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DGAP-Adhoc: aap Implantate AG resolves on concept for extensive staff reduction and extraordinary value adjustment to capitalized development costs; postponement of publication of the 2019 financial statements

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DGAP-Ad-hoc: aap Implantate AG / Key word(s): Restructure of Company/Annual
aap Implantate AG resolves on concept for extensive staff reduction and
extraordinary value adjustment to capitalized development costs;
postponement of publication of the 2019 financial statements

16-March-2020 / 18:49 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation
(EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The Management Board of _aap_ Implantate AG ("_aap_") resolved on March 16,
2020 with the approval of the Supervisory Board on the same day on a concept
for extensive staff reduction and, in connection with the preparation of the
2019 annual and consolidated financial statements, on making an
extraordinary value adjustment to capitalized development costs. In
addition, against the background of the evaluation of various strategic
alternatives, the Company has decided to postpone the publication of the
annual financial report 2019 (HGB) and the consolidated annual financial
report 2019 (IFRS) until April 30, 2020.

Starting from a headcount of 145 on February 29, 2020, _aap_ plans to reduce
its workforce by around 25% in the current financial year.The aim of the
measure is to save more than EUR 1.3 million annually in personnel costs
from 2021. In connection with this measure, the Company expects one-off
expenses of up to EUR 0.7 million, which will have a negative impact on
earnings in financial year 2020. In order to make the measure as socially
acceptable as possible, the staff reduction is to be carried out in
cooperation with a private transfer company.

The planned reduction in headcount is an essential part of the measures
taken by the Management Board to reduce costs and increase efficiency. The
decision was taken against the background of _aap_'s current economic
situation and to adjust to the actual market and sales situation. The aim of
the personnel measure is to streamline the Company's cost structure
sustainably and thereby increase efficiency and flexibility. In this
connection measures such as changing the stock market listing and
discontinuing parts of the standard trauma portfolio have already been
implemented in the financial year 2019.

_aap_ develops innovative platform technologies and products in response to
unmet needs and challenges in traumatology. With its three platform
technologies LOQTEQ(R) (successfully on the market since 2011),
antibacterial silver coating (in approval process) and resorbable magnesium
implants (in development) the Company is addressing precisely these needs.

_aap_ as a development-intensive company capitalizes not only self-produced
assets but also expenditure on in-house and development projects
(capitalized development costs) for which there is a high probability of
approval and economically successful marketing. Development projects must be
recognized as assets if all six criteria of IAS 38 "Intangible Assets" are
met. All six criteria apply equally to each other. Among other things, the
Company must prove the availability of technical, financial and other
resources to complete the intangible asset. All capitalized development
projects (developed in-house and acquired) must be subjected to an annual
impairment test. Any resulting impairment loss is to be recognized
immediately in the income statement in the year in which it occurs as an
impairment loss.

In the financial year 2019 _aap_ made substantial progress in its innovative
key technologies antibacterial silver coating and resorbable magnesium
implants. With regard to silver coating technology the Company received,
among other things, approval to conduct a human clinical study by the
Federal Institute for Drugs and Medical Devices ("BfArM") and a further
funding commitment of up to around EUR 2.7 million from the Federal Ministry
of Education and Research ("BMBF"). In the field of resorbable magnesium
implant technology, _aap_ was able to coordinate the regulatory approval
path with the U.S. Food and Drug Administration (FDA) to the greatest
possible extent and in a pilot animal study with the renowned Colorado State
University recorded the first very promising results.

Irrespective of the progress made in financial year 2019 and the measures
introduced to reduce costs and improve efficiency, the Company will, at
least for the foreseeable future, be dependent on further financing through
equity or debt measures. In addition, against the backdrop of the
ever-increasing regulatory requirements (conversion to MDR), there are
increasing uncertainties with regard to the duration of the approval process
and, associated therewith, the risk of the timely financing of the projects
under development. In order to take appropriate account of the above
mentioned risks, _aap_ has decided after a thorough analysis under the
leadership of the new CEO to make an extraordinary value adjustment totaling
EUR 10.8 million on the development projects antibacterial silver coating
technology and resorbable magnesium implant technology in the course of
preparing the annual and consolidated financial statements for 2019. This
non-cash effect is shown below EBITDA as an extraordinary depreciation in
the income statement 2019. Irrespective of this, the Management Board
remains firmly convinced that the two innovative key technologies,
antibacterial silver coating and resorbable magnesium implants, will be
brought to market approval, particularly in cooperation with partners and
with the help of the government grants already promised.

The progress mentioned above, especially in the financial year 2019, is
being followed with great interest by various global orthopedic companies
that have once again confirmed their interest in _aap_'s innovative silver
coating technology in talks currently underway. Specifically, the Company is
discussing in addition to joint product development and approval projects
also distribution partnerships as well as licensing deals up to the sale of
the technology for specific application areas. In the area of the resorbable
magnesium implant technology _aap_ has intensified talks with
technology-savvy investors in order to provide the financial basis for joint
further development of the technology in a timely manner. With regard to its
LOQTEQ(R) platform technology, _aap_ is in well advanced discussions on the
conclusion of a development and supply agreement with a worldwide leading
U.S. medical technology company.

In parallel, the Management Board is currently evaluating various strategic
alternatives for increasing value. These include, among other things, joint
venture agreements up to corporate transactions (e.g. mergers, share or
asset deals as well as carve-outs). These measures are being examined as
part of the Company's ongoing holistic strategic planning and associated
efforts to evaluate all available options for increasing the inherent value
of _aap_'s comprehensive trauma product portfolio and its various patented
platform technologies.

Since individual decisions in the context of this forthcoming evaluation may
have to be taken into account in the annual and consolidated financial
statements for 2019, the Company has decided to postpone publication of the
annual financial report 2019 (HGB) and the consolidated annual financial
report 2019 (IFRS) until April 30, 2020. _aap_ will comment again on any
developments in this process after the Management Board has taken concrete
decisions together with the Supervisory Board or has otherwise terminated
the evaluation of the issues.

_aap _Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market
- All German stock markets -

About _aap_ Implantate AG
_aap_ Implantate AG is a globally active medical technology company based in
Berlin, Germany. The Company develops, manufactures and markets products for
trauma. The IP-protected portfolio includes besides the innovative
anatomical plating system LOQTEQ(R) a wide range of cannulated screws. In
addition, _aap _Implantate AG has an innovation pipeline with promising
development projects such as the antibacterial silver coating technology and
magnesium-based implants. These technologies address critical and unmet
needs in trauma. In Germany, _aap_ Implantate AG sells its products directly
to hospitals, purchasing groups, and hospital groups, while at international
level it primarily uses a broad network of distributors in around 25
countries. In the US the Company pursues a hybrid distribution strategy with
its subsidiary _aap_ Implants Inc. Distribution is carried out both through
distribution agents and partnerships with global orthopedic companies. _aap_
Implantate AG's stock is listed in the General Standard segment of Frankfurt
Stock Exchange (XETRA: AAQ.DE). For more information, please visit our
website at www.aap.de [1].

*Forward-looking statement*
This release may contain forward-looking statements based on current
experience, estimates and projections of the management board and currently
available information. They are not guarantees of future performance.
Various known and unknown risks, uncertainties and other factors could lead
to material differences between the actual future results, financial
situation, development or performance of the company and the estimates given
here. Many factors could cause the actual results, performance or
achievements of _aap_ to be materially different from those that may be
expressed or implied by such statements. These factors include those
discussed in _aap_'s public reports. Forward-looking statements therefore
speak only as of the date they are made. _aap_ does not assume any
obligation to update the forward-looking statements contained in this
release or to conform them to future events or developments.

For inquiries please contact:

(MORE TO FOLLOW) Dow Jones Newswires

March 16, 2020 13:49 ET ( 17:49 GMT)

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