Geratherm Medical AG

Quarterly Report • Aug 23, 2012

GERATHERM AT A GLANCE

Group financial ratio	Jan.-June 2012	Jan.-June 2011	Change
Sales revenues	7,860	8,530	-7.9
	kEUR	kEUR	%
Export share	6,863	7,443	-7.8
	kEUR	kEUR	%
Export ratio	87	87	0.0
	%	%	%
Gross result for first quarter of year	545	1,261	-56.8
(EBITDA)	kEUR	kEUR	%
EBITDA-Margin	6.9 %	14.8 %	-53.4%
Amortization or depreciation	-372	-331	12.6
	kEUR	kEUR	%
Operating results (EBIT)	173	930	-81.4
	kEUR	kEUR	%
EBIT	2.2	10.9	-79.8
margin	%	%	%
Financial results	369	628	-41.1
	kEUR	kEUR	%
Result of ordinary activities	542 kEUR	1,558 kEUR	-65.2 %
Net earnings of the parent company`s shareholders in the period concerned	453 kEUR	1,334 kEUR	-66.0 %
Long-term assets	5,822	5,688	2.4
	kEUR	kEUR	%
Short-term assets	17,510	19,340	-9.5
	kEUR	kEUR	%
Total assets	23,332	25,028	-6.8
	kEUR	kEUR	%
Equity capital	17,491	19,223	-9.0
	kEUR	kEUR	%
Return on equity	5.2	13.9	-62.7
	%	%	%
Equity ratio	75.0	76.8	-2.3
	%	%	%
Cash, cash equivalents and securities	7,866 kEUR	11,193 kEUR	-29.7 %
Earnings per share according to	0.09	0.27	-66.7
IFRS (EPS)*	EUR	EUR	%
Earnings per share according to	0.09	0.27	-66.7
DVFA*	EUR	EUR	%
Number of employees at end of the period	143	135	5.9 %
Total shares issued	4,949,999	4,949,999
* based on total shares issued	4,949,999	4,949,999

Business Performance from January 1 to June 30, 2012

• Sales revenues EUR 7.9 million -7.9 %
• Gross result for first half of year (EBITDA) 545 kEUR -56.8 %
• Results from ordinary activities 542 kEUR -65.2 %
• Earnings after taxes (EAT) 453 kEUR or 9 EUR cent per share
• Lack of sales of gallium-filled thermometers adversely impacts earnings
• Production capacity for gallium-filled thermometers adapted
• Business segments Respiratory, Warming systems and Cardio with double-digit growth

Dear Shareholders and Parties Interested in Geratherm Medical,

The sales and earnings of Geratherm Medical failed to develop satisfactorily during the second quarter. While we were able to attain the equivalent level of sales, our earnings experienced a weaker development compared to the same quarter last year, when very healthy growth was registered. The main reason is the lack of sales of gallium-filled thermometers. The increase in inventory is valued only at manufacturing costs. The missing sales margin had an adverse impact on the result of approx. 800 kEUR as at June 30, 2012. All other product segments showed positive development. Compared to the weak sales performance in Europe (-38.3 %), we posted considerable growth in South America (+30.9 %) and Other countries (+61.8 %), primarily from the regions Middle East and Africa.

While the overall performance remained consistent during the second quarter, material expenses increased disproportionately by 21.8 %. This is due to the falling gallium prices and thus the lower valuation of products in the inventory.

The operating result in the second quarter decreased significantly from 333 kEUR to 25 kEUR due to the above reasons. By the end of the quarter, we had decreased the production capacity for gallium thermometers by approx. 30 % at the Geschwenda plant in Thuringia.

A positive financial result of 327 kEUR was posted during the second quarter of the fiscal year. The result from ordinary business activities amounted to 352 kEUR (2011: 960 kEUR) including the financial earnings. For the second quarter, an after-tax result of 321 kEUR (2011: 858 kEUR) or 6 EUR cent per share (2011: 17 EUR cent) was realized less taxes and the result for minority interests.

Facts and Figures		II/12	I/12	IV/11	III/11	II/11
(in kEUR)	Sales	3,742	4,118	3,843	4,756	3,749
	EBITDA	6.0 %	7.8 %	12.0 %	14.2 %	13.3 %
	EBIT	25	148	284	506	333
	EPS (EUR)	0.06	0.03	-0.03	0.05	0.17
	Cashflow	250	222	439	615	458

Sales Development

The sales posted during the first six months of 2012 were lower by 7.9 % compared to the reference period of 2011. Exports represented a share of 87 %, which is the same level as last year. The sales of Geratherm products in Germany decreased by -8.3 %.

The reduced demand for gallium-filled thermometers as well as the weak economic growth especially in southern Europe resulted in a considerably negative sales development in Europe. The sales of Geratherm products in the United States were positive, however, and increased by 50.8 %. Sales posted in South America, especially in Brazil, also showed a very positive development with a 30.9 % increase. The area designated as Other countries, which essentially encompasses the Middle East and Africa, experienced a very favorable development with a 61.8 % growth in sales.

Sales by regions 1/1 to 6/30/2012

The mainstay of Geratherm's sales during the first six months of 2012, with an 83.5 % share, includes products in the Healthcare Diagnostic segment, which are marketed internationally in hospitals, clinics and pharmacies. The most important products in this segment are gallium-filled clinical thermometers (31.5 %), blood pressure monitors (28.6 %) and digital clinical thermometers (11.3 %). Due to the weak demand for gallium-filled thermometers in Europe, sales in the Healthcare Diagnostic segment decreased by 13.1 % compared to the same period last year. The Medical warming systems segment showed positive contributions to growth with a 22.3 % increase during the first six months of 2012. The first orders for the US military had a noticeable effect in this regard. On June 25, 2012, Geratherm was selected as the exclusive supplier of warming systems for the United States Army, Special Operations Forces Survival, Support & Equipment System (SSES) for the next five years. Geratherm is the only supplier of tactical medical equipment outside of the US that was taken into account in the Special Operations Forces (SOF) budget.

Even the Cardio segment performed favorably at a low level with an 18.7 % sales growth. The Respiratory segment showed a clear increase in sales of 41.1 %.

Sales by segments 1/1 to 6/30/2012

Earnings Situation

Geratherm Medical's earnings situation from business operations experienced a considerably below-average development during the past six months. As already mentioned, the main reason is the weak demand for gallium products and the resulting temporary increase in inventory, which in turn has led to significantly low earnings. The lack of earnings from the sales of gallium-filled thermometers resulted in a lower gross profit (-17.5 %) compared to the same period last year. The gross margin decreased from 65.4 % to 58.5 %. The gross profit (EBITDA) dropped to 545 kEUR (-56.8 %) during the course of the first six months.

Amortization and depreciation increased by 12.6 % to 372 kEUR due to the higher investments and write-offs for development costs.

The operating result (EBIT) decreased to 173 kEUR for the first six months of the current fiscal year (2011: 930 kEUR). The decrease in the quality of earnings can be attributed to the weak sales and the increase of gallium-filled thermometers in stock, which have a lower valuation compared to last year due to the drop in gallium prices.

Geratherm managed to post a favorable net financial result of 369 kEUR during the first six months of 2012. All in all, the result from ordinary business activities amounted to 542 kEUR (-65.2 %) during the first six months of the current fiscal year. Income taxes weigh on the result with 98 kEUR.

The consolidated net profit amounted to 444 kEUR (2011: 1,202 kEUR). Geratherm Medical posted a net result of 453 kEUR less the net result for minority interests in the amount of -9 kEUR (2011: -132 kEUR) during the first six months of 2012. The result per share is 9 EUR cent (2011: 27 EUR cents).

Net Assets and Financial Situation

Geratherm Medical continues to enjoy a favorable asset situation. At the end of the first six months of 2012, the balance sheet total was a total EUR 23.3 million (2011: EUR 24.6 million) and is essentially formed by equity capital. The company's equity capital amounted to EUR 17.5 million (2011: EUR 18.7 million) as of June 30, 2012. The equityto-assets ratio represents 75 % of the balance sheet total. The return on equity was 5.2 % (2011: 13.9 %) for the first six months of the current fiscal year. As of June 30, 2012, the company had cash, cash equivalents and securities in the amount of EUR 7.9 million (2011: EUR 11.2 million) Thus, the company has a solid financial position, even in light of the current temporary weak earnings.

With regard to long-term assets, development costs were written off in the amount of 121 kEUR. The assets held in in property, plant and equipment increased by 7.0 % to EUR 4.0 million.

Inventories increased from EUR 6.0 million to EUR 6.2 million compared to the same period last year. Receivables and other assets remained with EUR 3.4 million on the same level as the same period last year. As of June 30, 2012, the company held securities worth EUR 4.9 million (2011: EUR 5.3 million). The cash and cash equivalents amounted to EUR 3.0 million (2011: EUR 4.2 million).

The gross cash flow for the first six months was 472 kEUR (2011: 1,175 kEUR). The cash flow from operations decreased considerably from 1,404 kEUR to 135 kEUR. The cash flow from investment activities was favorable with 103 kEUR (2011: -871 kEUR).

Research and Development

The research and development activities of Geratherm Medical mainly focus on the relatively new business segments Warming Systems, Respiratory and Cardio/Stroke. In the Healthcare Diagnostic segment, the regulatory hurdles are becoming more and more complex such that clinical trials have also become a necessity for new products.

We are pleased to announce that after our many years of development the results of the clinical study conducted at the Universität Heidelberg was published in early August in the "Stroke Journal", the official voice of the American Heart Association.

Staff

The Geratherm Group had a staff of 143 persons in total as of June 30, 2012 (2011: 135). 78.5 % of the staff is employed in Germany.

Outlook

Due to the weak demand for gallium-filled thermometers, we have decreased production by 30 % at the plant in Thuringia. Workforce was also adapted accordingly. With regard to costs, the burden resulting from adjusting capacity levels will be dispensed with after August 2012.

For the second half of the fiscal year, we are anticipating the demand for gallium-filled thermometers to recover. Sales dynamics in newly industrializing countries, where Geratherm is active, is expected to continue. By publishing the atrial fibrillation study, we are anticipating a significant increase in the number of stroke prevention centers joining the system.

The quality of earnings is likely to increase again during the second half of 2012. Based on current information, we will not attain the result from operating activities as posted for 2011. We still expect a considerably higher financial result compared to last year.

The general meeting of shareholders took place on June 8, 2012 in Munich, Germany. All items on the agenda were discussed and adopted by our shareholders at the annual general meeting. The shareholders in attendance represented 62.76 % of the share capital.

Geschwenda, August 2012

Dr. Gert Frank Thomas Robst Chairman of the Board Head of Sales

Statement of comprehensive income for the period January 1, 2012 to June 30, 2012

	April-June 2012 EUR	April-June 2011 EUR	Change	Jan.-June 2012 EUR	Jan.-June 2011 EUR	Change
Sales revenue	3,742,351	3,748,982	-0.2 %	7,859,860	8,529,941	-7.9 %
Change in inventories of semi-finished	330,627	338,813	-2.4 %	327,179	452,735	-27.7 %
and finish products
Other capitalized own work Other operating income	0 118,506	0 140,682	-15.8 %	0 179,645	0 247,617	-27.5 %
Cost of Materials	4,191,484	4,228,477	-0.9 %	8,366,684	9,230,293	-9.4 %
Cost of raw materials, consumables
and goods for resale	-1,836,687	-1,479,555	24.1 %	-3,601,290	-3,476,443	3.6 %
Costs of purchased services	-73,764	-89,508	-17.6 %	-166,983	-176,706	-5.5 %
	-1,910,451	-1,569,063	21.8 %	-3,768,273	-3,653,149	3.2 %
Gross profit or loss	2,281,033	2,659,414	-14.2 %	4,598,411	5,577,144	-17.5 %
Personnel expenses
Wages and salaries	-764,581	-851,853	-10.2 %	-1,456,081	-1,718,582	-15.3 %
Social security, pension and other benefits	-178,226	-184,009	-3.1 %	-382,024	-365,498	4.5 %
	-942,807	-1,035,862	-9.0%	-1,838,105	-2,084,080	-11.8 %
Amortization of intangible assets and depreciation of tangible assets	-200,498	-164,480	21.9 %	-372,389	-330,782	12.6 %
Other operating expenses	-1,113,140	-1,126,174	-1.2 %	-2,215,177	-2,232,267	-0.8 %
Operating results	24,588	332,898	-92.6 %	172,740	930,015	-81.4 %
Dividend income	113,082	94,696	19.4 %	121,626	105,548	15.2 %
Income from securities trading	250,572	908,021	-72.4 %	290,555	908,021	-68.0 %
Losses from securities	0	-338,805	-100.0%	0	-338,805	-100.0%
Securities-related expenses	-24,606	-24,022	2.4 %	-25,806	-30,278	-14.8 %
Other interest and similar income	6,730	13,334	-49.5 %	16,286	24,167	-32.6 %
Interests and similar expenses	-18,496	-26,458	-30.1 %	-32,924	-40,477	-18.7 %
Financial results	327,282	626,766	-47.8 %	369,737	628,176	-41,1%
Result of ordinary activities	351,870	959,664	-63.3 %	542,477	1,558,191	-65.2 %
Income taxes	-43,655	-144,820	-69.9 %	-98,099	-356,125	-72.5 %
Group net profit for the period	308,215	814,844	-62.2 %	444,378	1,202,066	-63.0 %
Minority interests result	-12,616	-42,964	-70.6 %	-9,051	-131,954	-93.1 %
Net earnings of the parent company`s shareholders in the period concerned	320,831	857,808	-62.6 %	453,429	1,334,020	-66.0 %
EBITDA	225,086	497,378	-54.7 %	545,129	1,260,797	-56.8 %
Earnings per share undiluted	0.06	0.17	-64.7 %	0.09	0.27	-66.7 %

Statement of financial position as at the end of the period by June 30, 2012

Assets	30. June 2012 EUR	31. December 2011 EUR	Change
A. Long-term assets
I. Intangible assets
1. Development costs	306,652	427,043	-28.2 %
2. Software	21,529	26,342	-18.3 %
3. Goodwill	75,750	75,750	0.0 %
	403,931	529,135	-23.7 %
II. Tangible assets
1. Land, land rights and buildings	1,234,966	1,051,726	17.4 %
2. Technical equipment and machinery	2,182,336	1,719,117	26.9 %
3. Other equipment, factory and office equipment	236,859	249,529	-5.1 %
4. Construction in process	316,917	691,035	-54.1 %
	3,971,078	3,711,407	7.0 %
III. Deferred taxes	1,446,759	1,502,384	-3.7 %
	5,821,768	5,742,926	1.4 %
B. Short-term assets
I. Inventories
1. Raw materials and supplies	1,143,994	1,473,887	-22.4 %
2. Unfinished goods	1,757,516	1,364,390	28.8 %
3. Finished goods and merchandise	3,308,786	3,124,793	5.9 %
	6,210,296	5,963,070	4.1 %
II. Receivables and other assets
1. Trade receivables	2,936,303	2,890,938	1.6 %
2. Tax receivables	157,857	98,069	61.0 %
3. Other assets	339,886	354,226	-4.0 %
	3,434,046	3,343,233	2.7 %
III. Securities	4,864,644	5,309,329	-8.4 %
IV. Cash and cash equivalents	3,001,478	4,224,480	-29.0 %
	17,510,464	18,840,112	-7.1 %
	23,332,232	24,583,038	-5.1 %
Equity and Liabilities
A. Equity capital
I. Subscribed capital	4,949,999	4,949,999	0.0 %
II. Capital reserves	10,672,874	10,672,874	0.0 %
III. Other reserves	2,273,845	3,435,162	-33.8 %
Minority interests assigned to the shareholders of the parent	17,896,718	19,058,035	-6.1 %
Non-controlling interests	-405,590	-393,150	3.2 %
	17,491,128	18,664,885	-6.3 %
B. Long-term debts
1. Liabilities to banks	900,000	1,100,000	-18.2 %
2. Accrued investment subsidies	743,750	782,680	-5.0 %
3. Other long-term liabilities	596,079	609,444	-2.2 %
	2,239,829	2,492,124	-10.1 %
C. Short-term debts
1. Liabilities to banks	1,700,714	1,463,485	16.2 %
2. Payment on accounts	99,504	41,825	>100.0 %
3. Trade payables	976,797	1,131,346	-13.7 %
4. Tax liabilities	189,714	136,096	39.4 %
5. Other short-term liabilities	634,546	653,277	-2.9 %
	3,601,275	3,426,029	5.1 %
	23,332,232	24,583,038	-5.1 %

Statement of cash flow for the period January 1, 2012 to June 30, 2012

	January – June 2012 kEUR	January – June 2011 kEUR
Group net profit for the period	444	1,202
Other costs affecting income/expenses	-7	-21
Dividend income	-122	-105
Interest earnings	-16	-24
Interest expenses	33	40
Decrease in deferred taxes	56	278
Income tax expenditure	42	78
Depreciation of fixed assets	372	331
Income from securities trading	-291	-908
Losses from securities trading	0	0
Losses from valuation of securities	0	339
Amortisation of public grants and subsidies	-39	-35
Loss from disposal of fixed assets	0	0
Gross cash flow	472	1,175
Increase in loan liabilities	-247	-189
Decrease/increase in trade receivables and other assets	-91	847
Decrease in current liabilities and other liabilities	-62	-269
Monies received from dividends	122	105
Monies received from interest	16	24
Cash outflow from interest	-33	-40
Cash outflow for income taxes	-42	-249
Cash flow from operations	135	1,404
Cash outflow for investments in fixed assets	-506	-221
Monies received based on financial assets	898	1,515
Cash outflow based on financial assets	-289	-2,165
Cash flow from investments	103	-871
Cash inflow from minority interests	0	39
Dividend payout to minority interests	0	-18
Dividend payments	-1,485	-1,980
Decrease/increase in loan liabilities	37	-157
Decrease/increase of long-term liabilities	-13	50
Cash flow from financing activities	-1,461	-2,066
Change in cash and cash equivalents	-1,223	-1,533
Cash and cash equivalents at the start of the reporting period	4,224	5,519
Cash and cash equivalents at the end of the reporting period	3,001	3,986

Statement of changes in equity for the period by June 30, 2012

				Other reserves
	Subscribed capital	Capital reserves	Market valuation reserve	Currency conversion reserves	Accumulat ed earnings	To be assigned to the shareholders of the parent company	Non-con trolling interests	Equity capital
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
As of January 1, 2011	4,949,999	10,577,354	1,004,598	55,346	4,029,635	20,616,932	-100,176	20,516,756
Increase in share capital apoplexy medical technologies GmbH	0	0	0	0	0	0	39,000	39,000
Dividend payment to shareholders	0	0	0	0	-1,979,999	-1,979,999	-17,902	-1,997,901
Transaction with shareholders and member partners	0	0	0	0	-1,979,999	-1,979,999	21,098	-1,958,901
Group period result	0	0	0	0	1,334,020	1,334,020	-131,954	1,202,066
Unrealised profits and losses from valuation of securities	0	0	-515,421	0	0	-515,421	0	-515,421
Currency translation in group	0	0	0	-10,848	0	-10,848	-10,422	-21,270
Total consolidated income	0	0	-515,421	-10,848	1,334,020	807,751	-142,376	665,375
As of June 30, 2011	4,949,999	10,577,354	489,177	44,498	3,383,656	19,444,684	-221,454	19,223,230
As of January 1, 2012	4,949,999	10,672,874	-92,385	27,232	3,500,315	19,058,035	-393,150	18,664,885
Dividend payment to shareholders	0	0	0	0	-1,484,999	-1,484,999	0	-1,484,999
Transaction with shareholders and member partners	0	0	0	0	-1,484,999	-1,484,999	0	-1,484,999
Group period result	0	0	0	0	453,429	453,429	-9,051	444,378
Unrealised profits and losses from valuation of securities	0	0	-126,219	0	0	-126,219	0	-126,219
Currency translation in group	0	0	0	-3,528	0	-3,528	-3,389	-6,917
Total consolidated income	0	0	-126,219	-3,528	453,429	323,682	-12,440	311,242
As of June 30, 2012	4,949,999	10,672,874	-218,604	23,704	2,468,745	17,896,718	-405,590	17,491,128

Consolidated Statement of Earnings (IFRS) for the period from January 1, 2012 to June 30, 2012

	01/1-06/30/2012 EUR	01/1-06/30/2011 EUR
Net earnings of the parent company`s shareholders in the period concerned	453,429	1,334,020
Result of the minority interests	-9,051	-131,954
Group net profit for the period	444,378	1,202,066
Profit and losses from the revaluation of securities	-126,219	-515,421
Difference resulting from currency translation	-6,917	-21,270
Income and expenses directly included in equity capital	-133,136	-536,691
Total consolidated income	311,242	665,375
of which assignable to minority interests	-12,440	-142,376
of which assignable to shareholders of parent company	323,682	807,751

Segment Report for the period from January 1, 2012 to June 30, 2012

According to product segments 2012	Healthcare Diagnostic Jan.-June kEUR	Med. Warming Systems Jan.-June kEUR	Cardio/ Stroke Jan.-June kEUR	Respiratory Jan.-June kEUR	Consolidation Jan.-June kEUR	Reconciliation Jan.-June kEUR	Total Jan.-June kEUR
Segment sales	7,243	382	127	612	-504	0	7,860
Operating results	481	23	-86	25	-16	-254	173
of which:
Amortisation of intangible assets and depreciation of tangible assets	365	12	2	4	-53	42	372
Segment assets	12,196	958	201	679	0	7,851	21,885
Segment debts	4,674	195	635	337	0	0	5,841

According to product segments	Healthcare Diagnostic	Med. Warming Systems	Cardio/ Stroke	Respiratory	Consolidation	Reconciliation	Total
	Jan.-June	Jan.-June	Jan.-June	Jan.-June	Jan.-June	Jan.-June	Jan.-June
2011	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Segment sales	8,234	331	112	536	-683	0	8,530
Operating results	1,212	-3	-104	-23	156	-308	930
of which:
Amortisation of intangible assets and depreciation of tangible assets	331	19	2	5	-61	35	331
Segment assets	10,432	834	246	651	0	11,052	23,215
Segment debts	4,719	139	605	341	0	0	5,804

According to regions	Germany	Europe	USA	South America	Others	Total
2012	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR
Sales revenue	1,222	2,806	542	2,775	1,019	8,364
Elimination of intercompany Sales	-225	0	0	-279	0	-504
Sales revenue to third parties	997	2,806	542	2,496	1,019	7,860
Gross profit or loss	556	1,566	303	1,604	569	4,598
Operating results	-6	-19	-4	209	-7	173
of which:
Amortisation/depreciation of intangible assets and tangible assets	65	185	36	19	67	372
Amortisation of public grants and subsidies	7	20	4	0	8	39
Acquisition costs of fixed assets for the period	485	0	0	22	0	507
Segment assets	20,825	0	0	2,507	0	23,332

According to regions	Germany	Europe	USA	South America	Others	Total
2011	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR	Jan.-June kEUR
Sales revenue	1,327	4,547	359	2,351	630	9,214
Elimination of intercompany Sales	-240	0	0	-444	0	-684
Sales revenue to third parties	1,087	4,547	359	1,907	630	8,530
Gross profit or loss	744	3,111	246	1,045	431	5,577
Operating results	148	620	49	27	86	930
of which:
Amortisation/depreciation of intangible assets and tangible assets	52	216	17	16	30	331
Amortisation of public grants and subsidies	6	24	2	0	3	35
Acquisition costs of fixed assets for the period	213	0	0	8	0	221
Segment assets	21,580	0	0	1,635	0	23,215

Notes on Interim Consolidated Financial Statements for the Period from January 1, 2012 to June 30, 2012

Accounting and Valuation Methods

The interim consolidated financial statements of Geratherm Medical AG were prepared for the six months of the 2012 fiscal year in accordance with the rules of the International Financial Reporting Standards (IFRS) valid on the date of the financial statements and in consideration of the guidance provided by the International Financial Reporting Interpretations Committee (IFRIC), as is mandatory in the European Union.

The accounting, evaluation and consolidation principles were maintained, as shown in the Notes to Consolidated Financial Statements for 2011 Fiscal Year.

The valuation of assets and liabilities is based in part on estimates and/or assumptions about future developments. For instance, the statements on economic useful life for long-term assets are based on estimates and assumptions. In addition, the assessment of the intrinsic value of deferred taxation allocated to the losses carried forward and the impairment tests of the cash-generating units and the assets is based on the corporate planning, which of course involves uncertainties such that the actual values may deviate from the made assumptions and estimates in individual cases. Estimates and the underlying assumptions are regularly checked and evaluated with regard to possible impact on accounting.

Consolidated Group

No changes in the consolidation group have occurred during the first six months of 2012.

Equity Capital

.

The development of the equity capital is shown in the consolidated statement of change to the shareholders' equity.

The subscribed capital of Geratherm Medical AG amounts all in all to EUR 4,949,999 as at 6/30/2012 (2011: EUR 4,949,999) and is divided into 4,949,999 (2011: 4,949,999) share certificates issued to the bearers. The subscribed capital has been paid in full. As of the reporting date there were no shares held by the company.

The shareholders of Geratherm Medical AG have agreed during the annual general meeting of the company on June 8, 2012 in Munich to distribute a dividend of 0.30 EUR per individual share. The dividend is disbursed in full from the tax contribution account in accordance with Art. 27 of KStG (not contributions to nominal capital) without any deduction of capital gains tax and solidarity surcharge. The dividend was distributed in the amount of EUR 1,484,999.70 on June 11, 2012.

These interim consolidated financial statements as at Saturday, June 30, 2012 were not audited or reviewed by the company's auditors.

Financial Statement Affidavit

To the best of our knowledge, and in accordance with the applicable accounting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group interim management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

Geschwenda, in August of 2012

Dr. Gert Frank Thomas Robst Chairman of the Board Head of Sales

Interim Report, 3rd Quarter November 22, 2012

Analysts Conference November 29, 2012 in Hamburg

Publication of 2012 Financial Report April 24, 2013

Interim Report 1st Quarter May 23, 2013

Geratherm Medical AG

Fahrenheitstraße 1 98716 Geschwenda Telefon: +49 36205 980 Fax: +49 36205/98 115 Info@geratherm.com www. geratherm.com