Frontier IP : Final Results for the year to 30 June 2020

5 November 2020

Frontier IP Group plc

("Frontier IP", the "Group" or "the Company")

Audited final results for the year ended 30 June 2020

Frontier IP is focused on the commercialisation of intellectual property

Financial highlights

• Fair value of our portfolio increased by 47% to £19,444,000 (2019: £13,252,000)
• Profit before tax increased by 78% to £4,184,000 (2019: £2,350,000)
• Total revenue and other operating income increased by 49% to £6,377,000 (2019: £4,268,000) -
  reflecting a net unrealised profit on the revaluation of investments of £5,973,000 (2019: £3,850,000)
• Revenue from services decreased by 3% to £404,000 (2019: £418,000)
• Basic earnings per share increased to 8.76p (2019: 5.77p)
• Cash balances at 30 June 2020 of £2,968,000 (2019: £1,466,000)
• Net assets per share as at 30 June 2020 of 51.0p (2019: 41.4p)

Corporate highlights

• Strong response to opportunities and challenges presented by COVID-19 includes portfolio companies taking advantage of additional UK government support and adapting portfolio company technology to meet challenges posed by the crisis
• Post period end, raised £2.3 million via an oversubscribed placing and PrimaryBid retail offer to provide firepower and nimbleness through additional investment in the Group and enable increased capacity for bridge financing and direct investment in portfolio companies
• The post period end fundraising attracting strong support from existing and a significant number of new investors
• Two new portfolio companies incorporated - Elute Intelligence Holdings Limited and AquaInSilico Lda
• Increased stake in portfolio company Celerum from 10 per cent to 33.8 per cent to support development of its nature-inspired artificial intelligence tools to improve the efficiency of logistics
• Appointed Nplus1 Singer Advisory LLP ("N+1 Singer") as the Group's sole broker. Allenby Capital remains the Group Nominated Adviser
• Team strengthened with the appointment of two specialist advisers focused on defence, and food and agritech. We also appointed a Technology Commercialisation Director and, post period end, a Software Commercialisation Director. Both posts are non-board roles

• Collaborative project with University of Cambridge to tackle gum disease awarded grant by the National Biofilms Innovation Centre

Portfolio highlights

• Strong commercial and technical progress, including industry engagement, within the portfolio overall, reflected in the increase in fair value
• Growing maturity of portfolio with a number of companies approaching inflection points reflected in faster flow of equity fund raisings:
  o Exscientia secured $60 million in Series C funding, led by new investor Novo Holdings
  o The Vaccine Group raised £680,000 and Fieldwork Robotics raised £316,000 through their first equity fund raisings
  o Molendotech raised a further equity investment of £425,000
  o Post period end, Cambridge Raman Imaging Limited attracted £250,000 equity investment in addition to winning €140,000 EU Graphene Flagship grant during the year
  o Post period end Pulsiv Solar raised £500,000 via a convertible loan, including a £250,000 investment by the UK government's Future Fund matched by the University of Plymouth Enterprise Limited and Frontier IP
  o Post-period end Elute Intelligence commercially launched Patent Reader Product following successful trials with a group of high-end users
  o Post period end, Nandi Proteins raised £720,000 via a convertible loan, including a £360,000 investment from the UK government's Future Fund, matched by Frontier IP and Shackleton Finance Limited
• Portfolio companies also made strong commercial and technical progress, including developing new and existing industry partnerships:
  o The Vaccine Group is developing vaccines for COVID-19, Ebola, Lassa fever, African Swine Fever bovine Tuberculosis and bovine mastitis, generating new commercialisable IP
  o Exscientia entered collaborative agreements with Rallybio, Bayer AG and SRI International. Behind first AI-designed drug to enter human clinical trials in partnership with Sumitomo Dainippon Pharma. Entered COVID-19 joint initiative with Diamond Light Source and Calibr to progress compounds with potential to be viable drugs to combat the disease
  o Elute Intelligence used novel technology to develop COVID-19 document reader and Patent Reader product, launched commercially post period end
  o Post period end Pulsiv Solar announced it had started work funded by major multinational to incorporate technology into new product line, was engaged with other major companies and strengthened IP position
  o Other post period end developments included Fieldwork Robotics entering into a collaboration with Bosch, Celerum supporting PlanSea Solutions and AquaInSilico working with a leading European environmental, water and waste management group

ENQUIRIES

Frontier IP Group Plc	T: 020 7332 2338
Neil Crabb, Chief Executive	[e-mail]
Andrew Johnson, Communications &	M: 07464 546 025
Investor Relations

Company website:www.frontierip.co.uk

Allenby Capital Limited (Nominated

T: 0203 328 5656

Adviser)

Nick Athanas / James Hornigold

N+1 Singer (Broker)

T: 0207 496 3000

Harry Gooden / George Tzimas

ABOUT FRONTIER IP

Frontier IP unites science and commerce by identifying strong intellectual property and accelerating its development through a range of commercialisation services. A critical part of the Group's work is involving relevant industry partners at an early stage of development to ensure technology meets real world demands and needs.

The Group looks to build and grow a portfolio of equity stakes and licence income by taking an active involvement in spin-out companies, including support for fund raising and collaboration with relevant industry partners at an early stage of development.

Chairman's Statement

Performance

The year to 30 June 2020 saw Frontier IP and its portfolio companies make strong progress despite the considerable uncertainties resulting from the COVID-19 outbreak. Chief Executive Officer Neil Crabb deals with the impact and our response in his statement, so I will limit my comments to saying that I am delighted with the responses from the Frontier IP team and our portfolio companies.

I would like to thank them for the splendid way they have reacted to the challenges and opportunities arising from the crisis.

Outside of coronavirus, highlights of the year saw the growing maturity of the portfolio reflected in an increased flow of fundraising and new industrial partnerships. A number of companies are now at important inflection points in their development. They have completed much hard toil in developing and validating their technologies and are now poised to see commercialisation materially accelerate.

Among them, of course, is Exscientia, whose artificial intelligence underpinned the first AI-designed drug to enter human clinical trials in partnership with Sumitomo Dainippon Pharma. The Company also raised $60 million through a successful Series C equity funding round during the year and signed further collaboration and commercial agreements, including with Bayer AG. Total milestone and other payments potentially due to Exscientia now come to more than £500 million.

Other successes include the significant progress made by Pulsiv Solar which is now being paid by a major

multinational to incorporate its technology to improve the energy efficiency of power converters into a new product line. The company was already collaborating with Bosch.

Building on our relationship, Bosch also entered into a collaboration with Fieldwork Robotics to support development of its agricultural robots. The Company also completed its first ever equity fund raising and entered into a new industry collaboration after the period end; it is now working with Bonduelle, a leading European produce company, to develop a cauliflower harvesting iteration of its advanced agricultural robot technology.

I was also delighted with the rapid rate of progress at our two new portfolio companies. Elute Intelligence, the first in our portfolio to be formed from an existing company rather than a university spin out, commercially launched its Patent Reader post period end, as well as providing free-to-use tools for researchers investigating COVID-19. In addition, AquaInSilico won a European Union grant to commercialise its wastewater management software tools for improving the removal of phosphorus from wastewater.

Neil talks about the work The Vaccine Group is doing to create a family of vaccines, initially for use in animals, to combat COVID-19. The company is also making significant progress in its other work developing vaccines for Ebola, Lassa fever, African Swine Fever, bovine tuberculosis and Streptococcus suis. The company and its partners have already received substantial backing from the state sector. Strong endorsement from the private sector came post period when it announced a collaboration with The Pirbright Institute and ECO Animal Health Group.

We believe our portfolio as a whole is strongly placed despite the uncertainties resulting from the virus - and as we explain in our governance statements, our companies are playing their part in tackling some of the most pressing issues of the day.

Our governance

Good governance is vital for long-term sustainable growth, and we strive to achieve the highest standards for a company our size. We adhere to the Quoted Companies Alliance Corporate Governance Code, introduced in April 2018. To see more details about how we apply the principles of the Code, see the Our Governance section of this report and our website: https://www.frontierip.co.uk/about/governance/

Results

I am delighted with how the Group has performed in the year. An increase of 78% in pre-tax profits and an increase in the fair value of our portfolio to £19,444,000 vindicate the strength of our business model.

For the year to 30 June 2020, total revenue and other operating income increased by 49% to £6,377,000 (2019: £4,268,000) as a result of a net unrealised profit on the revaluation of investments of £5,973,000

(2019: £3,850,000), principally due to the increase in fair value of Pulsiv Solar and The Vaccine Group. Revenue from services, principally board retainers and licence income decreased slightly by 3% to £404,000 (2019: £418,000) as some services were assigned to companies' own management.

Outlook

"Our team at Frontier IP is strong, and we strengthened it further with several key appointments during the year. I would like to thank our team for an excellent performance in very difficult circumstances. It has also been a particularly tough environment for our partners and I would like to express my gratitude to our key stakeholders for their resilience and for their support in growing our portfolio, which I am sure will continue to develop and thrive in the years ahead."

Andrew Richmond

Chairman