The Trendlines Group Investor presentation Steve Rhodes Todd Dollinger Gabi Heller Chairman and CEO Chairman and CEO Chief Financial Officer March 2018 SGX:42T OTCQX: TRNLY
Legal disclaimer Important notice This presentation is for informational purposes only and does not constitute or form any part of any offer for sale or subscription of, or solicitation of, any offer to buy or subscribe for any securities of The Trendlines Group Ltd. (“Company”) or any of its portfolio companies nor shall it or any part of it form the basis of, or be relied on in connection with, any contract, commitment or any investment decision whatsoever in Singapore, Israel, the United States or in any other jurisdiction. The summary information herein does not purport to be complete. The information in this presentation should not be relied upon as any representation or warranty, express or implied, of the Company. No reliance should be placed on the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. The information is subject to change without notice. The past performance of the Company is not necessarily indicative of its future performance. This presentation may contain statements that constitute forward-looking statements which involve risks and uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the results of business operations and financial condition, industry, environment and future events and plans of the Company. Such forward-looking statements are not guarantees of future results, performance or achievements. Actual results, performance or achievements of the Company may differ from those expressed in the forward-looking statements as a result of various factors and assumptions, such as known and unknown risks and uncertainties, including those risk factors discussed in our Offer Document dated 16 November 2015 and in our other filings with the SGXNET. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. In light of these risks and uncertainties, actual events, results and developments could differ materially from those expressed or implied by the forward-looking statements. Reliance should not be placed on these forward-looking statements, which reflect the view of the Company or its officers as of the date of this presentation only. The Company does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise. None of the Company or any of its respective affiliates, advisers or representatives shall have any liability whatsoever for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation. Neither this presentation nor any of its contents may be used without the prior written consent of the Company. 2
10 years of portfolio value expansion Portfolio value with exit proceeds US$ millions 140 120 Portfolio value* 100 Cumulative exit proceeds 80 60 40 20 0 30.12.08 30.12.09 30.12.10 30.12.11 31.12.12 31.12.13 31.12.14 31.12.15 31.12.16 31.12.17 *Portfolio value includes the fair value of investments in portfolio companies accounted for under the equity method or consolidated subsidiaries 3
Trendlines: building companies, commercializing innovation Life science incubators 4
Trendlines: building companies, commercializing innovation In-house innovation center of The Trendlines Group Inventing and developing technologies to address unmet market needs 5
Carrying value on eve of exit vs. exit value US$ millions Total exits through 31 December 2017 70 60 50 40 30 Cash invested 20 Total investment = Cash + in-kind Pre-exit carrying value 10 Exit value (1) 0 (1) Includes present value of Most Valuable Portfolio Company estimated royalties 6
Exits: estimated returns and IRR Estimated return * Exit Company/Description Acquirer IRR (%) 2017 MitrAssist Wai Tech (Hong Kong) Holding Ltd. 2.1 X 12 2017 BioSight Arkin Bio Ventures LP 216.7 X 71 2016 E.T.View Medical Ambu A/S 1.2 X 5 Most Valuable Portfolio 2014 Undisclosed ** 82.7 X *** 80 Company (MVPC) ** 2014 Inspiro Medical OPKO Health 8.8 X 131 2013 InnoLap Surgical Teleflex, Inc. 3.2 X 447 2013 FlowSense Medical Baxter Int’l 4.0 X 280 2011 PolyTouch Medical Covidien Ltd. 6.7 X 289 Weighted 10. 4X 95% average Notes * Estimated return represents the multiple of exit proceeds over Trendlines’ cash and non -cash investment in the exited company: (i) our cash investment and (ii) estimated value of services provided to the exited company. ** Unable to disclose due to confidentiality obligations. *** Exit by MVPC asset sale. Based on the fair value of the MVPC (which remains in our portfolio) as of 31 December 2017 compared to our investment at that time. 7
The Trendlines model
The Trendlines model: capital leverage* Trendlines’ typical investment ~US $1,420,000 per company In-kind Trendlines Government investment at capital grant cost ~US $120,000 ~US $650,000 ~US $650,000 over two years *Model shown is Israel; similar leverage in Singapore 9
Trendlines model: proven, focused company-building timeline Need/ Due Year 1 Year 2 Year 3+ Diligence Ideation Proof of concept R&D to prototype Path to exit Physicians Market assessment Regulatory plan Follow-on funding Governance Engineers Business case IP strengthening Preclinical / clinical trials Follow-on funding Farmers Technology assessment Market research Regulatory submission Business development Tech transfer Leverage funding Accounting & legal Marketing activities Commercialization Trendlines Labs Investment HR management “A” Round funding Investment banking 10
Trendlines model: intensive support Business development Financial structuring Customer, partner, investor relationships Raising capital Entrepreneurial Market research ecosystem G&A support Marketing communications Bookkeeping, accounting, legal, operations Facilities & infrastructure Technology development Companies located in Trendlines’ offices 11
Trendlines model: Government strategic of Singapore partnerships Haier Government of Israel 12
Trendlines Labs • 2 Trendlines portfolio companies: Selected Trendlines Labs inventions Limaca and InterVaal Field Invention Status • Partnerships in Singapore, Japan, Reduced infection-risk New company: Urology Europe, U.S. Foley catheter InterVaal (Singapore) Disposable surgical • Neurology Concept Growing investments with current endoscope partners Women’s health Delaying preterm birth Establishing company • 2 Trendlines Labs technologies in Cardiology Treating AFIB Prototype clinical trials: Aging Portfolio of concepts At-home monitoring population and products • Electrolyte balance monitoring (sZone) Endoscopic ultrasound New company: Limaca Diagnostics • Stress urinary incontinence device fine needle biopsy (Israel) 13
Decades of company-building experience Nitza Kardish, Ph.D. Todd Dollinger VP The Trendlines Group Yosi Hazan Chairman & CEO CEO Trendlines Incubators Israel CEO Trendlines Labs Eric Loh CEO Trendlines Medical Singapore Steve Rhodes Chairman & CEO Gabi Heller Moshe Katzenelson CFO & Joint Co. Sec’y. VP Business Dev. 14
Expanding portfolio value
Achieving milestones to create value As at 31 December 2017; 29 written-off portfolio companies and 1 company established before September 2007 not listed. One of our 10 most valuable portfolio companies as at 31 December 2017. 16
10 most valuable portfolio companies Fair market value of 10 most valuable portfolio companies ~US$67.8 million, 70.1% of total portfolio value of ~US$96.8 million.* Company name Initial investment % owned (fully diluted) ApiFix Ltd. 2011 24.02 Arcuro Medical Ltd. 2013 37.36 BioFishency Ltd. 2013 48.78 EdenShield Ltd. 2012 23.06 Fidmi Medical Ltd. 2014 48.28 Leviticus Cardio Ltd. 2010 20.08 Saturas Ltd. 2013 28.00 Stimatix GI Ltd. 2009 27.17 STS Medical Ltd. 2013 32.72 ViAqua Therapeutics Ltd. 2014 53.50 *As at 31 December 2017, including the fair value of investments in consolidated portfolio companies. Companies listed alphabetically. 17
Minimally invasive scoliosis correction system Minimally invasive scoliosis correction system incorporates a miniature ratchet mechanism for gentle, incremental correction over time Investment & Intense Support • US$10.8 million raised in three rounds • Last round led by B. Braun • Investors brought by Trendlines, including many Trendlines’ shareholders Achievements • Completed >175 successful surgical procedures • Some patients more than 5 years post-surgery • CE mark, commercial sales • Surgical procedures: North America, Europe • Distribution agreements: Canada, Spain, Holland, Greece, Singapore, and more The ApiFix minimally invasive scoliosis correction system 4 Jan 2018 18
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