Geratherm Medical AG

Quarterly Report • Aug 21, 2008

General course of business: 1st January to 30th June 2008

• Turnover 1st half of 2008 +10.9%; EBIT +4.5%
• EPS 1st half 7 cents (p. y.: 10 cents); Q II 4 cents (p. y.: 6 cents)
• US patent issued for atrial fibrillation detection

Dear Geratherm Medical shareholders and interested parties,

In the 2nd quarter of 2008 the operational business got well under way. Not only the operational core business but also the new business areas are showing an upward trend and for the first time are contributing to the positive development of turnover. Despite a lower dollar exchange rate Geratherm registered an 11.2% increase in turnover in the 2nd quarter. The rise in gross profit – 16.4% – even exceeded that of turnover. As in the 1st quarter, the gross margin came to 60.1% of turnover.

The two new business areas – Apoplex Medical and Respiratory – though headed for growth, still had an adverse effect on the Group result in the 2nd quarter of 2008 owing to start-up losses amounting to 88 kEUR.

Even allowing for these losses the consolidated operating result (EBIT) rose by 21.8% to 151 kEUR in the 2nd quarter compared to the same period last year. Apart from dividend payments, no earnings from financial investments were achieved, so that the contribution of the Finance area to the Group result fell markedly in relation to the previous year. Altogether the net earnings of the parent company's shareholders in the 2nd quarter came to 172 kEUR (-35.5%), or 4 cents per share (previous year: 6 cents).

		II/08	I/08	IV/07	III/07	II/07
Facts and Figures (in kEUR)	Turnover	2,428	2,308	2,524	2,009	2,183
	EBITDA	9.6%	8.3%	12.2%	11.1%	9.2%
	EBIT	151	115	218	144	124
	EPS (EUR)	0.04	0.03	0.17	0.04	0.06
	Cashflow	241	164	294	203	192

Turnover trend in 1st half of 2008

The +10.9% increase in turnover in the first six months of the business year was largely in keeping with our plans. The export business accounted for 3.7 million EUR, or more than 79.0% of sales revenues. Turnover in the domestic market showed a disproportionate increase of 21.6% to 996 kEUR. The rise in domestic turnover is largely a result of the launching of new products and the rising contribution to sales revenues of the Respiratory and Apoplex business areas, whose sales revenues are still mainly generated in Germany.

In Europe sales revenues from Geratherm products showed a 9.5% rise in the first six months of this year. In contrast the US business performed poorly, with a loss of 18.4%. Sales in other countries did better, with a clear increase of 23.6%. They did particularly well in South America, where the growth rate of 47.4% was similar to that of the previous year.

Turnover by regions 01.01.- 30.06.2008

The main contribution to sales revenues (33.6%) was again made by Analog Diagnostic Products based on gallium. This share was further reduced as planned. This product group earned 1,842 kEUR in the 1st half, a rise of +6.6%.

The Digital Diagnostic Products group was also able to sustain its previous growth rate, posting a rise of 9.5% for the first six months.

Turnover by segments 01.01.- 30.06.2008

The share of turnover achieved by the Other Products business area also rose in the 1st half of 2008, increasing by 25.7% to 867 kEUR. The Cardio area, with its subsidiary Apoplex Medical GmbH, posted for the first time invoiced sales of 53 kEUR. The Respiratory business area made an unprecedented turnover of 121 kEUR from the delivery of new products. In the course of 2008 we expect the new business areas to show clear increases in turnover.

Earnings situation

The earnings situation improved in the 1st half of 2008 compared to the same period last year. Gross profit in the first six months of the current year grew at the exceptional rate of 17.4% to reach 2,843 kEUR.

Personnel costs at +15.7% were markedly higher than the rise in turnover, which was largely due to the cost of staffing the new Respiratory business area. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 5.8% to 424 kEUR in the first six months. The operating result, including depreciation and amortization (EBIT) but excluding financial earnings, also rose by 4.5% to 266 kEUR.

The earnings situation still suffers from the strong negative effects of the rollout losses of the new product areas Cardio, Respiratory, and Warming Systems.

The financial result of 48 kEUR was well below that of the previous year (196 kEUR). The market fluctuations in the field of securities were recorded in Equity as market valuation reserves. Taken together, the operating result and the financial result for the first six months of the current year produced a result from normal business activity of 314 kEUR, as compared to 451 kEUR for the previous year.

Shareholders' net earnings in the period concerned came to 296 kEUR, which is 36.8% less than last year's figure. Earnings per share in the period concerned came to 7 cents, as opposed to 10 cents in the previous year.

Asset and financial position

As in the previous period, Geratherm Medical had a sound capital basis as per 30th June 2008. Equity makes up 86.2% of the total assets of 15.5 million EUR.

As per 30th June 2008 the company held liquid funds and securities to the value of 5.0 million EUR (previous year: 7.7 million EUR). As regards securities items there have been no significant changes in the composition of the portfolio since the end of 2007.

Owing to market fluctuations as per 30th June 2008 2.7 million EUR were recorded in Equity under market valuation reserves as a negative value contribution. We regard the decline in assets as temporary and anticipate the further positive development of the biotech and healthcare shares that we hold, with special reference to cancer, vaccines and CNS.

On the assets side, the long-term assets rose slightly by 5.0% to 1,808 kEUR. In view of higher development costs a write-up of 159 kEUR occurred in intangible assets. The stocks of supplies rose by 12.5% to 3.3 million EUR. Receivables and other assets fell by 14.7% to 1.8 million EUR. Securities holdings fell by 17.0% to 4.9 million EUR since the beginning of the year, largely as a result of lower prices.

The gross cash flow rose slightly in the first six months to 405 kEUR from 379 kEUR in the previous year. The cash flow from operating activities fell to 525 kEUR (previous year: 774 kEUR) as a result of the need to stock up with inventory. The cash flow from investment activities came to -1,349 kEUR (investments in fixed assets: 400 kEUR; purchases of securities: 970 kEUR). Together with the dividend payment of 1,350 kEUR on 10th June 2008, stocks of cash and cash equivalents fell to 165 kEUR as per 30th June 2008, compared to 2,085 kEUR in the previous year.

Research and Development

The Research and Development activities in the 2nd quarter of 2008 concern the product launches in the business areas Respiratory and Apoplex and the new generation of warming systems.

The new generation of digital warming systems is still in the licensing process and will in all probability receive all the medical licenses needed for a market launching in the course of the 3rd quarter of 2008.

In the Respiratory business area the development focus was on a new desktop version for measuring lung function. The first deliveries will be made at the end of the 3rd or the beginning of the 4th quarter of 2008.

The Apoplex/Cardio business area continues to push ahead with the development of the Stroke Risk Analyser (SRA) in various versions. On 5th May 2008 the integrated health-care contract (IGV contract) was signed with the health insurance fund Kaufmännische Krankenkasse (KKH). By the end of June 2008 85 medical practitioners had acceded to the contract. An increasing interest is also being shown by professional associations; the German

Neurologists' Association, for example, supports the IGV contract. The scientific expertise for the IGV contract is provided by the Atrial Fibrillation Competence Network.

The Network also collects the relevant data and analyses it in the course of a prospective study. Other manufacturers of ECG systems have been acquired as partners for SRA screening. In response to our application the patent for "Detection of Atrial Fibrillation" was issued by the US Patent Office for the US market at the beginning of the 2nd quarter of 2008.

Employees

As per 30th June 2008 the Geratherm Group had a total of 83 employees, 89.2% of whom were based in Germany.

Outlook

For the rest of the year we expect the current business trends to continue. In operational terms we are aiming at higher turnover and a higher operating profit. The negative effects of the rise in the price of gallium ought to make themselves felt in the 2nd half of 2008. As things look at present, the introduction of the new Respiratory products ought to be somewhat delayed, but they should provide a definite boost for 2008. For the Cardio area we expect the positive trend to continue. Nevertheless the way things are at present the Respiratory and Cardio business areas will not begin to make a profit in 2008, which will continue to place a strain on the Group result. In view of the difficult financial markets we do not expect a positive contribution from the financial result in 2008.

Other

At the Annual General Meeting held on 9th June 2008 in Frankfurt am Main all items on the agenda were discussed and approved by our shareholders. For the business year 2007 Geratherm Medical AG paid out to shareholders a tax-neutral dividend of 30 cents per share from the deposit account.

The shareholders attending the AGM represented 71.45% of the company's share capital.

We expect the 2nd half of 2008 to show a positive trend. According to our current information the growth path we have been following ought to continue in the coming months.

Risks exist in the shape of changes in the general economic circumstances, such as currency exchange rates, prices of raw materials, and developments on the capital market.

GERATHERM AT A GLANCE

Group financial ratio	Jan.-June 2008	Jan.-June 2007	Change
Turnover	4,736 kEUR	4,269 kEUR	10.9%
Including export share	3,740 kEUR	3,449 kEUR	8.4%
Export rate	79 %	81 %	-2.5%
Gross result (EBITDA)	424 kEUR	401 kEUR	5.8%
EBITDA – margin	9.0 %	9.4 %	-4.3%
Depreciation	-158 kEUR	-146 kEUR	8.2%
Operating results (EBIT)	266 kEUR	255 kEUR	4.5%
Financial results	48 kEUR	196 kEUR	-75.5%
Result of ordinary activities	314 kEUR	451 kEUR	-30.3%
Net earnings of the parent company`s shareholders in the period concerned	296 kEUR	469 kEUR	-36.8%
Long-term assets	5,343 kEUR	5,144 kEUR	3.9%
Short-term assets	10,147 kEUR	12,368 kEUR	-18.0%
Balance sheet total	15,490 kEUR	17,512 kEUR	-11.5%
Equity capital	13,352 kEUR	15,938 kEUR	-16.2%
Equity return	4.4 %	5.9 %	-24.7%
Equity ratio	86.2 %	91.0 %	-5.3%
Cash and securities	5,048 kEUR	7,656 kEUR	-34.1%
Result per share pursuant to IFRS (EPS)*	0.07 EUR	0.10 EUR	-30.0%
Result per Share pursuant to DVFA*	0.07 EUR	0.10 EUR	-30.0%
Number of employees at end of the period	83	76	9.2%
Individual shares	4,500,000	4,500,000
* based on individual shares in circulation	4,500,000	4,500,000

Consolidated profit and loss statement of 1 January to 30 June 2008

	April June 2008 EUR	April June 2007 EUR	Change	Jan.- June 2008 EUR	Jan.- June 2007 EUR	Change
Turnover Change in inventories of finished products and	2,428,080	2,183,202	11.2%	4,735,984	4,269,274	10.9%
work in progress	-105,876	-7,271	>100.0%	-195,383	57,399	>-100.0%
Other internally produced and capitalized assets	59,250	45,287	30.8%	132,103	74,018	78.5%
Other operating revenue	75,974	28,799	>100.0%	115,888	58,720	97.4%
	2,457,428	2,250,017	9.2%	4,788,592	4,459,411	7.4%
Material input
Expenditure for raw material and supplies
and for purchase goods	-970,394	-925,214	4.9%	-1,845,952	-1,888,429	-2.2%
Expenditure for purchased services	-27,695	-71,600	-61.3%	-99,756	-149,981	-33.5%
	-998,089	-996,814	0.1%	1,945,708	-2,038,410	-4.5%
Gross profit	1,459,339	1,253,203	16.4%	2,842,884	2,421,001	17.4%
Personnel costs
Wages and salaries	-507,136	-438,687	15.6%	-1,028,159	-896,644	14.7%
Social welfare contributions and expenditure for old-age provision	-116,461	-99,060	17.6%	-227,874	-188,850	20.7%
	-623,597	-537,747	16.0%	-1,256,033	-1,085,494	15.7%
Amortization of intangible assets and depreciation of property, plant and equipment	-81,331	-75,469	7.8%	-157,845	-145,895	8.2%
Other operating expenses	-603,595	-516,130	16.9%	-1,162,601	-934,594	24.4%
Operating result	150,816	123,857	21.8%	266,405	255,018	4.5%
Income from dividends	48,026	15,777	>100.0%	48,026	17,198	>100.0%
Income from the sale of securities	0	94,795	-100.0%	0	126,814	-100.0%
Losses from the sale of securities	-801	0		-801	0
Expenditure from securities	-10,702	-6,760	58.3%	-13,662	-14,755	-7.4%
Other interest and similar income	8,679	30,160	-71.2%	24,798	68,845	-64.0%
Interest and similar expenses	-3,953	-1,927	>100.0%	-10,212	-1,929	>100.0%
Financial result	41,249	132,045	-68.8%	48,149	196,173	-75.5%
Profit (loss) on ordinary activities	192,065	255,902	-24.9%	314,554	451,191	-30.3%
Taxes on income and profits	-27,197	-16,761	62.3%	-49,956	-33,521	49.0%
Group net profit for the period	164,868	239,141	-31.1%	264,598	417,670	-36.6%
Minority interests result	-7,381	-27,892	-73.5%	-31,898	-51,599	-38.2%
Net earnings of the parent company`s shareholders in the period concerned	172,249	267,033	-35.5%	296,496	469,269	-36.8%
EBITDA	232,147	199,326	16.5%	424,250	400,913	5.8%
Result per share undiluted	0.04	0.06	-33.3%	0.07	0.10	-30.0%

Consolidated balance sheet 30 June 2008

Assets	30. June 2008 EUR	31. December 2007 EUR	Change
A. Long-term assets
I. Intangible assets
1. Development costs	711,969	553,338	28.7%
2. Software	35,629	41,235	-13.6%
3. Goodwill	75,750	75,750	0.0%
	823,348	670,323	22.8%
II. Fixed assets
1. Land property and buildings	1,311,712	1,348,995	-2.8%
2. Technical equipment and machinery	319,521	225,003	42.0%
3. Other plant, operating and commercial equipment	168,566	148,185	13.8%
4. Plant under constraction	8,300	0
	1,808,099	1,722,183	5.0%
III. Deferred taxes	2,711,424	2,761,380	-1.8%
	5,342,871	5,153,886	3.7%
B. Short- term assets
I. Supplies
1. Raw materials and supplies	890,356	819,208	8.7%
2. Unfinished goods	540,740	620,672	-12.9%
3. Finished products and goods	1,866,541	1,492,181	25.1%
	3,297,637	2,932,061	12.5%
II. Receivables and other assets
1. Receivables from deliveries and services	1,636,849	1,885,167	-13.2%
2. Tax receivables	83,689	113,378	-26.2%
3. Other assets	80,902	114,110	-29.1%
	1,801,440	2,112,655	-14.7%
III. Securities	4,882,576	5,882,688	-17.0%
IV. Cash and cash equivalents	165,014	2,085,040	-92.1%
	10,146,667	13,012,444	-22.0%
	15,489,538	18,166,330	-14.7%
Equity and Liabilities
A. Equity capital
I. Subscribed capital	4,500,000	4,500,000	0.0%
II. Capital reserves	7,570,000	7,570,000	0.0%
III. Other reserves	1,188,723	4,183,335	-71.6%
Attribute to shareholders of the parent company	13,258,723	16,253,335	-18.4%
Minority interest	92,817	124,808	-25.6%
	13,351,540	16,378,143	-18.5%
B. Long-term debts
1. Accrued investment cost	538,544	560,852	-4.0%
2. Other long-term liabilities	320,329	255,329	25.5%
	858,873	816,181	5.2%
C. Short-term debts
1. Amounts due to banks	195,816	0
2. Down payments received	2,311	65,144	-96.5%
3. Liabilities from deliveries and services	636,085	463,733	37.2%
4. Tax liabilities	56,056	45,858	22.2%
5. Other liabilities	388,857 1,279,125	397,271 972,006	-2.1% 31.6%
	15,489,538	18,166,330	-14.7%

Group cash flow statement of 01 January to 30 June 2008

	Jan.-June 2008 kEUR	Jan.- June 2007 kEUR
Group net profit for the period	264	417
Other non-cash expenditure/income	14	15
Dividend income	-48	-17
Interest earned	-25	-69
Interest paid	10	2
Decrease in deferred tax assets	50	34
Depreciation on fixed assets	158	146
Income from the sale of securities	0	-127
Losses from the sale of securities	1	0
Amortisation of grants and subsidies	-22	-24
Losses on disposal of fixed assets	3	2
Gross cash flow	405	379
Decrease / increase in supplies	-366	-235
Decrease / increase in receivables from deliveries and services and other assets	312	463
Increase in short-term payables and other liabilities	111	83
Income from dividends	48	17
Interest income	25	69
Interest outflow	-10	-2
Cash flow from operating activities	525	774
Expenses for investments in fixed assets	-400	-161
Payment received owing to financial investments	21	827
Expenses owing to financial investments	-970	-3,100
Cash flow from investment activities	-1,349	-2,434
Flow of funds from minority interest	0	157
Dividend payouts to minority shareholders	-7	0
Purchase of own shares	-9	0
Sale of own shares	9	0
Dividend payoffs	-1,350	-1,800
Recourse to short-term bank borrowings	196	0
Assumption of short-term liabilities	65	0
Cash flow from financing activities	-1,096	-1,643
Change in amount of available cash and cash equivalents	-1,920	-3,303
Cash and cash equivalents at the start of the reporting period	2,085	5,129
Cash and cash equivalents at the end of the reporting period	165	1,826

Group equity change calculation by 30. June 2008

			Other reserves
	Subscribed capital	Capital reserves	Market valuation reserve	Currency conversion reserve	Cumulative profits	Assignable to the shareholders of the parent company	Shares of other partners	Equity capital
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
1. January 2007	4,500,000	7,570,000	78,591	2,205	5,297,454	17,448,250	56,616	17,504,866
Foundation of the subsidiary Geratherm Respiratory GmbH							157,500	157,500
Unrealised profits and losses from the valuation of securities			-357,331			-357,331		-357,331
Currency translation in the Group				7,593		7,593	7,295	14,888
Dividend paid out to Shareholders					-1,800,000	-1,800,000		-1,800,000
Income and expenses recorded in equity capital			-357,331	7,593	-1,800,000	-2,149,738	164,795	-1,984,943
Net earnings of the parent company` s shareholders in the period concerned					469,269	469,269	-51,599	417,670
30. June 2007	4,500,000	7,570,000	-278,740	9,798	3,966,723	15,767,781	169,812	15,937,593
1. January 2008	4,500,000	7,570,000	-717,064	10,268	4,890,131	16,253,335	124,808	16,378,143
Unrealised profits and losses from valuation of securities			-1,948,240			-1,948,240		-1,948,240
Purchase of own shares	-2,000	-7,000				-9,000		-9,000
Sale of own shares	2,000	7,000				9,000		9,000
Currency translation in the Group				7,132		7,132	6,852	13,984
Dividend payouts to minority shareholders							-6,945	-6,945
Dividend paid out to Shareholders					-1,350,000	-1,350,000		-1,350,000
Income and expenses recorded in equity capital			-1,948,240	7,132	-1,350,000	-3,291,108	-93	3,291,201
Net earnings of the parent company` s shareholders in the period concerned					296,496	296,496	-31,898	264,598
30. June 2008	4,500,000		7,570,000 -2,665,304	17,400	3,836,627	13,258,723	92,817	13,351,540

Segment reporting of 1 January to 30 June 2008

By Region		Germany		Europe		USA		Others		Total
	Jan.- June 2008	Jan.- June 2007	Jan.- June 2008	Jan.- June 2007	Jan.- June 2008	Jan.- June 2007	Jan.- June 2008	Jan.- June 2007	Jan.- June 2008	Jan.- June 2007
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Turnover	1,212	1,036	2,118	1,933	490	601	1,482	1,080	5,302	4,650
Elimination of intragroup turnover	-216	-216					-350	-165	-566	-381
Turnover to third parties	996	820	2,118	1,933	490	601	1,132	915	4,736	4,269
Gross profit	715	523	1,205	1,063	279	331	644	504	2,843	2,421
Operating results	67	55	113	112	26	35	60	53	266	255
of which:
Amortisation of intangible assets and depreciation of property, plant and equipment	40	32	67	64	15	20	36	30	158	146
Amortisation of subsidies and allowances	5	5	10	11	2	3	5	5	22	24
Acquisition costs for fixed assets in the period	394	134	0	0	0	0	6	27	400	161
Book value of segment assets	12,427	14,184	0	0	0	0	351	456	12,778	14,640

According to areas of activity		Analogue Diagnostic Products		Digital Diagnostic Products		Others		Total
	Jan.- June 2008 kEUR	Jan.- June 2007 kEUR	Jan.- June 2008 kEUR	Jan.- June 2007 kEUR	Jan.- June 2008 kEUR	Jan.- June 2007 kEUR	Jan.- June 2008 kEUR	Jan.- June 2007 kEUR
Turnover	1,842	1,728	2,027	1,851	867	690	4,736	4,269
Gross profit	1,221	1,226	894	772	728	423	2,843	2,421
Operating results	291	317	165	214	-190	-276	266	255
Financial result							48	196
Taxes on income and earnings							-50	-34
Group net profit for the period							264	417
of which:
Amortisation of intangible assets and depreciation of property, plant and equipment	40	49	26	40	92	57	158	146
Amortisation of subsidies and allowances	8	10	10	10	4	4	22	24
Acquisition cost for fixed assets in the period	96	18	20	36	284	107	400	161
Book value of fixed assets	783	754	232	287	1,616	1,231	2,631	2,272
Short- term assets	1,947	2,182	1,859	1,430	6,341	8,756	10,147	12,368
Segment assets	2,730	2,936	2,091	1,717	7,957	9,987	12,778	14,640
Deferred taxes					2,712	2,872	2,712	2,872
Total assets	2,730	2,936	2,091	1,717	10,669	12,859	15,490	17,512
Short-term debts	498	153	547	164	234	673	1,279	990
Long-term debts	209	236	231	253	419	95	859	584
Segment debts	707	389	778	417	653	768	2,138	1,574

Explanations concerning the interim Group statement for the period from 1st January to 30th June 2008

Accounting and assessment methods

The interim Group statement of Geratherm Medical AG for the 2nd quarter of 2008 has been drawn up in compliance with the International Financial Reporting Standards (IFRS) and the interpretations given by the International Financial Reporting Interpretations Committee (IFRIC) that were valid on the reference date, as is required in the European Union.

All accounting, assessment and consolidation principles set out in the appendix to the 2007 Group Statement have been retained.

The assessment of assets and liabilities is based partly on estimates or assumptions about future developments. The assessment of the intrinsic value of the deferred tax accrual on the carryover of accumulated losses and the capitalised development costs is based on the company's planning, which is, of course, subject to uncertainties, so that in some cases the actual values may diverge from the assumptions and estimates. Estimates and the assumptions on which they are based are revised regularly and their possible effects on accounting are assessed.

Consolidation scope

No changes to the consolidation scope took place during the 2nd quarter of 2008.

Explanations

Long-term assets

As per 30th June 2008 development costs for internally created intangible assets amounting to 214 kEUR (previous year: 74 kEUR) were capitalised. A further 186 kEUR (previous year: 87 kEUR) was capitalised for investments in the replacement of production plant and other business equipment.

Short-term assets

Major changes to the short-term assets are mainly to be found under the points Securities and Liquid Funds. As per 30th June 2008 the stock of securities increased by 970 kEUR (previous year: 3,100 kEUR) as a result of purchases. Retirements due to sales occurred to the value of 21 kEUR (previous year: 827 kEUR). As per 30th June 2008 the acquisition costs amounted to 7,548 kEUR (previous year: 6,108 kEUR), whereas the value of the stocks according to the exchange rate on the reference date of 30th June 2008 was 4,883 kEUR (previous year: 5,829 kEUR). Hence reference date-related book losses to the value of 2,665 kEUR (31 March 2008: 2,602 kEUR) as per 30th June 2008 were incurred, which in compliance with the rules were debited from equity. We are convinced of the quality of the investment portfolio. The latter is subject to market fluctuations, which also means, however, that the value of the portfolio can rise again once the financial markets are stabilized. If a lasting diminution in value sets in that can no longer be made good, we will record parts of it in the income statement as an asset impairment.

The change in the amount of available cash and cash equivalents as per 30th June 2008 amounts to minus 1,920 kEUR (previous year: -3,303 kEUR). This figure is composed of the cash flow from operating activities amounting to 525 kEUR (previous year: 774 kEUR); the cash flow for investments in fixed assets amounting to 400 kEUR (previous year: 161 kEUR); purchases (970 kEUR; previous year: 3,100 kEUR) and sales (21 kEUR; previous year: 827 kEUR) of securities; the cash flow from the paying out of dividends amounting to 1,350 kEUR (previous year: 1,800 kEUR); and a cash flow from taking advantage of credit lines amounting to 261 kEUR (previous year: 0 kEUR).

Equity capital

Geratherm Medical AG's total subscribed capital as per 30th June 2008 amounted to 4,500,000 EUR and is divided into 4,500,000 ordinary bearer shares with no par value. The subscribed capital is fully paid up. The number of shares in circulation as per 30th June 2008 was 4,500,000.

The development of the equity capital has been presented in the Group's statement of changes in equity.

The present interim Group statement as per 30th June 2008 has not been audited by a firm of chartered accountants.

Balance sheet oath under § 37y of the Securities Trading Act (WpHG) in conjunction with § 37w, section 2, no. 3 WpHG

We hereby attest that to the best of our knowledge and in accordance with the applicable accounting principles for interim reporting the interim Group statement conveys a factual picture of the Group's assets, finances and earnings situation, and that in the Group interim report the business performance, including the operating result and the Group's situation, are presented in a way that is in keeping with the facts, and that the main opportunities and risks of the Group's anticipated development in the remainder of the business year are described.

Geschwenda, August 2008

Dr. Gert Frank Thomas Robst

Chairman of the Board Director of Sales & Marketing

IR Calendar 2008

November 20, 2008 Quarterly Report III. Quarter