Visioneering Technologies : 2021 Annual Report

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Visioneering Technologies, Inc. (ASX:VTI)

2021 Annual Report

Visioneering Technologies, Inc.

Redefining Vision

Visioneering Technologies Inc. (ASX: VTI), "VTI" or "the Company", is an innovative eye care company committed to redefining vision. A pioneer in myopia management, VTI merges advanced engineering with a relentless drive to achieve superior results for patients and practitioners.

VTI's flagship product is the NaturalVue® (etafilcon A) Multifocal 1-Day Contact Lens, an extended depth of focus lens that is one of the most significant innovations in the eye care industry in more than 20 years. For more information, please visitwww.vtivision.com.

Contents

Forward-looking Statements	3
What We Do	4
Letter to Securityholders - review of operations and activities	5
Directors	9
Senior Leadership Team	12
Remuneration Report (unaudited)	13
Corporate Governance Statement	17
Other Securityholder Information	18
Financial Statements (for the years ended December 31, 2020 and 2019)	F-i
Corporate Directory	IBC

Forward-looking statements

This Annual Report contains or may contain forward-looking statements that are based on management's beliefs, assumptions and expectations and on information currently available to management. Forward-looking statements involve known and unknown risks, uncertainties, contingencies and other factors, many of which are beyond VTI's control (including but not limited to the COVID-19 pandemic), subject to change without notice and may involve significant elements of subjective judgment and assumptions as to future events which may or may not be correct.

All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. These include, without limitation, US commercial market acceptance and US sales of our product, as well as our expectations with respect to our ability to develop and commercialize new products and to complete clinical trials.

Factors that could cause our actual results to differ materially from anticipated results expressed or implied by forward-looking statements include, among others:

• • our ability to obtain sufficient capital or strategic business arrangements to fund our operations and expansion plans and the funding of our clinical trials for product candidates;

• • our ability to build and maintain the management and human resources infrastructure necessary to support the growth of our business;

• • scientific, regulatory and medical developments beyond our control;

• • our ability to obtain and maintain, as applicable, appropriate governmental licenses, accreditations or certifications or to comply with healthcare laws and regulations or any other adverse effect or limitations caused by government regulation of our business;

• • whether any of our current or future patent applications result in issued patents, the scope of those patents and our ability to obtain and maintain other rights to technology required or desirable for the conduct of our business; and our ability to commercialize products without infringing upon the claims of third-party patents;

• • whether any potential strategic or financial benefits of various licensing agreements will be realized;

• • our ability to diversify our pipeline of development product candidates, which could include an acquisition, merger, business combination, in-license or other strategic transaction, and whether any of such efforts will result in us entering into or completing any transaction or that any such transaction, if completed, will add to shareholder value;

• • the results of our development activities;

• • our ability to complete our planned clinical trials (or initiate other trials) in accordance with our estimated timelines due to delays associated with enrolling patients due to but not limited exclusively to the novelty of the treatment, the size of the patient population and the need of patients to meet the inclusion criteria of the trial or otherwise; and

• • the extent to which the COVID-19 pandemic may impact our business, including our clinical trials and financial condition.

Any forward-looking statements are provided as a guide only and should not be relied upon as an indication or guarantee of future performance. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements. You should not place undue reliance on forward-looking statements because they speak only as of the date when made and are subject to change without notice. VTI does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. VTI may not actually achieve the plans, projections or expectations disclosed in forward-looking statements.

What We Do

What we do: Contact lenses

VTI designs and markets contact lenses. Our flagship product, the NaturalVue® Multifocal (etafilcon A) 1 Day Contact Lens (NaturalVue MF), is used by two very large global patient populations that have complex and poorly addressed vision needs.

➢ The first patient population is that of children who have blurry distance vision ("nearsightedness" or "myopia") which progressively worsens through their childhood and adolescence, a condition called myopia progression. This condition correlates to an elevated life-time risk for blindness and other debilitating ocular diseases, with the risk increasing with the severity of the myopia. Currently, no widely adopted solutions are available to address this issue.

➢ The second population is composed of persons over the age of 40 who have myopia and are losing their ability to see near objects, a condition called presbyopia. Most current contact lenses designed for presbyopia compromise either near or distance vision and are time consuming for practitioners to optimize.

Eye Care Professionals (ECPs) use the same NaturalVue MF contact lens to treat both populations, slowing the progression of myopia in children and providing middle-age and older adults with simultaneous correction of near and distance vision. The versatility of treating two large and under addressed patient populations with a single contact lens design is a worldwide competitive advantage.

Together, myopia in children and presbyopia represent approximately US$5 billion of addressable market opportunity in the United States alone. In Asia, where in some countries up to 80-90% of children suffer from myopia, the addressable market for NaturalVue MF in treating myopia progression in children is in the billions of dollars, with China alone representing approximately US$8-11 billion of addressable market. As the degree of nearsightedness correlates to one's lifetime risk of blindness and other debilitating eye diseases, treatments for myopia progression in children are increasingly in demand.

In addition to contact lenses for presbyopia and myopia progression, VTI also sells NaturalVue Sphere, which is a contact lens for the simple correction of blurry distance vision. VTI is also developing products for those with astigmatism.

Defined terms

We reference several defined terms throughout this Annual Report as follows:

Shipments to US ECPs - represents the gross revenue equivalent of lenses shipped to ECPs located in the US, net of fulfillment fees.

Active US Accounts - ECPs located in the US that purchased VTI products in the most recent fiscal quarter. Repeat Customer Rate - the percent of prior quarter Active US Accounts that purchased in the current quarter.

To Our Securityholders

Despite a global pandemic involving COVID-19 and its negative impact on all types of businesses, including ours, 2021 was a year of achievement for VTI. One of our most significant accomplishments involved you, our securityholders and, in hindsight, has become even more important to us as the worldwide stock markets have become more volatile and capital has become much more difficult and expensive to secure. In March and April 2021, you invested US$16.7 million (A$23.3 million) in VTI, which included investments by myself and three of my fellow Directors. Thank you for your support and commitment to our vision.

As you may recall, we announced four purposes for the capital raise in our Notice of Special Meeting of

Stockholders dated 26 February 2021. It's now a year beyond the financing and I am pleased to recap our performance against those stated objectives.

1. The conduct of clinical trials, including a trial for approval in China

With the financing secured, VTI launched the PROTECT (PROgressive Myopia Treatment Evaluation for NaturalVue® Multifocal Contact Lens Trial) Clinical Study to generate randomized, controlled clinical data to support our NaturalVue® (etafilcon A) Multifocal (MF) 1 Day Contact Lens product. Historically, VTI has released the results of its own real-world data for NaturalVue MF and the standalone results have been extremely favorable. Recently, however, the results of two randomized control trials for competitor products were published. One was conducted by the maker of the MiSight® 1 day lens and the other was the Bifocal Lenses In Nearsighted Kids (BLINK) Study, which was conducted by two large research institutions in the US and was funded by the US National Eye Institute. These studies covered children ages 7 - 12 at enrollment and included several measurements as endpoints, a key one of which was the absolute change in spherical equivalent refractive error over a three-year period. The studies showed that the patients wearing the MiSight or BLINK lenses averaged 0.60 Diopters or more of absolute change over three years while the patients wearing the single vision contact lens control lens averaged a full diopter or more of change over three years.

Subsequently, VTI compared the results from these studies to the results of an age-matched corresponding subset of the children in the NaturalVue MF real-world study. The comparison, as seen in the diagram below, is compelling. On average, the children in the VTI real-world study experienced almost no worsening of their myopia over a three-year period.1