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ASX ANNOUNCEMENT / MEDIA RELEASE 27 JANUARY 2021 AROA BIOSURGERY DECEMBER 2020 4C COMMENTARY AROA HIGHLIGHTS • Aroa maintains expectation to deliver revenue growth on H2 FY20 , equating to more than NZ $ 21.0m for FY21 on a constant currency basis ( i.e. eliminating impact of exchange rate fluctuations ) Cash outflow from operations was modest for the December quarter at NZ $ 1.1 million and in line with Aroa's internal budget • Cash on hand of NZ $ 36.8 million as at 31 December • • • • Aroa received regulatory approval for three products from India's Central Drugs Standard Control Organisation ( CDSCO ) Aroa is targeting distribution of its products in India in H2 CY21 and confirms appointment of an experienced Indian distributor to manage a network of sub - distributors across the subcontinent Aroa gains further validation for Myriad ™ with two recent clinical studies published in leading peer reviewed scientific journals Aroa initiates manufacturing expansion to support future anticipated demand across the product portfolio Intellectual property portfolio expands with a new patent application for a treatment system to approximate surgically - created tissue planes . The European Patent Office has notified the Company that a patent for the laminated tissue graft product will be granted . Soft tissue regeneration company Aroa Biosurgery Limited ( ASX : ARX , ' Aroa ' or the ' Company ' ) is pleased to provide an update on its activities for the quarter ended 31 December 2020 and release its Appendix 4C . Financial commentary With sales in the June quarter being impacted by the COVID - 19 pandemic , Aroa saw an improvement in the September quarter and sales have continued to improve during the December quarter . Aroa maintains its expectation to deliver sales growth on H2 FY20 , on a constant currency basis ( i.e. when eliminating the impact of exchange rate fluctuations , namely USD vs NZD ) . Cash receipts for Q3 FY21 ( NZ $ 5.9 million ) were higher than Q2 ( NZ $ 4.1 million ) , reflecting the improvement in sales over the course of the September and December quarters . Cash outflow from operations for the December quarter remained modest at NZ $ 1.1 million and in line with Aroa's internal budget , ending the quarter with cash on hand of NZ $ 36.8 million . In accordance with ASX Listing Rule 4.7C.3 , Aroa advises that an aggregate amount of NZ $ 105k was paid during the quarter to Aroa's five Non - Executive Directors in payment of their director fees . Appendix A provides a summary of actual expenditure , compared to the estimated use of funds set out in the Prospectus , in accordance with ASX Listing Rule 4.7C . Cash expenditure is consistent with the use of funds set out in Aroa's IPO Prospectus . Aroa receives Indian regulatory approval for three products In December , Aroa received regulatory approval to introduce three products to the Indian market based on its Aroa ECM platform . The three products , Myriad ™ , EndoformⓇ Natural and Endoform® Antimicrobial , were approved under the ' Medical Device Rules 2017 ' by the national regulatory authority of India , the Central Drugs Standard Control Organisation ( CDSCO ) . Estimates of the value of the advanced wound care market in India range from US $ 225-485 million in 2020 , with compounding growth between 5.5 and 8 percent per year . Aroa is targeting distribution of its products in India in the second half of the 2021 calendar year and has appointed an AROA BIOSURGERY LIMITED 2 Kingsford Smith Place , Airport Oaks Auckland 2022 , New Zealand Phone : +64 9 8693035 US ( 844 ) -793-0490 PG | 1