Volpara Health Technologies Limited

A S X : V H T (NZ Company no. 2206998/ARBN 609 946 867)

2019 ANNUAL REPORT

CELEBRATING of helping save familiesfrom breast cancer.

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Over 12 million images have been analysed by Volpara technologies in the cloud, helping improve the lives of countless women and families.

ARR 86%$6,630,000 ARR2019 HIGHLIGHTS

2019 ANNUAL REPORT

Celebrating 10 Years2019 Highlights & Table of Contents

About VolparaMaking a DifferenceDedicated to Early DetectionCorporate TimelineImproving QualityEnabling Personalised Breast Care

Chair’s LetterCEO’s LetterDirectors’ ReportRemuneration ReportIndependent Auditor’s Report

Financial ReportFinancial StatementsNotes to the Financial StatementsAdditional InformationCorporate Directory

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Table of Contents

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Medical TechnologyMaking a Difference Every Day“Volpara was founded for very personal reasons, as we all had friends and family members die of breast cancer. However, with more than 500,000 breast cancers deaths each year, our vision quickly expanded to focus on helping save all families from breast cancer.”

Ralph Highnam, PhD, VHT founder and CEO

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Dedicatedto the Early Detectionof Breast CancerVolpara is dedicated to the early detection of breast cancer by improving the quality of mammographic screening. Volpara’s artificial intelligence (“AI”) imaging algorithms enable breast imaging centres around the world to provide personalised, high-quality mammographic screening based on automated, objective measurements of breast density, positioning, radiation dose, and compression.

Volpara’s technology is based on research in medical physics originally conducted at Oxford University. Today, the company’s groundbreaking work is supported by numerous patents, trademarks, and regulatory clearances, including FDA clearance and CE marking, and a volume of peer-reviewed publications unparalleled in the breast density industry. Used by customers and/or research projects in 38 countries, Volpara’s industry-leading quality assurance software provides role-specific dashboards and wide-ranging benchmarking analytics to help centres manage their business more efficiently.

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10 years of excellence in breast care2009Company incorporated

Volpara attains ISO 13485 Medical devices — Quality management systems certification

2010Volpara exhibits at RSNA conference for first time

VolparaDensity software obtains FDA clearance

2011First customer installs VolparaDensity software

2012First Taiwan, Japan, and South Korea VolparaDensity customers

2013VolparaDensity Scorecard includes radiation dose and pressure

VolparaDensity software’s 100th install

2014Volpara wins Frost & Sullivan Best Practices Award

Independent study published in Breast Cancer Research shows strong connection between VolparaDensity and breast cancer risk

2015Volpara signs US distribution agreement with GE Healthcare

Over 100 peer-reviewed papers, making VolparaDensity the most clinically validated automatic, volumetric breast density assessment software in the world

Density assessments for more than 20 million women across 38 countries

Software installed in more than 300 leading facilities worldwide, including the top two cancer centres, according to the latest hospital rankings from US News & World Report

More than 2.5 million mammographic and tomosynthesis studies evaluated for positioning and compression stored in the Volpara®Enterprise™ cloud

Recurring revenue growth of over 3,000% since listing on the Australian Securities Exchange (ASX) in 2016

2016Volpara Health Technologies listed on ASX (ASX:VHT)

VolparaEnterprise launched

Volpara boasts many accomplishments in its 10-year history. Some of the most notable achievements:

2017VolparaEnterprise analyses first million mammographic studies

2018Volpara attains ISO27001 Information security certification

100th Volpara peer-reviewed paper published

2019VolparaLive! launched

36 International patents granted

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Celebrating our 10th Anniversary in 2019, Volpara remains committed to helping breast imaging centres achieve improved mammographic sensitivity and detect breast cancers earlier. Since launching VolparaDensity software in 2010, the company has pioneered a robust suite of quantitative breast imaging tools that enable personalised measurements of volumetric density, breast compression, and breast positioning on every mammogram—factors that are designed to maintain image quality and provide critical insight for breast imaging workflow.

“Lake Medical Imaging is known in the region as an innovator. We were the first practice to deploy a full range of the latest breast imaging technology, including VolparaDensity software, so we could customise annual breast screenings based on each patient’s breast density. For us, it is imperative that we continue our leadership role in creating and maintaining a culture that uses the best methods and advances our field has to offer while always treating our patients and employees like family.” —Dr Cathrine Keller, Lake Medical Imaging

“I can’t see how a large and busy practice in breast imaging can meaningfully meet quality assurance without VolparaEnterprise.”—Robin Shermis, MD, MPH, ProMedica

“Our work demonstrates that use of an automated, objective assessment tool can improve mammographic quality and positioning. Technologists that receive feedback more frequently are more likely to improve their mammography quality.” —Wendi Rader, Christiana Care, 2019 NCoBC Poster Presentation

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Personalised CareVolpara and MRS will deliver technologies enabling personalised breast care

Volpara has acquired MRS Systems, Inc. (MRS). Through this acquisition, Volpara will be able to expand its product portfolio and apply its extensive experience in artificial intelligence (AI) and machine learning (ML) to revolutionise personalised breast care through new technology development. The combination of MRS and Volpara will give breast care providers a unique view of the patient journey, through screening, diagnosis, and treatment. The combination of technology and data will enable customers to deliver personalised care, comply with regulations, and explore business - and workflow-improvement opportunities.

Greater than 90% Gross MarginInstalled in 1,700 clinics across the US$7.5M in Revenue

About

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Dear Shareholders

Estimate based on public sources and management observations. 8

There has never been a more exciting time for Volpara. Powered by supportive investors, a dedicated and hardworking team, and insightful leadership focused on cutting-edge clinical science, Volpara is now reaching critical mass. Building on its rapidly expanding customer base, strong revenue growth, and a capital raise that has bolstered the balance sheet, added value to our shareholders, and enabled the acquisition of MRS Systems, Inc., Volpara now has the means to significantly grow its market and advance its vision of Saving Families from Breast Cancer.

In reviewing the accomplishments of the past financial year, in casting an eye toward the plans and possibilities of the year to come, I see Volpara’s evolution as the natural consequence of several factors.

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Ongoing InvestmentVolpara’s investment in both product development and the sales team has prompted strong growth. The number of VolparaEnterprise customers increased 125%, from 57 to 128, with Volpara’s Annual Recurring Revenue (ARR) increasing 86% over the previous year, from NZ $3.6 million to NZ$6.63 million. Revenue from customers increased 78% year on year, with Software as a Service (SaaS) revenues increasing 109%. Volpara has proven its ability to scale its operations while generating a gross margin above 80%, achieving 83% compared to 77% the previous year.

THE NEXT STEPSVolpara has already amassed an unprecedented, ever-growing amount of data, so far analysing over 12 million images—one of the largest data sets in breast cancer research. Now, with the ability to link these mammographic images to health outcomes, Volpara is poised to change the game altogether, to harness AI in the creation of predictive risk models that go beyond the early detection of breast cancer to the next logical step: prevention.The key business structures and disciplines are now in place. Building on the pillars of investment, a receptive market, and expansion, over the next 12 months Volpara will focus on four key areas:• increasing US market share with a target of 27% and continuing to grow ARR to around US$11.5M;• integrating MRS into the Company’s operations;• investing further in research and development, bringing to market a personalised risk assessment product; and• growing the engineering team to accelerate the core functionality of VolparaDensity and VolparaEnterprise.

In working towards these goals, you can be assured that we will continue to scale the Company’s resources prudently.For their contributions to Volpara’s success, I’d like to thank the staff and fellow members of the Board, noting especially the leadership of my predecessor, Roger Allen AM, over the previous three years. Roger remains on the Board and is a significant investor in Volpara.

TWOA Changing EnvironmentAwareness of breast density as a factor in improving the early detection of breast cancer is at an all-time high. In the United States, Volpara’s main market, 38 states now have breast density notification legislation in place. At the federal level, the US Food and Drug Administration (FDA) has announced draft regulations that would mandate density notification for all American women. The market is now catching up to what Volpara’s clinical science team has known all along, that assessing breast density is vital to the early detection of breast cancer, and that doing so in an automated, objective, and repeatable manner is the most effective way to amass the massive amounts of data needed to create the next-generation algorithms that will power increasingly personalised breast screening programmes.

Such a favourable climate for density assessment presents a tremendous opportunity for Volpara at a time when our VolparaDensity clinical application—already the most clinically validated automated, objective volumetric breast density assessment software—has been further validated by major studies from around the world.

| See the sidebar for a sample of these studies.

THREEExpansionVolpara has taken a big step in broadening the extent of its reach by acquiring MRS, a leading mammography information systems company based in Seattle, Washington. The addition of MRS’s 1700 breast imaging centres brings Volpara’s net total to over 2,000 sites, covering approximately 25% of US women. We anticipate that the acquisition will allow us to expand our product portfolio, support breast imaging centres with streamlined workflow and enhanced regulatory compliance, and combine our collective expertise in AI and machine learning to develop new technologies that optimise breast screening.

Behind the acquisition was Volpara’s successful capital raise of A$55 million, where the institutional placement exceeded the demand. Our mix of retail and global institutional support remains robust, hailing from not only Australia and New Zealand but also the United States, the United Kingdom, and Hong Kong. Thank you to Bell Potter and Morgans for their help in raising that money.

Breast density has featured in numerous major studies from around the world. A selection of recent papers:

The New England Journal of MedicineUniversity of California, San FranciscoDr Kerlikowske identified how increased breast density has been shown to be associated with a risk of breast cancer that is four to six times greater than in women with the lowest density quartile range at a similar age.

Breast Cancer ResearchItalyDr Puliti discussed VolparaDensity’s correlation of the incidence of breast cancer with volumetric breast density, showing that accurate assessment of breast density is important in breast screening effectiveness. RadiologyUniversity of PennsylvaniaDr Gastounioti identified that visual assessment of breast density when using visual Breast Imaging Reporting and Data System (BI-RADS) with digital breast tomography (DBT) and synthetic mammography screening modalities tended to underestimate breast density with effects that also varied between ethnicity and body mass index. The findings have direct implications for personalised, supplemental screening, which require accurate, unbiased breast density assessment.

The Journal of Breast ImagingUnited Kingdom/University of Virginia Dr Brentnall validated the importance of including breast density as a risk factor in the Tyrer-Cuzick breast cancer risk assessment model. The inclusion of breast density was shown to stratify risk accurately in US women, with VolparaDensity automated volumetric density measures, which have excellent MRI agreement, found to have a practical advantage over BI-RADS in a clinical setting.

Finally, I thank you, our shareholders, for joining us in meeting our opportunity and responsibility.

Personalised CareDear Shareholders

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Yours sincerely,

Paul Reid,Chair

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CEO’s Letter Dear Shareholders, FY2019 was a very pleasing year for Volpara for many reasons, not least the growth in ARR and continuing support from shareholders. These set the groundwork that allowed us to acquire MRS Systems, Inc., and thus attain critical mass in the all-important US breast cancer screening market.

Key SaaS metrics to end FY2019 were the following: • Annual Recurring Revenue rose from NZ$3.6M to NZ$6.63M, an increase of 86%. • Total Contract Value signed rose from NZ$11.2M to NZ$15.8M, an increase of 41%.

These translated to the following traditional accounting metrics: • Accounting revenue from customers rose from NZ$2.8M to NZ$5.0M, an increase of 78%. • Gross margin rose from 77% to 83%. • Net loss rose from NZ$8.8M to NZ$11.7M, an increase of 33%, reflecting increased expenses associated with expansion of both the US sales team, to capitalise on open leads, and the Wellington engineering team, to propel product innovation.

Where did this strong growth come from? The sales in FY2019, as in previous years, came predominately from the United States, with over 84% of revenue. The US market remains our big focus and was one of the driving reasons behind the recent MRS acquisition, which will give us a mature and stable US headquarters along with excellent technology and outstanding people in installation, training, and onboarding. The recent acquisition and associated raise are also enabling us to further build out our US direct sales team. Now they will also have MRS products in their tool kit, which should see Volpara’s average revenue per user (ARPU) increase and sales productivity multiply.

Big US wins during the year included Memorial Sloan Kettering Cancer Center, the University of Texas MD Anderson Cancer Center, and Seattle-based Swedish Health Services. In our recent press release on the last deal, Karen McInerney, R.T.(R)(M), Director for the Swedish Breast Care Network, commented on their use of VolparaEnterprise:

“The driving force behind our decision to implement the VolparaEnterprise software was the vast amount of data analytics it would provide to us. This data, especially the image quality metrics, will be a tremendous tool in both our quality improvement and operational efficiency efforts.”

Such a statement is of double importance since Swedish is part of the Providence Integrated Delivery Network (IDN); when the luminary is happy, the rest of the network is more likely to participate.

I’d like to thank our US sales team, managers, and Chief Commercial Officer Mark Koeniguer for getting us the traction we needed to get us to 7% of women screened in the United States and laying the groundwork for success in the coming years.

Though our primary focus is the United States, we retain a global perspective. In Australia, our deal with I-MED Radiology Network will likely add over 85 clinics across Australia, and after signing another major hospital in Adelaide we now cover most of that region. Additionally, we are progressing well with the state-wide screening programs and getting traction across Australia: Women’s & Breast Imaging and Royal Perth Hospital in Perth; the Wesley Hospital in Brisbane; Alfred/Mater Imaging in Sydney; and Imaging Associates, Royal Melbourne Hospital, and MIA Radiology in Melbourne. In New Zealand, most of the private clinics in Auckland (Mercy Breast Clinic, Mercy Radiology, St Marks Breast Centre, and Auckland Breast Centre) now report breast density, and BreastScreen Aotearoa Central uses VolparaEnterprise at their Hutt Hospital site to record and improve quality. In Asia, we continue to win sales in Japan, South Korea, and Taiwan, though progress remains relatively slow compared to elsewhere in the world.

For their outstanding efforts in APAC this year, I’d like to thank Anton Zerle, Paul Clancy, and Kylie Chandler. We look forward to announcing major new deals shortly.

Europe is dominated by the population screening programs that still seek randomised controlled trials before they change practice, but we continue to pick up individual sales. As per our announcements, Project DENSE from the Netherlands is one such trial whose publication we greatly look forward to. PROCAS II, the UK trial in the Manchester region, continues to run and has seen patients having their risk assessed, though the trial’s start was delayed due to privacy regulations. Researchers in Norway continue to publish a range of papers on Volpara ranging from density to compression pressure.

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For their efforts in Europe this year, I’d like to thank Chris Tromans, Pete Edwards, Penny Gibson, Melissa Hill, and Vincenzo La Bella.

Beyond sales, Volpara’s products are as well-received as ever. VolparaDensity continues to get excellent publications, including one by Brentnall et al. showing that VolparaDensity matched a world expert in density assessment within the Tyrer-Cuzick v8 breast cancer risk software. VolparaEnterprise continues to garner case studies and ever-strong return-on-investment stories. And the VolparaLive! system has seen multiple quotes starting to convert to sales. These products are going to get much stronger with the addition of MRS. Specifically, we can now

• access the name of the radiologist who read the images, allowing that name to go into VolparaEnterprise ready for the FDA EQUIP audit and signifying a much more convenient solution for the customer;

• sell not just VolparaDensity, but also Tyrer-Cuzick v8 software itself as a discrete product, raising ARPU and letting us address what’s clearly a massive unmet clinical need;

• pass information from VolparaLive! to VolparaDensity so the radiologist can see whether the woman was difficult for the radiographer to position during the mammographic exam. For example, did she have a frozen shoulder? was she in a wheelchair?

Our products have also received a boost in the form of Matt Prickett, who joined Volpara in January as Product Management Lead. Already he has done an outstanding job of getting processes in place, collating ideas, and putting structure around those ideas. He’s now building a strong product team in Wellington, tightly linked to Richard Hudson’s engineering team, which has performed well across multiple releases over the last year.

Product-wise, there have been interesting challenges over the last year, most notably because much of our work is to make subjective scores objective, and people’s perceptions of density and quality have changed markedly over the last few years. Just two years ago, density was all about making sure you get the a-b/c-d threshold right, but now radiologists want to get each individual category correct—a/b/c/d—as they enter the scores into risk models. One paper this year showed that a new form of image processing (C-view from an x-ray vendor) managed to reduce the visual perception of breast density in 40% of cases! Objective, science-based scoring is sorely needed, and that is exactly what Volpara will continue to provide.

Finally, many thanks to Craig Hadfield and others who helped in our recent fundraising. The amount of paperwork and intense effort required by both the due diligence process and the acquisition itself is staggering. I believe it shows how we’ve progressed as company that we can now acquire companies, raise money, finish the FY reports, and keep selling and developing product all at the same time.

And, of course, our focus now is on having a very successful merger and future with MRS.

Many thanks to you, and to Bell Potter and Morgans, for continuing to support the Company and believe in our mission.

Yours sincerely,

Ralph Highnam, PhD

CEO & Chief Scientist

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Roger joined the Board in June 2010 and was Chairman from October 2015 to March 2019. Roger is a highly experienced entrepreneur and investor in early-stage growth companies in Australia, New Zealand, and internationally. Originally, he built Computer Power Group (CPG) in the 1970s from a small startup to a worldwide group of 3,000 people operating from 50 offices in 12 countries, listing on the Australian Securities Exchange (ASX) in 1987. The company was aquired in 1995. In 1996 he cofounded Allen & Buckeridge, an early-stage venture capital fund with offices in Silicon Valley and Australia. He is dedicated to social entrepreneurship and impact investing, especially to enterprises focused on digital health and indigenous economic development.

Roger has served on two Prime Ministers’ Science and Technology Councils and Advisory Boards, and was Deputy Chairman of Austrade from 1990 to 1997. Previously an adjunct professor in the Business School of the University of Technology Sydney, he has also lectured at the School of Entrepreneurship at INSEAD. Roger has been awarded the top two lifetime awards in the IT industry (CSIRO Tony Benson award and the Pearcey Medal for lifetime achievement) as well as an Order of Australia Honour for his services to the IT sector through leadership roles, venture capital investment, and professional development, and in recognition of his support of the indigenous community and philanthropic interests. He was also elected as a Fellow of the Australian Computer Society. He is based in Sydney, Australia.

Roger is a member of the Audit and Risk Committee and the Remuneration Committee.

Ralph, a founding Director of VHT, has been at the forefront of the digital breast imaging field for over 25 years. Ralph’s innovative work as a research scientist in quantitative breast imaging technology at the University of Oxford led him to form first OXIVA Limited and then Mirada Solutions with Professor Sir John Mike Brady. Under Ralph’s leadership, Mirada became the number-one provider of image registration and fusion tools before being acquired by CTI Molecular Imaging Inc. and later Siemens Medical Solutions USA, Inc.

Before founding VHT in 2009, Ralph consulted for many of the world’s top medical imaging companies, including R2, Siemens, Hologic, and Dexela, as well as many leading breast screening programs. During this time, he continued his academic research as part of an international circle of collaborators.

Ralph is the author of numerous articles and, with Brady, the seminal book Mammographic Image Analysis. As CEO of VHT, Ralph is dedicated to providing the most accurate measurements possible of breast composition (“breast density”) in order to improve the health outcomes of women around the world. Based in Wellington, New Zealand, in 2015 he was named a Wellingtonian of the Year finalist.

Paul joined the Board in March 2018 and brings extensive commercial experience gained across a range of technology/SaaS businesses. He was the founding CEO and Chairman of Figured Limited, a fintech SaaS company that provides management accounting software to farmers in the United States, the United Kingdom, Australia, and New Zealand. Figured was New Zealand’s Startup of the Year in 2016 and has grown at an incredible pace, funded by private, corporate, and Venture Capital (VC) investors.

He is also currently Chair of Pukeko Pictures GP, an independent entertainment production company with a focus on quality children’s programming such as Thunderbirds Are Go, Jane and the Dragon, and The WotWots. Other key directorship roles include Christchurch International Airport Limited and Comvita Limited, which is listed on the New Zealand Exchange (NZX).

Prior to embarking on a startup and governance career, Paul held a number of key executive roles, from CEO to COO, in businesses such as Air New Zealand, MetService, Carter Holt Harvey, and Ernst & Young. He is based in Wellington, New Zealand.

Roger Allen AMNON-EXECUTIVE DIRECTORBA, FACS

Dr Ralph HighnamEXECUTIVE DIRECTOR & CEOBSc (Hons) 1st Class, MSc, PhD

Paul ReidCHAIR, INDEPENDENT NON-EXECUTIVE DIRECTORBSc (Hons)

Directors’ Report The Directors present their report on Volpara Health Technologies Ltd (VHT) and the entities it controlled during and at the end of the year ended 31 March 2019.

Directors The following persons held office as Directors of VHT for the financial year: Paul Reid, Roger Allen AM, Dr Ralph Highnam, Professor Sir John Michael (Mike) Brady, John Diddams, John Pavlidis, Lyn Swinburne AM (did not stand for reelection 23 August 2018), Dr Monica Saini (appointed 23 August 2018)

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Monica joined the VHT Board in 2018. She is an internationally recognised expert in breast cancer, especially breast density and breast cancer risk assessment.

Monica is a Doctor of Medicine and a prior BSc in nursing. She has had US radiology training and an additional fellowship in women’s imaging. She has over 10 years of patient care experience and was the Chief of Breast Imaging at Santa Fe Imaging/Christus St Vincent Hospital in the southwestern United States from 2008 to 2016. She also served as the chairman for the Christus St Vincent Cancer Committee.

In 2015, she became a medical advisor for GE Healthcare and consultant for ProScan Imaging, as well as research advisor for World Care Clinical. By 2016, she was appointed Medical Director of Automated Breast Ultrasound Systems, GE Healthcare. Globally, she has worked on early detection of breast cancer, breast cancer research, and international physician education for breast imaging technologies.

Monica relocated to New Zealand in 2017 and started as a consultant for VHT, where she implements hands-on expertise in product development, research, and customer relations. She also evaluates patients as a lead radiologist at Hutt Valley District Health Board in Wellington.

John is the principal of an Australian CPA firm that provides companies with corporate advisory services. John has extensive knowledge and practical experience in the application of Australian corporations law, ASX Listing Rules, international accounting standards and corporate governance principles.

Over the past 25 years John has managed the processes to raise capital, perform due diligence and seek ASX listing for a number of enterprises, including IPOs for a wide range of diverse offerings. These include oil and gas interests, food and retail, a fine-wool processing plant, an innovative telephony product, a biotech company, an Internet advertising initiative, a dental device for snoring and sleep apnoea, an indoor skydiving company, the New Zealand developer of the Martin Jetpack, a healthy fast-food chain and Skydive the Beach Group Limited (now Experience Co Limited).

John is a Non-Executive Director and Deputy Chair of ASX-listed Experience Co Limited, an adventure tourism business operating in Australia and New Zealand.

John is Chair of the Audit and Risk Committee and also the Remuneration Committee and is based in Sydney, Australia.

John joined the VHT board in early 2015 with more than 25 years of medical device experience as an executive and company director. John currently serves as the President and CEO of Vytronus, Inc., a venture-backed startup using novel catheter-based ultrasound and robotics technology to treat atrial fibrillation, a cardiac arrhythmia.

Prior to Vytronus, John was the President and CEO of Endoscopic Technologies, Inc., a leader in minimally invasive and endoscopic treatment of atrial fibrillation, until it was acquired by AtriCure, Inc., in 2014. Since 2007, John has also served on the board of directors of several health technology companies, including U-systems, Inc., which pioneered automated breast ultrasound imaging as an adjunct to mammography for breast cancer screening and was acquired by GE Healthcare in 2012.

Previously, John served as President and CEO of R2 Technology, Inc., the pioneer and leader in computer-aided detection of breast cancer, until Hologic, Inc. acquired the company in 2006. Before joining R2 Technology, John was president of the Ultrasound group at Siemens Healthcare, where he led the acquisition and integration of Acuson and subsequent growth of the combined organization to $1 billion in revenue. He is based in Silicon Valley.

John DiddamsINDEPENDENT NON-EXECUTIVE DIRECTORB Com, FCPA, FAICD

John PavlidisINDEPENDENT NON-EXECUTIVE DIRECTORBS, MS

Dr Monica SainiEXECUTIVE DIRECTOR AND CHIEF MEDICAL OFFICERBSc, MS, MD

Mike, a founding Director of VHT, is currently Emeritus Professor of Oncological Imaging at the University of Oxford, having retired after 25 years as Professor of Information Engineering. He served for 20 years as a Non-Executive Director and Deputy Chairman of the FTSE 250 company Oxford Instruments plc and for 10 years as a Non-Executive Director of AEA Technology plc.

Mike is founding Director of Perspectum Diagnostics, which performs liver image analysis by MRI; Mirada Medical Limited, which develops medical image analysis software and is installed in several thousands of hospitals worldwide; Screenpoint, which develops machine learning methods for computer-aided diagnosis in mammography; and Optellum, which develops software to classify lung nodules in CT.

Mike is the author of over 750 articles and 35 patents in computer vision, robotics, medical image analysis, and artificial intelligence, and the author or editor of 10 reference books. He is based in Oxford, the United Kingdom.

Professor Sir John Mike BradyNON-EXECUTIVE DIRECTORFRS, FREng, FMedSci, HonFIE

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Chief Financial Officer and Company Secretary Craig Hadfield CA (SA) Craig joined VHT in July 2016 and was appointed Chief Financial Officer and Company Secretary on 1 March 2017, prior to which he worked as an Associate Director at Deloitte. Craig is a Chartered Accountant, holding a Higher Diploma in Accounting, and is a member of the South African Institute of Chartered Accountants and an affiliate member of Chartered Accountants Australia and New Zealand.

Principal activities The Group’s principal activity during the year was the sale of VolparaEnterprise, a comprehensive cloud-based breast imaging analytics platform that delivers quality assurance and performance monitoring. With dynamic, role-specific dashboards and wide-ranging benchmarking analytics to help clinics manage their business more efficiently, VolparaEnterprise is supported by the company’s suite of market-leading clinical applications: VolparaDensity, VolparaDose, VolparaPressure, VolparaPositioning, and VolparaServer.

Significant changes in the state of affairs There have been no significant changes in the state of affairs of the Group during the financial year ended 31 March 2019. Sub-sequent to year end, the Group successfully raised A$55M in capital and concluded the acquisition of MRS as set out in matters subsequent to the end of the financial year.

Operating results for the year Statutory results Below are some of the key statutory results which have been summarised. The total revenue from contracts with customers and SaaS-only revenue both show how the Group continues to gain traction with the SaaS revenue model. The 109% increase in SaaS-only revenue has been driven by the sale of VolparaEnterprise, which, together with VolparaDensity, is now in use by more than 7% of the US breast screening market. Volpara’s net loss after tax increased as planned by 33% compared to FY18 as a result of increased expenses during the year associated with expansion of both the US sales team, to capitalise on open leads, and the Wellington engineering team, to continue to drive innovation with existing and new products.

2019 2018 $ Variance VarianceNZ$000 NZ$000 NZ$000 %

SaaS 4,040 1,933 2,107 109%

Capital sales 581 575 6 1%

Service maintenance agreements revenue 379 304 75 25%

Total revenue 5,000 2,812 2,188 78%

Net loss after tax (11,741) (8,818) (2,923) 33%

SaaS metrics Volpara ended the year with ARR of NZ$6.63M and Total Contract Value (TCV) signed in FY19 of NZ$15.8M, an increase of 86% and 41%, respectively, over FY18.

It is important to distinguish these metrics from some of the statutory results seen in the notes to the financial statements. Deferred revenue per note 4 shows NZ$2.2M vs. NZ$934K in FY18. Although the Group has ARR of NZ$6.63M, the deferred revenue represents only that portion of the ARR that has not already been recognised as revenue but which has already been invoiced; i.e., there are amounts for which the Group has not earned as the Group has not yet delivered on the performance obligations, and these amounts will not be reflected in either the revenue or deferred revenue numbers.

Similarly, TCV represents the total dollar value of deals signed by the Group for contracts ranging in length from 12 months to five years. Those periods also represent the period over which the revenue for the contracts will be recognised. These deals are cancellable, which makes Volpara’s job of customer satisfaction that much more important, to ensure churn rates are kept to a minimum.

Matters subsequent to the end of the financial year Subsequent to the end of the financial year, the Company successfully raised A$45M through the issue of 30 million shares at A$1.50 from a placement to existing and new institutional investors, and a further A$10M from an accelerated non-renounceable entitlement offer to existing shareholders through the issue of 6,666,666 shares at A$1.50 per share.

Subsequent to, and in conjunction with, the placement, the Company acquired MRS, a mammography information systems company based in Seattle, Washington, for US$14.59M.

Likely developments and expected results of operations Over the course of the 2019 financial year, Volpara continued to gain customers at an increasing rate; the number of customers using VolparaEnterprise, for example, increased from 57 to 128 (up 125%) and ARR increased as discussed above. As a result of this growth, revenue from customers has increased 78% year on year, with SaaS revenues increasing 109%.

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2020 is shaping up to be a defining year in Volpara’s journey, with a successful capital raise and the acquisition of MRS already having been completed. First and foremost, we will continue to focus on increasing our market share with our existing and new products, with stated goals of achieving 27% of the US breast screening market and increasing ARR to US$11.5M. Second, if not more important, we will look to integrate Volpara and MRS to begin realising the many benefits of the combined Group: an increase in data volume, new cross-selling opportunities, an expanded product portfolio, combined resources, and ever more capability in the areas of compliance and quality.

Dividends paid or recommended No dividends have been paid or declared for payment during the financial year.

Diversity policy The Group is not affected by any significant environmental regulation in respect of its operations.

Environmental issues The Company has adopted a Diversity Policy, which includes the requirement for the Board or a relevant committee of the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the Company’s progress in achieving them. However, due to the stage of development and the relatively small number of employees (compared to others listed on the ASX), the Board did not set objectives for diversity for the past financial year. As the Company moves closer to achieving its commercialisation goals and increases its number of employees, it will reexamine its approach in this regard.

There were six men and one woman on the Board during the 2019 financial year. One Director was replaced on the Board during the 2019 financial year.

As at the date of this Annual Report, the proportion of women in the Company as a percentage of its total employees was 29 out of 82, or 35.4%. The proportion of women as a total of the senior executive positions (not including the CEO) is 2 out of 5, or 40%. For this purpose, senior executives are members of management who report directly to the CEO.

Indemnifying officers During or since the end of the financial year, the Company has given an indemnity, entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

The Company has entered into deeds of indemnity with each of the Directors in accordance with the constitution, under which the Company indemnifies each Director against:

(i) costs incurred by the Director in any proceeding that relates to liability for any act or omission made by the Director as an officer of the Company and in which judgment is given in the Director’s favour or in which the Director is acquitted or which is discontinued;

(ii) any liability to any third party for any act or omission by the Director as an officer of the Company; and

(iii) any costs incurred by the Director in defending or settling any claim or proceeding to any costs or liability of the nature referred to in (i) and (ii).

The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by them in defending legal proceedings arising from their conduct while acting in the capacity of Directors of the Company, other than conduct involving a wilful breach of duty in relation to the Company.

Unissued shares As at 31 March 2019, there were 12.412M unissued ordinary shares under employee share options. Refer to the remuneration report and note 13 of the financial report for further details of the employee options outstanding.

Share options There were ordinary shares of Volpara Health Technologies Ltd issued during the year ended 31 March 2019 on the exercise of options granted under the Legacy Employee Share Option Plan (LESOP). The following ordinary shares of Volpara Health Technologies Ltd were issued during the year ended 31 March 2019 on the exercise of options granted under the New Employee Share Option Plan (NESOP).

Date Options Exercised Average Issue Price of Shares A$ Number of Shares Issued16/05/18 0.5000 20,000

15/06/18 0.5000 168,000

7/08/18 0.5000 142,000

27/09/18 0.5000 26,000

21/12/18 0.5000 168,000

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Meetings of DirectorsDuring the financial year, 11 Directors’ meetings were held along with three Audit and Risk Committee meetings. Attendances by each Director during the year were as follows:

Board of Directors Audit and Risk Committee Remuneration Committee

DirectorNo. eligible to attend

No. attended

No. eligible to attend

No. attended

No. eligible to attend

No. attended

Roger Allen AM 11 11 4 4 1 1

Dr Ralph Highnam 11 11

Professor Sir John Mike Brady 11 8

Lyn Swinburne AM 5 3

John Diddams 11 10 4 4 1 1

John Pavlidis 11 10

Paul Reid 11 11 4 3 1 1

Dr Monica Saini 7 7

Non-audit services During the year, there were no non-audit services provided by Deloitte Limited.

Auditor’s independence declarationA copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out below.

AUDITOR INDEPENDENCE DECLARATION TO THE DIRECTORS OF VOLPARA HEALTH TECHNOLOGIES LIMITED

In relation to the independent audit report for the year ended 31 March 2019, to the best of my knowledge and belief there have been:

(i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and

(ii) No contraventions of any applicable code of professional conduct.

This declaration is in respect of Volpara Health Technologies Limited and the entities it controlled during the year.

Trevor Deed Partner 25 June 2019

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Remuneration Report (Unaudited)The Directors are pleased to present your Company’s 2019 remuneration report, which sets out remuneration information for Volpara Health Technologies Ltd’s Non-Executive Directors, Executive Directors, and other key management personnel.

This remuneration report outlines the Director and Executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Companies Act 1993 and its regulations. For the purposes of this report, key management personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the Parent company.

For the purposes of this report, the term “Executive” encompasses the Chief Executive and other senior Executives of the Parent and the Group.

Directors and KMP disclosed in this reportName Position

Non-Executive and Executive Directors

Paul Reid Chairman from 1 March 2019, Independent Non-Executive Director

Roger Allen AM Chairman until 1 March 2019, Non-Executive Director

Dr Ralph Highnam Chief Executive Officer, Executive Director

Professor Sir John Michael (Mike) Brady Non-Executive Director

Lyn Swinburne AM (did not stand for reelection 23 August 2018) Independent Non-Executive Director

John Diddams Independent Non-Executive Director

John Pavlidis Independent Non-Executive Director

Dr Monica Saini (appointed 23 August 2018) Chief Medical Officer, Executive Director

Other KMP

Mark Koeniguer Chief Commercial Officer

Craig Hadfield Chief Financial Officer & Company Secretary

Remuneration philosophyThe performance of Volpara is dependent upon the quality of its Directors and senior Executives. Given the developing nature of Volpara, the remuneration policy must reflect the need to attract, motivate, and retain highly skilled Directors and Executives.

To this end, the Group embodies the following principles in its remuneration framework:

• Provide competitive rewards to attract high-quality Executives; • Provide an equity incentive for senior Executives that will highly motivate them and align their motivation with creation

of shareholder value; and• Ensure that rewards are referenced to relevant employment market conditions.

Remuneration structureThe Board of Directors (the “Board”) determined to establish a Remuneration Committee during the 2019 financial year. The Remuneration Committee was formally established on 28 March 2019. The Remuneration Committee is responsible for making recommendations to the Board on the remuneration arrangements for each of the Non-Executive Directors, Executive Directors and Chief Executive Officer and senior Executives.

The Remuneration Committee periodically assesses the appropriateness of the nature and amount of Executive remuneration by reference to relevant employment market conditions. Where appropriate the Remuneration Committee may engage external consultants to provide independent advice.

As of the date of this report the Remuneration Committee comprises the following Non-Executive Directors: - John Diddams (Chair) - Roger Allen - Paul Reid

In accordance with best practice corporate governance, the structure of Non-Executive Director and senior Executive remuneration is separate and distinct.

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Non-Executive Director remuneration policy Objective The Board seeks to set aggregate remuneration at a level which provides the company with the ability to attract and retain Directors of the highest calibre, while incurring a cost that is acceptable to shareholders.

Structure It has been resolved that the total aggregate amount to be paid to the Directors (excluding any Executive Director) is NZ$500,000 per annum. Under the ASX Listing Rules, any increase to that aggregate annual amount will need to be approved by Shareholders. The Company does not utilise that full amount based on its current Board of Directors.

In addition to their annual remuneration, the Directors may also be reimbursed for expenses properly incurred by the Directors in connection with the affairs of the Company, including travel and other expenses. There are no retirement benefit schemes for Non-Executive Directors. Non-Executive Directors are encouraged to hold shares in the Company. The Non-Executive Directors also participate in the employee share option plans of the Company, which are not linked to performance.

The remuneration of Non-Executive Directors for the year ended 31 March 2019 is detailed later in this report.

Executive remuneration policy and framework Objective

The Company aims to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company. The objective of the remuneration policy is to:

• reward Executives for company and individual performance;• align the interests of the Executives with those of the shareholders;• ensure that total remuneration is competitive by market standards; and• provide an incentive to achieve or exceed budget expectations.

Structure In determining the level and makeup of Executive remuneration, the Board has reviewed reports detailing market levels of remuneration for comparable roles.

Remuneration consists of fixed and variable elements, with the variable component broken down further into short- and long-term incentives.

Base salary and benefits Objective The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market.

Fixed remuneration is reviewed annually by the Board; the process consists of a review of company-wide and individual performance, relevant comparative remuneration from external sources and relevant comparison between roles within the company. As noted above, the Board draws on relevant industry remuneration data.

Structure Executives receive their fixed remuneration as a salary payment.

Short-term incentives (STI) Objective The objective of the STI is to link the achievement of the Company’s operational targets with the remuneration received by the Executives charged with meeting those targets.

Structure Actual STI payments granted to each Executive depend on the extent to which specific targets set at the beginning of the financial year are met. The targets consist of a number of key performance indicators (KPIs) covering both financial and non-financial, corporate and individual measures of performance. Typically included are measures such as sales growth, process improvement, product development and overall contribution.

The aggregate pool of potential STI payments has been approved by the Board.

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Long-term incentives (LTI) Objective

The objective of the LTI plan is to reward Executives in a manner which aligns this element of remuneration with the creation of shareholder wealth. They are not, however, linked to performance of the individual.

Structure LTI grants to Executives are delivered in the form of options.

General employee share option plans (ESOP)Volpara currently has two ESOPs, a Legacy ESOP and a New ESOP.

Holders of options under ESOPsLegacy ESOPs New ESOPs

John Pavlidis Dr Ralph Highnam

Mark Koeniguer Craig Hadfield

Lyn Swinburne Roger Allen

Mike Brady

Mark Koeniguer

Paul Reid

Dr Monica Saini

Under normal conditions, for the New ESOPs, 40 percent of the options are exercisable on the second anniversary of the grant date. The remaining 60 percent of the options are exercisable in three tranches every 12 months thereafter. The Legacy ESOPs vest on a straight-line basis over a period of time, ranging from monthly over a few years to yearly over a few years. All Legacy ESOPs are now fully vested.

Should a Director (Executive or Non-Executive) or senior Executive cease to be employed by Volpara, then all options which have not yet vested will automatically lapse, unless the Board determines otherwise. Any options that have vested with that person must be exercised within 60 days of ceasing employment or those vested options will also lapse, unless the Board determines otherwise.

The exercise price of the options is determined relative to the prevailing market price of Volpara’s shares as at the date of the issue. Options are usually issued at the higher of the 30-day VWAP (volume-weighted average price) and share price achieved at the last capital-raising event.

Historically, the options have had an exercise period of between five and 10 years from the date of issue; however, all issues of options under the New ESOP since March 2016 have an exercise period of seven years, and at any time during that period the Executive can decide to exercise any vested options.

Employment contracts CEO

Dr Ralph Highnam is employed by the Company in the role of both Chief Executive Officer and Executive Director. Under the terms of his contract:

• Dr Highnam is entitled to a base salary and benefits plus short-term and long-term incentives.

• Dr Highnam does not receive any additional payments for performance of his role as an Executive Director on the Board.

• Either the Company or Dr Highnam may terminate the employment by providing three months’ written notice.

• Dr Highnam’s remuneration and performance may be reviewed at the Company’s discretion.

• The Company may terminate Dr Highnam’s employment immediately for serious misconduct. Dr Highnam may under certain circumstances be subject to a post-employment restraint for a period of up to three months.

• Upon termination, any options that are vested may be exercised by Dr Highnam within a 60-day period. Any options that are unvested, or any vested options not exercised within 60 days of termination of the employment contract, will be forfeited, unless the Board determines otherwise.

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Employment contracts (continued)KMPAll Executives have rolling contracts. The Company may terminate the Executive’s employment agreement by providing written notice or providing payment in lieu of the notice period (based on the fixed component of the Executive’s remuneration). The notice period is determined by the employment agreement for each Executive and can vary from 30 to 90 days. On termination or notice by the Company, any LTI options that have vested or that will vest during the notice period will be released, subject to the standard exercise criteria, unless the Board determines otherwise. LTI options that have not yet vested will be forfeited. The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs, the Executive is entitled only to that portion of remuneration that is fixed, and only up to the date of termination. On termination with cause, any unvested options will immediately be forfeited, unless the Board determines otherwise.

Performance of Volpara Health Technologies LimitedRelationship between remuneration and Volpara Health Technologies Limited’s performance.

The following table shows key performance indicators for the Group for this year and the prior year.

Consolidated 2019 2018 $ Variance % Variance

Sales revenue (NZ$’000) 5,000 2,812 2,188 78%

Operating expenses (NZ$’000) (17,129) (11,954) (5,175) 43%

Net loss after tax for the year (NZ$’000) (11,741) (8,818) (2,923) 33%

Loss per share (NZ$) (0.07) (0.06) (0.01) -8%

Share price at financial year end (A$) 1.40 0.72 0.68 94%

Details of remuneration2019 Short-term

employee benefits

Post-employment

benefits

Share-based

payments3

Name Cash salary and fees

Cash bonus Non-monetary benefits

Superannuation Options Total

Non-Executive Directors

Roger Allen AM 87,500 - - - 14,978 102,478 Lyn Swinburne AM 1 20,591 - - - 8,117 28,709 Professor Sir John Mike Brady 50,000 - - - 14,978 64,978 John Pavlidis 58,561 - - - - 58,561 John Diddams 80,000 - - - - 80,000 Paul Reid 62,500 - - - 66,077 128,577 Subtotal 359,152 - - - 104,150 463,302 Executive Directors

Dr Ralph Highnam 299,449 71,158 21,831 - 29,956 422,394 Dr Monica Saini 2 160,154 - - - 54,767 214,921 Subtotal 459,603 71,158 21,831 - 84,723 637,315 Other KMP

Mark Koeniguer 381,016 57,515 40,040 24,333 42,541 545,445 Craig Hadfield 194,259 6,000 - 6,128 13,125 219,512 Subtotal 575,275 63,515 40,040 30,461 55,666 764,957 Total KMP 1,394,030 134,673 61,871 30,461 244,539 1,865,574 (1) Lyn did not stand for reelection on 23 August 2018. (2) Monica was appointed on 23 August 2018. (3) These share-based payments are the accounting, non-cash cost of the share options granted based on NZ IFRS 2 - Share-based Payment. No cash payments are made in relation to these.

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Details of remunerations (continued)

2018 Short-term employee benefits

Post-employment

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Share-based

payments*

Name Cash salary and fees

Cash bonus Non-monetary benefits

Superannuation Options Total

Non-Executive Directors

Roger Allen AM 90,000 - - - 30,716 120,716 Lyn Swinburne AM 60,000 - - - 23,069 83,069 Professor Sir John Mike Brady 50,000 - - - 30,716 80,716 John Pavlidis 61,362 - - - 4,156 65,518 John Diddams 70,000 - - - 44,531 114,531 Paul Reid 1,615 - - - 1,562 3,177 Subtotal 332,977 - - - 134,750 467,727 Executive Director

Dr Ralph Highnam 280,305 - 18,932 - 61,432 360,668 Other KMP

Mark Koeniguer 346,939 35,076 - 60,870 68,937 511,823 Craig Hadfield 170,450 10,000 - 5,113 15,873 201,436 Subtotal 517,388 45,076 - 65,984 84,810 713,259 Total KMP 1,130,670 45,076 18,932 65,984 280,992 1,541,654

* These share-based payments are the accounting, non-cash cost of the share options granted based on NZ IFRS 2 - Share-based Payment. No cash payments are made in relation to these.

The definition of KMP has been reviewed for 2019 and this has been reflected in the 2018 table above.

The relative proportions of remuneration paid that are linked to performance are as follows:S T I

Name 2019 % 2018 %

Non-Executive Directors

Roger Allen AM - -

Lyn Swinburne AM 1 - -

Professor Sir John Mike Brady - -

John Pavlidis - -

John Diddams - -

Paul Reid -

Executive Directors

Dr Ralph Highnam 17 -

Dr Monica Saini 2 - - Other KMP

Mark Koeniguer 11 7

Craig Hadfield 3 5

(1) Lyn did not stand for reelection on 23 August 2018. (2) Monica was appointed on 23 August 2018.

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Share-based compensation Remuneration options: granted and vested during the year During the financial year, options were granted as equity compensation benefits to certain key management personnel. The options were issued for $nil consideration. Each option entitles the holder to subscribe for one fully paid ordinary share in the company at the specified exercise price. 40 percent of the options may be exercised after two years. The remaining 60 percent may be exercised in three equal tranches over the following three years. Historically options expire after five to 10 years; however, options issued since March 2016 expire after seven years. Options are calculated at fair value using the Black-Scholes option pricing model, which takes account of factors including the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected dividends on the underlying share, current market price of the underlying share and the expected life of the option. For further details relating to the options, refer to note 13 in the financial statements.

Options granted to Non-Executive Directors, Executive Directors, and key management personnel during the year Name Number

grantedFair value per option grant

date NZ$

Exercise price per share A$

Final vesting

date

First exercise

date

Last exercise

date

Value of options granted during the year NZ$

Non-Executive Directors

Roger Allen AM - - - - - - -

Lyn Swinburne AM 1 - - - - - - -

Professor Sir John Mike Brady - - - - - - -

John Pavlidis - - - - - - -

John Diddams - - - - - - -

Paul Reid - - - - - - -

Executive Directors

Dr Ralph Highnam - - - - - - -

Dr Monica Saini 2 450,000 0.57 0.60 23/08/23 23/08/20 23/08/23 255,038

Other KMP

Mark Koeniguer 50,000 0.52 0.60 1/06/23 1/06/20 1/06/25 25,823

Craig Hadfield - - - - - - -

(1) Lyn did not stand for reelection on 23 August 2018. (2) Monica was appointed on 23 August 2018.

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Equity instrument disclosures relating to KMPOptions holdings The numbers of options over ordinary shares in the company held during the financial year by each Director of Volpara Health Technologies Limited and other key management personnel of the Group, including their personally related parties, are set out below.

2019 OptionsName Balance at start

of the yearGranted as

compensationExercised Other

changesBalance at end

of the yearVested and exercisable

Unvested

Directors

Roger Allen AM 300,000 - - - 300,000 120,000 180,000

Lyn Swinburne AM 1 450,000 - - - 450,000 450,000 -

Professor Sir John Mike Brady 300,000 - - - 300,000 120,000 180,000

John Pavlidis 451,872 - - - 451,872 451,872 -

John Diddams - - - - - - -

Paul Reid 450,000 - - - 450,000 - 450,000

Dr Ralph Highnam 600,000 - - - 600,000 240,000 360,000

Dr Monica Saini 2 - 450,000 - - 450,000 - 450,000

Total 2,551,872 450,000 - - 3,001,872 1,381,872 1,620,000

Other KMP

Mark Koeniguer 1,400,000 50,000 - - 1,450,000 1,350,000 100,000

Craig Hadfield 200,000 - - - 200,000 40,000 160,000

Total 1,600,000 50,000 - - 1,650,000 1,390,000 260,000 (1) Lyn did not stand for reelection on 23 August 2018. (2) Monica was appointed on 23 August 2018.

2018 OptionsName Balance at start

of the yearGranted as

compensationExercised Other

changesBalance at end

of the yearVested and exercisable

Unvested

Directors

Roger Allen AM 300,000 - - - 300,000 - 300,000

Lyn Swinburne AM 450,000 - - - 450,000 300,000 150,000

Professor Sir John Mike Brady 300,000 - - - 300,000 - 300,000

John Pavlidis 451,872 - - - 451,872 451,872 -

John Diddams 300,000 - 300,000 - - - -

Paul Reid - 450,000 - - 450,000 - 450,000

Dr Ralph Highnam 3,148,336 - 2,548,336 - 600,000 - 600,000

Total 4,950,208 450,000 2,848,336 - 2,551,872 751,872 1,800,000

Other KMP

Mark Koeniguer 1,350,000 50,000 - - 1,400,000 900,000 500,000

Craig Hadfield 100,000 100,000 - - 200,000 - 200,000

Total 1,450,000 150,000 - - 1,600,000 900,000 700,000

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ShareholdingsThe numbers of shares in the company held during the financial year by each Director of Volpara Health Technologies Ltd are set out below:

2019 ShareholdingsName Balance at start

of the yearReceived during the year on the exercise of options

Other changes during the year

Balance at end of the year

Roger Allen AM 20,467,848 - - 20,467,848

Lyn Swinburne AM 1 42,000 - 19,702 61,702

Professor Sir John Mike Brady 7,919,211 - - 7,919,211

John Pavlidis - - - -

John Diddams 1,783,416 - 19,702 1,803,118

Paul Reid - - - -

Dr Ralph Highnam 18,180,634 - 9,851 18,190,485

Dr Monica Saini 2 - - - -

(1) Lyn did not stand for reelection on 23 August 2018. (2) Monica was appointed on 23 August 2018.

2018 ShareholdingsName Balance at start

of the yearReceived during the year on the exercise of options

Other changes during the year

Balance at end of the year

Roger Allen AM 20,467,848 - - 20,467,848

Lyn Swinburne AM 42,000 - - 42,000

Professor Sir John Mike Brady 7,919,211 - - 7,919,211

John Pavlidis - - - -

John Diddams 1,463,416 300,000 20,000 1,783,416

Paul Reid - - - -

Dr Ralph Highnam 15,632,298 2,548,336 - 18,180,634

End of Remuneration ReportThis Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.

Ralph Highnam, Executive Director

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Independent Auditor’s Report (continued)

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Independent Auditor’s Report (continued)

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Financial StatementsConsolidated income statement and other comprehensive income 29

Consolidated statement of financial position 30

Consolidated statement of changes in equity 31

Consolidated statement of cash flows 32

Notes to the consolidated financial statements 33

Additional information for listed companies 61

Corporate directory 64

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2019 Restated 2018

Notes NZ$’000 NZ$’000

Revenue from contracts with customers 4 5,000 2,812

Cost of sales* 7 (872) (647)

Gross profit 4,128 2,165

Other operating income 6 724 723

Sales and marketing* 7 (8,433) (5,557)

Product research and development* 7 (5,647) (3,380)

General and administration* 7 (3,049) (3,017)

Foreign exchange gains/(losses) 118 (19)

Operating loss (12,159) (9,085)

Finance income 465 272

Finance costs (59) (5)

Net loss for the year before tax (11,753) (8,818)

Income tax benefit 8 12 -

Net loss for the year after tax (11,741) (8,818)

Statement of comprehensive income

Net loss for the year (11,741) (8,818)

Other comprehensive income/(expense)

Items that may be reclassifed subsequently to profit or loss (net of tax):

Exchange differences on translation of foreign operations 58 (17)

Other comprehensive income/(expense) for the year (net of tax) 58 (17)

Total comprehensive loss for the year, net of tax (11,683) (8,835)

Basic and diluted loss per share (NZ$) 12 (0.07) (0.06)

The above Consolidated Income Statement and Other Comprehensive Income should be read in conjunction with the accompanying notes. *Certain items have been reclassified in the Consolidated Income Statement to enhance disclosure. Refer to note 2.4.

Consolidated income statement and other comprehensive incomeFor the year ended 31 March 2019

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Ralph Highnam John Diddams

2019 2018 Restated

Notes NZ$’000 NZ$’000

AssetsNon-current assetsFixed assets 21 337 106 Intangible assets 22 355 71 Trade receivables 10 7 46 Right-of-use assets 14 217 348 Contract costs 5 934 430 Total non-current assets 1,850 1,001

Current assetsCash and cash equivalents 9 4,112 3,342 Cash on deposit 9 10,271 1,500 Trade receivables* 10 1,919 1,140 Contract assets 10 157 70 Other receivables* 381 133 Inventories 32 14 Contract costs 5 249 127 Total current assets 17,121 6,326 Total assets 18,971 7,327

Equity and liabilitiesEquityShare capital 12 84,129 63,192 Share option reserve 13 2,374 2,066 Foreign currency translation reserve (113) (171)Accumulated losses (72,208) (60,592)Total equity 14,182 4,495

Non-current liabilitiesDeferred revenue 4 19 13 Lease liabilities 14 127 210 Total non-current liabilities 146 223

Current liabilitiesTrade and other payables 11 2,318 1,558 Deferred revenue 4 2,165 921 Lease liabilities 14 125 130 Tax payable 8 35 - Total current liabilities 4,643 2,609 Total liabilities 4,789 2,832

Total equity and liabilities 18,971 7,327

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. *Certain items have been reclassified in the Consolidated Statements of Financial Position to enhance disclosure. Refer to note 2.4.

For and on behalf of the Board, who authorised the issue of these consolidated financial statements on 25 June 2019.

Consolidated statement of financial positionAs at 31 March 2019

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Share capital

Share option reserve

Foreign currency

translation reserve

Accumulated losses

Total equity

Notes NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

Balance at 1 April 2018 63,192 2,066 (171) (60,592) 4,495

Net loss for the year after tax - - - (11,741) (11,741)

Other comprehensive income - - 58 - 58

Total comprehensive income/(loss) for the year, net of tax - - 58 (11,741) (11,683)

Transactions with owners:

Issue of share capital from placement and share purchase plan 12 21,488 - - - 21,488

Costs of placement and share purchase plan capital raise 12 (980) - - - (980)

Issue of share capital from exercise of share options 13 429 (156) - - 273

Forfeiture of share options 13 - (125) - 125 -

Recognition of share-based payments 13 - 589 - - 589

Balance at 31 March 2019 84,129 2,374 (113) (72,208) 14,182

Balance at 1 April 2017 62,644 1,858 (154) (51,774) 12,574

Net loss for the year after tax - - - (8,818) (8,818)

Other comprehensive loss - - (17) - (17)

Total comprehensive loss for the year, net of tax - - (17) (8,818) (8,835)

Transactions with owners:

Issue of share capital from exercise of share options 13 548 (540) - - 8

Recognition of share-based payments 13 - 748 - - 748

Balance at 31 March 2018 63,192 2,066 (171) (60,592) 4,495

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated statement of changes in equityFor the year ended 31 March 2019

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2019 2018

Notes NZ$’000 NZ$’000

Cash flows from operating activities

Receipts from customers 5,567 3,068

Payments to suppliers and employees (17,218) (11,729)

Other income received 667 587

Interest received* 387 390

Interest paid* (59) (5)

Net taxes received/(paid) 29 (20)

Payment of low value asset leases (15) (6)

Net cash utilised in operating activities 9 (10,642) (7,715)

Cash flows from investing activities

Purchase of property and equipment (393) (116)

Payments for intangible assets (301) (43)

Net (payments)/receipts to/from term deposits (8,769) 10,100

Net cash (utilised)/provided by investing activities (9,463) 9,941

Cash flows from financing activities

Proceeds from issue of share capital from placement and share purchase plan 21,488 -

Transaction costs of raising capital (980) -

Proceeds from exercise of share options 273 8

Payment of principal portion of the lease liabilities (87) (129)

Net cash provided/(utilised) in financing activities 20,694 (121)

Net increase in cash and cash equivalents 589 2,105

Net foreign exchange difference 181 (39)

Cash and cash equivalents as at 1 April 3,342 1,276

Cash and cash equivalents at the end of the period 9 4,112 3,342

*Certain items have been reclassified in the Consolidated Statement of Cash Flows to enhance disclosure. Refer to note 2.4. Cash and cash equivalents does not include cash on deposits totalling NZ$10.3M (2018: NZ$1.5M). Refer to note 7 for further details. The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Consolidated statement of cash flowsFor the year ended 31 March 2019

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Notes to the Consolidated Financial StatementsFor the period ended 31 March 2019

Corporate Information1. Corporate information

Significant Accounting Policies2.1 Basis of preparation2.2 Basis of consolidation2.3 Significant accounting policies2.4 Restatement of comparatives2.5 New and amended standards and interpretations2.6 Going concern

Performance 3. Segment information 4. Revenue from contracts with customers 5. Contract costs 6. Other operating income 7. Operating expenses and cost of sales 8. Taxation Working Capital9. Cash, cash equivalents, and cash on deposit10. Trade receivables and contract assets11. Trade and other payables Debt and Equity12. Share capital and EPS13. Share-based payments14. Lease liabilities and right-of-use assets Financial Risk Management15. Financial risk-management objectives and policies 16. Interest rate risk17. Foreign currency risk 18. Credit risk19. Liquidity risk20. Financial instruments Other21. Fixed assets22. Intangible assets23. Related parties24. Contingencies and commitments25. Events after the balance date

ENHANCED UNDERSTANDING

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Corporate Information1. Corporate informationThe consolidated financial statements of Volpara Health Technologies Limited (the Company or Volpara) and its subsidiaries (collectively, the Group) for the year ended 31 March 2019 were authorised for issue in accordance with a resolution of the Directors on 23 May 2019.

Volpara (the Company and the ultimate Parent) is a limited liability company incorporated and domiciled in New Zealand and whose shares are publicly traded. Its principal place of business and registered office is Level 7, 44 Victoria Street, Wellington Central, Wellington 6011, New Zealand.

Volpara is designated as a profit-oriented company incorporated under the Companies Act 1993 (NZCN: 2206998) and is listed on the Australian Securities Exchange. The Company is also registered in Australia (ARBN: 609 946 867). The Company’s principal sales and services are in the medical device software industry. Information on the Group’s structure and other related party relationships of the Group is provided in note 23.

Significant Accounting Policies2.1 Basis of preparation

2.2 Basis of consolidation

2.3 Significant accounting policies

2.4 Restatement of comparatives

2.5 New and amended standards and interpretations

2.6 Going concern

2.1 Basis of preparation The consolidated financial statements for the year ended 31 March 2019 have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand (NZ GAAP). They comply with International Financial Reporting Standards (IFRS), New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS), and other applicable Financial Reporting Standards as appropriate for profit-orientated entities.

The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities that have been measured at fair value.

The consolidated financial statements are presented in New Zealand dollars, which is the Parent’s functional and presentational currency based on the fact that the majority of expenditure (including all research and development) is incurred in New Zealand. All values are rounded to the nearest thousand ($’000) except when otherwise indicated.

The consolidated financial statements provide comparative information in respect of the previous period.

2.2 Basis of consolidation The Group’s financial statements consolidate the financial statements of Volpara Health Technologies Limited and its subsidiaries. A subsidiary is a controlled entity over which the Group has power, is exposed, or has rights, to variable returns from its involvement with the entity, and has the ability to use its power to affect its returns.

2.3 Significant accounting policiesSignificant accounting policies, accounting estimates and judgments that summarises the measurement basis used and are relevant to the understanding of the financial statements are provided throughout the accompanying notes.

a) Current versus non-current classification The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: • Expected to be realised or intended to be sold or consumed in the normal operating cycle • Held primarily for the purpose of trading • Expected to be realised within twelve months after the reporting period or • Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period • All other assets are classified as non-current.

b) Foreign currencies For the purposes of presenting the Group financial statements, the assets and liabilities of the Group’s foreign operations are expressed in New Zealand Dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the spot exchange rates for the period. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated as a separate component of equity in the Group’s foreign currency translation reserve.

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2.3 Significant accounting policies (continued)c) Impairment of non-financial assets At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount and an impairment loss is recognised immediately in the profit or loss. Further disclosures relating to impairment of non-financial assets are also provided in note 22. 2.4 Restatement of comparatives To ensure consistency with the current period, comparative figures have been restated where appropriate:

An adjustment was made to ensure the correct classification of financial statement line items and in particular, ensure that cost of sales only includes expenses which are incremental in deriving additional revenue. The adjustment made was to reclassify $183,000 from “Cost of sales” to “Sales and marketing” in the Consolidated Income Statement to accurately reflect the nature of the expenses. This involved removing fixed costs from costs of sales.

Government grants of $723,000 has been reclassified from revenue to other operating income as this is not determined to be revenue from operations. This removes it from the gross profit.

Research and development costs of $239,000 has been reclassifed from general and administration costs to product research and development costs to better reflect the nature of these expenses.

Certain balance sheet and cash flow items have been disclosed separately due to becoming material in this financial year.

2.5 New and amended standards and interpretations The Group applied NZ IFRS 9 for the first time. The nature and effect of the changes as a result of adoption of these new accounting standards are described below.

In the prior year the Group elected to early adopt NZ IFRS 16 Leases as issued in February 2016, which would otherwise be mandatorily effective for annual reporting periods beginning on or after 1 January 2019. The initial application date for the Group was 1 April 2017.

Several other amendments and interpretations apply for the first time in 2019, but do not have an impact on the consolidated financial statements of the Group. The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective.

NZ IFRS 9 Financial Instruments NZ IFRS 9 Financial Instruments replaces NZ IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.

With the exception of hedge accounting, which is not applicable to the Group, the Group has applied NZ IFRS 9 retrospectively, with the initial application date of 1 April 2018 and adjusting the comparative information for the period beginning 1 April 2017. The Group has however considered that the prior year effect is not material and has therefore not adjusted the prior year balances. For further information regarding the classification and measurement of effected financial assets and liabilities refer to the applicable notes to these financial statements.

2.6 Going concern The considered view of the Directors of the Group is that the going concern assumption is valid. This view has been reached after making due enquiry and having regard to the circumstances which the Directors consider will occur and those which are reasonably likely to affect the Group during the period of one year from the date these condensed consolidated financial statements are approved.

The Group recorded a net loss of NZ$11.741M for the year ended 31 March 2019 (2018: NZ$8.818M) and is expected to make further losses in 2020.

Notwithstanding the above, the Group has prepared cash flow forecasts which indicate that cash on hand at year end, combined with the net cash flow as a result of operations, including those of the newly acquired business MRS Systems Inc. and, the capital raised subsequent to reporting date as per note 25, will enable the Group to continue operating as a going concern.

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Performance 3. Segment information

4. Revenue from contracts with customers

5. Contract costs

6. Other operating income

7. Operating expenses and cost of sales

8. Taxation

3. Segment informationDuring the year the Chief Operating Decision Maker (CODM) was the Board of Directors. The Group operates in one industry, being medical device software. Consistent with prior years, the Group operates across three geographical locations—Asia Pacific (APAC); Europe, Middle East, and Africa (EMEA); North America (United States and Canada)—and three product categories—Capital (one-off) sales, Software Maintenance Agreement (SMA) contracts, and Software as a Service (SaaS) contracts. Consultancy revenues have been included in SaaS revenues on the basis that this is more reflective of its nature. The three geographic locations and three revenue streams all operate within the same industry. Operating costs, finance income, finance expenses and taxes (where applicable) are managed at an overall Group basis and as such, operating profits/(losses) by geographic location or revenue stream are not disclosed, however, additional information in respect of the geographic locations and revenue streams have been disclosed in note 4.

As at 31 March 2019 no customers accounted for more than 10% of revenue (March 2018: no customers accounted for more than 10% of revenue).

All material non-current assets are based in New Zealand.

Segment non-current assets 2019 2018 NZ$’000 NZ$’000

APAC 150 101

EMEA 4 5

North America 184 -

Total non-current assets as per the statement of financial position

338 106

4. Revenue from contracts with customers The Group recognises revenue from goods and services provided under three main product categories: • Capital sales contracts which involves the outright sale of software and associated items; • SMAs to support previous Capital sales; • SaaS contracts which involves the sale of software and cloud based support (and associated items).

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when control of a good or service is transferred to the customer. Refer below for more detail.

The Group has determined that no significant financing component exists in respect of the various revenue streams. This is due to there being no significant time lag between the delivery of goods or services and when payment is received. Further information about the Group’s three main product categories and related performance obligations is detailed below:

Capital Capital sales contracts involve the provision of base software, and in some cases the server hardware, density software, and in other add-on software (e.g., VolparaDoseRT, VolparaDoseSR, etc.), installation services, and training. Where these contracts involve several performance obligations, they all occur at or around the same time and as such the Group recognises revenue at a single point in time and in most cases this is usually the same time payment is due. This is usually the date that the customer has been provided with the server (where applicable) and the licence key(s), and training (where applicable) has been completed.

These contracts do not involve any variable consideration. Management considers whether revenue needs to be allocated to separate performance obligations only where significant elements of the contract remain outstanding at the reporting date (refer below for discussion on how revenue would be allocated if this were the case).

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4. Revenue from contracts with customers (continued) SMAs The Group’s SMA contracts with customers also generally comprise a number of distinct performance obligations, being the provision of the software updates, upgrades, provision of ongoing technical support, IT configuration changes, etc. SMA contracts usually begin one year after the commencement of a Capital sale and contracts range in length between one and four years. SMA contracts are considered “stand-ready” performance obligations, where all elements are provided over time. Therefore revenue is recognised on a straight-line basis over the period of the contract. Payment is usually due upon commencement of each year of the SMA.

Software as a Service The Group’s SaaS contracts with customers generally comprise a range of goods and services. These may include the base software (and hardware in some instances), software updates and upgrades, installation, upfront training and ongoing technical support, and role licences to access online services.

As a result, the transaction price must be allocated to the performance obligations on a relative stand-alone selling-price basis. This requires estimation because, while each separate performance obligation is identified in the contract, the contract price is set for the agreement as a whole. In the absence of comparable market prices for the various goods and services provided, the Group relies on internal information such as a master price list to determine the stand-alone selling price for each good or service. This internal information may be adjusted to reflect market conditions across the geographic locations, the nature of the customer and their expected use of the software, and other factors.

As the customer takes control of the base software (and hardware) when it is provided (when the software licence keys are provided), fixed revenue is recognised at that point in time. Upfront training and installation services are recognised over time as the services are provided. Role licences provide access to online services where the Group is required to maintain access to analytical and other information. Revenue allocated to the role licences, as well as software updates and upgrades and ongoing technical support, are recognised as the service is provided. These are predominantly “stand-ready” services which are recognised on a straight-line basis over the period of service.

Contracts involve pricing based on usage of the software (mammography volumes). Revenue based on minimum volume usage is recognised on a straight-line basis over the contract life as this is in line with expected usage patterns of the minimum guarantees each year and for practicality purposes. Variations to minimum guarantees are recognised when occurred.

Most SaaS contracts are for one- to five-year terms, with a right to cancel at the end of each year without penalty. The Group’s judgement is that these are one-year contracts with a right to renew and accordingly revenue is recognised as the performance obligations are met on an annual basis.

A small number of contracts allow the customer to renew the contract at a discount to the initial price, or to obtain additional role licences or other goods and services at a discount. Where the discount is incremental to the range of discounts typically given for the goods or services, the value of the discount is determined and some revenue is allocated to this customer option known as the material right. Revenue allocated to the customer option is recognised when the subsequent discounted goods or services are provided.

Payment is usually due annually in advance either upon go-live or 45 days after the contract is signed, whichever occurs first.

There are no warranties to be accounted for on SaaS Enterprise products for the current period. Warranties will be applicable on VolparaLive! product sales after the first year.

Contract modifications There were two contract modifications that occurred during the year where customers on an existing SMA or Density, Dose, and Pressure (DDP) agreement signed SaaS contracts. As a result, these modifications were accounted for as separate contracts.

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4. Revenue from contracts with customers (continued) Disaggregation of revenue The Group derives its revenue from the transfer of goods and services over time and at a point in time in the following product categories and geographic locations. This is consistent with the revenue information that is disclosed for each reportable segment under NZ IFRS 8 (refer to note 3). The revenue information below is based on the locations of the customers.

For the year ended 31 March 2019 NZ$ 000

Capital sales Service maintenance agreements

Software as a Service

Total

Geographic locations

North America 205 362 3,655 4,222

EMEA 91 5 147 243

APAC 285 12 238 535

Total revenue from contracts with customers 581 379 4,040 5,000

Timing of revenue recognition

Goods or services transferred at a point in time 581 - 1,052 1,633

Services transferred over time - 379 2,988 3,367

Total revenue from contracts with customers 581 379 4,040 5,000

For the year ended 31 March 2018 restated NZ$ 000

Capital sales Service maintenance agreements

Software as a Service*

Total

Geographic locations

North America 229 293 1,771 2,293

EMEA 24 1 42 67

APAC 322 10 120 452

Total revenue from contracts with customers 575 304 1,933 2,812

Timing of revenue recognition

Goods or services transferred at a point in time 575 - 671 1,246

Services transferred over time - 304 1,262 1,566

Total revenue from contracts with customers 575 304 1,933 2,812 *Revenue previously accounted for as consultancy revenue in the prior period has been reclassified to SaaS revenue at this is deemed to be a more accurate reflection of the nature of this revenue.

Where invoicing occurs in advance of the performance of the various performance obligations a corresponding deferred revenue obligation is recognised. This is then subsequently amortised as the obligations are met.

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4. Revenue from contracts with customers (continued) Deferred revenueDeferred revenue is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a deferred revenue liability is recognised when the payment is made or the payment is due (whichever is earlier). Deferred revenue liabilities are recognised as revenue when the Group performs under the contract.

Deferred revenue 2019 2018

NZ$’000 NZ$’000

Opening balance as at 1 April 934 555

Amount recognised in revenue (4,127) (2,237)

Contracts entered into in current year 5,377 2,616

Closing balance as at 31 March 2,184 934

The outstanding balances of these accounts increased in 2019 and 2018 due to the continuous increase in the Group’s customer base.

Deferred revenue by years and contract type

As at 31 March 2019 NZ$’000

0–12 months 1–2 years 2–5 years Total

Capital sales 4 - - 4

Service maintenance agreements 211 6 - 217

Software as a Service 1,950 13 - 1,963

Total deferred revenue 2,165 19 - 2,184

As at 31 March 2018 NZ$’000

0–12 months 1–2 years 2–5 years Total

Capital sales 24 - - 24

Service maintenance agreements 207 8 4 219

Software as a Service 690 1 - 691

Total deferred revenue 921 9 4 934

5. Contract costs Cost to obtain a contract The Group pays sales commissions to its employees for each contract that they obtain. The costs are either amortised over the life of the contract or at a point in time in order to mirror the treatment of revenue. A contract costs asset is recognised as at the reporting date. There was no impairment loss in relation to the costs capitalised.

Contract costs 2019 2018

NZ$’000 NZ$’000

As at 1 April 557 -

Costs to obtain contracts for contracts entered into in current year

915 679

Amortisation within cost of sales (289) (122)

As at 31 March 1,183 557

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6. Other operating income

For the year ended 31 March 2019 2018

NZ$’000 NZ$’000

Government grants 722 723

Other income 2 -

724 723

Government grants are received as compensation when expenses or losses have already occurred, and recognised in the consolidated income statement, when it becomes reasonably certain that the grants will be received. For government grants received from Callaghan Innovation, there is a restriction that only research undertaken in New Zealand is reimbursed. The Callaghan Innovation R&D Growth Grant has 10% withheld until conditions are met. This has been accrued for on the basis that conditions will be met.

7. Operating expenses and cost of sales

Cost of sales includes only those costs which are deemed incremental to the Group’s revenue activities.

Overhead allocation The presentation of the consolidated income statement by function requires certain overhead costs to be allocated to functions. These allocations require management to apply judgement. Salaries and benefits excludes those salaries and benefits which have been incurred in research and development activities which have not been capitalised based on the application of “research expenses” as defined in NZ IAS 38.

Sales and marketing Sales and marketing expenses consist of personnel and related expenses (including salaries, benefits, bonuses and commissions) directly associated with the sales and marketing teams and the cost of educating and onboarding customers. Other costs included are external advertising, marketing and conference costs for events such as RSNA, as well as allocated overheads.

Product research and development Product design and development costs consist primarily of personnel and related expenses (including salaries, benefits and bonuses) directly associated with our product research and development, regulatory and quality employees, as well as allocated overheads. Under NZ IFRS, the proportion of product research and development expenses that create a benefit in future years is capitalisable as an intangible asset and is then amortised to the consolidated income statement over the estimated life of the asset created. The amount amortised relating to Volpara’s products is included as a product research and development expense. Refer to note 22 for further details.

General and administration General and administration expenses consist of personnel and related expenses (including salaries, benefits and bonuses) for the Chief Executive Officer (CEO) as well as the finance, human resources and administrative employees. It also includes legal, accounting and other professional services fees, insurance premiums, other corporate expenses and allocated overheads. Share-based compensation is included for all Directors, Key Management Personnel (KMP), and employees.

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7. Operating expenses and cost of sales (continued)

For the year ended 31 March 2019 2018 RestatedNotes NZ$’000 NZ$’000

Salaries and benefits1, 2 7,733 4,698

Research and development costs not capitalised1, 2 2,449 1,710

Superannuation contributions 2 1,378 553

Advertising and marketing 1,153 767

Travel 950 768

Consulting and subcontracting1 791 1,234

Share-based payments expense 2 589 748

Directors’ fees 386 333

Depreciation and amortisation 14, 21, 22 310 181

Movement in provision for expected credit losses 10 - 3

Auditor’s remuneration 115 122

Bad debts 16 21

Low-value lease expenses 15 10

Other operating expenses 2,116 1,457

Total cost of sales and operating expenses3 18,001 12,605

Auditors’ remuneration 2019 2018The auditor of the Group is Deloitte Limited. NZ$’000 NZ$’000

Audit of financial statements 70 63

Other assurance services 29 42

99 105

Fees to a non-Deloitte audit firm:

Audit of financial statements 16 17

16 17

(1) Certain costs from the prior period have been reclassified to research and development costs not capitalised to more accurately reflect the nature of these costs.

(2) Some salaries and benefits have been split out into other lines. The total salaries and benefits paid during the year amount to $7,999,000 (2018: $5,698,000).

(3) This total excludes foreign exchange gains/(losses).

8. Taxation

Current income tax The income tax benefit for the year comprises current and deferred tax. Tax is recognised in the income tax component of the consolidated income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

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8. Taxation (continued)A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. No deferred tax asset has been recorded in the current year.

Current income tax 2019 2018NZ$’000 NZ$’000

Income tax payable/(refundable) 35 -

Reconciliation of effective tax rate

Net loss before tax (11,753) (8,818)

Prima facie taxation at 28% (2018: 28%) (3,291) (2,469)

Less tax effect

Exempt and non-taxable income (202) (222)

Disallowable expenditure 817 394

Temporary differences not recognised 824 -

Tax in respect of prior years (47) -

(1,899) (2,297)

Deferred tax not recognised 1,911 2,297

Tax benefit (12) -

Represented by

Current tax 35 -

Prior year tax (47) -

Deferred tax - -

Income tax benefit (12) -

The Group has unrecognised deferred tax assets consisting of:

Temporary differences 1,991 1,102

Accumulated losses 4,003 5,237

Total unrecognised deferred tax assets 5,994 6,339

Accumulated tax losses

Balance at beginning of year 18,702 18,228

Prior period adjustment 3,850 -

Losses forfeited (14,943) -

Tax loss for the year 6,757 474

Balance at end of year 14,366 18,702

The Group has tax losses in New Zealand of NZ$14,100,000 (2018: NZ$16,980,000); tax losses in the United States of US$0 (2018: US$977,000); tax losses in Australia of A$0 (2018: A$0) and tax losses in Europe of GBP111,000 (2018: GBP153,000) that are available for offset against future taxable profits of the companies in which those losses arose, subject to satisfying relevant jurisdiction income tax loss carry forward rules and maintaining minimum levels of shareholder continuity; and therefore realisation is currently uncertain.

The majority of the prior period adjustment above relates to the timing of when losses were forfeited. Some of the losses forfeited were recorded as forfeited in the previous year’s tax note, however these were not actually forfeited until after 31 March 2018. The other portion relates to deferred R&D expenditure calculated in the prior period.

Imputation credits 2019 2018NZ$’000 NZ$’000

Imputation credit account balances 7 7

Total imputation credits 7 7

Included in the income tax expense is an $86,000 R&D tax incentive received in the UK.

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Working Capital9. Cash, cash equivalents, and cash on deposit

10. Trade receivables and contract assets

11. Trade and other payables

9. Cash, cash equivalents, and cash on deposit2019 2018

NZ$’000 NZ$’000

Cash at bank and on hand 2,367 1,342 Short-term deposits 1,745 2,000 Cash on deposit * 10,271 1,500 Total cash and cash equivalents and cash on deposit 14,383 4,842 *Cash on deposit is in the form of term deposits that require a notice period of between 91 and 365 days to access. Cash at bank and on hand earns interest at floating rates based on daily bank deposit rates (note 16). Short-term deposits are made for varying maturity periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. They are subject to an insignificant risk of changes in value.

At 31 March 2019, the Group had available $10,000 (2018: $10,000) of undrawn committed borrowing facilities with Kiwibank.

Credit riskThere are significant concentrations of credit within the Group with $12,016,000 in outstanding term deposits held at the end of the financial year (2018: $3,500,000). The Group holds some cash in current and savings accounts with various large and reputable financial institutions in New Zealand, Australia, the United Kingdom, and the United States of America.

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following at 31 March:

2019 2018NZ$’000 NZ$’000

Cash at bank and on hand 2,367 1,342 Short-term deposits 1,745 2,000 Total cash and cash equivalents 4,112 3,342

Reconciliation of operating cash flowsFor the year ended 31 March 2019 2018

NZ$’000 NZ$’000

Net loss for the year after tax (11,741) (8,818)

Non-cash and non-operating items:Depreciation and amortisation 310 181 (Gains)/losses on foreign exchange transactions (121) 21 Share-based payments 589 748

Changes in working capital:Increase in trade and other receivables (988) (83)Increase in contract costs (626) (70)Increase in contract assets (87) (557)Decrease in inventory (18) - Increase in trade and other payables 760 465 Increase in deferred revenue 1,250 398 Effect of foreign exchange variance 30 - Net cash used in operating activities (10,642) (7,715)

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10. Trade receivables and contract assets Trade receivables are amounts due from customers for the sale of goods or services performed in the ordinary course of business that are unconditional. If collection is expected in one year or less they are classified as current assets. If not, they are classified as non-current assets.

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivables

2019 2018NZ$’000 NZ$’000

Trade receivables 1,936 1,197

Allowance for expected credit losses (10) (11)

Total trade receivables 1,926 1,186

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.

Contract assets

2019 2018NZ$’000 NZ$’000

Opening balance as at 1 April 70 -

Amount recognised in revenue during the year 292 143

Amounts transferred to trade receivables during the year (205) (73)

Closing balance as at 31 March 157 70

2019 2018NZ$’000 NZ$’000

Contract assets 158 70

Allowance for expected credit losses (1) -

Total contract assets 157 70

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10. Trade receivables and contract assets (continued)

Customer credit risk The Group seeks to trade only with reputable third parties, and as such collateral is typically not requested nor is it the Group’s policy to securitise its trade and other receivables. In addition, outstanding customer receivables and contract assets are monitored on an ongoing basis with the result that the Group’s experience of bad debts is not significant.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses (ECLs). The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type). The calculation reflects the probability-weighted outcome, reasonable and supportable information that is available at the reporting date about past events, current conditions, and forecasts of future economic conditions. Generally, trade receivables are written off if past due for an extended period (e.g., one year) and are not subject to enforcement activity. This is one of the factors in determining if there has been a significant increase in credit risk. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables and contract assets. The Group does not hold collateral as security. The Group evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are generally large institutions.

For trade receivables and contract assets, the Group applies the simplified approach permitted by NZ IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the trade receivables and contract assets.

31 March 2019 Trade receivablesDays past due

Contract assets

Current <30 days 31–60 days 61–90 days >90 days Total

NZ$ 000

Expected credit loss rate 0.6% 0.3% 0.5% 0.7% 2.0% 0.5% 0.5%

Estimated total gross carrying amount at default 158 1,069 371 146 151 199 2,094

Expected credit loss 1 3 2 1 3 1 11

Set out below is the movement in the allowance for expected credit losses of trade receivables and contract assets:

2019 2018NZ$’000 NZ$’000

As at 1 April 11 8

Movement in provision for expected credit losses (note 7) - 3

As at 31 March 11 11

11. Trade and other payablesTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are classified as non-current liabilities.

2019 2018NZ$’000 NZ$’000

Trade payables 543 353

Accrued expenses 105 97

Employee entitlements 1,670 1,108

Total trade and other payables 2,318 1,558 Trade payables are generally on terms of 14–30 days.

Employee entitlements comprise entitlements for annual leave, superannuation contributions in their various forms (401(k), UK pension, Super, and Kiwisaver), salaries, and commissions for sales staff. Employee entitlements expected to be settled within 12 months of the reporting date are recognised in respect of employees services up to the reporting date.

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Debt and Equity12. Share capital and EPS

13. Share-based payments

14. Lease liabilities and right-of-use assets

12. Share capital and EPSOrdinary shares are classified as equity. Incremental costs directly attributed to the issue of new ordinary shares or options are shown in equity as a deduction from proceeds.

(a) Ordinary shares All issued shares are fully paid and have no par value. Ordinary shares are entitled to one vote per share at meetings of Volpara Health Technologies Limited. All ordinary shares rank equally with regard to Volpara Health Technologies Limited residual assets.

(b) Capital risk management The Group’s capital includes share capital, accumulated losses, and reserves.

The Group’s policy is to maintain a sound capital base so as to maintain investor and creditor confidence, sustain future development of the business, and continue as a going concern. The Group’s policies in respect of capital management and allocation are reviewed by the Board of Directors.

Ordinary Shares Issued and Fully Paid 2019 2018

NZ$’000 000’s NZ$’000 000’s

In issue as at 1 April 63,192 145,493 62,644 142,645

Exercise of share options 429 524 548 2,848

Issue of share capital from placement 15,278 25,000 - -

Issue of share capital from entitlement offer 5,230 8,333 - -

In issue as at 31 March* 84,129 179,350 63,192 145,493 * The 179.350M shares outstanding as at 31 March 2019 includes 51.482M shares under voluntary escrow. These shares were initially escrowed for 24 months from the date of the IPO (up until 27 April 2018); however, they were voluntarily escrowed for a further 12 months from that date to 27 April 2019.

Dividends No dividends have been declared or paid for the year ended 31 March 2019 (2018: nil).

Earnings per shareBasic earnings per share is calculated by dividing net loss for the year after tax by the weighted average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential ordinary shares. The Group has potential ordinary shares in the form of share options however as these are anti-dilutive due to the company being in a loss position, the earnings per share and diluted earnings per share are the same.

The following reflects the income and share data used in the basic and diluted EPS computations:

As at 31 March 2019 2018

Net loss after tax (NZ$’000) (11,741) (8,818)

Ordinary number of shares (’000’s) 179,350 145,493

Weighted average number of shares on issue (’000’s) 175,196 145,048

Basic and diluted loss per share (0.07) (0.06)

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these financial statements.

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13. Share-based payments The Group operates two equity-settled share-based incentive plans for Directors, Executives, senior management, employees, and others of the company and its subsidiaries. The plans are designed to retain key personnel. There is a legacy employee share option plan (Legacy ESOP) that was in operation from 2009 until the Initial Public Offering (IPO) in April 2016. Since the IPO a new employee share option plan (New ESOP) has been in operation.

The value of the services rendered for the grant of the share options is recognised as an expense over the vesting period (which ranges from 0 to five years or upon meeting stipulated milestones). The amount is determined by reference to the fair value of the share options granted which is calculated using the Black-Scholes options model. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the consolidated income statement for the year represents the movement in cumulative expense recognised as at the beginning and end of that year.

The share option reserve arises on recognition of the share-based payment expense. Amounts are transferred out of the reserve and into issued capital when the options are exercised, or into retained earnings when options lapse or are forfeited.

Legacy ESOPIn accordance with the terms of the plan, as approved by shareholders at a previous annual general meeting, Executives, senior employees, employees, and others were granted options to purchase ordinary shares at exercise prices ranging from $0.0003 to $0.4667 per ordinary share.

Each Legacy ESOP converts into one ordinary share of Volpara Health Technologies Limited on exercise. The options carry neither rights to dividends nor voting rights. Options vest upon satisfying the condition of continued employment with the Group for the service period specified in the contract (ranging from 0 to five years). Vested options can be exercised 30 days prior to expiry, at the time of an exit event, or after a listing of shares on a public stock exchange.

The options granted expire, or are forfeited within 5–10 years of their issue or on termination of employment within the vesting period, whichever occurs first.

The key terms and conditions related to the grants under these programs are as follows; all options are to be settled by the issue of ordinary shares.

Grant date/ employees entitled

Number of share options outstanding

’000’s

Vesting conditions

Contractual life of options

Options granted to Directors

2015 452 Monthly over a period of 36 months’ service from grant date 10 years

2016 450 Annually over a period of 3 years’ service from grant date 5 years

Options granted to key management personnel

2010 749 No vesting conditions and quarterly over a period of 1 year from grant date 10 years

2015 390 1 year’s service from grant date 10 years

2016 1,350 Annually over a period of 3 years’ service from grant date 5 years

Options granted to senior employees

2011 446 Annually over a period of 1–5 years’ service from grant date 10 years

2012 450 Monthly over a period of 2 years’ service 1 year from grant date 10 years

2013 711Annually over a period of 2–3 years’ service from grant date & subject to

performance criteria10 years

2014 225 Annually over a period of 2 years’ service from grant date 10 years

2014 192 Quarterly over a period of 1 year’s service from grant date 10 years

Total share options 5,415

The expense recognised for the year ended 31 March 2019 for the Legacy ESOP share options was $35,000 (of the $589,000 per note 7) (2018: $145,000).

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13. Share-based payments (continued)The number and weighted-average exercise prices of share options under the Legacy ESOP plan were as follows:

Number of options

Weighted-average exercise price

Number of options

Weighted-average exercise price

2019 2019 2018 2018000’s NZ$ 000’s NZ$

Outstanding at 1 April 5,415 0.31 8,263 0.20

Exercised during the period - - (2,848) 0.00

Outstanding as at 31 March 5,415 0.31 5,415 0.30

Vested as at 31 March 5,415 4,815

The options outstanding at 31 March 2019 had an exercise price in the range of $0.0003 to $0.4667 (2018: $0.0003 to $0.4667) and weighted-average contractual life of 2.6 years (2018: 5.3 years).

The following Legacy ESOPs were in existence during the current and prior year:

Grant year (financial year)

Number of share options ’000’s

NZ$ exercise price

Expiry date (financial year)

NZ$ fair value at grant date

2010 749 0.0003 2020 0.08

2011 446 0.0800 2021 0.10

2011 845 0.0030 2021 0.12

2011 638 0.0030 2021 0.16

2012 450 0.1567 2022 0.12

2013 360 0.3117 2023 0.15

2013 1,065 0.0030 2023 0.16

2013 351 0.1567 2023 0.21

2014 45 0.3333 2024 0.15

2014 372 0.3117 2024 0.16

2015 452 0.4667 2025 0.20

2015 390 0.4600 2025 0.20

2016 1,800 0.4667 2021 0.21

2016 300 0.0003 2026 0.47

Total 8,263

Less forfeited and exercised as at 31/3/2018 (2,848)

Forfeited/exercised during the year -

Total share options remaining 5,415

No further options are granted under the Legacy ESOP.

Valuation model assumptions The Black-Scholes model was used to assess the value of the Legacy ESOPs. Key variables in the model include, where relevant, the expected life, exercise restrictions and behavioural considerations. Expected volatility is based on the historical share-price volatility of NASDAQ-listed companies in the biomedical field over the past five years.

Option series 2016Grant date share price $0.40–$0.47

Exercise price $0.0003–$0.4667

Expected volatility 50%

Option life 5–10 years

Dividend yield 0%

Risk-free interest rate 2.17%–3%

Expected life 4 years from grant date

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13. Share-based payments (continued)New ESOP In accordance with the terms of the plan, as approved by shareholders at a previous annual general meeting, Executives, senior employees, employees, and others were granted options to purchase ordinary shares at exercise prices ranging from A$0.50 to A$1.19 per ordinary share.

Each New ESOP converts into one ordinary share of Volpara Health Technologies Limited on exercise. The options carry neither rights to dividends nor voting rights. Options vest upon satisfying the condition of continued employment with the Group for the service period specified in the contract (ranging from two to five years). Vested options can be exercised at set times during the year, 30 days prior to expiry or at the time of an exit event.

The options granted expire or are forfeited after seven years of their issue or on termination of employment within the vesting period, whichever occurs first.

All options are to be settled by the issue of ordinary shares. The key terms and conditions related to the grants under these programs are as follows:

Grant date/employees entitled Number of share options outstanding ’000’s

Vesting (in tranches) Contractual life of options

Options granted to Directors

2016 600 Annually over a period of 5 years’ service starting

2 years from the grant date

7 years

2018 450 7 years

2019 450 7 years

Options granted to management

2016 600

Annually over a period of 5 years’ service starting

2 years from the grant date

7 years

2017 100 7 years

2018 150 7 years

2019 50 7 years

Options granted to employees

2016 2,800

Annually over a period of 5 years’ service starting

2 years from the grant date

7 years

2017 467 7 years

2018 205 7 years

2019 1,125 7 years

Total share options 6,997

The expense recognised for the year ended 31 March 2019 for the New ESOP share options was $554,000 (of the $589,000 per note 7) (2018: $603,000).

The number and weighted-average exercise prices of share options under the New ESOP plan were as follows:

Number of options

Weighted-average exercise price

Number of options

Weighted-average exercise price

2019 2019 2018 2018000’s A$ 000’s A$

Outstanding as at 1 April 6,668 0.50 5,821 0.50

Granted during the year 1,725 0.69 865 0.65

Exercised during the year (524) 0.50 - -

Forfeited during the year (872) 0.53 (18) 0.50

Outstanding 31 March 6,997 0.56 6,668 0.52

Vested as at 31 March 1,798 0.50 -

The options outstanding at 31 March 2019 had an exercise price in the range of A$0.50 to A$0.1.19 (2018: A$0.50 to $0.69) and weighted-average contractual life of 4.7 years (2018: 5.3 years).

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13. Share-based payments (continued)The following New ESOPs were in existence during the current and prior year:

Grant year (financial year)

Number of share options granted ’000’s

A$ exercise price

Expiry date A$ fair value at grant date

2016 5,176 0.50 2023 0.27

2017 120 0.50 2024 0.27

2017 90 0.50 2024 0.22

2017 50 0.50 2024 0.23

2017 40 0.50 2024 0.20

2017 40 0.50 2024 0.20

2017 140 0.50 2024 0.19

2017 125 0.50 2024 0.17

2017 100 0.56 2024 0.33

2018 160 0.60 2025 0.22

2018 25 0.60 2025 0.16

2018 100 0.67 2025 0.39

2018 80 0.68 2025 0.35

2018 450 0.66 2025 0.37

2018 50 0.69 2025 0.39

2019 675 0.60 2026 0.48

2019 450 0.60 2026 0.52

2019 500 0.89 2026 0.47

2019 40 1.19 2026 0.63

Total 8,411

Less forfeited and exercised as at 31/3/2018 (18)

Exercised during the year (524)

Forfeited during the year (872)

Total share options remaining 6,997

Valuation model assumptions The Black-Scholes model was used to assess the value of the New ESOPs. Key variables in the model include, where relevant, the expected life used in the model has been adjusted based on management’s best estimates for the effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the historical share price volatility of NASDAQ-listed companies in the biomedical field over the past five years.

Option series 2019 2018Grant date share price A$ 0.79–1.20 A$ 0.375–0.72

Exercise price A$ 0.60–1.19 A$ 0.60–0.69

Expected volatility 50.00% 50.00%

Option life 7 years 7 years

Dividend yield 0.00% 0.00%

Risk-free interest rate 1.57%–2.54% 2.35%–2.55%

The directors are in the process of evaluating the tax impact following recently promulgated regulations on the share-based payment arrangements.

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14. Lease liabilities and right-of-use assetsThe determination of whether a contract is, or contains, a lease is based on the substance of the arrangement at the inception of the lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

At the commencement date, the Group recognises a right-of-use asset and a lease liability. The right-of-use asset asset is initially measured at cost and the lease liability is initially measured at the present value of the lease payments not yet paid at that date.

Subsequently the right-of-use asset is depreciated on a straight-line basis over the expected period of the lease. The carrying amount of the lease liability is increased to reflect interest and reduced by the lease payments made during the period.

Lease Liabilities

The Group enters into property lease agreements for the head office, based in Wellington, New Zealand. The lease agreement, entered into in April 2017 began on 1 September 2017. The term of the lease is for three years on the likelihood and consideration of the termination with a right of renewal for an additional three years. The current portion of the lease has been determined to be the interest and principal repayments over the next 12 months. The details for the lease are as follows:

Lease Liabilities

Property: Level 7, 44 Victoria Street, Wellington, NZ2019 NZ$000

0–12 months 1–2 years 2+ years Total

125 127 - 252

Potential Future Rental Payments (assumes a 6-year lease term)

2019 NZ$000

Lease liabilities recognised Payable in 1–5 years Payable in 6–10 years Total

252 397 - 649

The details for the lease are as follows:Start date 1 Sep 17

Initial lease period 6 years

Extension options 3 years

Extension options exercised N/A

Termination options After 3.25 years and any point thereafter up until 6 years

Termination penalties 3 months’ rent, reducing by a month each year after 3.25 years

Residual value guarantees None

Variable lease payments None

Indirect costs incurred Lawyers’ fees

Restrictions and/or covenants None

Incremental rate of borrowing 12.00%

Market rent reviews Every 2 years

The total cash outflow for leases for the year ended 31 March 2019 totalled $147,000 (31 March 2018: $132,000).

Post year end The Group has entered into a new lease agreement after year end. Refer to note 25 for details.

The Group considers laptop computers to be of “low value” and has therefore used the recognition exemption. The lease expense related to these items are therefore recognised as an expense on a straight-line basis over the lease term (2019: NZ$15,000, 2018: NZ$6,000). There are commitments relating to low-value assets totalling NZ$70,000 (2018: NZ$14,000).

Right-of-use assets Right-of-use assets are recognised when the Group, as a lessee, has the right to use an underlying asset for the lease term. The right-of-use assets are depreciated on a straight-line basis over the lease term. In the Group’s case the underlying asset relates to the office space as disclosed in the lease liability above.

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14. Lease liabilities and right-of-use assets (continued)

2019 2018 RestatedNZ$’000 NZ$’000

Cost

Balance as at 1 April 424 45

Additions - 424

Disposals and write-offs - (45)

Balance as at 31 March 424 424

Depreciation

Balance as at 1 April (76) -

Depreciation (131) (121)

Disposals and write-offs - 45

Balance as at 31 March (207) (76)

Net book value 217 348

Financial Risk Management15. Financial risk management objectives and policies

16. Interest rate risk

17. Foreign currency risk

18. Credit risk

19. Liquidity risk

20. Financial instruments

15. Financial risk management objectives and policiesThe Group has various financial instruments such as cash and cash equivalents, cash on deposit, trade receivables, and trade payables, which arise directly from its operations. It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken.

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk, and liquidity risk. The Group’s senior management oversees the management of these risks. The objective of the management of these risks is to support the delivery of the Group’s financial targets while protecting future financial security. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of market forecasts for interest rate and foreign exchange. Ageing analyses and monitoring of specific allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.

16. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s cash and cash equivalents with floating interest rates. The Group holds $764,000 with varying interest rates (2018: $970,000). At balance date, the Group had the following mix of financial assets exposed to New Zealand interest rate risk.

Financial assets 2019 2018NZ$’000 NZ$’000

Cash and cash equivalents 4,112 3,342

Cash on deposit 10,271 1,500

Net exposure 14,383 4,842

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16. Interest rate risk (continued) All of the Group’s cash and cash equivalents were considered on hand at the balance date. The cash on deposit have fixed interest rates between 0.95% and 3.45%.

The Group does not enter into interest-rate swaps to manage the interest-rate risk.

The Group consistently analyses its interest-rate exposure. Within this analysis, consideration is given to potential renewals of existing positions, and the mix of fixed and variable interest rates.

Sensitivity AnalysisThe following table summarises the sensitivity of the Group’s post-tax loss and equity to interest rate risk.

At 31 March 2019, if interest rates had moved on the basis that all investments had rolled, as illustrated in the table below, assuming the amount of the financial instruments outstanding at balance date was outstanding for the whole year and all other variables held constant, post-tax loss and equity would have been affected as follows:

Post-tax losshigher/(lower)

2019 2018NZ$’000 NZ$’000

+1.0% (100 basis points) (128) (48)

-1.0% (100 basis points) 128 48

17. Foreign currency riskForeign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense is denominated in a different currency from the entity’s functional currency), receivables, or payables in the statement of financial position related to the operating activities.

The Group does not enter into any forward contracts or any other instrument to hedge the currency exposure; however, where possible, the Group maintains a portion of available funds in USD, AUD, and GBP to match the respective expected expenses. The following tables demonstrate the sensitivity to a reasonably possible change in USD, AUD, and GBP exchange rates, with all other variables held constant. The Group’s exposure to foreign currency changes for all other currencies is not material.

USD Carrying amount in USD Change in USD rate Effect on loss before tax/equityNZ$’000

2019 1,437 10% 192 -10% (235)

2018 1,711 10% 213 -10% (260)

GBP Carrying amount in GBP Change in GBP rate Effect on loss before tax/equity

NZ$’000

2019 219 10% 38 -10% (47)

2018 (14)10% (2)-10% 3

AUD Carrying amount in AUD Change in AUD rate Effect on loss before tax/equityNZ$’000

2019 10910% 10 -10% (13)

2018 (20)10% (2)-10% 2

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18. Credit risk Credit risk arises from the financial assets of the Group; which comprise cash and cash equivalents, cash on deposit, contract assets, and trade receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable note.

The Group does not hold any credit derivatives to offset its credit exposure.

The Parent has a policy of lending to its wholly owned subsidiaries ensuring their continued operations as required.

The fair value of all financial instruments held are measured at amortised cost.

19. Liquidity risk Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group has established an appropriate liquidity risk management framework for the management of the Group’s short-term, medium-term, and long-term funding and liquidity requirements. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

All financial liabilities are due for payment in less than 12 months.

As at year ended 31 March 2019≤3 months 3–6 months 6 months–1 year >1 year Total

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

Liquid financial assets

Cash and cash equivalents 4,112 - - - 4,112

Cash on deposit 3,967 6,304 - - 10,271

Trade receivables 1,890 10 19 7 1,926

Total liquid financial assets 9,969 6,314 19 7 16,309

Financial liabilities

Trade and other payables 648 - - - 648

Lease liabilities 30 31 64 127 252 Total financial liabilities 678 31 64 127 900

Net flow 9,291 6,283 (45) (120) 15,409

As at year ended 31 March 2018≤3 months 3–6 months 6 months–1 year >1 year Total

NZ$’000 NZ$’000 NZ$’000 NZ$’000 NZ$’000

Liquid financial assets

Cash and cash equivalents 3,342 - - - 3,342

Cash on deposit 1,500 - - - 1,500

Trade receivables 1,122 - 18 46 1,186

Total liquid financial assets 5,964 - 18 46 6,028

Financial liabilities

Trade and other payables 450 - - - 450

Lease liabilities 33 33 64 210 340 Total financial liabilities 483 33 64 210 790

Net flow 5,481 (33) (46) (164) 5,238

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20. Financial instrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Management assessed that cash and cash equivalents, cash on deposit, trade receivables, and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments and/or because the interest rates applied are variable in nature.

Financial Assets Initial recognition and measurement

Financial assets are classified, at initial recognition, as measured at amortised cost if the Group’s intentions is to hold the financial assets for collecting cash flows and the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest.

The Group currently classifies its cash and cash equivalents, cash on deposit, trade receivables, and other receivables as financial assets measured at amortised cost.

Subsequent measurement

Where financial assets are measured at amortised cost, interest revenue, expected credit losses, and foreign exchange gains or losses are recognised in the consolidated income statement. On derecognition, any gain or loss is recognised in the consolidated income statement.

Impairment of financial assets

The Group recognises an allowance for expected credit losses (ECLs) for trade receivables and contract assets. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted using the original effective interest rate.

Financial liabilities

The Group currently, upon initial recognition, classifies its financial liabilities made up of trade payables and accrued expenses as measured at fair value through profit or loss.

Subsequent measurement

The Group’s financial liabilities subsequently measured at amortised cost are measured using the effective interest method.

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Other21. Fixed assets

22. Intangible assets

23. Related parties

23. Contingencies and commitments

23. Events after the balance date

21. Fixed assets Fixed assets consists of leasehold improvements, property, and computer equipment. They are all initially measured at cost and subsequently depreciated.

Assets are either fully depreciated after acquisition where initial recognition amounts are less than a certain threshold or depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows: Leasehold improvements: 3 to 4 years Property: 3 to 15 years Computer equipment: 1 to 5 years

Leasehold improvements or an item of property or computer equipment and any significant part initially recognised is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated income statement when the asset is derecognised.

The residual values, useful lives and methods of depreciation of leasehold improvements, property and computer equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Leasehold improvements Property

Computer equipment Total

NZ$’000 NZ$’000 NZ$’000 NZ$’000

Cost

Balance as at 1 April 2018 44 12 187 243

Additions 5 211 177 393

Disposals and write-offs - (2) (17) (19)

Balance as at 31 March 2019 49 221 347 617

Depreciation and impairment

Balance as at 1 April 2018 (8) (5) (124) (137)

Depreciation (15) (40) (107) (162)

Impairment - - - -

Disposals and write-offs - 2 17 19

Balance as at 31 March 2019 (23) (43) (214) (280)

Net book value 26 178 133 337

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21. Fixed assets (continued)

Leasehold improvements Property

Computer equipment Total

NZ$’000 NZ$’000 NZ$’000 NZ$’000

Cost

Balance as at 1 April 2017 - 12 115 127

Additions 44 - 72 116

Disposals and write-offs - - - -

Balance as at 31 March 2018 44 12 187 243

Depreciation and impairment

Balance as at 1 April 2017 - (3) (74) (77)

Depreciation (8) (2) (50) (60)

Impairment - - - -

Disposals and write-offs - - - -

Balance as at 31 March 2018 (8) (5) (124) (137)

Net book value 36 7 63 106

22. Intangible assets Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in the consolidated income statement in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be finite and are amortised over the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with useful lives is recognised in the consolidated income statement. The Group does not have any intangible assets with an indefinite useful life.

Software development

Research costs and costs associated with maintaining software products are expensed as incurred.

Costs that are directly associated with the development of new or substantially improved medical technology software products controlled by the Group are recognised as intangible assets only where the following criteria can all be met: • it is technically feasible to complete the product so that it will be available for sale; • management intends to complete the product and sell it; • there is an ability to sell the product; • it can be demonstrated how the product will generate future economic benefits; • adequate technical, financial, and other resources to complete the development and to sell the product are available; and • the expenditure attributable to the product during its development can be reliably measured.

Development expenditure directed towards incremental improvements in existing products does not qualify for recognition as an intangible asset. Development costs previously recognised as expenses are not recognised as assets in a subsequent period.

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22. Intangible assets (continued)

Patents, trademarks, and copyrights

Patents, trademarks, and copyrights are internally generated intangible assets that are also subject to the same recognition criteria as the software products above.

Software development Patents, trademarks, and copyrights

Useful lives Finite

Estimated useful lives 3 years 10–20 years

Estimated residual value Nil

Method used Amortised over the period of expected future benefit from the related project on a straight-line basis

Internally generated/acquired Internally generated Internally generated / acquired

Impairment test/recoverable amount test Management believes the most relevant indicators of impairment are where there is evidence of obsolescence or where unfavourable changes to the economic benefits derived from the assets have been experienced.

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

There has been no evidence of impairment in 2019 (2018: nil).

Software development

Patents, trademarks, and copyrights Total

Cost NZ$’000 NZ$’000 NZ$’000

Balance as at 1 April 2018 - 71 71

Additions - internally developed 89 212 301

Disposals and write-offs - - -

Balance as at 31 March 2019 89 283 372

Amortisation and impairment

Balance as at 1 April 2018 - - -

Amortisation (8) (9) (17)

Impairment - - -

Disposals and write-offs - - -

Balance as at 31 March 2019 (8) (9) (17)

Net book value 81 274 355

Software development

Patents, trademarks, and copyrights Total

Cost NZ$’000 NZ$’000 NZ$’000

Balance as at 1 April 2017 - 28 28

Additions - internally developed - 43 43

Disposals and write-offs - - -

Balance as at 31 March 2018 - 71 71

Amortisation and impairment

Balance as at 1 April 2017 - - -

Amortisation - - -

Impairment - - -

Disposals and write-offs - - -

Balance as at 31 March 2018 - - -

Net book value - 71 71

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23. Related parties

The consolidated financial statements include the financial statements of Volpara Health Technologies Limited and the subsidiaries listed in the following table:

Name of entity Country of incorporation 2019 ownership 2018 ownership

Volpara Solutions Europe Limited United Kingdom 100% 100%

Volpara Solutions Limited New Zealand 100% 100%

Volpara Solutions Incorporated United States 100% 100%

Volpara Solutions Australia Pty Limited Australia 100% 100%

The entities in the Group all have a balance date of 31 March. Financial support is provided to subsidiaries in accordance with Volpara’s transfer pricing policy.

Ultimate Parent Volpara Health Technologies Limited is the ultimate Parent entity.

Key management personnel (KMP) and Director compensation Key management personnel include the Chief Executive Officer (CEO), and those employees who report directly to the CEO.

Compensation of key management personnel and Directors 2019 2018NZ$ NZ$

Short-term employee benefits (i) 1,139,174 842,769

Post-employment benefits and medical benefits 92,333 84,916

KMP share-based payment expense 140,389 146,242

Directors’ fees 389,528 332,977

Directors’ share-based payment expense 104,150 134,750

Total compensation 1,865,574 1,541,654 (i) short-term employee benefits include salaries and wages, car allowances, short-term incentives earned during the period, and non-monetary benefits such as insurance; (ii) Some KMPs are based in the United States and are paid in US$. The total compensation is therefore translated for financial reporting purposes to NZ$ on a monthly basis.

The value of outstanding balances payable to KMP and Directors at balance date totalled $148,000 (2018: $146,000).The definition of KMP has been reviewed for 2019 and this has been reflected in the 2018 table above.

Interests held by key management personnel and DirectorsShare options held by KMP and Directors, under the Legacy ESOP and New ESOP to purchase ordinary shares, have the following expiry dates and exercise prices:

Expiry date Exercise price NZ$ 2019 2018Issue Date

KMP 15/01/2021–1/06/2025 0.47–0.63 3,250 3,620

Directors 15/03/2023–23/08/2025 0.47–0.63 1,952 1,952

5,202 5,572

Loans to DirectorsThere were no loans to Directors issued during the year ended 31 March 2019 (2018: Nil).

Other transactions and balances

Directors of Volpara Health Technologies Limited control 27.01% of the voting shares of the Company at balance date (2018: 33.71%).

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23. Related parties (continued) Transactions and outstanding balances with related parties All transactions with related parties are at arm’s length on normal trading terms. There are no related parties other than the subsidiaries within the Group and Directors of the Group. These intragroup amounts are eliminated upon consolidation.

The following balances relate to shares held in escrow by related parties as at 31 March 2019.

2019 2018Number of shares

000’sNumber of shares

’000’s

Roger Allen AM 17,565,319 17,565,319

Dr Ralph Highnam 17,537,602 17,537,602

Professor Sir John Mike Brady 7,180,717 7,180,717

John Diddams 1,402,908 1,402,908

43,686,546 43,686,546

24. Contingencies and commitments Contingent liabilities and capital commitments

The Group had no contingencies or commitments to purchase fixtures or equipment as at 31 March 2019 (2018: nil).

25. Events after the balance date Capital raise Subsequent to the end of the financial year, the company successfully raised A$45M (NZ$47.4M) through the issue of 30 million shares at A$1.50 from a placement to institutional shareholders.

A further A$10M (NZ$10.5M) is in the process of being raised, through a fully underwritten, accelerated non-renounceable entitlement offer which is due to close on 3 July 2019.

Acquisition of MRS Systems, Inc. 100% of MRS Systems Inc.’s shares were acquired on 14 June 2019, thereby enabling Volpara to obtain control. MRS is a mammography reporting system company whose primary function is to enable the reporting and tracking of patients in breast and lung screening. The primary purpose of the acquisition is to enable Volpara to expedite product development through the use of existing offerings of the acquiree. MRS’s year-end is 31 December.

Intangible assets arising from the acquisition are expected to include goodwill arising from the combination of synergies expected to be realised through a combined entity such as sales, marketing, and administration; and separately identified intangible assets including know-how, customer lists, brand, etc., that do not qualify for separate recognition in the underlying entity’s accounts.

The Group acquired 100% of the shares for US$14.59M (NZ$22.32M). This was accomplished through a payment of US$11.61M in cash to the existing shareholders, made up of the US$14.59M purchase price plus US$353,000 working capital adjustments less US$708,000 in indebtedness. The remaining US$2.63M is being held back for 18 months in the form of an escrow fund, which is available for the Group to settle any warranties and liabilities.

The acquisition-date of the total consideration transferred has not been finalised at the date of issuing these financial statements as the MRS balance date is 31 December and the previously reported balances are not IFRS compliant. Acquisition-related costs to date have totalled NZ$461,000 and have been expensed as incurred in accordance with NZ IFRS 3.53. They all relate to the Volpara financial year ended 31 March 2020.

The assets acquired relate to working capital, property, plant, and equipment along with the underlying software and analytic know-how.

Revenue and profit or loss amounts as required per IFRS 3.B64(q) cannot practicably be shown as the acquiree is currently preparing financial statements in accordance with US Generally Accepted Accounting Practice (US GAAP) and further work is required to determine their NZ IFRS equivalents. Similarly, the purchase price allocation will be undertaken in due course although it is expected that significant goodwill will arise on acquisition.

New lease agreement The Company entered into a lease agreement on 13 May 2019 for new office premises to be occupied from 1 August 2019. The annual lease payments amount to $344,000.

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Additional Information for Listed Companies

Volpara Health Technologies Limited(NZ Company no. 2206998/ARBN 609 946 867)

Stock exchange listingOur shares are listed on the Australian Stock Exchange (ASX: VHT).

Analysis of shareholding at 17 June 2019

Range Securities % No. of holders %

1 to 1000 1,144,456 0.54% 1,872 21.82%

1,001 to 5,000 9,948,886 4.67% 3,511 40.92%

5,001 to 10,000 11,527,042 5.41% 1,517 17.68%

10,001 to 100,000 39,777,093 18.64% 1,567 18.25%

100,001 and over 150,849,184 70.74% 114 1.33%

Total 213,246,661 100.00% 8,581 100.00%

The number of shareholdings held in less than marketable parcels is 209, representing 25,713 shares.

Twenty largest shareholders at 17 June 2019Rank Name Shareholding Percentage holding1 Patagorang Pty Ltd 20,467,848 9.60%

2 Dr Ralph Highnam 18,190,485 8.53%

3 J P Morgan Nominees Australia Pty Limited 15,987,043 7.50%

4 HSBC Custody Nominees (Australia) Limited 11,637,682 5.46%

5 National Nominees Limited 9,118,703 4.28%

6 Citicorp Nominees Pty Limited 8,660,990 4.06%

7 Custodial Services Limited <Beneficiaries Holding A/C> 7,458,977 3.50%

8 Prof Sir Michael Brady 7,419,075 3.48%

9 Mr Marcus Sarner 5,980,404 2.80%

10 Prof Martin Yaffe 3,985,850 1.87%

11 Prof Nico Karssemeijer 3,556,806 1.67%

12 Sir Martin Francis Wood 3,004,655 1.41%

13 Lady Kathleen Audrey Wood 3,004,654 1.41%

14 Bnp Paribas Noms (NZ) Ltd <DRP> 2,223,275 1.04%

15 CS Fourth Nominees Pty Limited <HSBC Cust Nom AU Ltd 11 A/C> 2,092,173 0.98%

16 Mr Jeremy Palmer 1,966,317 0.92%

17 Whitfield Investments Pty Ltd 1,730,767 0.81%

18 Sir Martin Gregory Smith 1,366,977 0.64%

19 HSBC Custody Nominees (Australia) Limited-Gsco Eca 1,154,327 0.54%

20 Halix Pty Ltd 969,083 0.45%

Total 129,976,091 60.95%

Balance of Register 83,270,570

Grand Total 213,246,661

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Additional information for listed companies (continued)

Donations made during the yearDonations made during the year ended 31 March 2019 totalled NZ$2,000 (2018: NZ$15,000).

Employee remunerationRemuneration and other benefits (excluding commissions and non-cash share based payments) of NZ$100,000 per annum or more received by employees (excluding company directors) in their capacity as employees during the period were as follows:

Remuneration range Number of employees 100,000 to 110,000 6 110,001 to 120,000 3 120,001 to 130,000 2 130,001 to 140,000 1 140,001 to 150,000 2 150,001 to 160,000 2 160,001 to 170,000 1 170,001 to 180,000 2 180,001 to 190,000 7 190,001 to 200,000 - 200,001 to 210,000 3 210,001 to 220,000 - 220,001 to 230,000 1 230,001 to 240,000 1 240,001 to 250,000 - 250,001 to 260,000 1 260,001 to 270,000 - 270,001 to 280,000 1 280,001 to 290,000 1 360,001 to 370,000 1 440,001 to 450,000 1

Substantial shareholdersThe names of the substantial shareholdings listed in the Company’s register are:

Shareholder Shareholding Percentage holding

Roger Allen AM 20,467,848 9.60%

Dr Ralph Highnam 18,180,634 8.53%

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Additional information for listed companies (continued)

Voting rightsThe voting rights attaching to each class of equity securities are set out below: (a) All ordinary fully paid share carry one vote per share without restrictions. (b) Options do not carry a right to vote.

Entries recorded in the interest registerThe Company maintains an interest register in accordance with the Companies Act 1993. The following are particulars of entries made in the Interest register for the period 1 April 2018 to 31 March 2019.

Director Date Interest

John Diddams 28/02/19 Resigned as Director - Olivers Limited

Dr Monica Saini 31/08/18 Medical Advisor - Breast Cancer New Zealand Foundation

Restricted securities as at 31 March 2019 In accordance with ASX requirements, a summary of the shares on issue and escrowed shares subject to ASX trading restrictions is as follows:

Fully paid ordinary shares (no ASX restriction) 127,867,945

Voluntary escrowed shares* 51,482,213

Total shares on issue 179,350,158 * Note that these shares were released from escrow on the 27th April 2019.

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Corporate Directory Volpara Health Technologies Limited

Share registerBoardroom Pty LimitedGrosvenor PlaceLevel 12, 225 George StreetSydneyNSW 2000Australia

AuditorDeloitte LimitedLevel 13, 20 Customhouse QuayWellington 6011New Zealand

Legal advisersSimmonds Stewart (New Zealand)Mills Oakley (Australia))Davis Wright Tremaine LLP (USA)

BankersKiwibank (New Zealand)Lloyds Bank (United Kingdom)Bank of America (USA)NAB (Australia)

Websitewww.volparasolutions.com

Registered officeVolpara Health Technologies LimitedLevel 7, 44 Victoria Street Wellington CentralWellington 6011New Zealand

Board of DirectorsPaul Reid - Chair, Non-Executive IndependentDr Ralph Highnam - Executive Director and CEORoger Allen AM - Non-ExecutiveProfessor Sir Mike Brady - Non-ExecutiveJohn Diddams - Non-Executive IndependentJohn Pavlidis - Non-Executive IndependentDr Monica Saini - Executive Director and Chief Medical Officer

Company SecretaryCraig Hadfield

New Zealand incorporationThe Company is registered under the laws of New Zealand, company number 2206998

Australian Registered Body Number (ARBN)609 946 867

The Company’s registered office address in AustraliaSuite 9, Level 1, 357 Military RoadMosmanSydneyNSW 2088Australia

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Volpara Health Technologies Limited

A S X : V H T (NZ Company no. 2206998/ARBN 609 946 867)