Annual Report 2021

Annual Report and Financial Statements

2021

Frontier IP aims to create high value businesses from intellectual property developed by universities, academics, scientists and engineers.

OVERVIEW

1	Highlights
3	Our Business

1. Our Portfolio: five companies and a project to watch

1. Chairman's Statement

STRATEGIC REPORT

1. Chief Executive Officer's Statement

1. Key Performance Indicators
2. Frontier IP and the United Nations Sustainable Development Goals

1. Operational Review
2. Portfolio Review

1. Financial Review
2. Key Risks and Challenges affecting the Group

OUR GOVERNANCE

29 Board of Directors

1. Committees of the Board

1. Audit Committee Report
2. Corporate Governance

1. Advisers
2. Directors' Report

1. Statement of Directors' Responsibilities
2. Independent Auditor's Report to the members of Frontier IP Group plc

OUR FINANCIALS

1. Consolidated Statement of Comprehensive Income
2. Consolidated Statement of Financial Position
3. Company Statement of Financial Position
4. Consolidated and Company Statements of Changes in Equity
5. Consolidated and Company Statements of Cash Flows
6. Accounting Policies

63 Notes to the Financial Statements

COMPANY INFORMATION

81 Five Year Record

Highlights

Financial

Fair value of our equity portfolio increased by 64% to

£31,982,000 2021

£19,444,000 2020

Total revenue and other operating income increased by 99% to

£12,668,000 2021

£6,377,000 2020

Reflecting the net unrealised profit on the revaluation of investments of

£12,306,000 2021

£5,973,000 2020

Revenue from services decreased by 10% to

£362,000 2021

£404,000 2020

FRONTIER IP GROUP PLC | Annual Report 2021 | OVERVIEW

1

Profit before tax increased by 145% to

£10,242,000 2021

£4,184,000 2020

Basic earnings per share increased to

17.47p 2021

8.76p2020

Cash balances at 30 June 2021 of

£1,992,000 2021

£2,968,0002020

Net assets per share as at 30 June 2021 of

69.8p 2021

51.0p2020

"Frontier IP and its portfolio companies made excellent progress during the year to June 2021. The results are exceptional. "

Andrew Richmond | Chairman

2	FRONTIER IP GROUP PLC | Annual Report 2021 | OVERVIEW

Highlights: continued

Corporate

• Raised £2.3 million via an oversubscribed placing and retail offer to support additional investment in the Group and to enable increased capacity for bridge financing and investment in portfolio companies
• The fundraising was firmly supported by existing shareholders and a significant number of new investors
• Team strengthened with three key appointments
• Post period end, first portfolio company IPO - Exscientia listed on Nasdaq Global Select Market raising gross proceeds of approximately $304.7 million through a public offer and a further $160 million through private placements with
  SoftBank and the Bill & Melinda Gates Foundation, with a value of $2.9 billion
• Post period end, Professor Dame Julia King, Baroness Brown of Cambridge DBE FREng FRS, joined the Board of Directors as an independent Non-ExecutiveDirector

Portfolio

• Robust commercial and technical progress, including industry engagement and increased pace of fundraisings across the portfolio, reflected by the increase in fair value
• Growing maturity of the portfolio with a number of companies reaching inflection points, reflected by increased pace of funding rounds, strengthening of management teams, and industry engagement. Fundraisings and grant awards included:
• • Exscientia closing a Series C funding round at $100 million and raising a further $225 million in a Series D round, led by new investor SoftBank. Post period end, the company raised total gross proceeds of $464.7 million through listing on the Nasdaq Global Select Market with a value of $2.9 billion
  • Cambridge Raman Imaging raised £250,000 through an equity funding round and involvement in €5 million pan-European project to develop new medical imaging technologies
  • Pulsiv completed £1.5 million equity funding round. In addition, the company converted £500,000 of debt plus accrued interest into equity, including a £250,000 loan from the UK government's Future Fund scheme
  • AquaInSilico was selected to receive $250,000 after being named as an Ocean Innovator by the United Nations Development Programme's Ocean Innovation Challenge. The company also received a €60,000 EIT RawMaterials grant
  • Fieldwork Robotics raised £675,000 through an equity funding round and received £229,000 in grants from schemes managed by Innovate UK
  • Elute Intelligence raised £250,000 in its first equity funding round

• • Nandi Proteins raised £720,000 through a convertible loan, including £360,000 from the UK government's Future Fund, matched by Frontier IP and Shackleton
    Finance
  • Alusid raised £250,000 in a convertible loan, including £125,000 from the UK government's Future Fund, matched by Frontier IP and a private investor
  • InSignals Neurotech gained €100,000 investment from
    Portugal Ventures
  • Post period end, CamGraPhIC raised £1.6 million
• Strong commercial and technical progress made by a number of portfolio companies, including developing new and existing industry partnerships:
• • Exscientia expanded its collaboration with Bristol Myers Squibb. Agreement includes upfront and commercial milestone payments potentially worth more than $1.2 billion. Post period end, Exscientia entered a $70 million collaboration with the Bill & Melinda Gates Foundation.
  • The Vaccine Group entered into first commercial agreement, with The Pirbright Institute and ECO Animal
    Health, and made good progress on developing its novel vaccine platform
  • Fieldwork Robotics secured collaboration agreements with Bosch and Bonduelle, one of the world's leading vegetable producers
  • Cambridge Raman Imaging signed a licence with Motic, a leading manufacturer of medical imaging devices
  • Elute Intelligence launched its Patent Reader product following successful pilot with dedicated user group comprising multinationals, high-tech SMEs and professional intellectual property service providers
• Steps taken to strengthen leadership and teams across portfolio to oversee scale up of companies:
• • Pulsiv appointed former Aixtron and Arm executive Darrel Kingham as Chief Executive Officer, Dr Zaki Ahmed as Chief Strategy Officer, and announced appointment of Adam Westcott as Chief Financial Officer
  • The Vaccine Group appointed GALVmed Chief Scientific Officer Jeremy Salt as Chief Executive Officer. He is a former senior director for the world's biggest animal health group Zoetis
  • Nandi Proteins appointed David Flower, a former senior director with Boon Rawd Brewing Company and Kerry
    Foods, as Chief Executive Officer
  • Alusid appointed David Taylor, founding chief executive for both English Partnerships and Amec Developments, property entrepreneur and Pro-Chancellor of the
    University of Central Lancashire to its board of directors as the University's representative

Our business

FRONTIER IP GROUP PLC | Annual Report 2021 | OVERVIEW	3

Our Key Strengths

• Strategy based on proving the commercial value of IP before significant financial commitment is made
• Portfolio offers opportunity for ongoing growth in equity valuation
• Innovative and capital efficient business model
• Proactive sourcing of potential spin outs
• Founder equity in return for hands-on commercialisation support before capital raising
• Strong relationships with academics, universities and industry partners

Our approach

IDENTIFY

OUT SPIN

UP SCALE

FUNDING

EXIT

Identify and evaluate commercialisable intellectual property generated by academics, universities and other partners

Take material equity stakes in return for commercialisation services and proactive, hands-on support

Drive industry engagement and validation to prove technology works, can be scaled up and meets the demands or needs of real-world customers

Raise funding for further development mostly from third party investors as technical and commercial milestones are achieved

Realise the value generated in portfolio companies