Medistim

Investor Presentation • Oct 23, 2015

Medistim ASA Third Quarter 2015

Kari E. Krogstad, President and CEO Thomas Jakobsen, CFO October 23rd, 2015

Disclaimer

The information included in this Presentation contains certain forward-looking statements that address activities, events or developments that Medistim ASA ("the Company") expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to economic and market conditions in the geographic areas and markets where Medistim is or will be operating, IP risks, clinical development risks, regulatory risks, fluctuations in currency exchange rates, and changes in governmental regulations. For a further description of other relevant risk factors we refer to Medistim's Annual Report for 2014. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in this information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and Medistim disclaims any an all liability in this respect.

Table of contents

• 1. Highlights third quarter
• 1. Financial statements
• 1. Business segments update
• 1. Implementing the strategy

1. Highlights third quarter

Highlights third quarter 2015

	Q3 2015	Q o Q
• Double digit growth in the third quarter Strong development in the USA continues, with o 40.3 % revenue growth in NOK, 6.7 % in USD Sale of 3.party products up 19.5 % to MNOK 17.1 o	Revenue MNOK 61.6 (52.0)	18.5%
• Strong EBIT growth to MNOK 12.7 for the quarter YTD, EBIT is MNOK 34.4 (MNOK 28.9) o	EBIT MNOK 12.7 (10.0)	26.3 %
• Profit per share increased with 32 % for the quarter to NOK 0.57 per share	Currency	11.4 %
• Launch of MiraQ Vascular, the new product for use in vascular	No of units sold:
surgery, at the European Society of Vascular Surgery meeting	Systems 33	-5,7 %
• Medistim enters into strategic partnership with em-tec	Flow probes 1 403	-23.1 %
	Imaging probes 24	60.0 %
	Procedures (USA) 10 936	19.5 %

2. Financial statements

Profit and loss Q3 2015

Profit & loss	Q3 2015	Q3 2014
All numbers in NOK 1000
Sales	61 646	51 999
Cost of goods sold	13 796	12 839
Salary and sosial expenses	21 347	17 930
Other operating expenses	11 175	9 156
Total operating expenses	46 318	39 925
Op. res. before depr. and write-offs (EBITDA)	15 328	12 074
EBITDA %	24,9 %	23,2 %
Depreciation	2 670	2 052
Write offs and accruals	-	-
Operating result (EBIT)	12 658	10 022
EBIT %	20,5 %	19,3 %
Financial income	2 517	1 751
Financial expenses	952	1 698
Net finance	1 565	53
Pre tax profit	14 224	10 075
Tax	3 906	2 248
Result	10 317	7 827

EBIT per Quarter (TNOK)

Profit and loss YTD September 2015

Profit & loss	YTD Sep 2015	YTD Sep 2014
All numbers in NOK 1000
Sales	176 807	148 724
Cost of goods sold	44 562	38 143
Salary and sosial expenses	55 724	47 652
Other operating expenses	31 180	27 855
Total operating expenses	131 466	113 650
Op. res. before depr. and write-offs (EBITDA)	45 341	35 074
EBITDA %	25,6 %	23,6 %
Depreciation	7 872	6 161
Write offs and accruals	3 200	-
Operating result (EBIT)	34 269	28 913
EBIT %	19,4 %	19,4 %
Financial income	13 637	5 292
Financial expenses	9 439	4 967
Net finance	4 198	325
Pre tax profit	38 467	29 237
Tax	10 272	9 049
Result	28 195	20 188
Dividend	25 362	14 481

EBIT per Quarter (TNOK)

9

Balance sheet - Assets

Balance sheet	30.09.2015	31.12.2014
All numbers in NOK 1000
Assets
Intangible assets	53 394	53 257
Fixed assets	14 804	15 276
Total intangible and fixed assets	68 198	68 533
Inventory	48 250	36 874
Customers receivables	40 861	39 948
Other receivables	7 980	8 658
Cash	35 702	49 475
Total current assets	132 792	134 955
Total assets	200 990	203 488

• Inventory build up related to MiraQ product line introduction
• Cash reduced due to dividend payment of MNOK 25,4 in May 2015

Balance sheet - Equity and liability

Balance sheet	30.09.2015	31.12.2014
All numbers in NOK 1000
Share capital	4 585	4 585
Premium fund	41 852	41 852
Other equity	96 236	92 659
Total equity	142 673	139 096
Total long term debt	7 280	13 117
Total short term debt	51 036	51 275
Total equity and liability	200 990	203 488

• 12.8 MNOK in interest bearing debt

3. Business segments update

Flow probes and systems in units

Flow probes in units VeriQ and MiraQ systems in units

1 000 1 100 1 200 1 300 1 400 1 500 1 600 1 700 1 800 1 900 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

• Slow probe sales for all regions in Q3
• Lower number of probes sold in particular to Germany due to the switch from probes approved for 30 times use to 50 times use

0 5 10 15 20 25 30 35 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Europe US ROW Asia

• System sales at the same level as Q3 last year
• Of the 21 flow systems sold, 9 were MiraQ systems, 6 were sold in Europe and 3 in ROW

Imaging probes and systems in units

Imaging probes in units

• 24 imaging probes sold when including sales to capital accounts in the USA, up 60 % compared to Q3 in 2014 VeriQ C & MiraQ systems in units

• System sales back on track after a slow Q2
• Of the 12 imaging systems sold, 3 were MiraQ systems, 1 was sold to Japan and 2 were sold in Europe

Q3 revenue performance by region

Mill NOK	Q3 '15	Q3 '14	Q / Q	YTD 15	YTD 15	H / H
Europe	34,2	29,5	16,0 %	99,2	88,9	11,6 %
USA	19,8	14,1	40,3 %	56,4	39,4	43,1 %
Asia & Jp	4,8	5,6	-14,4 %	13,6	13,3	1,7 %
ROW (MEA, CAN, SA)	2,8	2,7	1,6 %	7,6	7,1	8,0 %
Total	61,6	52,0	18,5 %	176,8	148,7	18,9 %

• In Europe, the regional performance for Q3 was driven by strong 19.5% growth from 3. party products. YTD September, 3. party products increased with 9,6 MNOK or 21.2 % over last year. Sale of own products ended at 17.1 MNOK for the quarter, up 12.7 %. YTD September sales of own products ended at 44.1 MNOK, up 1.5 %.

• In the USA, the strong growth continues, partly driven by favorable currency. Currency neutral growth was 6.7 % for Q3 and 10.7 % YTD September.
• Both Asia/Japan and ROW are so far smaller sales territories for Medistim and quarterly performance varies significantly. Performance YTD is positive for both territories.

Positive currency effects for Q3 with 5.9 MNOK and accumulated YTD September with 16.7 MNOK. Average rate to USD was 7.90 in 2015 vs 6.11 in 2014. Average rate to EUR was 8.81 in 2015 vs 8.28 in 2014.

Q3 revenue performance by product

Mill NOK	Q3 '15	Q3 '14	Q/Q	YTD 15	YTD 14	YTD15/YTD14
Procedures (USA)	18,4	12,3	50,4 %	51,7	34,3	50,6 %
Flow probes	15,4	16,1	-4,1 %	44,2	44,4	-0,4 %
Flow systems (VeriQ & MiraQ)	3,1	3,5	-12,1 %	9,2	10,4	-11,6 %
Imaging systems (VeriQ C & MiraQ)	6,2	5,0	23,3 %	13,0	11,4	13,4 %
Imaging probes	0,9	0,5	82,9 %	2,1	1,4	50,6 %
3rd party	17,1	14,3	19,5 %	55,2	45,5	21,2 %
Other	0,4	0,3	38,3 %	1,5	1,2	17,2 %
Total revenues	61,6	52,0	18,5 %	176,8	148,7	18,9 %

• Procedure sale in the USA: The number of flow procedures is up 16.2% and imaging procedures is up 50.5 % in Q3. YTD September flow procedures are up 12.2 % and imaging procedures is up by 45.0 %. Positive contribution from currency.
• Flow probes revenue: Revenue slightly down from Q3 last year, due to reduced number of probes sold particularly in Germany, due to the switch from probes for 30x use to 50x use.
• Flow systems: The number of systems sold in Q3 is par with LY. The reduction in NOK is related to the relative split between distributor and direct sales, and system configuration. The number of systems sold YTD September is down 11.7%.
• Imaging systems and probes: Good development for the imaging portfolio, with system sales back on track after a slow Q2 and probe sales increasing due to an expanding installed base.
• 3rd party products: Very strong quarter and sales YTD with 19.5 % and 21.2 % growth respectively.

4. Implementing the strategy

17

Growth opportunities – underdeveloped markets

• 1. Strengthen our position as market leader by establishing combined TTFM & Imaging as the new standard of care through
• o Early adopter KOL support
• o Easier conversion to imaging with MiraQ
• 2. Fight ignorance and indifference to QA by increasing the level of evidence and awareness through
• o Clinical marketing
• o Educational programs
• o Increase sales capacity
• 3. Product innovation and positioning to target new segments in vascular and open heart surgery
• o MiraQ Vascular

High performance US sales organization

RESULTS YTD 2015

• Revenues up by 43 % in NOK, 10.7 % in USD
• Number of procedures up by 14.9%
• o 12.2 % growth in flow procedures
• o 45.0 % growth in imaging procedures
• 20 new accounts
• 6 TTFM accounts converted to Imaging

# of Procedures per Consecutive Quarter

Growth opportunities – all CABG markets

• 1. Strengthen our position as market leader by establishing combined TTFM & Imaging as the new standard of care through
• o Early adopter KOL support
• o Easier conversion to imaging with MiraQ
• 2. Fight ignorance and indifference to QA by increasing the level of evidence and awareness through
• o Clinical marketing
• o Educational programs
• o Increase sales capacity
• 3. Product innovation and positioning to target new segments in vascular and open heart surgery
• o MiraQ Vascular

20

New, dedicated congress for coronary surgery

• Medistim highly profiled in the meeting
• Well attended "Lunch box" training session
• Prime time exposure in the main program

$11:27 - 11:35$	How I Choose OPCAB vs ONCAB in 2015 Sheng-Shou Hu, Fuwai Hospital, China		22. Exclusive Relian 1999: Late Clinical
$11:35 - 11:43$	Teaching On Pump & Off Pump CABG to Surgical Residents & Practicing Surgeons Paul T. Sergeant, Gasthuisberg University Hopsital, Belgium		Alistair Royse, The Australia, The Royal Victoria, Australia
$11:43 - 11:53$	Expert Opinion: Why Hasn't OPCAB Lived Up To Expectations? Bruce D. Lytle, Baylor Healthcare, USA		Anthony Brennan, T Australia Colin Royse, The Ro
$11:53 - 12:15$	Panel Discussion: Best Practices for OPCAB in 2015 Federico Benetti, Harold L. Lazar, David P. Taggart, John D. Puskas, Joseph F. Sabik, III, Sheng-Shou Hu,		Victoria, Australia 23. Coronary Artery A.V. Pavlov, MD, II, (
$12:15 - 1:30$	Paul T. Sergeant, Bruce D. Lytle LUNCH BOX SESSION - Industry Symposia		Cardiosurgery Cent Panel Discussion: A
Session 14A	Off Pump CABG via Median Sternotomy:		Harold L. Lazar, Kir
	Part 2 (Simultaneous Session) Moderators: Enio Buffolo & Paul T. Sergeant	Session 15	Graft Assessment v Frequency Ultrasou
$1:30 - 1:38$	The Evolution of OPCAB Enio Buffolo, Federal University of Sao Paulo School of Medicine. Brazil	$2:20 - 2:26$	Moderation Turbist onould Intraoperati Standard of Care?
$1:38 - 1:46$	Tips & Tricks for OPCAB John D. Puskas, Mount Sinai Beth Israel, USA	$8 - 2:36$	David P. Taggart, Un How Does TTFM Act
$1:46 - 1:54$	Coronary Shunting & Other Adjuncts to OPCABG Paul T. Sergeant, University of Leuven, Belgium	$2:36 - 2:44$	Gabriele Di Giamman Graft Flow Measure Mean & When to Re
$1:54 - 2:02$	Common Pitfalls of OPCAB Claudio Muneretto, University of Brescia Medical School, Italy	$2:44 - 2:52$	Gabriele Di Giamman High Frequency Ultras
$2:02 - 2:08$	Off-Pump Plication of Post MI Left Ventricular Aneurysm: Improve Cardiac Function & Mitral Regurgi Ajeet Bana, Fortis Escorts Hospital, Delhi, India	$2:52 - 3:00$	Hirokuni Arai, Tokyo Graft Flow Measure
$2:08 - 2:20$	Panel Discussions: My Tips & Tricks for State-of-the-Art OPCAB	$3:00 - 3:15$	Teresa M. Kieser, Lil Alberta, University of Discussion: Best Pra
Session 14B	Enio Buffolo, Paul T. Sergeant, John D. Puskas, Claudic Muneretto, Ajeet Bana Abstracts/Videos (Simultaneous Session)		in CABG Hirokuni Arai, James
	Moderators: Harold L. Lazar & Kim Ki-Bong	$3:15 - 3:35$	Di Giammarco, Teres
$2:20-3:15$	ABSTRACTS	Session 16A	COFFEE BREAK - Ex MIDCAB, Hybrid Rev
	17. MICS CABG: The Learning Curve: Lessons Learned Mahesh Ramchandani, Odeaa Al Jabbari, Walid K Abu Saleh, Basel Ramlawi, Houston Methodist DeBakey Heart &	$3:35 - 3:43$	via Thoracotomy (Sir Moderators: Francis Outcomes with MIDO
	Vascular Center, Houston, TX 18. Coronary Microsurgery		David Glineur, Univer:
	George E Green, MD,*Retired, Columbia-Presbyterian Hospital, Professor of Clinical Surgery, Columbia U. Coll.	2.55 3:43	Tips & Tricks for MID Marc Ruel, University
	Physicians & Surgeons, New York, NY Daniel G Swistel, MD, NYU Medical Center, New York, NY 19. Application of Cabrol Technique in Coronary Artery	$3:55 - 4:03$	Vessel CABG v How I Do it Marc Ruel, University
	Bypass Grafting Chab-Young Na, MD, Ph.D, Department of Cardiothoracic Surgery, Keimyung Univerisity, Daegu, South Korea	$4:03 - 4:11$	Angiographic Outcon from Around the Wor Naresh K. Trehan, Mr
	20. Research Angiography more than 10 years Postoperative in Patients with Each of Internal Mammary Artery, Radial Artery & Saphenous Vein Graft	$4:11 - 4:19$	Is there Any Real Ad Median Sternotomy 1 Michael E. Halkos, Er
	Alistair Royse, The University of Melbourne, Melbourne, Australia, The Royal Melbourne Hospital, Melbourne, Australia Jared Ou-Young, Zulfayandi Pawanis, The University of Melbourne, Melbourne, Australia	$4:19 - 4:27$	Current Role of Hybr Chinese Perspective Sheng–Shou Hu, Fuw
	Colin Royse, The University of Melbourne, Melbourne, Australia, The Royal Melbourne Hospital, Melbourne, Australia	$4:27 - 4:35$	Current Role of Hybr North American Pers Francis P. Sutter, Lan
	21. Very Long-Term (20 Years) Consequences of Radial Artery Removal on Forearm Circulation Mario Gaudino, MD, Department of Cardiac Surgery, Catholic Univeristy, Rome, Department of Cardio-thoracic Surgery, Weill-Cornell Medical College, New York Roberto Flore, MD, Department of Angiology, Catholic	$4:35 - 4:50$	Panel Discussion: W MIDCAB via Thoracot State-of-the-Art MII Francis P. Sutter, Nar Michael E. Halkos, Sh
	University, Rome Valentina Milazzo, MD. Department of Cardiac Sumany	Session 16B	Abstracts/Videos (Sin Moderators: James T:

Growth opportunities – vascular market

• 1. Strengthen our position as market leader by establishing combined TTFM & Imaging as the new standard of care through
• o Early adopter KOL support
• o Easier conversion to imaging with MiraQ
• 2. Fight ignorance and indifference to QA by increasing the level of evidence and awareness through
• o Clinical marketing
• o Educational programs
• o Increase sales capacity
• 3. Product innovation and positioning to target new segments in vascular and open heart surgery

o MiraQ Vascular

MiraQ Vascular Launch MiraQ Vascular launched in Q3

• Launched at the European Society of Vascular Surgery in Porto, Portugal 23-25. September
• A specialized and complete product offering for vascular surgery:
• o MiraQ Vascular system
  • Application adjusted front panel
  • Adapted vascular software features
• o Vascular flow probes for use on delicate blood vessels completed with small sizes

MiraQ Vascular Launch

Why perform surgical guidance & quality assessment in vascular surgery

MiraQ Vascular Launch

Surgical guidance & quality assessment in vascular surgery

• Guide carotid endarterectomy (CEA) and assess for technical imperfections

• Assess graft patency in peripheral bypass and evaluate anastomosis

• Quantify flow for guidance during AV access surgery

Immediate feedback to revise on the spot

MiraQ Vascular Launch

Combining surgical guidance & quality assessment in CEA

Improve surgical outcome, demonstrate quality and increase cost efficiency

MiraQ Vascular Launch Vascular market potential

• Global vascular market is about 600 000 procedures annually
• > 1 Billion NOK of market opportunity for Medistim
• Key vascular applications:
• Carotid endarterectomy (CEA)
• Peripheral bypass surgery
• Vascular access for hemodialysis (AV fistulae)
• Niche application:
• Liver transplant

Applications	Size of key markets # of procedures (USA, Germany, Nordic)	Clinical needs
CEA surgery	>135 000	Reduce risk of death and stroke Improve cost-effectiveness
Peripheral bypass surgery	>200 000	Improve long-term graft patency Improve quality of life
AV access surgery	>80 000	Secure maturation of shunt/fistula Reduce risk of cardiac failure & hand ischemia
Liver transplant Surgery	20 000 (globally)	Increase success rate for a costly procedure

The MiraQ family completed with MiraQ Ultimate

Growth opportunities – emerging markets

• 1. Strengthen our position as market leader by establishing combined TTFM & Imaging as the new standard of care through
• o Early adopter KOL support
• o Easier conversion to imaging with MiraQ
• 2. Fight ignorance and indifference to QA by increasing the level of evidence and awareness through
• o Clinical marketing
• o Educational programs
• o Increase sales capacity
• 3. Product innovation and positioning to target new segments in vascular and open heart surgery
• o MiraQ Vascular
• o Entry-level flowmeter for price sensitive segments

29

Breaking news…. agreement signed October 22nd: Medistim enters into a strategic partnership with em-tec

Under the License and OEM agreement:

• Medistim obtains exclusive, eternal, world-wide rights to market and sell em-tec's transit time flow measurement (TTFM) technology for use on human blood vessels within cardiac-, vascular- and transplant surgery
• Medistim gets time- and cost efficient access to a basic, entry-level customer solution that meets lower price-point market segments and fills a gap within Medistim's product portfolio

• Medistim gets access to a highly competent flow technology development partner for future technology and product developement

• Upfront fee approx. €300,000

• Minimum purchase commitments
• First product to be launched 2016

Current em-tec product

Press release October 23rd 2015

• Medistim ASA enters into a strategic partnership with em-tec GmbH
• (Oslo, October 22nd 2015), Medistim ASA (OSE: MEDI), a medtech company that develops and distributes surgical guidance and quality assessment devices, has entered into a long-term agreement with em-tec GmbH.
• Under the License and OEM agreement, Medistim obtains exclusive, eternal, world-wide rights to market and sell emtec's transit time flow measurement (TTFM) technology for use on human blood vessels within cardiac-, vascular- and transplant surgery. em-tec's flow measurement device is designed as a basic, entry-level customer solution that meets lower price-point market segments and fills a gap within Medistim's product portfolio. The first Medistim labeled device will be launched in 2016.
• The financial terms of the agreement consist of an upfront payment of approx. EUR 300,000 and minimum purchase commitments.
• In addition to the License and OEM agreement, the companies intend to collaborate on new technology and product development, thereby strategically combining the strengths of both companies.
• "While Medistim is the market leader with our own high-end products for surgical guidance and blood flow measurement in cardiac-, vascular and transplant surgery, we have been lacking an entry-level device to reach some emerging market product segments," says Medistim President and CEO, Kari E. Krogstad. "This agreement gives us a time- and cost effective path to serve these segments, while at the same time, it opens up for very exciting opportunities from the two companies joining forces to further technological progress and engage in new product and technology development".

Seeing is believing