MeVis Medical : Financial Statements (HGB) for 2021/2022 - convenience translation

Annual Report

Annual Financial Report 2021/2022

Annual Financial Report 2021/2022

FOREWORD BY THE

EXECUTIVE BOARD

Dear Shareholders, Customers,

Business Partners, and Employees,

Fiscal year 2021/2022 was a very successful year for MeVis, despite the global impact of the Corona pandemic and the conflict between Russia and Ukraine. Despite the difficult circumstances, sales increased much more positively than expected in some areas compared to the previous year. For example, the licensing business, the maintenance business and development services developed very positively compared with the previous year. Despite a planned increase in costs, earnings after taxes also developed excellently.

To the financial ratios in detail:

Sales in the past fiscal year 2021/2022 amounted to € 18.8 million (compared to € 16.2 million in fiscal year 2020/2021). 28% (previous year: 30%) of revenues were generated from the sale of licenses, 32% (previous year: 34%) from maintenance revenues, and 40% (previous year: 36%) from other revenues, which include services provided to and recharges made to affiliated companies and the parent company.

The year-on-year improvement in revenue from licenses and maintenance is mainly due to the sharp rise in the average USD exchange rate, as invoices are mainly denominated in USD. Licenses sold were almost stable. The year-on-year improvement in other revenue is due to an increase in revenue from development services.

The results are very satisfactory. EBIT (earnings before interest and taxes) of €7.9 million was generated in 2021/2022, compared with €4.6 million in 2020/2021. EBIT margin improved accordingly to 42% from 28% a year earlier.

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

This results in earnings after taxes of € 7.8 million (41% margin) for the financial year 2021/2022, compared to € 4.5 million (28% margin) in 2020/2021. The profit of € 7,789 k will be transferred to Varex Imaging Deutsch- land AG on the basis of the control and profit transfer agreement.

This year, the percentage distribution of sales among the three areas of licenses, maintenance, and development services was again similar to that of the previous fiscal year, but with significantly more sales in total. In digital mammography, we had the largest increase in sales. Revenues from our customer Hologic increased by more than € 1.5 million, and we are pleased to report that both license revenues and maintenance revenues increased. In fiscal year 2021/2022, digital mammography contributed the largest share of 52.5%, digital mam- mography accounted for the largest share of MeVis' total sales.

Development Services performed slightly better than we had expected in the past fiscal year. Due to the acquisition of Varian Medical Systems by Siemens Healthineers, future cooperation was not easy to forecast. Fortu- nately, the cooperation continued to develop positively. Revenues from development services with Varex Imaging Corporation decreased slightly. Here, we are working jointly on human medical, veterinary and industrial software applications relating to both image acquisition and image post-processing.

Business with our lung cancer screening solutions developed slightly positively in 2021/2022 compared to fiscal 2020/2021. We sense an increasing demand for commercial use for the early detection of lung cancer. Unfor- tunately, lung cancer screening has still not passed the status of funding such screening programs in many countries. In many regions, there is still no final clarification of which provider will cover the costs of lung cancer screening and how much will be covered. However, the signs are very positive, as more and more countries are taking a close look at financing. The market outlook for nationwide lung cancer screening remains very positive.

Annual Financial Report 2021/2022

The topic of mammography diagnostics also developed more positively again at MeVis last year. Demand for our software solutions increased again. The demand for the further development of tomosynthesis and multimodal breast diagnostics increasingly. The cooperation with our customer Hologic continued to develop posi- tively.

The area of liver surgery solutions also developed positively in the past market. Following the market launch of MeVis' own software application, in addition to the very well-established liver service which has been provided by MeVis for many years, we are looking positively to the coming years.

As we expected, the topic of artificial intelligence is taking up more and more space in medical and industrial software applications. We are significantly engaged in this area in order to keep our applications competitive and to further expand our market position.

For the financial year 2022/2023, sales are now expected to remain almost stable compared to the previous year at € 18.0 million to € 18.5 million. In addition to stable sales with the customer Hologic, only slightly increasing sales are expected in the lung and liver area. We expect a slight decline in the area of development services. For earnings before interest and taxes (EBIT), we expect a decrease in the range of € 4.5 million to € 5.0 million. The forecast stability in sales and the simultaneous increase in personnel costs, in addition to a significant negative result from exchange rate differences, is the main driver for the outlook of EBIT.

While the environment around us remains extremely challenging and difficult to predict, I am confident that the measures we have taken in the past, which have made our company stronger and more resilient, will enable us to meet any new challenges as well.

I am very much looking forward to hopefully welcoming our shareholders again this year at an attendance event at our planned Annual General Meeting on March 21, 2023.

Once again, I would like to thank all employees in the Company for all your hard work and for your continued commitment and dedication to MeVis. I would also like to thank our business partners, customers and shareholders for their trust.

Marcus Kirchhoff

CEO

Annual Financial Report 2021/2022

REPORT OF THE SUPERVISORY BOARD

FOR THE FISCAL YEAR 2021/2022

Dear Shareholders,

The Supervisory Board of MeVis Medical Solutions AG continued its trusting and goal-oriented cooperation with the Executive Board in fiscal year 2021/2022. In accordance with the duties incumbent upon it under the law, the Articles of Association and the rules of procedure, it advised and monitored the Executive Board. The Executive Board regularly informed the Supervisory Board in writing and verbally about the business situation and development, the current earnings situation, potential risks, planning, 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 Supervisory Board's decisions were based on the reports and resolution proposals of the Executive Board, which were examined in detail. The Chairwoman of the Supervisory Board was also in close contact with the Executive Board between Supervisory Board meetings in fiscal year 2021/2022 and provided advice on strategy, planning and business performance. She also kept herself informed about major business transactions. Outside meetings she also informed the other Supervisory Board members and discussed current developments with them.

CHANGES TO THE SUPERVISORY BOARD AND EXECUTIVE BOARD

There were no changes to the Supervisory Board in fiscal year 2021/2022. The Supervisory Board currently comprises Ms. Kimberley Honeysett (Chairwoman of the Supervisory Board), Mr. Shubham Maheshwari (Vice Chairwoman of the Supervisory Board) and Mr. Sunny Sanyal. The Supervisory Board of the Company is also the Audit Committee. Mr. Maheshwari was elected Chairman of the Audit Committee.

There were also no changes to the Executive Board in the reporting year: 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 regular meetings in fiscal year 2021/2022 - each with the participation of the Executive Board - all of which were held as videoconferences due to the ongoing Corona pandemic and for the protection of the participants. Ms. Honeysett and Mr. Sanyal attended all four meetings. Mr. Maheshwari attended three meetings and received extensive reports on the fourth meeting. In addition to the Company's results of operations, financial position and net assets, the main topics discussed in the year under review were general market developments and the opportunities and risks arising for the Company as a result. A particular focus was on the further expansion of existing customer relationships and the establishment of new ones, as well as the expansion of the product portfolio. Cooperation in the product area with solutions from Varex and other customers in the area of development services were an additional focus. As in the previous fiscal year, a particular challenge was the ongoing Corona pandemic and its impact on the company's economic development. Another area of focus since February 2022 has been the assessment of the economic consequences of the Russia-Ukraine conflict for the Company and the associated supply bottlenecks, price increases, energy price increases, and concerns about rising inflation rates, restrained purchasing power, and fears of recession.

The meeting on January 19, 2022 focused on the adoption and approval of the annual financial statements, the report of the Supervisory Board for the fiscal year 2020/2021 and the results of the audit conducted by Pricewa- terhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Bremen. To this end, the Executive Board presented the annual financial statements and management report of MeVis Medical Solutions AG for the fiscal year 2020/2021 prepared in accordance with the provisions of the German Commercial Code (HGB). In addition to the Executive Board, the responsible auditor of the financial statements attended the meeting and reported to the Supervisory Board in detail on the key findings of the audit. Following the meeting, the annual financial statements were approved by the Supervisory Board by circular resolution and thus adopted. The agenda for the virtual Annual General Meeting of MeVis Medical Solutions AG scheduled for March 23, 2022, including the required resolution proposals to the Annual General Meeting, was also approved. The Executive Board also