Osprey Medical : Corporate Governance Statement

Corporate Governance Statement*

ARBN 152 854 923

* Approved for release by the Board of Directors of Osprey Medical Inc.

2021 CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Osprey Medical Inc. is responsible for the governance of the Company and its controlled entity. Good corporate governance is a fundamental part of the culture and business practices of the Company.

The Board of Directors confirms that the Company's corporate governance framework complies in almost all respects with the ASX's Corporate Governance Council's Corporate Governance Principles and Recommendations (4th Edition) ("Recommendations") and that where it does not comply, it is due to the current relative size of the Company, its stage of development and commercialization, and the scale and nature of its operations. The Council recognises that different entities may legitimately adopt different governance practices, based on a range of factors, including their size, complexity, history and corporate culture.

The Company provides below a review of its corporate governance framework using the same numbering as adopted for the Recommendations within the ASX Corporate Governance Recommendations.

Further details in relation to the Company's governance framework are set out in a dedicated corporate governance information section on the Company's website athttps://ospreymed.com/investors/corporate-governance/. This section of the Company's website contains copies of all of the corporate governance policies and Board Committee charters.

This Corporate Governance Statement was been approved by the Board of Directors of the Company on, and is current as at 1 March, 2022.

Principle 1: Lay solid foundations for management and oversight

The Company did not comply with Recommendations 1.3 and 1.5, but it did comply with Recommendations 1.1, 1.2, 1.4, 1.6 and 1.7 for the financial year ended 31 December 2021.

Recommendation 1.1:

A listed entity should have and disclose a board charter setting out:

• (a) the respective roles and responsibilities of its board and management; and

• (b) those matters expressly reserved to the board and those delegated to management.

The Board's responsibilities are defined in the Board Charter, a copy of which is available on the Company's website athttps://ospreymed.com/investors/corporate-governance/ and there is a clear delineation between the functions reserved for the Board and those conferred upon the chief executive officer and certain other officers of the Company for the day-to-day management of operations.

Recommendation 1.2:

A listed entity should:

• (a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for election as a director; and

• (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

The Company has in place a process to undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director.

The Company will provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

Recommendation 1.3:

A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

The Company has formal contracts with its independent non-executive directors Mr. John Erb, Mr. Steve Brandt, Mr. Martin Emerson, Mrs. Sandra Lesenfants and Mr. Neville Mitchell setting out the terms of their appointment.

There is currently no formal contract with Dr. Christopher Nave. The Company considers that there is sufficient certainty as to the terms of the appointment of Dr. Nave that a written agreement is not necessary at this stage and noting that Dr. Nave is not paid a director's fee by the Company.

The Company has written agreements with its senior executives including Mr. Mike McCormick, CEO, setting out the terms of their appointment.

Recommendation 1.4:

The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The Company Secretary is accountable to the Board, through the Chairman, on all matters relating to governance and the effective operation of the Board.

Recommendation 1.5:

A listed entity should:

• (a) have and disclose a diversity policy;

• (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and

• (c) disclose in relation to each reporting period:

  • (1) the measurable objectives set for that period to achieve gender diversity;

  • (2) the entity's progress towards achieving those objectives; and

  • (3) either:

    • (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or

    • (B) if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined in and published under that Act.

If the entity was in the S&P/ASX 300 Index at the commencement of the reporting period, the measurable objective for achieving gender diversity in the composition of its board should be to have not less than 30% of its directors of each gender within a specified period

The Company has adopted a Diversity Policy. The Company's Diversity Policy confirms that as the Company moves closer to achieving its commercialisation goals and increases its number of employees, it will:

• (a) establish appropriate and measurable objectives for achieving gender diversity and annually review; and

• (b) assess both the measurable objectives for achieving gender diversity and the Group's progress in achieving them.

As at the date of the report, the proportion of women in the company as a percentage of its total employees was 14 out of 34 or 42%. The Company employs Ms. Nancy Ness, as its Chief Financial Officer. Ms. Ness reports to the CEO and is a member of the Company's Executive Staff. The Company also employs Ms. Sarah Runde, as the Company's Senior Director of Clinical Affairs. Ms. Runde reports to the CEO and is a member of the Company's Executive Staff. In addition, Ms. Melanie Hess, is the Company's Vice President of Regulatory Affairs. Ms. Hess reports to the CEO and is a member of the Company's Executive Staff.

The proportion of women as a total of the senior executive (Vice President) positions is 3 out of 6, or 50.0%.

A copy of the Company's Diversity Policy is available on the Company's website athttps://ospreymed.com/investors/corporate-governance/

Recommendation 1.6:

A listed entity should:

• (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

• (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

The Board's process for periodically evaluating the performance of the board, its committees and individual directors is for each director to complete a survey and undertake an assessment of the performance of the Board including:

• • the effectiveness of the Board and each committee on which they served;

• • the extent to which the responsibilities set forth in the respective charters of the Board and each committee were met;

• • the quality of reporting from and interaction with management; and

• • the extent to which substantive issues were appropriately prioritised and considered during Board meetings.

One on one Board and Committee performance related discussions are held between the Chairman and each director and as deemed appropriate following receipt of the survey results by the Chairman.

A review was conducted during the 2021 year in accordance with the process described above. Constructive feedback was provided to the Chairman by each director and from the Chairman to each director. Based on the assessments performed, it was determined that the Board and its committees were operating effectively.

Recommendation 1.7:

A listed entity should:

• (a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and

• (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period

In accordance with the Board Charter, the directors' responsibilities include monitoring the performance of senior executives (including the CEO) and ensuring that succession plans are in place. The Board has established a Nomination and Remuneration Committee which is responsible for reviewing executive remuneration and incentive policies and practices, and ensuring that the policies and practices are performance based and aligned with the Company's vision, values and overall business objectives.

The Board and Nomination and Remuneration Committee ensure that an evaluation of the senior management team is undertaken at least annually. The methodology by which the CEO will evaluate his senior management team is reviewed by the Committee and Board.

The Nomination and Remuneration Committee annually reviews the performance of the CEO and recommends to the Board the key performance targets of the CEO.

In addition, the Board has established a process whereby it reviews senior executive performance at each meeting of the Board. Feedback is provided to the CEO as deemed appropriate by the Board.

A performance evaluation of the Company's senior management team was undertaken in accordance with the process described during the year.

A copy of the Nomination and Remuneration Committee Charter is available on the Company's website athttps://ospreymed.com/investors/corporate-governance/

Principle 2: Structure the board to be effective and add value

The Company did not comply with Recommendations 2.1 but it did comply with Recommendations 2.2 to 2.6 for the financial year ended 31 December 2021.

Recommendation 2.1:

The board of a listed entity should:

• (a) have a nomination committee which:

  • (1) has at least three members, a majority of whom are independent directors; and

  • (2) is chaired by an independent director, and disclose:

  • (3) the charter of the committee;

  • (4) the members of the committee; and

  • (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

• (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience,

independence and diversity to enable it to discharge its duties and responsibilities effectively

The Board has established a Nomination and Remuneration Committee, however a majority of the members of the Committee is not independent.

The current members of the Nomination and Remuneration Committee are: Dr. Christopher Nave and Mr. John Erb. Dr. Nave is not considered to be an independent director of the Company under the ASX Corporate Governance Principles and Recommendations due to his position at a fund manager that has an association with some of the Company's major shareholders. (Dr. Nave, is a Partner of Brandon Capital Partners).) Each of the members of the Nomination and Remuneration Committee are non-executives,

Dr. Nave does not receive directors' fees paid by the Company. Having regard to the Company's stage of development and the collective experience and expertise of the members of the Nomination and Remuneration Committee, the Board considers the current composition of the Committee to be appropriate.

The Nomination and Remuneration Committee's authority, responsibilities, composition and membership requirements are documented in the Committee's charter approved by Board, which is available on the Company's website athttps://ospreymed.com/investors/corporate-governance/

Details of directors' attendance at meetings during the reporting period are disclosed below.

Recommendation 2.2:

A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership.

The Board has determined that, in terms of the mix of skills and diversity it is looking for in its membership, it is best served by having a mix of individuals with different perspectives that have expertise and a breadth of experience in the following areas:

• • strategy and innovation;

• • leading, managing and overseeing corporations in a range of industry sectors (including the medical technology sector), at both executive and Board level;

• • corporate governance, finance and risk management; and

• • medical technology/life science companies.

Details in relation to the skills and diversity of each director may be found on the Company's website athttps://ospreymed.com/investors/corporate-governance/

The Board considered as part of its performance review during the 2021 financial year its skills, experience and composition and considered its current composition to be appropriate given the strategic direction of the Company and its stage of development.

Recommendation 2.3:

A listed entity should disclose:

• (a) the names of the directors considered by the board to be independent directors;

• (b) if a director has an interest, position or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position or relationship in question and an explanation of why the board is of that opinion; and

• (c) the length of service of each director.

The Company has assessed the independence of its directors against the requirements for independence which are set out in Principle 2 of the ASX Corporate Governance Principles and Recommendations. A director is independent if he or she is a non-executive director, not a member of management and free of any business or other relationship that could materially interfere with (or be perceived to materially interfere with) the independence of his or her judgement.

Mr. John Erb has served on the Board for greater than 10 years. Director tenure is a factor taken into account by the Board in assessing the independence of a director but is not determinative. In assessing Mr. Erb's independence, the Board assessed whether he would be able to continue to bring valuable expertise, independent judgement and the ability to act in the best interests of the Company beyond the term of 10 years.