ALM.L Regulatory News (ALM)

FOR RELEASE ON 28 APRIL 2015

Allied Minds plc

Annual Results Release

Allied Minds plc (LSE: ALM) ("Allied Minds" or the "Group" or the "Company"), an innovative US-focused science and technology development and commercialisation company, today announces its annual results for the year ended 31 December 2014.

highlights

Period Highlights

Corporate

Completed successful initial public offering (IPO), and admission to the premium listing segment of the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange (LSE), raising proceeds of $155.0 million.

New Businesses

Formed and funded four new businesses:

• Allied-Bristol Life Sciences (ABLS), in collaboration with Bristol-Myers Squibb, to identify and foster research and pre-clinical development of biopharmaceutical innovations

• Seamless Devices, with technology from Columbia University, to develop a novel signal processing technique for analog to digital converters

• Percipient Networks, with technology from The MITRE Corporation, to develop next-generation security technologies for enterprise network defence

• Whitewood Encryption Systems, with technology from Los Alamos National Laboratory, to develop the next-generation systems of data encryption that leverage advanced quantum cryptography technologies

Team

Hired additional key senior leadership at Allied Minds and its subsidiaries, including the first General Counsel of the Group, a new Vice President to lead the partnerships with US research universities, and new experienced CEOs at each of ABLS, Federated Wireless, Novare Pharmaceuticals and Optio Labs, as well as an overall increase of more than 90 new employees and consultants during the year

Investment

Attracted third-party investment and grants directly into several subsidiaries, including:

• Spin Transfer Technologies, in connection with a $70.0 million equity financing

• Optio Labs, in connection with a $10.0 million equity financing

• SiEnergy, which was awarded a $2.65 million US government ARPA-E REBELS grant

Valuation

Increased Group Subsidiary Ownership Adjusted Value (GSOAV) from $367.3 million to $488.0 million, an increase of $120.7 million, or 32.9%

Subsidiary Milestones

Achieved numerous technical milestones, including:

• STT completing its first phase of integration of magnetic and CMOS wafer technology to demonstrate the technology's capability to integrate with existing fabrication processes standard in the industry

• SciFluor advancing two lead compounds through key in-vivo, pre-clinical tests, successfully testing its retinal disease lead in a leading choroid neovascular study in rabbits, and successfully testing its lead focused on neurological disease through an agency within the US National Institutes of Health (NIH)

• RF Biocidics quadrupling revenues during 2014 to $6.5 million, acquiring a 28.5% interest in its supplier Stalam SpA in Italy, a manufacturer of radio frequency equipment, and successfully launching its new fourth generation APEX machine

• Precision Biopsy continuing development of its commercial system in preparation for eventual regulatory submissions, successfully completing in-vivo human feasibility study in patients undergoing prostatectomies, and additional testing of ex-vivo post-prostatectomy showing favourable results when compared to traditional pathology

• LuxCath demonstrating real time heart lesion visualisation proof of concept system in large animals using LuxCath catheter system, expanding potential applications by incorporating LuxCath optics into leading 3rd party ablation catheters, and demonstrating real-time tissue contact assessment as well as cardiac lesion progression monitoring in animals, all while preparing for First-In-Man studies with a leading cardiologist in 2015

Intellectual Property

Received grant of numerous patents, including two patents granted by the US Patent and Trade Office to SciFluor for claims covering novel compounds for retinal and neurological diseases

Partner Network

Welcomed three new universities and seven new federal laboratories to the Allied Minds partner network

Financial Highlights

* includes excess cash in form of fixed income securities

Post-Year-End Highlights

• In February 2015, Allied Minds formed and funded BridgeSat, in collaboration with The Aerospace Corporation, Draper Laboratory, Massachusetts Institute of Technology Assistant Professor Dr. Kerri L. Cahoy and the graduate student team in the Space, Telecommunications, Astronomy, and Radiation (STAR) Laboratory, to develop an optical connectivity system that aims to increase the speed, security and efficiency of data transmissions from Low Earth Orbit (LEO) satellites compared to traditional radio frequency solutions

• In April 2015, SciFluor successfully raised $30.0 million in a Series A preferred stock financing. Significant participants in the funding round were Invesco Asset Management and Woodford Investment Management, demonstrating their continued support for the commercialisation model of academic and federal research pioneered in the US by Allied Minds

• In April 2015, Optio Labs purchased the assets of Maryland-based security company Oculis Labs, and its CEO, Dr. Bill Anderson, joined Optio Labs as Chief Product Officer. Oculis Labs develops products that protect data displayed on a user's computer and mobile device screen from visual eavesdroppers

• In April 2015, the Federal Communications Commission (FCC), in a unanimous decision, approved the formal Rule & Order governing the dynamic sharing of federal spectrum in the 3.5 GHz band, thereby ensuring the necessary regulatory authority for Federated Wireless to go to market with its proprietary Spectrum Access System

Commenting on the Group's annual results, Mark Pritchard, Executive Chairman of Allied Minds, and Chris Silva, Chief Executive Officer of Allied Minds, jointly said:

"2014 was a year of significant milestones for the Group, with strong performance and third-party equity investments driving a meaningful increase in the value of the Group.

Our successful initial public offering (IPO) on the Main Market of the London Stock Exchange, raising gross proceeds of $155.0 million, was the highlight of the first half of 2014 and provided the necessary capital to support our business strategy and long- term growth.

Our significant expertise across science and technology disciplines, highly skilled workforce and capital resources enabled Allied Minds to further build upon our strong foundations. Since the beginning of 2014, Allied Minds has attracted third-party investment and grants into Spin Transfer Technologies (STT), Optio Labs, SiEnergy, Allied-Bristol Life Sciences (ABLS) and SciFluor. Allied Minds formed the ABLS partnership with Bristol-Myers Squibb (BMS), to create 10 new businesses that aim to develop novel biopharmaceutical assets. Further, we established collaborations with additional US universities and US federal laboratories that led to the formation of new businesses, including Seamless Devices, Percipient Networks, Whitewood Encryption Systems and BridgeSat, and enabled further progress in scientific research and development for the commercialisation of products in our portfolio.

Allied Minds is building a diversified portfolio of businesses in the life and high-technology sectors. We believe that the US continues to produce a wealth of potentially world-class intellectual property from its universities and federal government laboratories. Leveraging our unparalleled network of universities and federal government laboratories and our proven management approach, Allied Minds is well-positioned to continue backing and developing IP-based early-stage projects and businesses to achieve growth and value creation over the medium and long-term."

In compliance with Listing Rule 9.6.3, the following documents have today been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM :

· Annual Report and Accounts for the year ended 31 December 2014; and

· Notice of 2015 Annual General Meeting.

Printed copies of these documents together with the Form of Proxy have been posted to shareholders today. Copies are also available electronically on the Investor Relations section of the Company's website at http://www.alliedminds.com/investors/reports-presentations.

The 2015 Annual General Meeting will be held at 2pm on Thursday 28 May 2015 at the offices of DLA Piper UK LLP, 3 Noble Street, London, EC2V 7EE.

The Company also announces today that Mr. Peter Dolan will be appointed to the role of Non-Executive Chairman of the board of directors of the Company, with effect from the conclusion of the Company's Annual General Meeting on 28 May 2015. Mr. Dolan will replace the current Executive Chairman, Mr. Mark Pritchard, who will remain on the Board in an executive capacity in the short term but intends to step down from the Board later in the year, although he is expected to continue to be actively engaged with the Company. A separate RIS announcement has been released to the market at the same time as the release of the Company's full year results.

For more information, please contact:

Allied Minds plc www.alliedminds.com

Mark Pritchard, Executive Chairman +1 617 419 1800

Chris Silva, Chief Executive Officer +1 617 419 1800

FTI Consulting

Ben Atwell, Matthew Cole +44 (0) 20 3727 1000

Further information on Allied Minds is available on our website: www.alliedminds.com

Notes

(i) Nature of announcement

This Annual Results Release was approved by the directors on 28 April 2015. The financial information set out in this Annual Results Release does not constitute the company's statutory accounts for 2014 or 2013. Any references to page numbers in this announcement are to pages within the Annual Report and Accounts. Statutory accounts for the years ended 31 December 2014 and 31 December 2013 have been reported on by the Independent Auditor. The Independent Auditor's Reports on the Annual Report and Financial Statements for 2014 and 2013 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2013 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2014 will be delivered to the Registrar when due.

 (ii) Forward looking statements

This Annual Results Release and the Annual Report and Accounts contain statements that are or may be forward-looking statements, including statements that relate to the company's future prospects, developments and strategies. The forward-looking statements are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from current expectations, including, but not limited to, those risks and uncertainties described in the risk management section. These forward-looking statements are based on assumptions regarding the present and future business strategies of the company and the environment in which it will operate in the future. Each forward-looking statement speaks only as at the date of this Annual Results Release. Except as required by law, regulatory requirement, the Listing Rules and the Disclosure and Transparency Rules, neither the company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

strategic report

Chairman's Report

It gives me great pleasure to present our first annual results release as a public company and to welcome you as a shareholder in Allied Minds plc.

I am pleased to note that 2014 was a year of significant milestones for the Group, with strong performance and third-party equity investments driving a meaningful increase in the value of the Group. Both the Group and its subsidiary businesses had a very active year. The execution of a successful initial public offering (IPO) on the Main Market of the London Stock Exchange, raising gross proceeds of $155.0 million, was the highlight of the first half of 2014, and provided the Group with the capital necessary to support its business strategy and long- term growth.

Investment Model and Opportunity

The funding of basic research to generate new intellectual property (IP) is now largely driven by government sources, be it through higher education systems or directly funded research bodies. Once created, these ideas require an effective, efficient and sustainable channel to develop and mature into products or services which can benefit the wider economy.

A strong economy requires innovation to drive new products, new markets and ultimately enhance productivity and promote employment. There are a number of paths to commercialising promising technology, the most obvious being the formation of a new company. The disruptive force of start-ups has been shown to be a significant driver of innovation and an important and necessary feature of productive, growing economies.

In our experience there is no shortage of high-quality IP being generated by research institutions, particularly in the United States where Allied Minds operates. What is often lacking is an active and supportive eco-system to enable start-ups to mature and evolve into high-growth, impactful and valuable companies. Building a successful start-up is not easy and requires not only great ideas, but also high-quality management and consistent access to capital, ideally delivered within a model which can also ensure high-fidelity control and governance. Above all, start-ups often require considerable time to mature in order to truly deliver value.

Competition for investment funds amongst different asset classes is driving the need for shorter investment time frames. Few venture funds have the flexibility or the operational emphasis to focus on early-stage investment in IP-centric projects. This has meant that many venture investors, particularly in the US, have increasingly focused on internet and media deals with the inevitable escalation of asset valuations. True early-stage investment in IP-based start-ups still remains a relatively rare commodity.

I believe we are seeing the emergence of a new type of investment model to help address this problem, which is better suited for building the next generation of technology companies and seeks to deliver above average returns for investors. These public venture companies focus on developing portfolios of IP-based early-stage start-ups and seek to help build them into companies over a much longer time horizon, providing capital and management support along the way.

I am proud to say that Allied Minds has been at the forefront of pioneering this model in the US and is its leading proponent. The United States is the most important market in the world for both generating valuable technology and in consuming the end product or services. The market opportunity facing our company is truly enormous; we are the market leader in the leading market.

In utilising the strengths of our investment model and successfully executing to our strategic plan, I believe there is every opportunity to take Allied Minds to the next level as one of the most significant and valuable global technology driven businesses.

People

During the year and in anticipation of our IPO, we reviewed the Board composition and welcomed two new independent Directors, Peter Dolan and Jeff Rohr. Peter has 30 years of operating experience, including 18 years at Bristol-Myers Squibb, where he served as Chairman and CEO. He is currently the Chairman of the Board of Trustees of Tufts University in Massachusetts. Jeff has 30 years of senior management experience at Deloitte LLP, having last served in the role of Vice Chairman and Chief Financial Officer.

In order that we fully comply with UK corporate governance guidelines, the Group Chairman needs to be an independent director and accordingly I will be standing down at our forthcoming Annual General Meeting. I am delighted to report that Peter, who currently serves as the Senior Independent Director, has agreed to transition to the role of Non-Executive Chairman. I will remain on the Group Board in an executive capacity in the short term but intend to step down from the Board later in the year, although I expect to stay actively engaged with the Group. The Nomination Committee is actively considering adding an additional independent director in the near future.

We are fortunate at Allied Minds to have a dynamic and dedicated group of people both at the corporate level and at our subsidiary businesses who are all determined to build further on the success we have had to date. The Group would not be in the position it is today without the contributions of our employees and, as always, I am proud of and thankful for their efforts. On behalf of the Board I also want to express our particular thanks to those employees directly involved in the stock market listing for their tremendous hard work and dedication.

Finally, I would like to formally note my thanks to all the Group's stakeholders, but particularly for the strong support from shareholders for the Group's IPO and subsequent subsidiary financings.

Outlook

It has been both a highly active and exciting year for the Group. I believe that the Group's track record and expertise in its field, coupled with extensive US university and US federal research institution partnerships, and strong balance sheet, leaves Allied Minds well placed to continue to generate significant value for shareholders over the medium and long term. I look forward to the future with much confidence.

Mark Pritchard

Executive Chairman

CEO's Report

I am pleased to present my first report as Allied Minds plc's CEO. Allied Minds has been at the forefront of developing a US-based public venture company that creates, invests in, and actively manages high-potential technology businesses. Prior to our London Stock Exchange listing on 25 June 2014, Allied Minds dedicated itself to building a strong foundation to this purpose. Before our listing, we created and managed 18 subsidiary businesses; employed more than 200 people, of which 125 held advanced degrees, including 65 PhDs; and developed a robust pipeline emanating from a network of 64 leading US universities and federal research centers of excellence. During the IPO roadshow, the Chairman and I outlined Allied Minds' near-term objectives, which were: to invest in (with third party participation) the acceleration of key subsidiary businesses; to create the Group's first corporate partnership with a major international conglomerate; to progress the commercial development across our portfolio of businesses; and to create new high-impact businesses. I am happy to report that Allied Minds accomplished all of these objectives.

The Group's significant expertise across a range of science and technology disciplines, its highly skilled workforce, as well as its capital resources, allowed it to expand upon its strong foundations. Since mid-2014, Allied Minds attracted third-party investment and grants and co-invested $123 million into Spin Transfer Technologies (STT), Optio Labs, SiEnergy, Allied-Bristol Life Sciences (ABLS) and SciFluor. In August 2014, we formed ABLS, a partnership with Bristol-Myers Squibb (BMS), to create 10 new businesses that aim to develop novel biopharmaceutical assets. Further, the Group established collaborations with additional university and federal labs that led to the formation of new businesses; and continued to progress ongoing scientific research and development for the commercialisation of products in its portfolio.

Allied Minds is building a diversified portfolio of businesses in the life and high-technology sectors. I believe that the US continues to produce a wealth of potentially world-class intellectual property from its universities and federal government laboratories, and that the Group is well-positioned to continue to back IP-based early-stage projects and businesses given its strong track record, patient development timelines, strong management and cash position. The Group aims to achieve growth and value creation over the medium and long term as its subsidiary businesses' products and services mature through the commercialisation cycle.

Milestones Achieved

Allied Minds has access to an extensive array of intellectual property and technology opportunities in the US through its network of universities and federal government laboratories. In 2014, our partner network grew to 68 partners, to include the addition of three new universities and seven new federal laboratories: University of Massachusetts, Lowell; Worcester Polytechnic Institute; University of Texas, San Antonio; Los Alamos National Laboratory; Oak Ridge National Laboratory; Pacific Northwest National Laboratory; Sandia National Laboratories; Georgia Tech Research Institute; MITRE National Cyber Security Centre of Excellence; and Charles Stark Draper Laboratory.

The partner network and technology pipeline led the Group to form three new businesses:

• Seamless Devices, with technology from Columbia University, to develop a novel signal processing technique for analog to digital converters;

• Percipient Networks, with technology from The MITRE Corporation, to develop next-generation security technologies for enterprise network defence; and

• Whitewood Encryption Systems, with technology from Los Alamos National Laboratory, to develop next- generation systems of data encryption that leverage advanced quantum cryptography technologies.

2014 also marked the year that we completed our first corporate partnership. We teamed with BMS to form ABLS to identify and foster research and pre-clinical development of biopharmaceutical innovations. ABLS plans to create 10 subsidiary companies, each developing a novel biopharmaceutical asset with the intention of exiting the subsidiary business to BMS at the end of pre-clinical development.

Our subsidiary businesses progressed well in 2014, achieving numerous technical milestones. Notably, STT completed its first phase of integration of magnetic and CMOS wafer technology, demonstrating the technology's capability to integrate with existing fabrication processes that are standard in the industry. The Group also saw significant growth in its intellectual property estate, receiving grant of numerous patents, including two by the US Patent and Trade Office to SciFluor for claims covering the novel compounds for retinal and neurological diseases.

Allied Minds attracted third-party investment and grants directly into several subsidiaries, including a $70.0 million equity financing in STT, a $10.0 million investment in the formation of ABLS, a $10.0 million equity financing in Optio Labs, and a $2.65 million US government ARPA-E REBELS grant for SiEnergy.

The Group Subsidiary Ownership Adjusted Value increased to $488.0 million as of 31 December 2014 from $367.3 million at 31 December 2013, an increase of $120.7 million, or 32.9%.

Continuing Momentum

Allied Minds has continued this progress into 2015. The Group recently announced the formation and funding of BridgeSat, which is developing an optical connectivity system that aims to increase the speed, security and efficiency of data transmissions from Low Earth Orbit (LEO) satellites compared to traditional radio frequency solutions. BridgeSat was formed in collaboration with The Aerospace Corporation, Draper Laboratory, Massachusetts Institute of Technology Assistant Professor Dr. Kerri L. Cahoy, and the graduate student team in the Space, Telecommunications, Astronomy, and Radiation (STAR) Laboratory.

In addition, SciFluor recently raised a $30.0 million equity financing, which included $25.2 million of third- party funds, to commence clinical trials of its patent-protected compounds in retinal and neurological diseases.

The Group also has two additional transactions near completion. ABLS I, LLC was formed to execute on the first project approved for investment under our ABLS partnership with BMS. This project involves licensing intellectual property with respect to prostate oncology from an Ivy League institution, and proceeding to pre-clinical evaluation and development. In addition, ABLS II, LLC was formed to execute on a second project approved for investment. This project involves licensing intellectual property with respect to fibrotic diseases from a second Ivy League institution, and proceeding to pre-clinical evaluation and development.

The Group is currently assessing new technologies we believe can have a significant commercial impact. We have 13 technologies in final due diligence and 89 technologies in early due diligence. The Group expects that its significant technology pipeline is likely to lead to the creation of a number of new subsidiaries during the remainder of 2015, and aims to form and fund 5 to 10 new projects annually.

We continue to scale and add resources at the Group and its subsidiary businesses. Since the IPO, we have added an additional 98 employees and contractors across our businesses. Our total workforce has reached 298 employees and contractors, of which 180 hold advanced degrees, including 87 PhDs. We intend to strengthen our highly skilled workforce as business needs require.

Outlook

As we continue to build from our strong foundation, the momentum we achieved with a successful IPO, and the meeting of the near-term goals set out during the IPO process, I believe Allied Minds is well positioned for meaningful further growth. In 2015, we will continue to focus on the commercial advancement of our subsidiary businesses; intend to invest further in our businesses and together with third-party investment where appropriate; expand our portfolio of high-impact businesses; and add key industry managers and expertise to the Group. Importantly, as the Group and the subsidiary businesses mature, we aspire to attract new corporate alliances, which we believe will further validate our model and the commercial potential of the subsidiaries. Future corporate collaborations could include co-development agreements, licensing, joint ventures, and direct equity investment. The Company and its businesses are well positioned for continued execution excellence, commercial maturation and expansion, which should result in increased value for shareholders over the medium and long term. In closing, I believe the outlook for Allied Minds is strong.

Chris Silva

Chief Executive Officer

Company Overview

Allied Minds is an innovative US-focused science and technology development and commercialisation company. The Group commenced operations in 2006 to invest in and advance science and technology innovation developed at many of the leading US universities. The Company's business model is to form, fund, manage and build start-up companies which undertake research and product development and ultimately to commercialise scientific research and innovations emerging from US universities, and scientific research and innovations emerging from US federal research institutions and laboratories.

Allied Minds' strategy is to build a significant and diversified group of businesses and achieve strong growth over the medium to long term through the maturation of its products through the commercialisation cycle. Allied Minds' business model centralises the support functions at the Group level, thereby enabling its businesses to focus efforts primarily on commercialisation activities whilst achieving operational and financial efficiency. We believe one of the foundations of the Group's strategy is its ability to access a wide range of innovative scientific research and technology by leveraging its relationships with leading research institutions. In total, the Group currently has relationships with 68 research universities and US federal government laboratories, providing it with an extensive pipeline of scientific and technological innovations from which the Group can identify technology for potential development to commercially viable products.

Since inception, the Group has invested significant capital and resources in companies that focus on laboratory based scientific research and product development. This has enabled Allied Minds to successfully progress and complete testing of a number of innovative products. The Group currently comprises 22 subsidiary businesses in the life sciences and high technology sectors based upon a broad range of underlying innovative technologies ranging from molecular compounds to memory integrated circuit technology. Allied Minds benefits from a highly skilled workforce, with significant expertise throughout the Group across a range of science and technology disciplines. The Group has 298 employees and consultants of whom 180 hold advanced degrees and 87 have PhDs (as at 31 March 2015). By leveraging this expertise, and through its extensive research and development activity to date, Allied Minds has established a significant portfolio of intellectual property to support and protect its research and innovation.

Allied Minds is structured as a diversified holding company with a strong central management team active in the strategic development of its subsidiary businesses. We believe this is a key distinguishing feature of the Company when compared with investment funds. Allied Minds' core aim is to focus on early-stage disruptive technologies that it believes have significant upside potential and to realise that potential through supporting commercial development.

The Opportunity

The US is the world's largest market for R&D investment. The investment by the US federal government in research through the nation's universities, federal laboratories, and non-profit institutions generates innovations and inventions with considerable commercial potential. These innovations and inventions result in thousands of US patent applications per annum. Though US universities and federal research institutions have an established technology transfer process designed to commercialise this intellectual property, they face a number of challenges. Marketing early-stage innovations to investors that often seek lower-risk, more mature technologies is challenging. Universities also often lack the resources necessary to adequately and efficiently identify the most marketable opportunities, coordinate between technology transfer offices and researchers to render opportunities marketable, and locate investors and entrepreneurs to licence the invention and carry concepts forward. As a result, many universities licence only a relatively small number of patents a year from a base of thousands, of which only a small fraction progress to the next stage of development.

Allied Minds was established with the objective of collaborating with universities, and subsequently, US federal government labs, to better identify high-potential innovations and inventions at an early stage, and subsequently licensing those inventions into subsidiaries formed and funded by the Company. By providing requisite commercial direction and management talent together with funding the research and product development activities of its businesses, we believe Allied Minds has the potential to be able to unlock the market potential inherent in promising technologies.

Our Strategy

Allied Minds aims to identify, develop and commercialise potentially transformative technologies. The Company seeks to maximise growth by creating new businesses based around innovative intellectual property. Allied Minds is actively engaged in focused scientific research and product development within its businesses, with the objective of bringing commercially viable products to significant identifiable markets. The Company's objective is to build its businesses into commercially successful and valuable enterprises.

A key component of the Company's strategy is to maintain strict capital discipline within an operationally efficient model for new companies while the commercial viability of the technology is explored and tested. The Company aims to ensure that only when there are sufficient additional proof points that the technology is satisfactorily de-risked and could succeed commercially, is additional scale-up capital provided. Should those proof points no longer support on-going commercialisation activity, a subsidiary's business is terminated. As part of Allied Minds' strategy it is recognised that failure is an inherent but necessary component of commercialising scientific research.

In order to execute this strategy, and more broadly to ensure alignment of stakeholder interests, we believe that for early-stage businesses it is important to retain control of projects. Accordingly, the Company currently maintains operating control of all of its businesses and we anticipate maintaining such control for as long as practical subject to the demands and needs of each subsidiary and the overall management of the Company's business.

We review the development path of each business on an on-going basis and, at the appropriate time, it is expected that each business will look to secure strategic, commercial and capital partners, as appropriate, with a view to accelerate and maximise value appreciation. Where the commercial potential of a business merits significant further investment, we may deem it to be in the best interests of the Company to dilute our shareholding in that business to below 50%. In such circumstances, we believe that Allied Minds is likely to remain the largest shareholder for a further period and should therefore retain influence over the strategic direction of the businesses for that period.

The Company's strategy is to drive each subsidiary business toward commercialisation but it does not mandate a specific timeline in which this has to be accomplished. The development time of each technology can vary enormously, particularly if regulatory approvals need to be secured before the product can reach the market. Inherent in the commercialisation strategy is a belief that realisation of assets should not be attempted until significant value inflection milestones have been reached. These milestones are typically commercial traction and revenue generation.

Achievement of such milestones is expected to provide the Board with strategic flexibility to explore a range of avenues for value realisation, including initial public offerings, trade sales (in whole or in part), licensing arrangements and joint ventures.

Our Business Model and Approach

Since inception, Allied Minds has sought to deliver the commercial potential of selected university owned early-stage intellectual property by working with technology transfer offices (TTOs) and establishing a structure to form, fund, manage and build start-up companies to develop innovative technologies. Allied Minds maintains regular contact with its university partners, which includes Allied Minds campus visits and interaction between Allied Minds staff and university technology transfer personnel and researchers. The strategic relationships that Allied Minds maintains with universities provide Allied Minds with direct access to scientific research which is potentially capable of developing into transformative technologies and products.

As an extension of its university model, in September 2012, Allied Minds reached agreements for first-of- their-kind Public Private Partnerships (PPP) with several US Department of Defence laboratories and federal government agencies, and subsequently reached agreements with other federal government agencies such as the Department of Homeland Security and the Department of Energy. Under these PPPs, the Company typically receives certain access and licensing rights to inventions originating from the US Department of Defence laboratories and other federal government agencies. We believe that these PPPs create a closer relationship between the Company and the respective institutions, thereby increasing the amount of potential deal flow available in new intellectual property for the Company.

Through these collaborative relationships with research universities and federal government laboratories, the Company and the corresponding research institutions work together to form, fund, manage and build early stage companies to commercialise US innovation.

Form

The Company's extensive network of relationships with universities and US federal government laboratories provides access to the outcome of substantial research and development expenditure. In 2014, Allied Minds evaluated approximately 2,160 potential projects from across a broad range of university and federal laboratories and addressing a broad range of underlying technologies. These proposals frequently represent the culmination of years of scientific research within university and federal government laboratory environments.

Using a screening and investment selection process and supported by data on technical merit, commercial potential and patentability, we believe Allied Minds is able to make timely and effective decisions on which projects merit further consideration. We believe that use of this opportunity assessment system and the efficiency of this process can substantially reduce transactional costs and enhance timely and effective decision making for the Group.

In order for a project to proceed past the first review stage, it must score highly in terms of a number of key technical assessment criteria. The starting point for this process is an assessment of the science that underpins the project. As part of this assessment, projects are assessed on the following criteria: value proposition; advantaged technology; initial commercial application; addressable market; business model; potential intellectual property protection; competitive landscape, and regulatory path, if applicable.

Approximately 5% of those projects reviewed are typically selected for further evaluation. At this stage Allied Minds coordinates the involvement of domain experts, academic peers and, in certain cases, external advisers to perform a deeper evaluation of the scientific and commercial potential of the project. Following this second review stage, approximately 1% of those projects initially reviewed are selected for detailed due diligence. The Company's full due diligence process involves coordination with the inventor(s) and institution to gain acceptance of the Allied Minds operating model as well as preparation of a detailed product and business development plan and budget structured around key milestones. We intend to form five to ten new projects per annum in the near and medium term.

After selecting a project, Allied Minds typically establishes a subsidiary that receives a licence for the commercial rights (which is normally exclusive subject to certain exceptions) to the underlying intellectual property. The subsidiary is usually majority owned by Allied Minds in either a limited liability company or incorporated structure, with the originating university and inventor(s) each typically receiving a minority shareholding in that entity.

Fund

Following the due diligence procedures to identify the technology and form a subsidiary to incubate, develop and ultimately commercialise such technology, the subsidiary and partner university or federal government agency often enter into a sponsored research agreement (SRA), cooperative research and development agreement (CRADA) or equivalent. Pursuant to such agreements, the subsidiary will work with the partner and fund a targeted scope of research, focused on validating the core scientific principles of the intellectual property, to be performed by the principal investigator (PI) and other personnel qualified to advance the science. This approach to developing technology allows an Allied Minds subsidiary to evaluate the progress and likelihood of commercial success of a technology prior to making a significant additional commitment to fund, develop and commercialise such technology.

Following this initial seed funding from the Company, Allied Minds aims to provide further incremental funding to support the scientific research and product development activity within its subsidiaries.

Disbursement of funding and future rounds of financing for further research and development are often based on achievement of key milestones, which are designed to measure technological and commercial progress. Where a project has failed to deliver sufficient additional proof points, no longer supports on- going development and commercialisation activity, and cannot be successfully redirected to an alternative commercial path, Allied Minds will look to terminate the investment early. Since inception, Allied Minds has terminated 11 underperforming businesses having spent approximately $1.0 million, on average, on each business.

As its businesses mature further, Allied Minds will also seek funding from third parties for its businesses should it be in the Group's strategic interests to do so. Allied Minds has a track record with certain institutional investors which have co-invested with Allied Minds to finance its subsidiary businesses.

Manage

Allied Minds actively manages and monitors its businesses as they advance research and product development activity towards commercialisation. During the early stages, Allied Minds typically utilises technical and executive leadership to provide oversight of progress of its businesses toward preliminary milestones. As those businesses evolve, Allied Minds actively contributes to the board composition of the companies and often appoints externally sourced dedicated management to advance the businesses towards commercialisation. Scientific advisors are often integrated into the decision making processes to ensure the appropriate technical direction is pursued. We believe the Company is well placed to continue to attract talented executives to its businesses.

Allied Minds expects to directly control each start-up company in its early stages, and retain board seats in the later stages of such company's development. Throughout this process, Allied Minds expects to continue to directly provide strategic and other advice or retain expert advisors for the businesses, as needed.

Build

Allied Minds applies a structured approach to building the business infrastructure that is critical to the growth of its businesses. In addition to providing executive leadership, Allied Minds can provide sales and marketing research, consulting, competitive analysis, technology analysis, commercial development support, shared services such as payroll and IT support, and operational advice. In doing so, Allied Minds' business model maintains central support functions at Group level, thereby enabling its businesses to focus on research and product development activity whilst achieving operational and financial efficiency. We believe that the support provided to each of the Group's businesses distinguishes them from many comparably-sized and -aged businesses in terms of availability of resources that aid in their planning and decision making.

Allied Minds is focused on pursuing projects with the objective of bringing commercially viable products to significant identifiable markets. Accordingly, we evaluate on an on-going basis the progress and potential of each of the Company's businesses, and take strategy and funding decisions based on the achievement of key milestones. The Company's policy is, wherever feasible, to look for each subsidiary to capture early revenue as a means of commercially validating the technology and business case.

Portfolio Summary

During 2014, the Group, together with third parties, deployed $125.0 million of capital into the Company's businesses, which includes, together with the ordinary course annual funding of the subsidiaries, the $10.0 million invested in ABLS at formation, and the equity financing transactions at STT ($70.0m), Optio Labs ($10.0m) and Federated Wireless ($5.0m). Allied Minds currently has majority ownership in, or operating control of, all of its subsidiary investments, and continues to invest in and support its most promising companies. Below we provide an overview of our current existing subsidiary companies, including year formed, and Allied Minds' ownership interest.

Notes:

(1) Ownership interests are as at 27 April 2015 (being the latest practicable date prior to the publication of this Annual Results Release). Allied Minds' ownership of SciFluor was 79.00% as at 31 December 2014, prior to a funding round (involving both Allied Minds and external investors) of $30.0 million in April 2015. Allied Minds ownership of Optio Labs was 79.86% as at 31 December 2014, prior to its final contribution and purchase of shares in January 2015 in the $10.0 million financing round. Allied Minds ownership of Seamless Devices was 80.00% as at 31 December 2014, prior to an exercise of employee stock options that reduced its ownership percentage.

Subsidiary Valuation

The Group currently has 22 subsidiary businesses, whose activities are principally in the life sciences and high technology sectors.

All of the Company's subsidiary companies are currently majority owned and/or controlled and therefore fully consolidated in the Company's consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS). As a result, the Consolidated Statements of Financial Position incorporated within the Company's consolidated financial statements do not include current valuations of the Company's subsidiary companies. As a means of promoting transparency, we also present, as supplementary information, ownership adjusted valuations of each of the Group's top ten subsidiary businesses by value, as well as an aggregated sum-of-the-parts valuation of all the Group's subsidiary businesses. This supplementary valuation disclosure has been prepared on the basis of the American Institute of Certified Public Accountants' Valuation of Privately-Held-Company Equity Securities Issued as Compensation (AICPA Guidelines). The AICPA Guidelines do not represent, but are consistent with valuation principles adopted under IFRS. The subsidiary company valuations are not presented as alternative measures to, and should be read in conjunction with, the Company's consolidated financial information prepared in accordance with IFRS as set out in the Annual Report.

There can be no guarantee that the aforementioned valuation of the Group will be considered to be correct in light of the future performance of the various Group businesses, or that the Group would be able to realise proceeds in the amount of such valuations, or at all, in the event of a sale by it of any of its subsidiaries.

At the close of each annual financial period, the Directors formally approve the value of all subsidiary businesses in the Group which is used to derive the "Group Subsidiary Ownership Adjusted Value". The Group Subsidiary Ownership Adjusted Value was $488.0 million as at 31 December 2014, as set out in the table below, which has been extracted without material adjustment from the Company's consolidated financial statements prepared in accordance with IFRS as set out in the Annual Report. We believe there has been no significant change in the Group Subsidiary Ownership Adjusted Value since 31 December 2014.

The Group Subsidiary Ownership Adjusted Value (GSOAV) of $488.0 million as of 31 December 2014, compared to $367.3 million at 31 December 2013, was an increase of $120.7 million, or 32.9%.

Notes:

(1) Ownership adjusted value represents Allied Minds' interest in the equity value of each subsidiary: = (Business Enterprise Value - Long Term Debt + Cash) x Allied Minds percentage ownership plus the value of debt provided by Allied Minds plc to each subsidiary business. Allied Minds commits post-seed funding to its subsidiaries in the form of loans.

(2) The Group Subsidiary Ownership Adjusted Value includes cash balances held by Allied Minds subsidiaries at 31 December 2014 amounting to $86.1 million (including those valued based on recent financing founds, of which $68.6 million was held by STT) on an ownership adjusted basis. As at 31 December 2014, the Group reported total consolidated net cash and other investments balances of $261.5 million, the balance being net cash and investments of $175.4 million held at the parent level and available for investment in the Group.

(3) Where subsidiaries have raised financing from external parties since 31 December 2014, the ownership adjusted value in the table above has been updated to reflect the current percentage ownership and the valuation implied by that external investment on a post new money basis, as well as the current Allied Minds' and total invested capital. SciFluor Life Sciences completed a funding round of $30.0 million in April 2015.

The Group Subsidiary Ownership Adjusted Value above excludes net cash and other investments balances of $175.4 million held at the parent level as at 31 December 2014 (2013: $85.7 million).

Partner Network

The Group has established relationships with 34 of the most prestigious academic research institutions across the United States, as set out below. Allied Minds aims to gain direct access to technologies at the forefront of research by working to develop the existing university network and selectively adding highly regarded research centres across the US.

In addition, the Group has established relationships with 34 US Department of Defence laboratories and other federal agency laboratories, such as the Department of Energy, with the objective of systematically commercialising the US federal government's technological inventions developed in the corresponding US federal government laboratory.

Key Performance Indicators

We believe the following Key Performance Indicators (KPIs) accurately measure the performance of the Company.

• Number of subsidiary businesses;

• Ownership adjusted value (OAV) of subsidiary companies;

• Group revenue growth; and

• Graduation of subsidiaries to the next development level, with the two levels being consistent with the Group's reporting segments as follows:

(a) Early Stage: subsidiary businesses that are in the early stage of their lifecycle characterised by incubation, research and development activities;

(b) Commercial Stage: subsidiary businesses that have substantially completed their research and development activities, and that have developed one or more products that are actively marketed.

2014 KPIs are set forth below:

Portfolio Review and Developments

For the purposes of this section, the Company's top 10 operating businesses by estimated value, accounting for approximately 85% of the Group Subsidiary Ownership Adjusted Value as at 31 December 2014, have been identified as Material Subsidiaries.

Material Subsidiaries

Early Stage

Spin Transfer Technologies, Inc.

Spin Transfer Technologies, Inc. (STT) engages in the development of Orthogonal Spin Transfer (OST) Magneto-Resistive Random Access Memory (MRAM), an innovative memory integrated circuit technology. OST-MRAM aims to combine the advantages of high- speed volatile memory (i.e. DRAM and SRAM) and non-volatile memory (Flash) in a single memory element. OST- MRAM's potentially unique combination of fast write speed, low power, and virtually unlimited endurance is expected to enable it to address a wide range of applications in the standalone and embedded memory markets, which collectively had a combined estimated value of greater than $60 billion per annum worldwide in 2014.

During 2014, STT completed its first phase of integration of magnetic and CMOS wafer technology. This is an important step to demonstrate the technology's capability to integrate with existing fabrication processes standard in the industry. Also the company successfully raised $70.0 million in a Series A preferred stock financing, the proceeds of which will be used to procure capital equipment and other infrastructure; strengthen the company's product development, sales and operations teams; and expand the intellectual property portfolio.

For 2015, key milestones include the development of a fully functional technology demonstrator memory integrated circuit, completion of the company's expansion of its clean room to accommodate the installation of a variety of fabrication equipment and expansion of existing partnership relationships and development of new ones.

On 10 October 2013, Crocus Technology S.A. filed a petition at the US Patent Office (PTO) requesting that the PTO grant an inter partes review (IPR) of US Patent No. 6,980,469 which relates to magnetic devices for memory cells that can serve as non- volatile memory. This patent is licensed by STT from the New York University (NYU). The IPR is a form of proceeding permitted under the Leahy- Smith America Invents Act, which permits third parties to challenge the validity of issued patents. No damages are available in such IPR proceedings.

On 26 March 2015, the PTO entered a judgment on the IPR and cancelled several claims under the NYU patent as being invalid over prior art references. The Company believes that STT's ability to develop and market its technology and products will not be materially impaired by this judgment. IPR proceedings do not make any findings regarding patent infringement, and thus this judgment provides no legal authority holding that STT infringes any patents held by third parties. In addition, the NYU patent portfolio licensed by STT contains other patent claims that are unaffected by the IPR action. Further, as STT has developed its technology, it has filed its own additional patents. The Company believes that the claims remaining under the licensed NYU patents, as well as under STT's owned patents, provide substantial defense against other competitors who may enter the market.

SciFluor Life Sciences, Inc.

SciFluor Life Science, Inc. (SciFluor) engages in drug discovery and development using fluorine and is building a portfolio of proprietary fluorinated compounds serving billion dollar markets. Fluorine modification of the underlying chemical structure of a drug has been demonstrated to improve potency, selectivity, rates of absorption and metabolic stability in many cases, and approximately 25% of drugs currently marketed or in the pipeline contain fluorine. SciFluor's principal products are two lead compounds:

• SF0166, a patented small molecule integrin antagonist wholly owned by SciFluor and intended to treat eye conditions including age- related macular degeneration, diabetic macular edema and retinal vein occlusion, representing an estimated 50 million patients worldwide. SF0166 is a topical drug intended to replace drugs requiring injection into the eye.

• SF0034, a KCNQ2/3 modulator and a fluorinated derivative of ezogabine, is also patented and is wholly owned by SciFluor. SF0034 could eliminate key safety issues associated with ezogabine and serve markets totaling $5 billion in aggregate including: epilepsy/seizures; tinnitus; amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease); and channelopathies (genetic orphan rare diseases).

In April 2015, SciFluor successfully raised $30.0 million in a Series A preferred stock financing. For the remainder of 2015, the company expects to advance the pre-clinical research so that SF0166 and SF0034 will be ready to enter Phase I clinical trials late in the year or early 2016. It is envisaged that the Phase I trials will cover up to four indications for these two drugs. Additionally the company will execute pre-clinical tests on its existing pipeline compounds in respiratory disease, pain therapy, fibrosis, cardiovascular disease, and neurology.

Optio Labs, Inc.

Optio Labs, Inc. (Optio Labs) is a software security company engaged in the development and deployment of mobile security solutions for global organisations. The company's three current prototype/early stage products include:

• OptioCore, an adaptive, policy-driven mobile device software solution secures information and applications for Google's Android operating system. OptioCore has the distinct advantage over all other platforms because it monitors, informs and resolves mobile security threats at the Inter-process, Communication (IPC) layer.

• OptioGrizzly, is an application which leverages OptioCore to provide real-time identification of malware on mobile devices. Additional features include the remediation of the malware and notification at both the enterprise and end user level.

• Kodomo is Optio Labs' consumer offering allowing parents to "monitor, teach and trust" their child's mobile behaviour and experiences. Kodomo allows parents the ability to review and control SMS traffic, YouTube video review, bad language notification and driver's speed.

In March 2014, Optio Labs closed a Series A round of funding. The company continued development of its products with OptioCore placed with a large aerospace OEM and beta roll-out for Kodomo. During 2014 and early 2015, Optio Labs welcomed several new executives. Gregg Smith, the former Chief Executive Officer of KoolSpan, Inc. and Acuity Mobile, Inc., joined to become Optio Labs' CEO. Bryan Glancey, the former Chief Technology Officer of CellTrust and Director of Public Sector and Security for Samsung Electronics Co., joined Optio Labs as its new CTO. Francis Knott, whose corporate development experience included Aether Systems and Telecommunications Systems, joined as Senior Vice President, Corporate Development.

In April 2015, Optio Labs purchased the assets of security company Oculis Labs, and its CEO, Dr. Bill Anderson, joined Optio Labs as Chief Product Officer. Oculis Labs developed products that protect data displayed on a user's computer and mobile device screen from visual eavesdroppers. The company's enterprise and consumer product, PrivateEye, protects computer screens against unauthorised viewers by using computer vision technology. For 2015, the company intends to focus on market deployment and sales development for its three main products: Grizzly, Private Eye and Kodomo.

Cephalogics, LLC

Cephalogics, LLC (Cephalogics) is working to develop and commercialise a non-invasive bedside neuroimaging system. The Cephalogics system aims to provide continuous data and imaging from clinically relevant cerebrovascular regions. This technology is aimed at improving on current neuro- monitoring technologies and bringing non-invasive neuro monitoring and imaging to the bedside in this estimated $1 billion market.

During 2014, the company continued development as well as bench, phantom, and clinical testing of its algorithms and prototype system. Cephalogics has collected data on normal subjects as well as a total of 24 patients at three hospitals and was able to utilise the data to interpret system performance and for input into algorithm development.

The focus for 2015 is to complete the company's commercial prototype and initiate testing on blood phantoms, animals and human subjects. A variety of tests are to be completed on healthy human volunteers or "normals." Patient testing should follow through existing relationships at university hospitals such as Duke University, Washington University or Tufts University.

ProGDerm, Inc. d/b/a Novare Pharmaceuticals

ProGDerm, Inc., d/b/a Novare Pharmaceuticals (Novare) holds the exclusive licence rights to a technology that represents a potentially revolutionary breakthrough in tissue engineering and disease control - based on the observation by Dr. Eva Turley (founder) that blocking RHAMM (Hyaluronan- mediated Motility Receptor, CD168) reduces inflammation and enhances normal tissue formation through unique anti-inflammatory properties and directed stem cell activation.

We believe that Novare is the only biotechnology company that is dedicated to treating catastrophic disease by using RHAMM-based cellular responses to aid the body's natural regenerative processes. Novare is positioned to provide novel therapies that range from promoting women's health and post-mastectomy breast regeneration, to reducing pain and joint damage in crippling arthritis, to aesthetics and to preventing life-threatening lung damage in infants with Bronchopulmonary Dysplasia and adults with Idiopathic Pulmonary Fibrosis.

During 2014, Dr. Mike Delmage joined the company to serve as Chief Executive Officer. Dr. Delmage earned his PhD in cellular and molecular biology, is an expert in Hyaluronic Acid and has served as Chief Technical Officer and CEO at Senetek PLC and Transvivo, Inc., respectively, with experience in the aesthetics, medical device and therapeutic drug sectors. Novare licenced additional RHAMM compounds discovered by Dr. Turley for research and development into therapeutics for inflammatory conditions and expanded the company's focus beyond aesthetics.

For 2015, the company intends to optimise peptide targets for the indications highlighted above. These peptides will be characterised and supported by a variety of in-vitro tests as well as limited animal studies. Expansion of the patent portfolio is intended to support these advancements.

Precision Biopsy, LLC

Precision Biopsy, LLC (Precision Biopsy) is developing a next generation prostate cancer biopsy system, with the aim of being able to analyse prostate tissue in real-time for signs of cancer during the biopsy procedure, and of minimising unnecessary tissue coring as well as the associated pathology costs. Current biopsy procedures require random or ''blind'' sampling, and often multiple and repeated biopsies per procedure. The Precision Biopsy system is intended to be used within the typical biopsy procedure and the company aims to develop a system along with a disposable needle biopsy unit, creating a capital equipment and recurring revenue model.

In 2014, Precision Biopsy continued development of its commercial system by evaluating multiple product design options, developing prototypes, and conducting testing on bench and in human excised prostate tissue to select optimum design. The company also established its own quality management system (QMS) to adhere to the FDA and CE Mark regulatory requirements. The company expanded its team and began evolving its reimbursement strategy.

In 2015, Precision Biopsy intends to complete its product development and complete FDA 510k and IDE (investigational device exemption) submissions. The current US regulatory strategy includes these two separate submissions to support commercialisation based on the indications for use. Precision Biopsy also intends to initiate a clinical trial to evaluate its commercial system in humans. This clinical data is expected to support the regulatory approvals. Precision Biopsy aims to expand its intellectual property portfolio.

SiEnergy Systems, LLC

SiEnergy Systems, LLC (SiEnergy) is developing thin film Solid Oxide Fuel Cell (SOFC) technology. The technology uses silicon-based microfabrication and nanometer scale electrolytes with the aim of creating SOFCs that operate at a commercially desirable temperature and are scalable to meet various power requirements. Thin film SOFC could be a promising technology for meeting cost and reliability challenges facing fuel cell developers. SiEnergy seeks to integrate its ultra-thin film SOFC technology into fuel cells and stacks, and will target joint development partners to integrate its technology into systems and end applications.

In 2014, SiEnergy continued to develop its technology and received an award of $2.65 million in US government ARPA-E funds under their Reliable Electricity Based on Electrochemical Systems (REBELS) programme. Under this programme, SiEnergy will collaborate with Harvard University to develop a multi-functional electrode to allow the cell to perform both as a battery and fuel cell, which enables the system to respond rapidly to changes in power demand. In addition, non-precious catalysts will be developed to allow the direct use of hydrocarbon fuels, such as natural gas, at 300-500 °C without the use of a fuel reformer. The awarded 3-year project entails the commitment by SiEnergy of cost share funds, part of which is offset by a $300,000 convertible grant provided by Massachusetts Clean Energy Centre in 2015, under their AmplifyMass programme.

In 2015, the company will continue to improve yield, degradation and power characteristics of its fuel cells and stacks. Additionally, as part of the ARPA-E programme, the company will seek to demonstrate In-situ charge storage to enable the battery-like capability.

Commercial Stage

RF Biocidics, Inc.

RF Biocidics, Inc. (RF Biocidics) engages in the development, manufacturing, and sale of environmentally friendly, chemical-free food safety solutions using radio frequency technology. RF Biocidics operates in the area of disinfection and disinfestation of agricultural products for the elimination of pathogens, pests and fungi in a variety of food commodities. Today, RF Biocidics' addressable market includes the dried fruit, tree nut and seed/grain markets representing an estimated 500 million metric tonnes (MMt), in aggregate, globally per annum. The company currently has two lines of RF processing equipment:

• The SENTINEL line uses high frequency RF to process high moisture products, such as prunes and raisins.

• The APEX line uses low frequency RF to process lower moisture products, such as nuts, grains, seeds and flours.

In March 2014, RF Biocidics acquired a minority interest of 28.5% in its supplier Stalam SpA (Stalam) in Italy, a manufacturer of radio frequency equipment, for $1.5 million. With Stalam, RF Biocidics successfully designed, built, and launched our new fourth generation APEX machine. 2014 also marked the transition to our new office and lab in Sacramento.

In addition to pursuing further sales opportunities, in 2015 the company will apply for additional regulatory approvals for pasteurisation, roasting and other capabilities. Treatment for new commodities could also be pursued.

CryoXtract Instruments, LLC

CryoXtract Instruments, LLC (CryoXtract) develops automated solutions to protect the long-term biological integrity and quality of biosamples used to advance next generation life-science R&D. The company has commercialised a frozen biospecimen sampling (aliquotting) technology platform that enables the research community to access and re- access biospecimens in the frozen state, avoiding the damaging freeze/thaw cycles common today. The technology does not require US FDA approval and the company's instruments are currently being marketed and sold both in and outside the US.

CryoXtract has developed two principal products to date:

• The CXT 750 Fully-Automated Frozen Sample Aliquotter is directed at large-scale automated access to frozen biofluids and feces.

• The CXT 350 Frozen Sample Aliquotter is a semi-automated solution directed at smaller- scale semi-automated access to frozen tissue samples, bone, and cells as well as frozen biofluids and feces. It is specifically designed to service a lower volume lab or biobank.

In 2014, the company focused its efforts on building its commercial capabilities, strengthening its global distributor network, restructuring its work force, developing application specific data sets and working with customers to enhance the company's products.

In 2015, the company will pursue sales and expand its installed base of units. Additional US direct sales resources added in 2014 and early 2015 are being augmented by an expanded set of international distributors. Recent expansion has focused on Asia with new distributors targeted for Japan, Korea and Singapore. Scientific data supporting the company's products are critical for the sales process and is best achieved with industry partners. The company will build on data sets and publications completed in 2014 with GSK, IBBL and others.

SoundCure, Inc.

SoundCure, Inc. (SoundCure) is a consumer medical device company with a core technology based on neuroscience used to treat tinnitus through its acoustic therapy, branded as S-Tones. S-Tones are temporally patterned sounds which are customised specifically for each patient's unique tinnitus, generating neural activity which researchers consider may suppress tinnitus.

SoundCure's first product is an FDA 510(k) cleared and CE Marked medical device in a handheld configuration called Serenade incorporating customised tracks of sound therapy including S-Tones. An estimated 50 million Americans experience tinnitus to some degree. Nearly a third of this number seek medical advice and approximately two million Americans experience tinnitus as a life- altering, disabling condition.

Sales growth in 2014 has not been as robust as first envisioned and 2015 will see an expanded emphasis on market development. With e-commerce sister company, Tinnitus Treatment Solutions (TTS), the company will be focused on becoming the number one online tinnitus therapy source. TTS is a cutting edge telemedicine tinnitus health care provider and will offer for sale, in addition to the Serenade medical device, a variety of tinnitus and hearing products from other manufacturers. As of this writing, supply agreements had been completed among others with hearing aid companies Starkey, Widex and Resound (note that most tinnitus sufferers also have hearing loss).

In April 2015, SoundCure received FDA clearance for the Remote Programing of the SoundCure Serenade. To the company's knowledge, this is the first FDA clearance for a tinnitus therapy device to be programed in a patient's home via telemedicine. This would represent a unique tinnitus care tool for telemedicine providers such as TTS, and potentially the US Veterans Administration (VA) - many returning soldiers suffer from tinnitus and look to the VA for therapies upon return from duty.

Other Subsidiaries

Allied-Bristol Life Sciences, LLC

Allied-Bristol Life Sciences, LLC (ABLS) is a drug discovery and development platform company created in August 2014 through a partnership between Allied Minds and Bristol Myers Squibb (BMS). Allied Minds and BMS provided $10.0 million to the company resulting in Allied Minds ownership of 80.0% and BMS ownership of 20.0%. The company's mission is to create novel drug candidates (Early Candidate Nominations, "ECNs" or New Chemical Entities, "NCEs") against serious diseases with large market size. These include fibrosis, genetically defined diseases, cardiovascular and immunological diseases, immune-oncology, oncology, and virology. The focus on these diseases is by design well aligned with the strategy of BMS. It is intended that up to 10 drug candidates will be sourced from US universities and national labs and a new subsidiary will formed around each of these candidates. Additional funding will be required to further advance these subsidiaries.

We believe that this partnership is a "win-win" for both parties. It provides Allied Minds with a seasoned large pharmaceutical partner as well a natural early stage acquirer of developing assets. It provides BMS access to Allied Minds' broad university network and experienced licensing practices and provides a capital efficient, structured format through which early university breakthrough research can be advanced into the formal drug discovery process at BMS. This partnership is structured to reduce risk for both partners since it is intended to drive exits of novel early stage assets to BMS prior to human testing or clinical trials. Both parties intend to agree on development milestones for each subsidiary programme prior to launching any given subsidiary and upon successful achievement of such milestones, it is anticipated that BMS would acquire the subsidiary or asset. We believe that this model of upfront agreement on exit milestones is typically deemed "early" relative to most exits in the pharmaceutical marketplace which require additional capital to enter clinical testing.

Since formation, ABLS has achieved the following milestones:

• Hired Chief Executive Officer, Satish Jindal, Ph.D., formerly Vice President of R&D within BMS, with prior executive positions at Vedantra Inc., Verastem Inc., and NeoGenesis Inc.;

• Retained Catherine D. Strader, Ph.D. and Ben Askew, Ph.D., each with more than 20 years of experience in senior research and executive leadership positions in the biotechnology and pharmaceutical industries, as advisors to ABLS;

• Retained Synergy Partners R&D Solutions, LLC (Synergy) to assist with due diligence and project management, utilizing their team of scientists with expertise in areas such as disease biology, medicinal chemistry, process chemistry, toxicology, pharmacology and drug safety, with proven track records at many of the world's leading biopharmaceutical companies, including Bristol-Myers Squibb, Merck & Co., AstraZeneca, Pfizer Inc., Johnson & Johnson and Eli Lilly & Co.;

• Sourced more than 625 potential projects from our US university partner network;

• Completed initial evaluation of more than 450 projects, with due diligence teams from Allied Minds, BMS and Synergy;

• Selected approximately 20 projects for continued due diligence, based upon strength of the project and alignment with BMS disease area focus; and

• Two companies have been formed as described below. Three additional projects are in final due diligence.

ABLS I, LLC

ABLS I, LLC was formed to execute on the first project approved for investment. This project involves licensing intellectual property with respect to prostate oncology from an Ivy League institution, and proceeding to pre-clinical evaluation and development. Allied Minds expects this investment to be completed in the second quarter of 2015.

ABLS II, LLC

ABLS II, LLC was formed to execute on the second project approved for investment. This project involves licensing intellectual property with respect to fibrotic diseases from a second Ivy League institution, and proceeding to pre-clinical evaluation and development. Allied Minds expects this investment to be completed in the second quarter of 2015.

Allied Minds Federal Innovations, Inc.

Allied Minds Federal Innovations, Inc. (AMFI) was created as a vehicle designed specifically to commercialise US federal laboratory inventions, via public private partnerships (PPP) with a number of US federal research institutions. The company represents the first PPP formed between the US Department of Defence and a US technology commercialisation firm dedicated to bringing government inventions to market. AMFI has a team of six employees, all of whom have advanced degrees. As at the date of this Annual Results Release, five companies have been created from federally sourced intellectual property, including: BridgeSat, Inc.; Federated Wireless, Inc.; Foreland Technologies, Inc.; Whitewood Encryption Systems, Inc.; and Percipient Networks, LLC each described further below.

Biotectix, LLC

Biotectix, LLC (Biotectix) aims to develop a new class of conductive polymer materials and coatings for medical devices which electrically communicate with the body including implantable medical devices and sensors as well as other markets. The company's technology seeks to address key limitations faced by the medical device industry including foreign body reactions, surgical invasiveness, component stability, and long-term electrical performance in vivo. The company's first commercially available coating, AmpliCoat™, is under evaluation by prospective medical device manufacturing customers. The company has had the following patent issue in 2014: AUSTRALIAN PATENT# 2011224383 - Electrically Conductive And Mechanically Supportive Materials For Biomedical Leads (the corresponding US Patent # 8,577,476 was granted on 11/5/2013). We believe that this technology has the potential to offer key benefits such as improved electrical performance, biocompatibility and tissue response. The core technology underlying Biotectix was sourced from the University of Michigan.

BridgeSat, Inc.

BridgeSat, Inc. (BridgeSat) was formed in February 2015 to seek out new applications for technologies at partner Federally Funded Research and Development Centre, The Aerospace Corporation. The resulting portfolio of technologies that has been licenced or optioned to licence to BridgeSat encompass intellectual property from Aerospace's small satellite efforts and select technologies from Cambridge, Massachusetts-based MIT. BridgeSat is developing an optical connectivity system that aims to increase the speed, security and efficiency of data transmissions from Low Earth Orbit (LEO) satellites at a reduced cost compared with traditional radio frequency solutions. Demand for accurate and frequent data collection from LEO satellites is expected to accelerate aggressively over the next decade amidst declining costs for building and launching satellites. Traditional RF communications are constrained by limited spectrum, lower bandwidth, and large transmitter payloads. Near term, BridgeSat will deploy a downlink payload and its associated ground stations to fully demonstrate its advantages in volume, mass, power, and bandwidth.

Federated Wireless, Inc.

Federated Wireless, Inc. (Federated Wireless) engages in the development and deployment of mobile connectivity and spectrum management software and hardware for mobile enterprises, building and venue owners and small businesses. The company's flagship product, Spectrum Management System (SAS), is a cloud-based dynamic spectrum management platform built to support FCC spectrum rules for the 3.55 GHz band, and it allows customer to deploy high quality in-building LTE systems at costs competitive with enterprise Wi-Fi products.

Founded in August 2012 (originally as Allied Communications, LLC), Federated Wireless was formed to develop and commercialise innovative spectrum management systems to capitalise on the planned restructuring by the Federal Communications Commission (FCC) of the way in which wireless spectrum is made available to commercial and government users. The core technologies underlying Federated Wireless were sourced from Virginia Polytechnic Institute, The Aerospace Corporation and the Naval Surface Warfare Centre Crane Division.

In April 2015, the Federal Communications Commission (FCC), in a unanimous decision, approved the formal Rule & Order governing the dynamic sharing of federal spectrum in the 3.5 GHz band, thereby ensuring the necessary regulatory authority for Federated Wireless to go to market with its proprietary Spectrum Access System.

Foreland Technologies, Inc.

Foreland Technologies, Inc. (Foreland) was created as a platform company for the discovery, incubation and commercialisation of cyber security related intellectual property, leveraging AMFI's access to technical innovation within Allied Minds' partner network. The company focuses on the following areas:

• large scale data management; infusion and analytics;

• information provenance and integrity;

• native IPv6 security technologies;

• forensics and attribution automation;

• geo- location and data tagging / tracking;

• self-configuring and self-optimising autonomous systems;

• cloud computing, cloud-based information assurance, and virtualisation security;

• active defence and cyber exploitation;

• supply chain security and hardware integrity verification; and

• secure data storage.

In 2014, Foreland created two subsidiaries, Percipient Networks, LLC which is commercialising intellectual property from The MITRE Corporation, and Whitewood Encryption Systems, Inc., which is commercialising intellectual property from Los Alamos National Laboratories. Foreland Technologies is currently evaluating several core technologies in due diligence to become the basis of new Foreland subsidiaries; these core technologies include those sourced from Oak Ridge National Laboratories, the Massachusetts Institute of Technology Lincoln Laboratory, and the Massachusetts Institute of Technology.

LuxCath, LLC

LuxCath, LLC (LuxCath) is developing a catheter based real-time visualisation technology for use during cardiac ablation procedures to ensure electrophysiologists are treating the right parts of the heart in atrial fibrillation patients effectively. LuxCath seeks to significantly improve the speed of ablation procedures and outcomes and is initially focused on optimising atrial fibrillation ablation. The technology has been proven to identify and distinguish viable from ablated cardiac tissue in preclinical tests. It has been used to monitor the progression of lesion formation as well as to determine the presence and quality of catheter-tissue contact in preclinical testing. All of these accomplishments have been performed both with standalone LuxCath devices as well as through the integration of LuxCath technology into an existing FDA approved ablation catheter. Various results from these tests were presented at the Heart Rhythm Society conference on May 8, 2014.

Atrial fibrillation is a commonly occurring cardiac arrhythmia or irregular heartbeat and leads to an increased risk of stroke, affecting approximately 2.5 million people in the US alone. Atrial fibrillation catheter ablation is a minimally invasive procedure used to disconnect electrical pathway and restore normal heartbeat and is expected to be one of the fastest growing catheter-based cardiac procedures in Europe in the next 5-10 years. In conjunction with its product development partner, Nocturnal Product Development, the LuxCath technology is the basis of a US government STTR (Small Business Technology Transfer) grant titled "New Generation of Catheters for Treatment of Atrial Fibrillation" amounting to $200,000. The LuxCath technology is based on discoveries by cardiologist Dr. Marco Mercader and colleagues at George Washington University.

Percipient Networks, LLC

Percipient Networks, LLC (Percipient) is developing cyber security technologies to provide network defenders more options against advanced threats. The company uses automated threat interdiction capabilities, advanced remediation techniques, and shared intelligence platforms as the foundational building blocks upon which the company is developing its solution for enterprise network defence. Percipient Networks is currently in the commercialisation stage on its first enterprise focused cybersecurity product. The company's first technology to be brought to market is STRONGARM, a malware protocol parser that automates precise malware identification and remediation on proprietary networks. The core technology underlying Percipient was sourced from The MITRE Corporation and was formally licenced in Q4 2014 as the company transitioned development efforts of the technology from the MITRE lab to the company's own development team, which is led by Todd O'Boyle (CTO) and Steven DiCato (VP, Engineering) both previously malware analysts at MITRE.

Since transitioning the technology from MITRE to Percipient in late 2014 the company has introduced its first product: STRONGARM Intelligent DNS Blackhole, an enterprise level solution to ingest threat intelligence and operationalise the analysis of DNS traffic to fingerprint malware and support incidence response in an automated fashion, saving enterprise time and money. The product has achieved significant technical milestones by completing a SaaS deployment mechanism with a multi-tenant architecture in its commercially available version 1.0. The company completed its first corporate partnership agreement with Threatconnect, a leader in threat intelligence aggregation with its threat intelligence framework. The relationship will help Percipient customers derive more value during testing, pilots and ultimately in commercial use given the high fidelity nature of this intelligence. The company has also filed a subsequent utility patent around the intelligent DNS black-hole capability.

Seamless Devices, Inc.

Seamless Devices, Inc. (Seamless) is a fabless semiconductor company based in Silicon Valley, California, that is developing devices using a novel approach to analog signal processing. The Seamless technology aims to simplify production of high-performance devices even as transistors are scaled down deep into the nanoscale. Developed in the Columbia University Electrical Engineering laboratory of Professor Peter Kinget, Seamless builds upon patented switched-mode signal processing algorithms and extends their capability to serve a wide range of applications across several industries, including consumer electronics, telecommunications hardware, instrumentation, network hardware, healthcare devices and even transportation and military systems. As semiconductor chips scale to increasingly finer features, the available voltage to circuit elements also diminishes, presenting difficulties in analog and mixed-signal applications. Typically these issues are addressed by adding additional complexity to the design or suffer with lower efficiency. Seamless Devices' switched-mode analog signal processing technology takes advantage of the fact that as timing resolution in integrated circuits becomes more accurate, transforming analog signals into a time-based form can preserve a high degree of signal fidelity in an elegant, lower power solution. Seamless Devices will initially develop solutions for the semiconductor intellectual property (IP) market, which involves licensing IP blocks that are incorporated into system-on-chip integrated circuits. Within the analog IP market, the company expects to offer analog-to-digital converters (ADC) for wireless connectivity applications, meeting an accelerating demand for ADCs that can operate at high bandwidth and high resolution in a low power environment.

Whitewood Encryption Systems, Inc.

Whitewood Encryption Systems, Inc. (Whitewood) commenced operations in August 2014 with a seed round of funding following incubation at Foreland Technologies, Allied Minds' cyber security platform company, to produce next generation systems of data encryption that leverage advanced quantum cryptography technologies originating from Los Alamos National Lab (LANL). In current network infrastructures, the increasing mass quantity and speed requirements of data being transferred is considered to be presently at odds with the market demand for more ubiquitous encryption to protect consumers and businesses from malicious, costly attacks and data leakages. While businesses and government entities have expressed a greater need for encryption of data both at rest and in transit, the performance of current encryption technologies may not scale linearly to address this need; rather, as encryption algorithms become more complex given improving adversarial capabilities, the encryption keys necessary to support the encryptor will become increasingly longer and more prolific.

As a result, scaling current software and hardware encryption systems may have a significant impact on network latency and computational intensity, making the widespread adoption of improved data encryption potentially costly and discouraging. Additionally, the development of high performance quantum computing capabilities in the future puts into jeopardy the cryptographic capabilities of existing systems of public key cryptography.

Against this backdrop, Whitewood is producing key management systems for encryption which are designed to be of lower computational intensity and lower latency, while providing for a high level of data integrity believed to be impervious to quantum computing attacks and offered at lower price points than that of existing competitive systems. Since the company's inception, Whitewood has formally licenced 21 patents and patent submissions from LANL and has funded a Cooperative Research and Development Agreement (CRADA) at LANL for the further technical development and productisation of the company's first product, a high throughput, high entropy quantum random number generator and entropy management system for providing the necessary randomness to support existing systems of key management, which is anticipated for market release in Q3 2015. Additionally, the company received a new patent approval in February 2015 for the patent Secure Multi-Party Communication with Quantum Key Distribution Managed by Trusted Authority.

Dissolved Subsidiaries

Consistent with the Allied Minds' model, where a project has failed to deliver sufficient additional proof points and no longer supports on-going development and commercialisation activity, and cannot be successfully redirected to an alternative commercial path, Allied Minds will look to terminate the investment early.

Allied Minds Devices, LLC

In April 2015, Allied Minds terminated and dissolved its subsidiary Allied Minds Devices, LLC (AMD). The company was initially formed to develop commercially viable medical device products. Allied Minds determined that the two technologies in the development stage did not meet key milestones which were designed to measure technological and commercial progress. At the time of dissolution, Allied Minds had invested $1.3 million in AMD, and had an Ownership Adjusted Value (OAV) in the investment of $nil.

Broadcast Routing Fountains, LLC

In April 2015, Allied Minds terminated and dissolved its subsidiary Broadcast Routing Fountains, LLC (BRF). The company was initially formed to develop an internet infrastructure technology that would supplement the border gateway protocol with a view to improving the way networks communicate. Allied Minds determined that the technology did not meet key milestones which were designed to measure technological and commercial progress. At the time of dissolution, Allied Minds had invested $0.6 million in BRF, and had an Ownership Adjusted Value (OAV) in the investment of $nil.

FINANCIAL REVIEW

The financial results of the year reflect the Group's sustainable model of deploying patient capital into our continuously growing portfolio of Group controlled businesses at the right pace. We significantly strengthened our balance sheet with the proceeds from the Company's listing on the London Stock Exchange in 2014 which raised $155.0 million (before issue costs) as well as $54.5 million raised from external investors directly into our subsidiaries.

Consolidated Statement of Comprehensive Loss

For the years ended 31 December

Revenue increased by $4.8 million, to $7.7 million in 2014 (2013: $2.9 million). This increase is mainly attributable to the higher product revenue at RF Biocidics, as well as the increasing sales at CryoXtract systems when compared to last year. The revenue in the early stage companies segment remained relatively consistent at $0.4 million in 2014 (2013: $0.5 million). Cost of revenue increased by $3.1 million, proportionately to the increase in revenue from prior year.

Selling, general and administrative (SG&A) expenses increased by $10.5 million, to $38.0 million for the year ended 31 December 2014 (2013: $27.5 million) largely due to incremental cost incurred due to the IPO in June 2014 as well as the overall growth of the Group. Of this increase $4.9 million relates to an increase in personnel expenses reflecting the increase in headcount and salaries as well as the increase in non-cash share-based compensation expense by $2.7 million, of which $2.4 million was due to the acceleration of vesting of options under the old US Stock Plan upon the IPO in addition to instituting the new UK LTIP plan under Allied Minds plc. The increase is also attributed to some incremental cost incurred in 2014 associated with the listing of Allied Minds on the London Stock Exchange, which is not otherwise offset against the net proceeds from the offering, reflected mainly in a $3.0 million increase in professional services to $5.6 million (2013: $2.6 million).

Research and development (R&D) expenses increased by $6.5 million to $22.2 million for the year ended 31 December 2014 (2013: $15.7 million). The increase is attributed to the overall growth of the Group's research and development activities, reflecting the creation of six new subsidiaries in 2014 and ramping up full scale of R&D activities of companies created in late 2012 and into 2013.

As a result of the above discussed factors, total comprehensive loss increased by $15.2 million to $57.9 million for the year ended 31 December 2014 (2013: $42.7 million). Total comprehensive loss for the year attributed to the equity holders of the Group was $45.6 million (2013: $34.5 million) and $12.2 million (2013: $8.2 million) was attributable to the owners of non-controlling interests.

Consolidated Statement of Financial Position

As of 31 December

Significant performance-impacting events and business developments reflected in the Company's financial position at year end include:

• Property and equipment decreased by $1.7 million to $16.3 million as at 31 December 2014 (2013: $18.0 million), mainly reflecting depreciation expense of $2.3 million for the period, the sale of machines in normal trade for $2.8 million and reclass of remaining systems into inventory for $1.3 million at RF Biocidics, offset by capital purchases for the period of approximately $4.7 million, of which $3.9 million by Spin Transfer;

• Intangible assets as of 31 December 2014 decreased by $1.1 million to $3.4 million (2013: $4.5 million) mainly as a result of amortisation expense of $0.6 million and impairment of $1.1 million of intellectual property returned by SciFluor, offset by new additions of $0.4 million in software and licences purchases and $0.2 million in capitalised development costs in CryoXtract;

• Investment in associate increased to $1.6 million (2013: nil) as a result of the investment by one of the subsidiaries. In March 2014, RF Biocidics acquired a minority interest of 28.5% in Stalam SpA (Stalam) in Italy, a manufacturer of radio frequency equipment for $1.5 million;

• Other investments, non-current increased to $22.2 million (2013: nil) reflecting the investment of excess cash into fixed income government and corporate securities that have maturities longer than twelve months;

• Other non-current assets, including non-current financial assets remained relatively consistent at$0.5 million when compared to prior year;

• Cash and cash equivalents increased by $119.5 million to $224.1 million at 31 December 2014 from $104.6 million at 31 December 2013. The increase is mainly attributed to the net proceeds from the IPO of approximately $142.9 million and $11.5 million from the exercise of options in Allied Minds, plus approximately $54.5 million from the third-party investors in subsidiary rounds in 2014, of which $50 million was invested in Spin Transfer. The increase in cash and equivalents for the year was offset by $45.4 million net cash used in operations, $40.7 million used in capital and other investing activities, of which $37.4 million for the purchase of fixed income security investments, and $3.3 million used in financing activities for repayment of loans;

• Other investments, current increased to $15.2 million (2013: nil) reflecting the investment of excess cash into fixed income government and corporate securities that have maturities shorter than twelve months;

• Inventories increased by $1.9 million to $2.9 million as at 31 December 2014 (2013: $1.0 million) reflecting the purchases of inventories of $2.2 million and the reclass of $1.3 million from property and equipment mentioned above, offset by cost of goods sold of $2.5 million;

• Trade and other receivables increased by $3.4 million to $6.3 million at 31 December 2014 (2013: $2.9 million) as a result of increase in prepaid and other current assets of $4.2 million, net of their amortisation, mainly from advance payments for inventory units at RF Biocidics of $3.0 million, offset by trade receivables net decrease of $0.8 million reflecting collections of receivables from sales that were invoiced close to 31 December 2013 at RF Biocidics and CryoXtract;

• The loans balance, current and non-current, decreased to $0.6 million as of 31 December 2014 (2013: $3.8 million) reflecting the repayment of the loans at CryoXtract and Spin Transfer. The loan at Spin Transfer was fully repaid in 2014;

• With the increase of its sales and pipeline, RF Biocidics is collecting deposits from customers as installment payments against purchases of its products. This accounts for the majority of the deferred revenue balance (current and non-current) of $1.1 million as of 31 December 2014, which decreased from $2.8 million as of 31 December 2013 as revenue from these sales was recognised in 2014; and

• As noted above, Allied Minds completed an IPO and listed on the Main Market of the LSE in June 2014, which is the main factor for the increase in the share premium to $153 million as of 31 December 2014 (2013: nil). Additionally, other reserve increased by approximately $9.0 million to $28.8 million (2013: $19.8 million) as a result of the share-based compensation expense charge for the period. Due to the merger of Allied Minds, Inc. (now Allied Minds LLC) into Allied Minds plc as part of the IPO process in June 2014 all issued and outstanding options under the US Stock Plan vested on 19 June 2014 and 7,662,424 options were exercised, resulting in the accelerated share-based payment charge of additional $2.4 million for the period. Furthermore, $54.5 million from the third-party investors in subsidiary rounds were contributed to non-controlling interests in 2014. The additions to total equity were offset by the net comprehensive loss for the year of $57.9 million (2013: $42.7 million).

Consolidated Statement of Cash Flows

For the years ended 31 December

The Group's net cash outflow from operating activities of $45.4 million in 2014 (2013: $35.1 million) was primarily due to the net operating losses for the year of $57.9 million plus the net effect from movement in working capital and other net finance cost of $1.0 million, offset by adjustment for non-cash items such as depreciation, amortisation, and share-based expenses of $13.3 million and interest received net of paid of $0.2 million.

The Group had a net cash outflow from investing activities of $40.7 million in 2014 (2013: $10.7 million) mainly reflecting the purchases of fixed income investment securities of $37.4 million and the acquisition of minority interest in associate by RF Biocidics of $1.6 million. These outflows were offset by $9.3 million lower purchases of property and equipment, when compared to higher capital purchases in 2013 due to the build out of a 'clean room' for the research and development activities at Spin Transfer Technologies, as well as capital purchases of equipment at some of the other subsidiaries.

The Group's net cash inflow from financing activities of $205.6 million in 2014 (2013: $116.6 million) largely reflects the net proceeds from the IPO of approximately $142.9 million and $11.5 million proceeds from the exercise of stock options under the US Stock Plan, compared to net proceeds from the Series B round in Allied Minds, Inc. (now Allied Minds, LLC) in 2013. Additionally, this increase reflected higher proceeds from issuance of share capital in subsidiaries of $54.5 million from the rounds in Allied- Bristol Life Sciences, Optio Labs and Spin Transfer in 2014, compared to the second tranche of $14.5 million from STT's financing round received in 2013. The cash provided in financing activities was offset by the net repayments of loans at CryoXtract and STT of $3.2 million compared to net borrowings against the loans of $2.9 million in 2013.

The Group's strategy is to maintain healthy, highly liquid cash balances that are readily available to support the activities of its subsidiaries by providing working capital, maintaining the level of research and development activities required to achieve the set milestone goals, and acquiring capital equipment where necessary to support research and development activities. To further minimise its exposure to risks the Group does not maintain any material borrowings or cash balances in foreign currency.

RISK MANAGEMENT

The execution of the Group's strategy is subject to a number of risks and uncertainties. A key focus for the Board is to formally identify the main risks facing the Group and develop a robust and effective framework to ensure that the risks are both well understood and appropriate to achieve the stated corporate goals. This process needs to address both risks arising from the internal operations of the Group and those arising from the business environment in which it operates. It is possible that one or more of these identified risks could impact on the Group in a similar timeframe which may compound their effects.

As an early-stage investor in start-ups, the Group inherently operates in a high risk environment. The overall aim of the risk management policy is to achieve an effective balancing of risk and reward, although ultimately no strategy can provide an absolute assurance against loss.

The major risks and uncertainties identified by the Board are set out below along with the consequences and mitigation strategy of each risk.

1. The science and technology being developed or commercialised by the Group's businesses may fail and/or the Group's business may not be able to develop their intellectual property into commercially viable products or technologies. There is also a risk that certain of the subsidiary businesses may fail or not succeed as anticipated, resulting in an impairment of the Group's value.

Impact: The failure of any of the Group's subsidiary businesses would impact the Group's value. A failure of one of the major subsidiary businesses could also impact on the perception of the Group as a builder of high value businesses and possibly make additional fund raising at the Group or subsidiary level more difficult.

Mitigation:

• Before making any investment, extensive due diligence is carried out by the Group which covers all the major business risks including market size, strategy, adoption and intellectual property.

• The initial seed round investment is typically quite small with incremental investment only being made on successful completion of milestones.

• A capital efficient approach is pursued such that proof of concept has to be achieved before substantial capital is committed.

• Members of the Group's management team who carry out the initial due diligence initially run the subsidiary in its incubation phase and subsequently move to becoming independent directors staying with the project to help ensure consistency of management. The Group's point of contact will stay in regular contact with the senior management of the subsidiary business.

• During incubation phase, we closely monitor milestone developments should a project fail to achieve sufficient progress, we terminate the investments.

• The investment committee carries out face to face quarterly reviews with the management of each of the subsidiary businesses.

• The shared services model provides significant administrative support to the subsidiary business whilst the budgetary and financial controls ensure good governance.

• Within the Group there is a wealth of management expertise which can be called upon to support each of the subsidiary businesses where necessary.

• In addition, the Group actively uses third party advisors and consultants, specific to the particular domain in which subsidiary business operates to assist on market strategy and direction. 

2. The Group expects to continue to incur substantial expenditure in further research and development activities of its businesses. There is no guarantee that the Group will become profitable and, even if it does so, it may be unable to sustain profitability.

Impact: The strategic aim of the business is to generate profits for its shareholders through the investment into IP-based start-ups, delivering value through capital gain. As such profits will be generated on exits. The timing and size of these potential inflows is uncertain and should exits not be forthcoming, or in the event that they are achieved but at values significantly less than the amount of capital invested, then it would be difficult to sustain the current levels of investment in the subsidiary businesses and continue to make new investments. This will lead to reduced activity across the Group. In turn this could make raising additional capital at the Group level difficult and it could ultimately lead to the failure of the Group as a whole.

Mitigation:

• The Group retains significant cash balances in order to support its internal cash flow requirements.

• The Group has close relationships with a wide group of investors, including its shareholder base to ensure it can continue to access the capital markets.

• Senior management continually seek to create additional strategic relationships for the Group.

3. If any of the Group's relationships with US universities and federal government institutions were to break down or be terminated or expire then the Group would lose any rights that it has to act as a private sector partner in the commercialisation of intellectual property being generated by such universities, other research intensive institutions or US federal research institutions.

Impact: Termination of certain of the Group's existing relationships would impact the quantity and potential quality of the Group's deal flow. This may in turn prevent the Company from achieving its stated aim of completing five to ten new deals per year. This could potentially have an adverse effect on the Group's long term prospects and performance.

Mitigation:

• The Group currently receives in excess of 2,000 items of intellectual property per year from its 68 partner institutions. The risk of losing deal flow through the termination of relationships is greatly lessened by the wide portfolio and geographic spread of our partners.

• The Group continues to add partners to its network.

• The Group has recently hired a dedicated resource to manage and expand the partner network.

4. A majority of the Group's intellectual property relates to technologies originated in the course of research conducted in, and initially funded by, US universities or other federally-funded research institutions. Although the Group has been granted exclusive licences to use this intellectual property there are certain limitations inherent in these licences, for example as required by the Bayh-Dole Act of 1980.

Impact: There are certain circumstances where the US government have rights to utilise the underlying intellectual property without any economic benefit flowing back to the Group. In the event this were to happen this could impact the financial return to the Group on its investment in the subsidiary business.

Mitigation:

• To the Board's knowledge, while these so called "march in" rights exist, the US government has never had cause to use them.

• The Group seeks to develop dual use capabilities for the technology it licences and generally tends to avoid use cases directly applicable to government use.

• This risk is also mitigated through employing experienced technology transfer experts supported by our legal team to assess risks that may arise out of this eventuality.

5. The Group currently has in place cooperative research and development agreements with certain US Department of Defence laboratories and federal funded government institutions. Certain regulatory measures apply to these agreements which restrict the export of information and material that may be used for military or intelligence applications by a foreign person.

Impact: If the Group were to breach restrictions on the use of certain licenced technologies, particularly those derived from federally funded research facilities, this could materially impact upon the Groups ability to licence additional IP from these establishments. In certain circumstances it may also lead to the termination of existing licences. In the event that this were to happen this could materially affect a number of the Groups businesses and potentially harm the reputation and standing of the Group and cause the termination of certain important relationships with federally funded research institutions.

Mitigation:

• Prior to the commercialisation process the Group's management seeks to obtain all the necessary clearances from applicable regulatory bodies to ensure that the export of products based upon the licenced IP is strictly in accordance with government guidelines.

• The Group employs a number of individuals with experience of working with various government agencies.

• Senior management are fully cognisant with the regulations and sensitivities in relation to this issue and in particular with International Traffic in Arms Regulations (ITAR) which regulate the use of technologies for export, and has numerous mitigating actions available should issues arise.

6. The Group operates in complex and specialised business domains and requires highly qualified and experienced management to implement its strategy successfully. All of the operations of the Group and its subsidiary businesses are located in the United States which is a highly competitive employment market. There is a risk that the Group may lose key personnel, or fail to attract or retain new personnel. Furthermore, given the relatively small size of the senior management at the corporate level, the Group is reliant on a small number of key individuals.

Impact: The loss of key personnel would have an adverse impact on the ability of the Group to continue to grow and may negatively affect the Group's competitive advantage.

Mitigation:

• The Board annually seeks external expertise to assess the competitiveness of the compensation packages of its senior management.

• Senior management continually monitor and assess compensation levels to ensure the Group remains competitive in the employment market.

• While staff turnover has historically been low and the Group continues to attract highly qualified individuals, management encourages development and inclusion through coaching and mentoring programmes.

7. A large proportion of the overall value of the Group's businesses may be concentrated in a small proportion of the Group's businesses. If one or more of the intellectual property rights relevant to a valuable business was terminated this would have a material adverse impact on the overall value of the Group's businesses.

Impact: The termination of critical IP licences would materially impact the value of the subsidiary business and have a consequent effect on the value of the overall Group.

Mitigation:

• In each subsidiary the management is specifically directed to pursue a policy of generating and patenting additional intellectual property to both provide additional protection and create direct IP ownership for the subsidiary business.

• Where possible the Group seeks to negotiate intellectual property ownership rights in any research and development agreement it enters into with a network partner, such that the Group becomes a part owner of the underlying IP.

• The Group has a diversified portfolio of subsidiary businesses. The value of any one of its subsidiaries relative to the aggregate value of the Group is closely monitored to ensure that the concentration risk of any on subsidiary is not disproportionate.

8. Clinical studies and other tests to assess the commercial viability of the product are typically expensive, complex and time-consuming, and have uncertain outcomes. If the Company fails to complete or experiences delays in completing tests for any of its product candidates, it may not be able to obtain regulatory approval or commercialise its product candidates on a timely basis, or at all.

Impact: Significant delays in any of the clinical studies to support the appropriate regulatory approvals could significantly impact the amount of capital required for the subsidiary business to become fully sustainable on a cash flow basis. A critical failure in any stage of a clinical testing programme would probably necessitate a termination of the project and a loss of the Group's investment.

Mitigation:

• The group has dedicated internal resource to establish and monitor each of the clinical programmes in order to try and maximise successful outcomes.

• During the evaluation and due diligence phase prior to the initial investment focus is placed on an analysis of the risks of the clinical phase of development.

• Prior to the launch of any clinical testing it will be normal for a dedicated management team (and in certain cases an advisory team to include key opinion leaders (KOLs)) to be hired, and experience with the management of clinical programmes would be a prerequisite qualification.

• In the event of the outsourcing of these trials, care and attention is given to assure the quality of the Contract Research Organisation (CRO) vendors used to perform the work.

This Strategic Report has been approved by the Board of Directors.

ON BEHALF OF THE BOARD

Mark Pritchard Chris Silva

Executive Chairman Chief Executive Officer

CONSOLIDATED FINANCIAL INFORMATION

The financial information set out below has been extracted from the Annual Report and Accounts of Allied Minds plc for the year ended 31 December 2014 and is an abridged version of the full financial statements, not all of which are reproduced in this announcement.

DIRECTORS' RESPONSIBILITY STATEMENT

The responsibility statement set out below has been reproduced from the Annual Report and Accounts, which will be published in April 2015, and relates to that document and not this announcement.

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and

• the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

ON BEHALF OF THE BOARD

Mark Pritchard Chris Silva

Executive Chairman Chief Executive Officer

28 April 2015

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

See accompanying notes to consolidated financial statements. Registered number: 8998697

The financial statements on pages 97 to 147 were approvedby the Board of Directorsand authorised for issue on 28 April 2015 and signed on its behalf by:

Christopher Silva

Chief Executive Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2014

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

See accompanying notes to consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(1) Accounting Policies

Basis of Preparation

Allied Minds plc ("Allied Minds" or the "Company") is a company incorporated and domiciled in the UK. The Annual Report and Accounts of Allied Minds and its subsidiaries (together referred to as the "Group") are presented for the year ended 31 December 2014. The group financial statements consolidate those of the Company and its subsidiaries and the Group's interest in associates. The Group financial statements have been prepared and approved by the directors in accordance with the International Financial Reporting Standards, International Accounting Standards, and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB") as adopted by the European Union ("adopted IFRSs"). The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated financial statements.

Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis.

Use of Judgments and Estimates

In preparing these consolidated financial statements, management has made judgments, estimates and assumptions that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to estimates are recognised prospectively.

Significant estimates made by the Group include those used in calculating share-based payment expense and related valuations, in particular when using Black Scholes or Monte Carlo models to determine the value of the equity based awards, the judgments involved in determining the point of capitalisation of development costs, the judgments used in considering any impairment required in relation to intangible assets, and the judgments made in determining control over subsidiaries. Significant estimates are also made when determining the appropriate valuation methodology and deriving the fair estimated fair value of subsidiary undertakings. These judgments include making certain estimates of the future earnings potential of the subsidiary businesses, appropriate discount rate and earnings multiple to be applied, marketability and other industry and company specific risk factors. Information about these critical judgments and estimates is included in the following notes.

Changes in Accounting Policies

In these financial statements the Group has changed its accounting policies in the following areas:

IFRS 10 Consolidated Financial Statements: As a result of IFRS 10 (2011), the Group has changed its accounting policy for determining whether it has control over and consequently whether it consolidates its investees. IFRS 10 introduces a new control model that focuses on whether the Group has power over an investee, exposure or rights to variable returns from its involvement with the investee and ability to use its power to affect those returns.

In accordance with the transitional provisions of IFRS 10, the Group reassessed the control conclusion for its investees at 1 January 2014. No modifications of previous conclusions about control regarding the Group's investees were required.

IFRS 12 Disclosure of Interest in Other Entities: As a result of IFRS 12, the Group has expanded disclosures about its interests in subsidiaries and equity-accounted investees.

Going Concern

The Directors have prepared trading and cash flow forecasts for the Group covering the period to 31 December 2016. Despite the fact that the Group is currently loss making and is likely to continue to be so, at least in the short term, after making enquiries and considering the impact of risks and opportunities on expected cashflows, and given the fact that the Group has in excess of $250 million of available funds in the form of cash and fixed income securities as at 31 December 2014, the Directors have a reasonable expectation that the Group has adequate cash to continue in operational existence for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the financial statements.

Basis of Consolidation

Allied Minds plc was formed on 15 April 2014 and on 19 June 2014 acquired Allied Minds Inc. (now Allied Minds, LLC) by share exchange. Each issued and outstanding common stock of Allied Minds Inc. held by stockholders of Allied Minds, Inc. (now Allied Minds, LLC) was converted into the right to receive twenty two ordinary shares of Allied Minds plc. This has been accounted for as a common control transaction under IFRS 3.B1 (see note 16), therefore the consolidated financial statements for each of the years ended 31 December 2014 and 2013 comprises the financial statements of Allied Minds plc and the consolidated financial statements of Allied Minds, Inc. (now Allied Minds, LLC) and its subsidiaries.

Subsidiaries

The financial information of the subsidiaries is prepared for the same reporting period as the parent Company, using consistent accounting policies. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Changes in the group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Where the group loses control of a subsidiary, the assets and liabilities are derecognised along with any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of another entity.

Associates are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group's share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an investee.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra- group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Acquisitions and disposals of non-controlling interests

Non-controlling interests (''NCI'') are measured at their proportionate share of the acquiree's identifiable net assets at the acquisition date. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Acquisitions and disposals of non-controlling interests that do not result in a change of control are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. Any difference between the price paid or received and the amount by which non-controlling interests are adjusted is recognised directly in equity and attributed to the owners of the parent.

Functional and Presentation Currency

This consolidated financial statements are presented in US dollars, which is the functional currency of most of the entities in the Group.

Foreign Currency

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group's presentational currency U.S. dollar at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve or non- controlling interest, as the case may be. When a foreign operation is disposed of, such that control, joint control or significant influence (as the case may be) is lost, the entire accumulated amount in the Translation reserve, net of amounts previously attributed to non-controlling interests, is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while still retaining control, the relevant proportion of the accumulated amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while still retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid instruments with original maturities of three months or less.

Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the specific identification or weighted-average method. The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Financial Instruments

Financial Assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.

Financial assets and liabilities are offset and the net amount presented in the Consolidated Statement of Financial Position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group classifies its financial assets into the following categories: cash and cash equivalents, trade and other receivables, security and other deposits, other investments. Such financial assets are recognised at fair value.

Other investments comprise fixed income debt securities, including government agency and corporate bonds, are stated at amortised cost less impairment. It is the Group policy to hold these investments till maximum maturity of three years.

Financial Liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

The Group classifies non-derivative financial liabilities into the following categories: trade and other payables and loans. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

Warrants are accounted for as equity instruments and recorded at fair value.

Share Capital

Ordinary shares are classified as equity. The Group considers its capital to comprise share capital, share premium, merger reserve, other reserve, translation reserve, and accumulated deficit.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Assets under construction represent machinery and equipment to be used in operations, R&D activities, or to be leased to customers once completed.

When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets:

Computers and electronics 3 years

Furniture and fixtures 5 years

Machinery and equipment 5 -20 years

Under construction Not depreciated until transferred into use

Leasehold improvements Shorter of the lease term or estimated useful life of the asset

Depreciation methods, useful lives and residual values are reviewed at least annually and adjusted if appropriate.

Intangible Assets

Licenses and Purchased In Process Research & Development

Licenses represent licenses provided by universities and scientists in exchange for an equity ownership in the entities. Purchased in process research & development (''IPR&D'') represents time and expertise already invested by the scientist and provided in exchange for an equity interest in the entity. Licenses and purchased IPR&D are valued based on the amount of cash contributed by Allied Minds, at inception of the subsidiary, and the proportionate amount of equity ascribed to Allied Minds. The licenses and IPR&D are capitalised only when they meet the criteria for capitalisation, namely separately identifiable and measurable and it is probable that economic benefit will flow to the entity.

Capitalised Development Costs

Research and development costs include charges from universities based on sponsored research agreements (SRAs) that the subsidiaries of Allied Minds enter into with universities. Under these agreements, the universities perform research on the technology that is being licensed to the subsidiaries. Research and development costs also include charges from independent research and development contractors, contract research organisations (CROs), and other research institutions.

Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, the Group intends to and has sufficient resources to complete development and to use or sell the asset, and if the Group can measure reliably the expenditure attributable to the intangible asset during its development. The point at which technical feasibility is determined to have been reached is when regulatory approval has been received, where applicable. Management determines that commercial viability has been reached when a clear market and pricing point have been identified, which may coincide with achieving recurring sales. Development activities involve a plan or design for the production of new or substantially improved products or processes. The expenditure considered for capitalisation includes the cost of materials, direct labour and an appropriate proportion of overhead costs. Otherwise, the development expenditure is recognised in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

Software

Software intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.

Finite-lived intangible assets are amortised on a straight-line basis over their estimated useful lives, from the date that they are available for use. Intangible assets which are not yet available for use (and therefore not amortised) are tested for impairment at least annually.

Amortisation

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. Amortisation methods, useful lives and residual values are reviewed at least annually and adjusted if appropriate.

The estimated useful lives of the Group's intangible assets are as follows:

Licences Over the remaining life of the underlying patents

Purchased IPR&D Over the remaining life of the underlying patents, once commercial viability has been achieved

Development cost Over the remaining life of the underlying technology

Software 2 years

Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current Income Tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred Income Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities where the Group intends to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Deferred taxes are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.

Impairment

Impairment of Non-Financial Assets

Non-financial assets consist of property and equipment and intangible assets, including licences, purchased IPR&D, capitalised development cost, with finite lives and such intangible assets which are not yet available for use.

The Group reviews the carrying amounts of its property and equipment and finite-lived intangibles at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Intangible assets which are not yet available for use are tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (''CGUs'').

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised in profit and loss if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are allocated to reduce the carrying amounts of assets in a CGU on a pro rata basis.

Impairment of Financial Assets

Financial assets not classified as at fair value through profit or loss are assessed at each reporting date to determine whether there is objective evidence of impairment.

Objective evidence that financial assets are impaired includes:

• default or delinquency by a debtor;

• restructuring of an amount due to the Group on terms that the Group would not consider otherwise;

• indications that a debtor or issuer will enter bankruptcy;

• adverse changes in the payment status of borrowers or issuers;

• the disappearance of an active market for a security; or

• observable data indicating that there is measurable decrease in expected cash flows from a group of financial assets.

Financial Assets Measured at Amortised Cost

The Group considers evidence of impairment for these assets at both an individual asset and a collective level. All individually significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is carried out by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Group uses historical information on the timing of recoveries and the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss is calculated as the difference between an asset's carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.

Share-based Payments

Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group.

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The fair value of the options granted is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Employee Benefits

Short-term Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

Defined Contribution Plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in the periods during which related services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Phantom Plan

The Phantom Plan is a cash settled bonus plan. Expense is accrued when it is determined that it is probable that a payment will be made and when the amount can be reasonably estimated.

Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.

Revenue Recognition

Sale of Goods

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably.

The transfer of significant risks and rewards of ownership usually occurs when products are shipped and the customer takes ownership and assumes risk of loss.

Rendering of Services

The Group recognises revenue from rendering of services at the time services are provided to the customer and the Group has no additional performance obligation to the customer.

Government Grants

Grants received are recognised as revenue when the related work is performed and the qualifying research and development costs are incurred.

Finance Income and Finance Costs

Finance income mainly comprises interest income on funds invested and foreign exchange gains. Finance costs mainly comprise loan interest expense and foreign exchange losses. Interest income and interest payable are recognised as they accrue in profit or loss, using the effective interest method.

Fair Value Measurements

A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

The carrying amount of cash and cash equivalents, accounts receivable, deposits, accounts payable, accrued expenses and other current liabilities in the Group's Consolidated Statements of Financial Position approximates their fair value because of the short maturities of these instruments.

Operating Leases

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Operating Segments

Allied Minds determines and presents operating segments based on the information that internally is provided to the executive management team, the body which is considered to be Allied Minds' Chief Operating Decision Maker (''CODM'').

An operating segment is a component of Allied Minds that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Allied Minds' other components. The operating segment's operating results are reviewed regularly by the CODM to make decisions about resources to be allocated to the segment, to assess its performance, and for which discrete financial information is available.

(2) New Standards and Interpretations not yet Adopted

A number of new standards, interpretations and amendments to existing standards are effective for annual periods beginning after 1 January 2015, and have not therefore been applied in preparing this consolidated financial information. Management has yet to complete an analysis of these new standards, interpretations and amendments to existing standards on the results of its operations, financial position, and disclosures. The Group intends to adopt these standards on their respective effective dates.

The following are amended or new standards and interpretations that may impact the Group. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated:

IFRS 9, 'Financial instruments' (effective 1 January 2018)

IFRS 15, 'Revenue from contracts with customers' (effective 1 January 2017)

Amendment to IFRS 11,'Joint arrangements on acquisition of an interest in a joint operation', (effective 1 January 2016)

Amendment to IAS 16 ,'Property, plant and equipment' and IAS 38,'Intangible assets', on depreciation and amortisation (effective 1 January 2016)

Amendment to IFRS 9, 'Financial instruments', on general hedge accounting (effective date 1 Jan 2018)

Amendments to IAS 27, 'Separate financial statements' on equity accounting (effective 1 January 2016)

Amendments to IFRS 10, 'Consolidated financial statements' and IAS 28,'Investments in associates and joint ventures' on sale or contribution of assets (effective 1 January 2016)

Amendments to IFRS 10, 'Consolidated financial statements' and IAS 28,'Investments in associates and joint ventures' on applying the consolidation exemption (effective 1 January 2016)

Annual improvements (2014) effective 1 January 2016

Amendments to IAS 1,'Presentation of financial statements' disclosure initiative (effective 1 January 2016)

(3) Revenue

Revenue recorded in the statement of comprehensive loss consists of the following:

Deferred revenue recorded in the statement of financial position consists of the following: