosi and Anthony G. Viscogliosi in New York City in 1999, Viscogliosi Bros., LLC (VB) was the first venture capital/private equity and merchant banking firm dedicated exclusively to the musculoskeletal/orthopedics sector of the health care industry. As principals of VB, the Viscogliosi brothers have a combined total of nearly half a century of experience analyzing and investing in the musculoskeletal/orthopedics sector.

VB’s mission is to create, build and finance companies founded on innovations developed by surgeons and uniquely focused on “life changing” musculoskeletal/orthopedic technologies. VB has worldwide surgeon, industry and trade relationships, and significant financial expertise in the musculoskeletal/orthopedic sector.

The Viscogliosi brothers have pioneered more than 170 financial, strategic and management initiatives for companies in the musculoskeletal/orthopedic sector, from start-up, seed and development stage all the way to exit. These initiatives have helped people live better lives through the orthopedic and spinal products developed, marketed and sold by the companies VB has assisted in developing and financing.

For more information about VB, please visit: www.vbllc.com

Forward-looking statements
This press release contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting SBi’s business including increased competition; the ability of SBi to expand its operations and to attract and retain qualified professionals; technological obsolescence; general economic conditions; and other risks.