InvestorNewsletter

Dear Shareholders,

The first half of 2015 was an exciting time for Osprey as we made substantial progress on our goals for the year. In early July we announced completion of the AVERT randomized clinical trial that is intended to strengthen the marketing claims for our FDA cleared AVERT System. We are seeking five additional claims – dye savings, reflux reduction, image quality, CIN reduction and hospital cost savings. We anticipate results from the trial to be available in Q4 2015.

I am pleased that our clinical enrolment was completed on time and on budget. We had strong support from the participating physicians who enroled over 500 patients in the last 12 months. In addition, Osprey’s clinical team did an outstanding job of site selection, training and support to accomplish this significant milestone. We look forward to completing the data analysis and announcing the results later this year.

Our pilot sales efforts in Texas continue to build strong momentum. Our initial sales goals are to understand the keys to market adoption (qualitative metrics) and to show rapid market adoption (quantitative metrics). We have made strong progress in understanding key qualitative metrics such as the five step selling process from introduction to full hospital adoption of the AVERT. We have also refined the sales message to accelerate this process as we expand to additional physicians and hospitals. Our quantitative metrics have also been strong with three consecutive quarters of 100% unit growth. These qualitative and quantitative metrics will serve as the foundation for the hiring of a full 25-30 person US sales organization in 2016. We are confident that this well-considered, tried and tested pilot study in Texas will act as an important blueprint for rapid scale-up of our sales efforts in the US.

Osprey Completes AVERT™ Trial Enrolment

MIKE McCORMICK

MESSAGE FROM THE PRESIDENT AND CEO

Continued on page 2

11TH Edition, September 2015

DyeSavings

ImageQuality

RefluxReduction

CINReduction

ExpandedAVERT

MarketingClaimsHospital

CostSavings

Osprey announced in July that it had successfully completed patient enrolment in its AVERT IDE Clinical Study. The study enroled 578 patients at 40 sites across the US, Europe and Australia.

The AVERT Trial is a randomized, controlled study aimed at strengthening the claims of the already FDA cleared AVERT System. The Company is seeking to support an additional five marketing claims – dye savings, reflux reduction, image quality, CIN reduction, and hospital cost savings.

Monitoring of sites, complete data cleaning, and adverse event adjudication will occur prior to the database being locked. After data collection and analysis, we anticipate an FDA submission for marketing claims to follow. We have experienced positive physician feedback for the AVERT System in proactively minimizing patient contrast volumes in support of current practice guidelines. The Company is already in the planning stages for expanding its sales team in preparation for full US commercialization in 2016.

Osprey’s pilot sales program in Texas continues to gain

momentum, providing valuable experience into understanding the sales adoption process on an individual hospital level. For the period ending June 30, 2015 the Company reported its third consecutive quarter of 100% unit sales growth. Osprey’s sales team has been able to gain new hospital accounts while also driving expanded volume with existing customers. Osprey is currently tracking to meet its goal of achieving a 2x sales growth rate per quarter throughout 2015.

The lessons learned from Osprey’s pilot sales program in Texas serves as the blueprint for hiring a full US sales force beginning in 2016. One of the important insights from this effort so far has been targeting of the pre-op nurses, in addition to attending physicians, in the sales process. It is often the pre-op nurse who identifies patients that could benefit from the AVERT System. To facilitate this deeper selling process, Osprey has hired a clinical sales specialist in Texas who is responsible for educating the cath lab staff and expanding physician users of the AVERT System.

In February 2015 Osprey hired a second sales representative located in Houston. This territory is gaining sales traction with product evaluation being conducted in two of the largest, multi-hospital systems in the Houston area (Methodist & Memorial Hermann), which consist of 15 separate hospital facilities. Osprey has already successfully obtained its first sales order from one of the Memorial Hermann hospitals. Osprey anticipates that momentum from its Houston territory will continue to drive sales growth as the company commences hiring a full US sales force in 2016.

Texas Sales Update

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The two top enroling sites in Osprey’s AVERT Trial were North Mississippi Medical

Center and North Carolina Heart & Vascular. Osprey recently caught up with site principal investigators, Dr. Barry Bertolet (North Mississippi Medical Center) and Dr. Lee Jobe (North Carolina Heart & Vascular) and asked them about their views on the dangers of contrast dye in patients with pre-existing kidney disease and the role of the AVERT System.

In your opinion, how important is it for the physician to minimize contrast use as ‘low as reasonably possible’ in patients undergoing a PCI procedure who have pre-existing kidney damage?

Dr. Bertolet: Associated with the development of CI-AKI is an increase in the length of stay in hospital and cost of care, as well as there is an increase in the short-term mortality. So the stakes are quite high for these patients. All of these issues are avoidable with simple steps, such as proper hydration and minimization of the amount of contrast used.

Dr. Jobe: CI-AKI is one of the most common complications of catheterization procedures, and is one of the most easily preventable. It is well known that some of the factors that can predict patients who may suffer from AKI as a result of their procedure include baseline renal status, volume of contrast used, and certain comorbid conditions, including diabetes. Patients who suffer AKI may have prolonged hospitalizations and possibly even additional treatments such as temporary or permanent dialysis, depending upon the degree of renal damage. Anything that we can do to reduce this risk will only benefit our patients in terms of morbidity, mortality, and economic impact on health care delivery.

Given your experience in the AVERT Trial, what role do you think the AVERT System plays in this?

Dr. Bertolet: The AVERT System takes the individual variability of contrast administration out of the equation. With this system there is a controlled amount of contrast delivered which allows adequate visualization of the coronaries with a minimal amount of contrast. I believe that physicians would find it hard to believe that you can do an adequate diagnostic heart catheterization using less than 30 mL of contrast, but that is clearly what the AVERT System allows you to do.

Dr. Jobe: The AVERT System can play an important role in minimizing contrast exposure for patients at risk for CI-AKI, by providing a uniform, repeatable, and measurable mechanism to reliably reduce contrast delivery without affecting image quality.

Our R&D team is constantly looking for ways to improve the usability and performance of our dye savings products and we recently announced CE Mark of the DyeVert™ System. This is a self-adjusting system that has sterile, single-use disposable components that does not require the use of a non-sterile control box. The system has been used in over 30 clinical cases in Germany showing dye savings, consistent image quality and physicians report it is easier to use than the AVERT System. The R&D team is working on creating a wireless smart syringe to interface with the DyeVert system, which we anticipate introducing to the US market in the back half of CY 2016. Prior to US full commercial availability we plan initiating pilot sales of the DyeVert system in Europe in 2016.

The period was an exciting and successful one for the Company and we are pleased to report such rapid progress. I would like to thank the employees of Osprey for their passionate pursuit of therapies to reduce the risk of dye induced kidney damage and to you, our investors, for your continued support.

Mike McCormickMike McCormick, Osprey Medical President & CEO

Shareholder Update Continued...

Interview with Top Enroling AVERT Investigators

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Osprey Introduces DyeVert™ (Self-Adjusting) System

AVERT Peripheral Study Publication

Osprey has introduced a next-generation product called DyeVert™ that offers dye

volume reduction in a self-adjusting, easy-to-use, all disposable design (no external control box or pin-adjustments needed). The DyeVert System expands the Company’s R&D pipeline, and extends its patent portfolio. So far, more than 30 human clinical cases (coronary and peripheral angiography) have been performed in Germany. Physicians have been reporting initial performance success with dye savings, reflux reduction and consistent image quality.

DyeVert already has CE Mark in Europe. Osprey is currently evaluating distribution partners in Europe to commence a pilot sales effort expected to begin in Q1 2016. Osprey intends to market this device in the US in 2016, once the product has been updated to be compatible with the Smart Syringe and Contrast Monitoring System, which is a key feature of the currently commercialized AVERT Plus System.

A study, which used the AVERT System in patients undergoing peripheral angiography,

was recently accepted for publication in the journal: Catheterization and Cardiovascular Interventions (CCI). The lead author of this publication, Dr. Anand Prasad (San Antonio, Texas), performed a first-in-man clinical study to evaluate the AVERT System’s dye reduction performance in 22 patients undergoing lower extremity (leg) X-ray angiography procedures. This publication also included bench model data, which was analyzed by Dr. David Kaye’s research group at the Baker IDI Heart & Diabetes Institute in Melbourne.

Osprey recently asked Dr. Prasad a series of questions regarding his pending publication:

Your publication is relatively unique in that it addresses contrast usage in the peripheral circulation. Unlike the coronary bed of the heart, why do you think there has not been a lot of research done in this area until now?

Dr. Prasad: There are relatively few published studies on contrast reduction strategies and contrast induced acute kidney injury (CI-AKI) in the literature. As the number of endovascular procedures increases – along with the growth in the prevalence of diabetes, we will see CI-AKI become more of an issue in the peripheral realm. Some centers have used CO2 (carbon dioxide gas) imaging to reduce the need for iodinated contrast dye. Unfortunately, the technique can be cumbersome and has been associated with complications. For these reasons it is not widely utilized. Iodinated contrast remains at the heart of endovascular therapies for PAD. As overall awareness of CI-AKI grows, we should see more research in the peripheral area.

Do you think that CI-AKI is as big of a problem in the lower extremity as it is in the heart?

Dr. Prasad: We have recently completed a systematic review of CI-AKI in the peripheral arena. Our analysis would suggest that the rates of CI-AKI are 8-10% for all comers undergoing peripheral angiography or intervention. However, in a handful of studies which included high-risk individuals – those with severely impaired baseline renal function – the rates were higher, approaching 40%. Given the connection between diabetes, renal disease, and vascular disease, CI-AKI in the context of lower extremity procedures is a major problem.

What were the key take-aways of your study publication?

Dr. Prasad: Our goal of the paper was to see if use of the AVERT System was feasible during peripheral angiography and interventions. The current strategies of dye reduction in the legs are to dilute contrast material with saline, which can make visualization of vessels – particularly large vessels or distal pedal vessels, challenging. The AVERT was validated in the coronary circulation, and we wanted to know if contrast volume could be saved without compromising image quality in lower extremity procedures. In the study we demonstrated a 37% reduction in contrast volume administered to the patients without significantly compromising image quality. We also found, through collaboration with Prof. David Kaye in Melbourne Australia, that reflux of contrast dye occurs in the lower extremities during injection and we can reduce reflux by using the AVERT System.

Lower ExtremityPeripheral Artery Disease (PAD)

Iliac Arteries

FemoropoplitealArteries

InfrapoplitealArteries

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FORWARD LOOKING STATEMENTS

This document contains certain forward-looking statements, relating to Osprey Medical’s business, which can be identified by the use of forward-looking terminology such as “promising,” “plans,” “anticipated,” “will,” “project,” “believe,”“forecast,” “expected,” “estimated,” “targeting,” “aiming,” “set to,” “potential,” “seeking to,” “goal,” “could provide,” “intends,” “is being developed,” “could be,” “on track,” or similar expressions, or by express or implied discussions regarding potential filings or marketing approvals, or potential future sales of product candidates. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no assurance that any existing or future regulatory filings will satisfy the FDA’s and other health authorities’ requirements regarding any one or more product candidates nor can there be any assurance that such product candidates will be approved by any health authorities for sale in any market or that they will reach any particular level of sales. In particular, management’s expectations regarding the approval and commercialization of the product candidates could be affected by, among other things, unexpected clinical trial results, including additional analysis of existing clinical data, and new clinical data; unexpected regulatory actions or delays, or government regulation generally; our ability to obtain or maintain patent or other proprietary intellectual property.

AVERT™ System Regulatory Status: • United States: U.S. FDA 510(k) cleared for the intended use of controlled infusion of radiopaque contrast media

for angiographic procedures. • Europe: CE Marked • Australia: ARTG Listed • New Zealand: MedSafe Listed

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Osprey Medical Inc.5600 Rowland Road

Suite 250Minnetonka, MN 55343

Phone: 952.955.8230www.ospreymed.com

Australia Media RelationsRebecca Wilson

Buchan ConsultingPhone: 613.9866.4722

rwilson@buchanwe.com.au

Osprey, AVERT and DyeVert™ are trademarks of Osprey Medical, Inc.©Osprey Medical, Inc. 2015. All Rights Reserved

U.S. Securities StatementThe shares of Osprey Medical have not been registered under the Securities Act of 1933 (the “U.S. Securities Act”) and may not be offered, sold or delivered in the United States, or to, or for the account or benefit of, any U.S. Person, as such term is defined in Regulation S of the U.S. Securities Act.

Osprey’s Limb Recovery Trials CompletedOsprey Medical has completed its 20 patient randomized study to evaluate the

effectiveness of its Limb Recovery System in patients with diabetes suffering from life or limb threatening foot infections. This randomized efficacy trial followed a smaller, five-patient pilot safety study that was completed in late 2012. Osprey received A$1.1 million grant in 2012 from the Victorian Government’s Market Validation Program to conduct these studies to investigate the ability of the system to deliver existing antibiotic therapy in a more targeted and aggressive manner in the infected limb of the patient. The clinical trial results were presented by Associate Professor Paul Wraight at the 7th International Symposium on the Diabetic Foot, in The Hage, Netherlands last May.

The results of these studies showed that the antibiotic therapy delivered by Osprey’s Limb Recovery System was both tolerable and safe in this sick patient population. Unlike the single-arm safety study, the larger randomized study compared the effectiveness of the treatment to a control arm using standard dose intravenous antibiotic delivery. The effectiveness of the therapy to reduce bacterial load (colony formation units) in tissue samples collected over a three-day period after administration of the therapy was consistent with initial observations seen in the pilot trial. Bacterial loads were reduced in both groups, however the treated group received 10% of the antibiotic load focally

through the Limb Recovery System as compared to the control group. Although not a hypothesized end point of the study, major adverse events such as amputations did not show a significant difference between the groups.

Mike McCormick, Osprey President and CEO, said, “We are pleased with the study results showing that our technology holds promise, although there still remain questions of antibiotic selection and dosing. We feel strongly that our delivery technology platform works well for this application and patient population.”

“Ultimately, the move forward will be to conduct additional clinical trials to evaluate the type of antibiotic drug and dosage guidelines to be used in this patient population. In order to do this, we would look to collaborate and partner with a drug manufacturer.”

“In the meantime, we plan to submit our Limb Recovery System to the US FDA for clearance as a stand-alone delivery system. We feel that obtaining clearance as a stand-alone delivery system would accelerate our ability to identify and collaborate with a potential pharma partner.”

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