Oventus Medical : Q2 FY22 Quarterly Activity Report and Appendix 4C

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ASX Release

Oventus Quarterly Business Review Q2 FY22 - Update

• Direct to Customer marketing drives an 88% increase in active leads from prior quarter, to 3,734
• Completed telehealth consults nearly doubled, up 181% to 1,318 on prior quarter
• Record revenue for the quarter at $334k, up 51% from prior quarter, while revenue per O2Vent® has increased by 39% over same period last year
• Operating expenses were $2.1m, resulting in a cash position of $4.3m as at 31 December 2021; $417k was received post quarter under the R&D tax incentive scheme
• Dr Chris Hart to transition from Chief Executive Officer and Managing Director to Executive Director, and Mr John Cox appointed as new Oventus Chief Executive Officer

Brisbane, Australia 31 January 2022: Obstructive Sleep Apnea (OSA) therapeutics company,

Oventus Medical Ltd or 'the Company' (ASX: OVN) is pleased to release its Appendix 4C and quarterly business activities review for the period ended 31 December 2022.

Oventus Founder Dr Chris Hart commented, "O2Vent® sales rebounded during the December quarter, leading to a record revenue result for Oventus. This was achieved in tandem with strong increases in our sales pipeline. The Direct to Consumer campaigns are not only increasing active leads, but also increasing our revenue per unit as we convert these leads into customers.

As announced earlier today, I am pleased to be transitioning the CEO role across to John Cox at a time of exceptional opportunity for Oventus. The December quarter results demonstrate that we are emerging from our restructuring period, and that the O2Vent technology and virtual service model can perform well even given the uncertainties created by the COVID-19 omicron variant."

Financial and sales funnel results in detail

Revenue for the quarter was $334k, up 51% on last quarter's $221k, a Company record. O2Vent unit sales were 309 for the quarter, up from 247 last quarter. Revenue per unit also increased by 39% over prior comparable period due to the improved pricing power associated with Direct to Consumer marketing and the value proposition of the Oventus-managed patient journey. Operating expenses were $2.1 million for the period, reflecting an increase over the prior quarter as the Company continued to build out its digital platforms and invest in patient marketing campaigns and related infrastructure. The Company finished the quarter

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with a cash position of $4.3m. A further $417k was received post quarter (ASX announcement 28 January 2022) under the R&D Tax Incentive scheme, which remains an important source of non-dilutive funding for Oventus.

Sales Funnel Results

The sales funnel grew rapidly, confirming that the customer capture model can identify and engage Oventus' target market and that these customers are motivated to learn more when exposed to the technology. Taking into account the lead time from initial consult to device sale of between 8 and 12 weeks, conversion rates are estimated to be approximately 25% at the moment. This does not include many patients currently in the pipeline yet to be treated who have the potential to proceed to therapy when their annual insurance coverage has accrued again. There is great potential for improvement in lead time and conversion rates as Oventus continues to optimize the patient journey and uses its customer capture model to engage and re-target active leads.

"Through the quarter we launched further upgrades to our digital CRM, which supported the rapid growth in our sales funnel through Q2. This tool allows us to communicate the benefits of O2Vent therapy to customers and partners very efficiently. The pipeline growth demonstrates just how interested prospective customers are in the O2Vent value proposition- and reinforces the fact that people who suffer from Sleep Apnea are actively looking for a new solution. Our focus now turns to further integration of our systems and processes with those of our clinical partners and ongoing improvements to our customer experience," noted John Cox, President and COO of Oventus.

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In the US, the pricing data analysis and coding (PDAC) contractors, Palmetto GBA, recently recoded the O2Vent Optima and O2Vent Mini oral appliances as K1027. This allows customers to bill Medicare for oral appliance therapy assisting the many millions of patients on federally funded programs in the US to access O2Vent therapy. While historically Medicare patients have represented a small proportion of patients accessing care it is envisioned that this may increase over time as Oventus scales access to O2Vent therapy through direct-to-consumer pathways.

Oventus CEO succession plan announced

In a separate release dated 31 January 2022, Oventus announced a succession plan which would see Dr Chris Hart transition out of the role of Chief Executive Officer (CEO) and Managing Director, and Mr John Cox appointed as the new CEO to lead Oventus through the next chapter of providing life-changing treatment to Obstructive Sleep Apnoea (OSA) patients.

Dr Hart, while remaining an executive director, will focus on ensuring a smooth transition for Mr. Cox, and will, in his new role as Chief Scientific Officer, lead Oventus' scientific "first line therapy" initiative, leading scientific and clinical research projects designed to position the O2Vent Optima technology as the first choice for patients and clinicians for the treatment of Obstructive Sleep Apnea. From 1 June 2022, Dr Hart will transition to Non-Executive Director of Oventus and will also lead the Company's Scientific Advisory Board.

The new roles will take effect on 1 February 2022.

Outlook and priorities for coming quarters

Accessing the O2Vent therapy completely virtually (from home) continues to be preferred by most Oventus customers. Particularly with the uncertainty of the Omicron variant still influencing patient and clinician behavior, the virtual model offers more than just convenience - it is faster from time of initial screening to treatment, without the perceived risk of in-person clinical visits. Oventus' selected clinical partners, sleep apnea specialist physicians and dentists, are highly skilled at providing empathetic, quality care via virtual and telehealth platforms. These clinicians assess patients expertly and offer their patients diagnostic and treatment options that suit their preferences, medical conditions and circumstances. Continuing to develop and perfect this model is Oventus' operational focus.

Through CY22, Oventus will continue to prioritize the development and optimization of its virtual and digital platforms, with the goal of making each step in the patient journey easier and more engaging for our customers and partners. The Company's digital CRM provides extensive real-time data on the patient journey, allowing development efforts to be focused on areas of friction as they are identified. This capability will allow Oventus to reduce customer acquisition costs over time.

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On the scientific front, Dr Hart, as Chief Scientific Officer, will spearhead the further development and initial commercial testing of the Predictive Algorithm in conjunction with the CRC-P Participants and Flinders University. The project, entitled SleepNavigator.ai™ is designed to assist clinicians in predicting patient responses to sleep apnea therapy before the patient begins treatment, based on certain patient characteristics and sleep test parameters. SleepNavigator.ai is part of the Oventus Vision 2025, with the goal of establishing O2Vent therapy as the first choice among patients and clinicians alike for selected OSA patients. Results of a research study related to the predictive algorithm were recently published in the prestigious Journal of Clinical Sleep Medicine. Please click here for more details: https://doi.org/10.5664/jcsm.9742

In North America, many Oventus customers elect to use their insurance benefits to pay for some or all of the medical and dental services associated with their sleep apnea treatment journey. As of 1 January, many US health plans "reset" deductible expenses (the amount the patients have to spend before their insurance coverage is accessible) while in Canada the insurance year starts again, meaning some treatment which has been deferred due to lack of benefit may be scheduled early in the New Year. Historically, patient traffic starts slowly in the calendar year in Australia as well. What effect these factors may have on March quarter sales is not completely clear, but the Company is encouraged by the continued rapid inflow of leads and booked consultations.

Payments to related parties of the entity and their associates

The amount of $217,000 at 6.1 of the Appendix 4C includes Director fees and salary for the CEO and Managing Director and Director fees (including superannuation) for Non-Executive Directors.

-ENDS-

Authorised for release by the Oventus Medical Ltd Board of Directors.

For further information, please visit our website at www.o2vent.comor contact the individuals outlined below.

Investors:

Dr Chris Hart, Managing Director and CEO: M: +61 409 647 496 or

John Cox, President and COO: M: +1 (949) 444-8532 or investors@oventus.com.au

Media:

Jane Lowe, IR Department: M: +61 411 117 774 or jane.lowe@irdepartment.com.au

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About Oventus - see more at www.o2vent.com

Oventus Medical's mission is to be a global leader in the management of sleep-disordered breathing, by providing a seamless patient journey and innovative oral appliance therapies. Oventus' Obstructive Sleep Apnea (OSA) treatment, called the O2Vent, has been demonstrated to be more effective and more desirable than other treatment options, offering hope for discreet, comfortable and effective relief to millions of people suffering from OSA. Based in Brisbane, Australia and Irvine, California, the Company has extensive clinical data demonstrating that its platform, with integrated airway support, has the potential to be accepted as a preferred first-line therapy for patients with mild to moderate sleep apnea.

In order to become the first choice for patients and clinicians alike, Oventus also makes the process for entering OSA treatment efficient, engaging and convenient. Oventus and its clinical partners have developed a virtual consultation and fitting process that enables patients to receive their custom-fit device and initiate therapy from the comfort of their home, all while maintaining the highest standards of service and patient care. By developing a complete solution, from best-in-class technology to outstanding care, Oventus has raised the bar for Sleep Apnea treatments in a rapidly-growing US$31B addressable market.