CEO Letter to Shareholders Making life's important moments possible - one breath at a time. To My Fellow Shareholders: In a year marked by global turmoil with the onset of the COVID-19 pandemic, the entire Electromed tea

important moments possible - one breath at a time.

In a year marked by global turmoil

with the onset of the COVID-19 pandemic, the entire Electromed team demonstrated an unwavering commitment to flawlessly manufacturing

and delivering our SmartVest Airway Clearance System. Despite widespread healthcare system disruption due to the

pandemic, in fiscal 2020 we improved our sales force productivity, achieved record revenue and profitability, generated strong

cash flow and increased our net cash position. Our mission of making life's important moments possible-one breath

at a time has been perhaps more important than ever as high frequency chest wall oscillation (HFCWO) therapy

with SmartVest keeps vulnerable patients out of hospitals, reducing their risk of exposure to COVID-19.

Managing Through the Pandemic

I commend our team's resilience,

dedication and response during the ongoing COVID-19 pandemic to ensure more patients breathe easier and live better with SmartVest.

In March, we implemented a comprehensive risk-mitigation program designed to protect the health, safety and wellbeing of our teammates,

clinicians and patients. Our team adjusted to staggered hours, socially-distanced workstations, remote work arrangements, mask-and-glove

protocols, virtual meetings, travel restrictions, strict sanitation practices and in some cases, furloughs - all while continuing

to serve our clinicians and patients with best-in-class customer service and differentiated SmartVest airway clearance products.

I am proud to say that we maintained uninterrupted operations, even during the most challenging phases of this crisis.

To counteract dampened face-to-face

clinician and patient interaction across the industry and lower home care referrals in the latter part of the year, we accelerated

our virtual sales and patient training efforts while elevating our direct-to-patient marketing initiatives. We also generated

awareness of Centers for Medicare and Medicaid System (CMS) waivers that temporarily relax certain rules for prescribing our devices

to the non-commercial Medicare population. These actions, along with an upward trend in physician office re-openings and clinician

activity, enabled us to exit fiscal 2020 on a positive note with our home care referrals approaching near pre-COVID-19 levels.

Despite near-term uncertainty surrounding

COVID-19, we believe we are well-positioned for a return to sustainable low double-digit revenue growth over the longer term,

as we continue to share our powerful individual patient success stories with physicians, leverage our published, independent bronchiectasis

outcomes study featuring SmartVest, position our services as an extension of the clinic office and improve the quality of our

Fiscal 2020 Financial Highlights

In fiscal 2020, we made progress in several other key areas

The Bronchiectasis Opportunity

Underpinning our enthusiasm for

long-term, sustainable, profitable growth is the largest opportunity for our airway clearance system: patients with non-cystic

fibrosis bronchiectasis (NCFB) or bronchiectasis. Bronchiectasis is a chronic, progressive disease resulting in failure to clear

sputum, leading to inflammation that progressively destroys the normal lung architecture-in particular, the elastic fibers of

bronchi. Bronchiectasis patient prevalence is growing at approximately 9 percent annually. Our goal is to gain market share and

grow annually at a faster rate. To the right is just one of the many compelling bronchiectasis patient testimonials we received

Based on 4.2 million estimated

bronchiectasis prevalence in the U.S. population in the Weycker study, we estimate that approximately 630,000 individuals could

benefit from HFCWO therapy with SmartVest. This compares to an estimate of only 77,000 patients treated with HFCWO therapy to

date. While the market is underpenetrated, bronchiectasis is experiencing a surge in clinical interest and awareness, including

the relationship to chronic obstructive pulmonary disease (COPD), commonly referred to as bronchiectasis COPD overlap syndrome

(BCOS). In addition to improving quality of life for patients, HFCWO therapy with SmartVest reduces the comprehensive cost of

care for our healthcare system by keeping patients out of the hospital.

To address this exciting market

opportunity, in the coming fiscal year we plan to:

Estimated HFCWO Market Opportunity

- Bronchiectasis Patients (U.S)

I believe our organic growth strategy

focused on the underpenetrated bronchiectasis market combined with our differentiated therapy, SmartVest, and our world-class

service will support our long-term goal of low double-digit revenue growth and sustained to improving profitability.

In conclusion, despite the impact

of the COVID-19 pandemic, we achieved record profitability and revenue in fiscal 2020. While the macro scenario remains highly

fluid and uncertain, we anticipate the COVID-19 pandemic will continue to impact our financial results and operations during fiscal

2021. As we emerge from this crisis, I believe Electromed is very well-positioned for long-term profitable growth and greater

share of the large, underpenetrated bronchiectasis market, supported by a strong balance sheet, an outstanding team, world-class

customer care and best-in-class product in SmartVest. I would like to thank our employees and clinicians for once again this year

enabling us to improve quality of life and outcomes for a greater number of patients with compromised pulmonary function. Finally,

I thank you, my fellow shareholders, for your continued support as we execute our strategic plan for Electromed.

Hansen G, Seifer F. Prevalence and incidence of non-cystic fibrosis bronchiectasis among US adults in 2013. Chronic Respiratory

Disease. 2017; 14(4):377-384.

for 2016, extrapolated from "Trends in Bronchiectasis-Among Medicare Beneficiaries in the United States, 2000 to 2007"

(Amy E. Seitz, MPH, et al. 2012).

et al. Bronchiectasis Research Registry C. Adult Patients With Bronchiectasis: A First Look at the US Bronchiectasis Research

Registry. Chest. 2017;151:982-92.