MeVis Medical : Financial Statements (HGB) for 2019/2020 - convenience translation

Annual Financial Statements 2019/2020

LETTER FROM THE EXECUTIVE BOARD

Dear Shareholders, Customers and Business Partners, dear Employees

Fiscal year 2019/2020 was a successful year for MeVis from our point of view, despite the global impact of the Corona pandemic. Revenues declined as expected compared to the previous year, with only a slight shift in the composition of revenues. The licensing business was stable compared to the previous year; at the same time, the maintenance business and development services declined as expected. With costs rising slightly, earnings after taxes were down, but still satisfactory.

Details of the key financial figures:

Revenues in the past fiscal year 2019/2020 amounted to € 17.1 million (compared to € 18.1 million in fiscal year 2018/2019). Of this figure, 31 % (prev. year: 29 %) relates to sales from license revenues of € 5.3 million (prev. year: € 5.3 million), 36 % (prev. year: 38 %) to sales from maintenance contracts (software service contracts) of € 6.2 million (prev. year: € 6.9 million), and 33 % (prev. year: 33 %) to other sales of € 5.6 million (prev. year: €

5.9 million). The deterioration in revenue compared with the previous year is mainly attributable to the expected decline in maintenance revenue with the customer Hologic and to lower revenue from development services with the customer Varian Medical Systems.

The results continue to be satisfactory. EBIT (earnings before interest and taxes) of € 5.8 million was generated in 2019/2020, compared with € 8.2 million in 2018/2019. The EBIT margin deteriorated accordingly to 34 % compared with the prior-year figure of 45 %.

As a result of the fiscal unity, only minor income taxes of € 0.1 million were incurred in the past fiscal year, identical to the previous year.

This results in earnings after taxes of € 5.7 million (33 % margin) for the financial year 2019/2020, compared with € 8.1 million (45 % margin) in 2018/2019. The profit of € 5,704 k will be transferred to Varex Imaging Deutschland AG on the basis of the domination and profit and loss transfer agreement.

We were able to positively continue the transformation in our MeVis business structure. The decline in the Digital Mammography segment will continue to accompany us due to the changes in the cooperation with Hologic. However, Digital Mammography still accounts for the largest share of MeVis' total sales at 58 %.

Development services developed as expected in the past fiscal year, particularly in joint projects with Varian Medical Systems and Varex Imaging Corporation. Here, we are working jointly on medical and industrial software applications relating to both image acquisition and image post-processing.

In addition, we have placed a stronger focus on expanding our expertise in the area of artificial intelligence (AI). The topic and functionality of artificial intelligence will increasingly find its way into our product portfolio.

New business with our lung cancer screening products unfortunately lost some momentum in 2019/2020. The positive demand for the products has not changed, but unfortunately installations of the software in hospitals were postponed last year due to capacity constraints.

In the market of our historical core business with medical software solutions, there continues to be a sustained trend towards integrating the existing IT landscape into a workflow-based overall solution. This makes it more difficult for us to offer added value with our dedicated workflow and diagnostics software. Here, it will be increasingly important that we manage to expand and further commercialize our offerings in cloud-based systems, Software as a Service (SaaS), imaging modules, services and artificial intelligence technology.

For the fiscal year 2020/2021, a significant decline in revenues to € 15.0 million to € 15.5 million compared to the previous year is now expected. In addition to the again expected decline in sales with the customer Hologic, falling sales revenues are expected in the area of development services, as fewer development services will be provided compared to 2019/2020. Earnings before interest and taxes (EBIT) are expected to decline to between

• 3.5 million and € 4.0 million. The forecast decline in sales, with earnings from exchange rate differences expected to break even, is the main driver of the EBIT decrease. Possible effects of the current Corona pan- demic have played a role in the budgeting process. It is very difficult to assess possible impacts.

Due to the Corona pandemic, we are currently all still in a very unfamiliar time for us. Like many other companies around the world, the pandemic has presented MeVis with unexpected challenges. The consequences for our future business development are still not foreseeable in their entirety. However, the impact of the crisis on the world is considerable. The pandemic continues to determine and change the way we live and work: Most employees work from their home offices, business trips have not taken place for about 1 year, personal contact with customers or partners is only possible virtually, and events and trade fairs have been cancelled or are now taking place virtually.

Also this year, against the background of the Corona pandemic, we will hold our planned Annual General Meeting on March 24, 2021 as a virtual meeting, without the physical presence of shareholders and their proxies. But we very much hope to welcome our shareholders again next year at a face-to-face event.

I would like to express my sincere thanks to all employees of the Company for their extraordinary commitment throughout fiscal 2019/2020 and their continued efforts to master the current challenges. I would also like to thank our business partners, customers and shareholders for their trust.

Marcus Kirchhoff

Vorstand

Annual Financial Statements 2019/2020

REPORT OF THE SUPERVISORY BOARD

FOR FINANCIAL YEAR 2019/2020

Dear Shareholders

In fiscal year 2019/2020, the Supervisory Board of MeVis Medical Solutions AG continued its trustful and target- oriented cooperation with the Executive Board. In accordance with the duties incumbent on it under the law, the Company's Articles of Association and the Rules of Procedure, it accompanied and monitored the Executive Board in an advisory capacity. The Executive Board regularly informed the Supervisory Board both verbally and in writing about the business situation and development, the current earnings situation, possible risks, planning as well as investments and organizational measures. The Supervisory Board was involved in all important decisions and passed the resolutions required by law, the Articles of Association and the Rules of Procedure. The decisions of the Supervisory Board were based on the reports and proposed resolutions of the Executive Board, which were examined in detail. In fiscal year 2019/2020, the Chairwoman of the Supervisory Board was also in close contact with the Executive Board between the meetings of the Supervisory Board and provided advice on strategy, planning and business development. In addition, she informed herself about significant business trans- actions. She also informed the other members of the Supervisory Board outside of meetings and discussed current developments with them.

CHANGES IN SUPERVISORY BOARD AND EXECUTIVE BOARD

During the reporting period, the Supervisory Board of the Company consisted of Mrs. Kimberley Honeysett (Chairwoman) and Mr. Matthew Lowell. Mr. Clarence Verhoef (Vice Chairman) resigned from the Supervisory Board for personal reasons as of September 23, 2020. By resolution of the Bremen District Court, Mr. Sunny Sanyal, Chief Executive Officer of Varex Imaging Corporation, was appointed as a member of the Supervisory Board effective September 24, 2020. He was elected as Deputy Chairman by the Supervisory Board. His mandate expires with the new election of the Supervisory Board by the Annual General Meeting scheduled for 2021. No committees were formed.

There were no changes in the Executive Board in the year under review: Mr. Marcus Kirchhoff heads the Company as sole member of the Executive Board.

SUMMARY OF THE MEETINGS OF THE SUPERVISORY BOARD

The Supervisory Board held four ordinary meetings in fiscal year 2019/2020, each with the participation of the Executive Board. In addition to the Company's results of operations, financial position and net assets, the main focus in the year under review was on the general market development and the opportunities and risks arising from it for the Company. A further focus was on the expansion of existing customer relationships and the establishment of new ones and the expansion of the product portfolio, cooperation in the product area with solutions from Varex and also the expansion in the area of artificial intelligence. A challenge, particularly in the second half of the year, was the spreading corona pandemic and its potential impact on the Company's economic de- velopment.

The meeting on January 15, 2020, focused on the adoption and approval of the annual financial statements, the report of the Supervisory Board for fiscal year 2018/2019 and the results of the audit conducted by Pricewater- houseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Bremen. To this end, the Executive Board presented the annual financial statements and management report of MeVis Medical Solutions AG for the 2018/2019 fiscal year prepared in accordance with the provisions of the German Commercial Code (HGB). The meeting was attended by the Executive Board as well as the responsible auditor of the annual financial statements, who reported in detail to the Supervisory Board on the material results of the audit. Following the meeting, the annual financial statements were approved and thus adopted by the Supervisory Board. The agenda of the annual general meeting of MeVis Medical Solutions AG, which was originally planned to be held on March 19, 2020, including the necessary proposals for resolutions to the Annual General Meeting, was also passed.