Mr. Tom Looby reports

CHINA'S NMPA APPROVES EOM'S CORONARY IMAGING SYSTEM BASED ON CONAVI MEDICAL'S IP

Conavi Medical Corp.'s exclusive licensing partner in China, East Ocean Medical (Hong Kong) Company Ltd. (EOM), has received approval by the China National Medical Products Administration (NMPA) for its coronary imaging system, which is based on Novasight Hybrid system intellectual property licensed to it by the company via a June, 2021, technology transfer and licensing agreement (TTLA). EOM is an affiliate of Grand Pharmaceutical Group Ltd., which is a Hong Kong-based company principally engaged in the manufacturing and sales of pharmaceutical preparations and medical devices.

• Approval triggers fourth and final $5.9-million (U.S.) milestone payment to Conavi Medical, which it will use to extinguish the promissory note owed by it to EOM.
• Conavi Medical eligible to receive future-tiered royalty payments, ranging from 5.0 per cent to 10.0 per cent, on net EOM coronary imaging system sales in China.

Pursuant to the TTLA, the NMPA approval of EOM's coronary imaging system triggers a fourth and final milestone payment of $5.9-million (U.S.) by EOM to Conavi Medical. While Conavi Medical expects to recognize the milestone payment as licensing income in the current fiscal quarter, it will use the total proceeds to finance the repurchase of the outstanding principal plus accrued interest balance in respect of a promissory note owing to EOM. The balance of this promissory note is also $5.9-million (U.S.), thereby extinguishing all of the company's debt owed to EOM. Upon future commercialization in China, EOM will pay to Conavi Medical certain tiered royalty payments, ranging from 5.0 per cent to 10.0 per cent of 75.0 per cent of amounts invoiced to EOM coronary imaging system customers, provided that EOM shall pay a minimum non-refundable annual royalty of $250,000 (U.S.), which shall be creditable against the royalties otherwise due pursuant to the TTLA.

"We congratulate our China licensing partner, EOM, on receiving NMPA approval of its Novasight Hybrid-based coronary imaging system," said Tom Looby, Conavi Medical's chief executive officer. "The NMPA approval marks a major milestone for both companies and provides important additional validation of our hybrid imaging technology, which is the first to combine two major intravascular imaging modalities -- IVUS and OCT -- to help guide common minimally invasive coronary procedures. China is an important market for emerging medical technologies, and we look forward to EOM's commercial launch of the technology early next year."

About Conavi Medical Corp.

Conavi Medical is focused on designing, manufacturing and marketing imaging technologies to guide common minimally invasive cardiovascular procedures. Its patented Novasight Hybrid system is the first system to combine both intravascular ultrasound (IVUS) and optical coherence tomography (OCT) to enable simultaneous and co-registered imaging of coronary arteries. The Novasight Hybrid system has 510(k) clearance from the U.S. Food and Drug Administration; and regulatory approval for clinical use from Health Canada, China's National Medical Products Administration, and Japan's Ministry of Health, Labor and Welfare.

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