DGAP-News: Mainstay Medical International Plc: Mainstay Medical legt Halbjahresergebnisse vor

Mainstay Medical International Plc: Mainstay Medical legt Halbjahresergebnisse vor

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DGAP-News: Mainstay Medical International Plc / Schlagwort(e):

Halbjahresergebnis/Umsatzentwicklung

Mainstay Medical International Plc: Mainstay Medical legt

Halbjahresergebnisse vor (News mit Zusatzmaterial)

05.09.2017 / 09:29

Für den Inhalt der Mitteilung ist der Emittent verantwortlich.

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Mainstay Medical legt Halbjahresergebnisse vor

- Klinische Studie ReActiv8-B kommt gut voran - Einschluss voraussichtlich

Ende 2017 komplett

- Vertrieb von ReActiv8(R) in Europa hat begonnen

- Barmittelbestand am 30. Juni 2017 - 24,5 Millionen US-Dollar

Dublin - Irland, 5. September 2017 - Mainstay Medical International plc

("Mainstay",

oder das "Unternehmen", Euronext Paris: MSTY.PA und ESM an der Irish Stock

Exchange: MSTY.IE) gibt heute die Vorlage des Halbjahresberichts zum

Stichtag 30. Juni 2017 bekannt. Das Medizintechnik-Unternehmen Mainstay

betreibt die Markteinführung von ReActiv8(R), eines implantierbaren

wiederherstellenden Neurostimulationssystems zur Behandlung von

einschränkenden chronischen Kreuzschmerzen (Chronic Low Back Pain, CLBP).

Peter Crosby, Vorstandsvorsitzender von Mainstay, sagte:

"Die klinische Studie ReActiv8-B ist ein entscheidender Schritt voran auf

dem Weg zum Vertrieb in den Vereinigten Staaten, unserem bedeutendsten

Zielmarkt. Die Studie kommt gut voran, und die Einschlussrate hat sich

beschleunigt, weil die Zahl der aktiven Zentren im Laufe des Jahres 2017

gestiegen ist. Auf der Grundlage unserer bisherigen Erfahrungen erwarten

wir, den Einschluss von Teilnehmern gegen Ende dieses Jahres abzuschließen.

Ergebnisse werden 2018 verfügbar sein."

"Inzwischen haben wir mit dem Vertrieb von ReActiv8 in Europa begonnen. Seit

dem ersten Verkauf samt Implantation Anfang 2017 gewinnen unsere

anfänglichen Kunden an Erfahrung mit ReActiv8 und wir arbeiten mit Ihnen

daran, die Therapie in ihre klinische Routine zu integrieren. Wir treiben

unsere Strategie weiter voran,

mit wichtigen Referenzzentren in Deutschland zusammenzuarbeiten, und dann

auf diese Erfahrungen und auf die Daten aus der Studie ReActiv8-B

aufzubauen, um den Vertrieb auf zusätzliche Zentren und andere Länder

auszuweiten."

Business-Update:

- Die klinische Studie ReActiv8-B ist eine internationale, multizentrische,

prospektive, randomisierte, Placebo-kontrollierte und dreifach verblindete

Studie mit einmaligem Crossover. Sie wird mit einer Ausnahmegenehmigung für

Forschungszwecke (Investigational Device Exemption, IDE) der US Food and

Drug Administration (FDA) durchgeführt. Die klinische Studie ReActiv8-B soll

Daten gewinnen, die Teil eines Pre-Market-Approval-Antrags (PMAA) für

ReActiv8 bei der FDA werden sollen. Weitere Details finden sich unter

https://clinicaltrials.gov/show/NCT02577354.

Im Jahr 2017 haben wir die klinische Studie ReActiv8-B vorangebracht, und

mehr als die Hälfte der erforderlichen Implantationen sind inzwischen

ausgeführt worden.

- Im Februar 2017 haben wir den ersten Verkauf samt Implantation am

Katholischen Krankenhaus Koblenz-Montabaur in Koblenz, Deutschland,

bekanntgegeben. Wir konzentrieren uns darauf, die Akzeptanz von ReActiv8 in

ausgewählten multidisziplinären Wirbelsäulenzentren voranzutreiben, die eine

große Patientenpopulation haben. In dem Maße wie unsere Pionier-Kunden an

Erfahrung mit ReActiv8 gewinnen, arbeiten wir mit Ihnen daran, die Therapie

in ihre klinische Routine zu integrieren. Wir machen Fortschritte bei

unseren Gesprächen mit anderen wichtigen Zentren in Deutschland, und

Implanteurs-Schulungen für diese Zentren laufen. Es ist unsere Strategie,

mit wichtigen Referenzzentren in Deutschland zusammenzuarbeiten, und dann

auf diese Erfahrungen und auf die Daten aus der Studie ReActiv8-B

aufzubauen, um den Vertrieb auf zusätzliche Zentren und andere Länder

auszuweiten. Erst kürzlich, im Mai 2017, haben wir den Vertriebsstart in

Irland bekanntgegeben, Mainstays Heimatmarkt.

Finanz-Update:

- Die Umsatzerlöse während der Halbjahresperiode vor dem Stichtag 30. Juni

2017 beliefen sich auf 0,25 Millionen US-Dollar.

- Die betrieblichen Aufwendungen betrugen 12,3 Millionen US-Dollar (8,0

Million US-Dollar im 1. Halbjahr 2016). Der Anstieg wurde maßgeblich vom

Hochfahren der Einschlüsse und Implantationen in der klinischen Studie

ReActiv8-B verursacht, sowie von den Ausgaben bei den Vertriebsaktivitäten

(die 2017 begonnen haben).

- Der Barmittelbestand lag am 30. Juni bei 24,5 Millionen US-Dollar, und der

operative Mittelabfluss beziffert sich in der Periode auf 11,4 Millionen

US-Dollar.

- Ende -

Über Mainstay

Mainstay ist ein Medizintechnik-Unternehmen mit dem Ziel, das innovative

implantierbare Neurostimulationssystem ReActiv8 für Menschen mit

einschränkenden chronischen Kreuzschmerzen (chronic low back pain, CLBP) auf

den Markt zu bringen. Das Unternehmen hat seinen Hauptsitz in Dublin,

Irland. Es ist mit Tochtergesellschaften in Irland, in den USA, in

Australien und in Deutschland tätig. Seine Aktien sind zum Handel an der

Börse Euronext Paris (MSTY.PA) und am ESM der Irish Stock Exchange (MSTY.IE)

zugelassen.

Über die klinische Studie ReActiv8-B

Die klinische Studie ReActiv8-B ist eine internationale, multizentrische,

prospektive, randomisierte, Placebo-kontrollierte und verblindete Studie mit

einmaligem Crossover. Sie wird mit einer Ausnahmegenehmigung für

Forschungszwecke (Investigational Device Exemption, IDE) durchgeführt. Die

klinische Studie ReActiv8-B soll Daten gewinnen, die Teil eines

Pre-Market-Approval-Antrags (PMAA) für ReActiv8 bei der US Food and Drug

Administration (FDA) werden sollen. Weitere Details finden sich unter

https://clinicaltrials.gov/show/NCT02577354.

Über chronische Kreuzschmerzen

Eine der anerkannten Ursachen von chronischen Kreuzschmerzen (chronic low

back pain, CLBP) ist die gestörte Kontrolle des Nervensystems über die

Muskeln, die für die dynamische Stabilisierung der Wirbelsäule im unteren

Rücken zuständig sind. Eine instabile Wirbelsäule kann zu Rückenschmerzen

führen. ReActiv8 ist so konstruiert, dass es diejenigen Nerven elektrisch

stimuliert, die für die Kontraktion dieser Muskeln zuständig sind. Dadurch

hilft es, die Kontrolle über die Muskeln wieder herzustellen und die

dynamische Stabilisierung der Wirbelsäule zu verbessern, was dem Körper eine

Genesung von den chronischen Kreuzschmerzen erlaubt.

Menschen mit chronischen Kreuzschmerzen haben üblicherweise eine stark

reduzierte Lebensqualität und weisen erhöhte Werte bei Schmerz,

Einschränkungen, Depressionen, Angstzuständen und Schlafstörungen auf. Ihre

Schmerzen und Einschränkungen können trotz bester verfügbarer medizinischer

Behandlung fortbestehen. Nur ein kleiner Teil der Fälle lässt sich auf einen

pathologischen Befund oder einen anatomischen Defekt zurückführen, der mit

einem wirbelsäulenchirurgischen Eingriff korrigierbar wäre. Die Betroffenen

sind durch die Beschwerden in ihrer Arbeitsfähigkeit und Alltagstauglichkeit

stark eingeschränkt. Die Verluste an Arbeitstagen, Hilfeleistungen bei

Schwerbehinderung und Inanspruchnahme medizinischer Leistungen ist eine

erhebliche Belastung für den Einzelnen, seine Familie, die Wirtschaft, die

öffentliche Verwaltung und für die Allgemeinheit.

Weitere Einzelheiten finden sich unter www.mainstay-medical.com

ACHTUNG - in den USA ist ReActiv8 durch Bundesgesetze auf den Einsatz in der

Forschung beschränkt.

PR- und IR-Anfragen:

Consilium Strategic Communications (International Strategische Kommunikation

- Wirtschafts- und Fachmedien)

Chris Gardner, Mary-Jane Elliott, Jessica Hodgson, Hendrik Thys

Tel: +44 203 709 5700 / +44 7921 697 654

Email: mainstaymedical@consilium-comms.com

FTI Consulting (für Irland)

Jonathan Neilan

Tel: +353 1 663 3686

Email: jonathan.neilan@fticonsulting.com

NewCap (für Frankreich)

Louis-Victor Delouvrier

Tel: +: +33 1 44 71 98 53

Email: lvdelouvrier@newcap.fr

AndreasBohne.Com/Kötting Consulting (für Deutschland)

Andreas Bohne

Tel : +49 2102 1485368

Email : abo@andreasbohne.com

Investor Relations:

LifeSci Advisors, LLC

Brian Ritchie

Tel: + 1 (212) 915-2578

Email: britchie@lifesciadvisors.com

ESM Advisers:

Davy

Fergal Meegan or Barry Murphy

Tel: +353 1 679 6363

Email: fergal.meegan@davy.ie or barry.murphy2@davy.ie

PR and IR Enquiries:

In die Zukunft gerichtete Aussagen

Diese Mitteilung enthält Aussagen, die in die Zukunft gerichtet sind oder so

verstanden werden könnten. Diese in die Zukunft gerichteten Aussagen sind

kenntlich durch Formulierungen, die in die Zukunft weisen, einschließlich

Ausdrücken wie "antizipiert", "glaubt", "schätzt", "erwartet",

"beabsichtigt", "mag", "plant", "projektiert", "sollte", "will" oder

"untersucht", oder jeweils durch deren negative oder andere Varianten, oder

durch vergleichbare Formulierungen, oder durch Darlegungen von Strategie,

Plänen, Planzielen, Zielsetzungen, künftigen Ereignissen oder Absichten.

Diese in die Zukunft gerichteten Aussagen schließen alles jenseits der

historischen Fakten ein. Sie sind Teil dieser Mitteilung und schließen

Absichten des Unternehmens, Überzeugungen oder gegenwärtige Erwartungen

unter anderem betreffend die Erlöse des Unternehmens, seine finanzielle

Lage, Vorstellungen, Finanzstrategien, Erwartungen an Produktentwurf oder

Entwicklung, regulatorische Anträge und Zulassungen, Erstattungsregelungen,

Vermarktungskosten und Marktdurchdringung ein, sie sind aber darauf nicht

beschränkt.

Es liegt in der Eigenart von in die Zukunft gerichteten Aussagen, dass sie

Risiken und Unwägbarkeiten einschließen, weil sie sich auf künftige

Ereignisse und Umstände beziehen. In die Zukunft gerichtete Aussagen sind

keine Garantien künftiger Leistungsfähigkeit, und die tatsächlichen

Ergebnisse der Tätigkeit des Unternehmens, die Entwicklung seines

Hauptproduktes, der Märkte und der Branche in der das Unternehmen tätig ist,

können wesentlich von jenen abweichen, die durch in die Zukunft gerichtete

Aussagen in dieser Mitteilung beschrieben oder angedeutet werden. Sogar wenn

die Ergebnisse der Tätigkeit des Unternehmens, seine finanzielle Lage und

sein Wachstum, sowie die Entwicklung seines Hauptproduktes, der Märkte und

der Branche, in der es tätig ist, mit den in dieser Mitteilung enthaltenen

in die Zukunft gerichteten Aussagen überein stimmen, sind diese Ergebnisse

oder Entwicklungen nicht unbedingt ein Hinweis auf Ergebnisse oder

Entwicklungen in Folgeperioden. Zahlreiche Faktoren könnten dafür sorgen,

dass Ergebnisse und Entwicklungen des Unternehmens erheblich von jenen

abweichen, die ausdrücklich oder implizit in den in die Zukunft gerichteten

Aussagen genannt sind. Das schließt den erfolgreichen Marktstart und die

Vermarktung von ReActiv8(R), den Fortschritt und Erfolg der klinischen

Studie ReActiv8-B, die allgemeinen wirtschaftlichen und geschäftlichen

Umstände, die Bedingungen am weltweiten Medizintechnik-Markt,

Branchentrends, Wettbewerb, gesetzliche oder regulatorische Veränderungen,

steuerliche Veränderungen, die Verfügbarkeit und Kosten von Kapital, die zur

Auflage und zum Abschuss klinischer Studien benötigte Zeit, die zur

Erlangung regulatorischer Zulassungen erforderliche Zeit und Prozesse,

Wechselkursveränderungen, Veränderungen der Geschäftsstrategie sowie

politische und wirtschaftliche Unwägbarkeiten ein, ohne sich darauf zu

beschränken. Die hier genannten in die Zukunft gerichteten Aussagen sind nur

aussagekräftig zum Zeitpunkt dieser Mitteilung.

Mainstay Medical International plc and its subsidiaries

Half Year Report comprising Interim Management Report and condensed

consolidated Financial Statements for the half year ended 30 June 2017

Mainstay Medical International plc

Table of contents

Corporate and shareholder information 3

Interim Management Report 4

Director's Responsibilities Statement 8

Condensed consolidated statement of profit or loss and other 9

comprehensive income

Condensed consolidated statement of financial position 10

Condensed consolidated statement of changes in shareholders' 11

equity

Condensed consolidated statement of cash flows 12

Notes to the condensed consolidated Financial Statements 13

Forward looking statements

This report includes statements that are, or may be deemed to be, forward

looking statements. These forward looking statements can be identified by

the use of forward looking terminology, including the terms "anticipates",

"believes", "estimates", "expects", "intends", "may", "plans", "projects",

"should", "will", or "explore" or, in each case, their negative or other

variations or comparable terminology, or by discussions of strategy, plans,

objectives, goals, future events or intentions. These forward looking

statements include all matters that are not historical facts. They appear

throughout this report and include, but are not limited to, statements

regarding the Company's intentions, beliefs or current expectations

concerning, among other things, the Company's results of operations,

financial position, prospects, financing strategies, expectations for

product design and development, regulatory applications and approvals,

reimbursement arrangements, costs of sales and market penetration.

By their nature, forward looking statements involve risk and uncertainty

because they relate to future events and circumstances. Forward looking

statements are not guarantees of future performance and the actual results

of the Company's operations, and the development of its main product, the

markets and the industry in which the Company operates, may differ

materially from those described in, or suggested by, the forward looking

statements contained in this report. In addition, even if the Company's

results of operations, financial position and growth, and the development of

its main product and the markets and the industry in which the Company

operates, are consistent with the forward looking statements contained in

this annual report, those results or developments may not be indicative of

results or developments in subsequent periods. A number of factors could

cause results and developments of the Company to differ materially from

those expressed or implied by the forward looking statements including,

without limitation, the successful launch and commercialization of ReActiv8,

the progress and success of the ReActiv8-B Clinical Trial, general economic

and business conditions, the global medical device market conditions,

industry trends, competition, changes in law or regulation, changes in

taxation regimes, the availability and cost of capital, the time required to

commence and complete clinical trials, the time and process required to

obtain regulatory approvals, currency fluctuations, changes in its business

strategy, political and economic uncertainty. The forward-looking statements

herein speak only at the date of this report.

Mainstay Medical International plc

Corporate and shareholder information

Directors Oern Stuge MD, Independent Non-Executive

Chairman

Peter Crosby, Chief Executive Officer and

Executive Director

David Brabazon, Independent Non-Executive

Director

Greg Garfield, Non-Executive Director

Nael Karim Kassar, Non-Executive Director

Antoine Papiernik, Non-Executive Director

James Reinstein, Independent Non-Executive

Director

Manus Rogan PhD, Non-Executive Director

Dan Sachs MD, Non-Executive Director

Secretary Tom Maher

Registered office Clonmel House

Forster Way

Swords, K67F2K3

County Dublin, Ireland

Registered number 539688

Website www.mainstay-medical.com

ISIN / Symbol IE00BJYS1G50 / MSTY.PA (Paris) and MSTY.IE

Solicitors/ Lawyers McCann FitzGerald

Riverside One

Sir John Rogerson's Quay

Dublin 2, Ireland

Jones Day

2, rue Saint-Florentin

75001 Paris, France

Independent Auditor KPMG

Chartered Accountants

1 Stokes Place

St Stephen's Green

Dublin 2, Ireland

Principal Bankers HSBC

Bank of Ireland

ESM Adviser and J&E Davy

Broker

Davy House

49 Dawson Street

Dublin 2, Ireland

Registrar Computershare Investor Services (Ireland)

Limited

Heron House

Corrig Road

Sandyford Industrial Estate

Dublin 18, Ireland

Paying Agent (in Caceis Corporate Trust

France)

1/3, Place Valhubert

75013 Paris

France

Mainstay Medical International plc

Interim Management Report

The Board of Directors is pleased to report on the progress of Mainstay

Medical International plc (Mainstay or the Company) and present the Half

Year Report for the half year ended 30 June 2017 of the Company and its

subsidiaries (the Group or we).

Principal activities

Mainstay is a medical device company focused on bringing to market

ReActiv8(R),

an implantable restorative neurostimulation system to treat disabling

Chronic Low Back Pain (CLBP). ReActiv8 is designed to electrically stimulate

the nerves responsible for contracting muscles which stabilize the lumbar

spine. Activation of these muscles to restore functional stability has been

shown to facilitate recovery from CLBP. Mainstay received CE Marking for

ReActiv8 based on positive results from the ReActiv8-A Clinical Trial which

demonstrated a clinically important, statistically significant and lasting

improvement in pain, disability and quality of life in people with disabling

CLBP and few other treatment options.

The Company is incorporated in Ireland as a public limited company. The

Company's ordinary shares are listed on the ESM of the Irish Stock Exchange

and Euronext Paris.

As at 30 June 2017, the Company together with its operating subsidiaries

Mainstay Medical Limited, Mainstay Medical Distribution Limited, Mainstay

Medical GmbH, MML US, Inc. and Mainstay Medical (Australia) Pty. Limited

form the Mainstay Medical Group.

Business review

ReActiv8-B Clinical Trial - The ReActiv8-B Clinical Trial (the Trial) is an

international, multi-center, prospective randomized sham-controlled triple

blinded trial with one-way crossover, conducted under an Investigational

Device Exemption (IDE) from the US Food and Drug Administration (FDA). The

statistical design of the Trial requires data from 128 subjects at the

120-day primary outcome assessment visit. Total subjects implanted will also

include some enrolled and implanted as part of the surgical roll-in phase,

in addition to subjects in the pivotal cohort.

The Trial is intended to gather data in support of an application for

pre-market approval (PMA) from the FDA, a key step towards the

commercialization of ReActiv8 in the US. Information about the trial can be

found at https://clinicaltrials.gov/ct2/show/study/NCT02577354.

During the first half of 2017, we have continued to advance the Trial which

commenced in September 2016. In August 2017, we announced that over half the

required number of implants have been performed. The enrollment has been

accelerating as the number of active sites increased during 2017.

The Trial is designed with an interim analysis of the primary efficacy end

point (the Interim Analysis) for sample size re-estimation when primary

outcome data are available from half the subjects in the pivotal cohort. The

Interim Analysis will be performed by a third-party independent statistician

under the direction of the Data Monitoring Committee (DMC), and the Interim

Analysis, other than a DMC recommendation regarding the findings, will

remain blinded to the Group, study subjects, investigators and Clinical

Trial sites.

The primary efficacy endpoint of the Trial is a comparison of responder

rates between the treatment and control arms. The Trial will be considered a

success if there is a statistically significant difference in responder

rates between the treatment and control arms. The Trial, if successful, will

provide Level 1A Evidence of efficacy of ReActiv8, which may be used to

support applications for favorable reimbursement in the USA. Evidence from

the Trial will be used to support market development activities worldwide.

Based on our experience to date, we anticipate that enrollment will complete

around the end of 2017, with results available in 2018.

Commercialization - In February 2017, we announced the first sale and

implant had been performed at the Catholic Hospital Koblenz-Montabaur in

Koblenz, Germany. We are focusing commercialization of ReActiv8 initially on

Germany, where we aim to drive adoption of ReActiv8 in a select number of

high volume multi-disciplinary spine care centers. As our pioneering

customers are gaining more experience with the ReActiv8 therapy we are

working with them towards the goal of making ReActiv8 part of their clinical

practice. We are progressing discussions with other key centers in Germany,

and implanter training for these centers is underway. Our strategy is to

work with key reference centers in Germany, and then build on that

experience and data from the ReActiv8-B Trial to expand commercialization to

additional centers and other countries.

More recently, in May 2017, we announced that commercialization has begun in

Ireland, Mainstay's home market.

On 12 January 2017, we announced we had applied for ReActiv8 to be admitted

to the Australian Register of Therapeutic Goods (ARTG) to allow for

commercialization in Australia. The ARTG application included the results of

the ReActiv8-A Clinical Trial. The Therapeutic Goods Agency will review the

application and may request additional data during the review process.

ReActiv8-A Clinical Trial/ PMCF Study - The ReActiv8-A Clinical Trial (the

ReActiv8-A Trial) is an international, multi-center, prospective, single arm

clinical trial of ReActiv8. We announced the results of the first 47

subjects implanted in the ReActiv8-A Trial, of whom, 46 reached the 90-day

end point in August 2015. On 20 September 2016, we announced the one-year

results from the ReActiv8-A Trial, which showed long term sustained

performance. As at 30 June 2017, 6 additional subjects had been implanted in

the ReActiv8-A Trial.

The results from 53 subjects at one year show clinically important,

statistically significant and lasting improvement in pain, disability and

quality of life in a population of people with few treatment options, with

94% of subjects showing a clinically important improvement in at least one

of the three major endpoints at 90 days, which was substantially maintained

through one year. The one year results of these 53 subjects implanted, were

presented at the 13th World Congress of the International Neuromodulation

Society in Edinburgh at the end of May 2017. The presentation was judged as

one of the "best abstracts" presented in the plenary session.

Following CE Mark approval, a range of activities is required for Post

Market Clinical Follow Up to gather additional data on the long term

performance and safety of ReActiv8. The ReActiv8-A Post Market Clinical

Follow-up (PMCF) Study is a continuation of the ReActiv8-A Trial (but with

CE Marked ReActiv8). 40 additional subjects are planned to be implanted as

part of the continuation of the ReActiv8-A PMCF Study.

ReActiv8-C Registry - In addition to the ReActiv8-A PMCF Study, the Group

will conduct a registry. The ReActiv8-C Registry is an international,

multi-center, data collection registry. All patients implanted with ReActiv8

during commercialization will be invited to enroll in the ReActiv8-C

Registry until the target enrollment numbers have been reached. The purpose

is to gather additional summary data on the long-term performance of

ReActiv8 in at least 50 patients.

Financial review

Income Statement - The first sales of ReActiv8 were recorded in the

six-month period ending 30 June 2017. Our customers are hospitals and are

served through our direct sales force. Revenue during the six-month period

ending 30 June 2017 was $0.25 million (nil during the same period in 2016).

Revenue was generated from sales of ReActiv8 systems to customers in Germany

and in Ireland.

Operating expenses related to on-going activities were $12.3 million during

the half year ended 30 June 2017 (30 June 2016: $8.0 million). On-going

activities during the financial year included research and development,

clinical and regulatory activities, selling, general and administrative

activities.

Research and development expenses increased by $0.3 million to $2 million

during the six-month period ended 30 June 2017. The increase is primarily

due to additional team members engaged in research, quality and regulatory

activities required for our ReActiv8-B Clinical Trial, and maintenance of

our quality system as we expand commercial activities.

Clinical and regulatory expenses were $5.2 million during the six-month

period ended 30 June 2017, and increased by $2.5 million from $2.7 million

during the same period in 2016. The increase is primarily driven by the ramp

up of enrollments in the ReActiv8-B Trial. As detailed above over half the

required subjects have been implanted in this trial by physicians in centers

in Australia, Europe and the US. The costs incurred include (without

limitation) the cost of the device, direct hospital costs (for example

operating theatre fees and costs related to the physicians and nurses time),

clinical and legal consulting, training costs, clinical database fees,

clinical monitoring fees and the payroll costs of our direct employees.

Our selling, general and administrative expenses were $5.1 million during

the six-month period ended 30 June 2017, and $3.5 million during the same

period in 2016. The increase of $1.6 million is primarily driven by

commercialization and the related increase in our direct sales force during

2016 and 2017 (impacting recruitment fees, payroll, travel and training

costs), as well as marketing, reimbursement consulting and market research

costs.

Statement of financial position - Total assets of the Group at 30 June 2017

end were $27.9 million (31 December 2016: $39 million). Cash on hand at 30

June 2017 was $24.5 million (31 December 2016: $36.7 million). Cash used in

operating activities was $11.4 million during the period (30 June 2016: $7.5

million), and is reflective of our increased operating expenses (excluding

non-cash expenses, for example share based payments, and adjusted for

outstanding payables at period end), and a build-up of inventory held for

commercialization.

During the period ended 30 June 2017, we commenced repayment of our debt

facility. As at 31 December 2016, the Group had drawn the full facility of

$15 million, and during the period we made the first repayment of $0.75

million.

Principal risks and uncertainties

The principal risks and uncertainties faced by the Group and/or its industry

for the remaining six months of 2017 remain substantially unchanged from the

risks disclosed in the 2016 Annual Report which is available on our website.

A summary of the principal risks relating to the Company and/or its industry

include the following:

- We have incurred significant operating losses and may not be able to

achieve or subsequently maintain profitability

- We expect to require additional funds in the future in order to meet our

capital and expenditure needs and further financing may not be available

when required or, if available, could require us to agree to terms which are

specifically favorable to new investors, or to restrictions significantly

limiting our access to additional capital

- Our future financial performance is substantially dependent on the

commercial success of ReActiv8, our only product which at the date of this

Half Year report is launched commercially in Germany and Ireland only

- We operate in a highly-regulated environment and regulatory approval is

required before we can market or sell ReActiv8 in any market

- Seeking and obtaining regulatory approval for medical devices can be a

long and uncertain process. Strict or changing regulatory regimes,

government policies and legislation in any of our target markets may delay,

prohibit or reduce potential sales

- We are required to conduct clinical trials for regulatory approvals and

other purposes. Clinical trials carry substantial risks and are costly and

time consuming, with uncertain results

- The availability of coverage and adequate reimbursement for our product by

government and private payers will be critical to market adoption for the

existing and future products

A more extensive description of the existing and future potential risks to

Mainstay's business and to the Company's ordinary shares are outlined in the

Risk Factors section of the 2016 Annual Report, on pages 23 to 41, and

should be considered carefully by Shareholders and prospective investors.

Outlook and future developments

We are pleased with the progress of the ReActiv8-B Trial. The Trial is

advancing well, and in August 2017 we announced that over half the required

number of implants in the Trial have been performed. We anticipate that

enrollment will complete around the end of 2017, with results available in

2018. If successful, the ReActiv8-B Clinical Trial will yield level 1A

Evidence of efficacy, which may be used to support applications for

favorable reimbursement in the USA. Evidence from the ReActiv8-B Trial will

also be used to support market development activities worldwide.

Our initial commercialization of ReActiv8 in Europe is underway. Our

strategy is to work with key reference centers in Germany, and then build on

that experience and data from the ReActiv8-B Trial to expand

commercialization to additional centers and other countries.

Related party transactions

Refer to note 13.

Going concern

The Directors note the following relevant matters:

- The Group has an accumulated retained losses reserve of $108 million and a

reorganization reserve of $44.6 million as at 30 June 2017 (31 December

2016: $94.7 million and $44.6 million respectively).

- The Group had operating cash out-flows of $11.4 million for the 6 months

ended 30 June 2017 (year ended 31 December 2016: $16.7 million).

- The Group has funded operations to date through the proceeds of equity

funding of approximately $85 million and as at 30 June 2017, debt with an

outstanding principal of $14.25 million. The Group will require additional

funding.

- The group expects to incur losses due to the ongoing investment in

research and development, clinical and commercial activities.

- The Group has cash of $24.5 million as at 30 June 2017 ($36.7 million as

at 31 December 2016).

The Directors have considered the conditions noted above and other factors,

the potential of the Group to raise additional funding, and the potential to

manage expenditure and believe that the Group will have sufficient funds to

be able to meet its liabilities as they fall due for a period of at least 12

months from the date of the Financial Statements and are satisfied that the

Financial Statements should be prepared on a going concern basis.

Auditors

The condensed consolidated Financial Statements have not been reviewed by

the Company's auditors.

Mainstay Medical International plc

Directors' responsibilities statement

Statement of the Directors in respect of Half Year Financial Report

Each of the Directors of the Company (the Directors), whose names and

functions are listed in the Corporate and Shareholder Information, confirm

that, to the best of each person's knowledge and belief:

(a) the condensed consolidated Financial Statements comprising the condensed

consolidated statement of profit or loss and other comprehensive income, the

condensed consolidated statement of financial position, the condensed

consolidated statement of changes in equity, the condensed consolidated

statement of cash flows and related notes 1 to 14 have been prepared in

accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

(b) the interim management report includes a fair review of the information

required by:

a. Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations

2007, being an indication of important events that have occurred during the

first six months of the financial year and their impact on the condensed

consolidated Financial Statements; and a description of the principal risks

and uncertainties for the remaining six months of the year; and

b. Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations

2007, being related party transactions that have taken place in the first

six months of the current financial year and that have materially affected

the financial position or performance of the entity during that period; and

any changes in the related party transactions described in the last annual

report that could do so.

On behalf of the Board on 04 September 2017,

Oern Stuge MD Peter Crosby

Chairman CEO

Mainstay Medical International plc

Condensed consolidated statement of profit or loss and other comprehensive

income

for the half year ended 30 June 2017

($'000) No- Half year Half year

te- ended 30 June ended 30 June

s 2017 2016

Unaudited Audited

Revenue 4 250 -

Cost of sales (136) -

Gross profit 114 -

Operating expenses (12,282) (7,987)

Operating loss (12,168) (7,987)

Finance income 10 -

Finance expense (986) (784)

Net finance expense (976) (784)

Loss before income taxes (13,144) (8,771)

Income taxes 6 (131) (71)

Loss for the half year (13,275) (8,842)

Net loss attributable to equity (13,275) (8,842)

holders

Other Comprehensive Income

Items that may be reclassified

subsequently to the statement of

profit or loss:

Foreign currency translation (50) -

differences of foreign operations

Total comprehensive loss for the half (13,325) (8,842)

year

Total comprehensive loss attributable (13,325) (8,842)

to equity holders

Basic and diluted loss per share (in 5 (2.01) (1.98)

$)

The accompanying notes form an integral part of these condensed consolidated

Financial Statements.

Mainstay Medical International plc

Condensed consolidated statement of financial position

at 30 June 2017

($'000) Notes 30 June 2017 31 December 2016

Unaudited Audited

Non-current assets

Property, plant and equipment 238 255

Current assets

Inventory 2,070 1,123

Trade and other receivables 7 877 889

Income tax receivable 217 103

Cash and cash equivalents 24,499 36,670

Total current assets 27,663 38,785

Total assets 27,901 39,040

Equity

Share capital 9 64 64

Share premium 106,364 106,360

Share based payment reserve 5,899 4,606

Other reserves 4,685 4,735

Retained loss (107,979) (94,707)

Surplus on shareholders' equity 9,033 21,058

Non-current liabilities

Loans and borrowings 8 12,119 13,276

Total non-current liabilities 12,119 13,276

Current liabilities

Loans and borrowings 8 3,006 2,268

Income tax payable 58 58

Trade and other payables 3,685 2,380

Total current liabilities 6,749 4,706

Total liabilities 18,868 17,982

Total equity and liabilities 27,901 39,040

The accompanying notes form an integral part of these condensed consolidated

Financial Statements.

Mainstay Medical International plc

Condensed consolidated statement of changes in shareholders' equity

for the half year ended 30 June 2017

($'000) Share Share Other Share based Retained Total

capi- premium reser- payment loss equity

tal ves reserve

Balance as at 61 72,588 4,700 2,691 (74,816) 5,224

1 January 2016

Loss for the - - - - (8,842) (8,842)

half year

Other - - - - - -

comprehensive

income for the

half year

Total - - - - (8,842) (8,842)

comprehensive

loss for the

half year

Transactions

with owners of

the Company:

Issue of 3 33,725 - - (1,053) 32,675

shares

Share based - - - 942 - 942

payments

Issue of - 9 - - - 9

shares on

exercise of

share options

or warrants

Balance at 30 64 106,322 4,700 3,633 (84,711) 30,008

June 2016

(Unaudited)

Loss for the - - - - (9,916) (9,916)

year

Other - - 35 - - 35

comprehensive

income

Total - - 35 - (9,916) (9,881)

comprehensive

loss for the

half year

Transactions

with owners of

the Company:

Issue of - - - - (124) (124)

shares

Share based - - - 1,017 - 1,017

payments

Issue of - 38 - (44) 44 38

shares on

exercise of

share options

or warrants

Balance at 31 64 106,360 4,735 4,606 (94,707) 21,058

December 2016

Loss for the - - - - (13,275) (13,275)

half year

Other - - (50) - - (50)

comprehensive

income for the

half year

Total - - (50) - (13,275) (13,325)

comprehensive

loss for the

half year

Transactions

with owners of

the Company:

Share based - - - 1,296 - 1,296

payments

Issue of - 4 - (3) 3 4

shares on

exercise of

share options

or warrants

Balance at 30 64 106,364 4,685 5,899 (107,979) 9,033

June 2017

(Unaudited)

The accompanying notes form an integral part of these condensed consolidated

Financial Statements.

Mainstay Medical International plc

Condensed consolidated statement of cash flows

for the half year ended 30 June 2017

($'000) No- Half year ended Half year ended

tes 30 June 2017 30 June 2016

Unaudited Unaudited

Cash flow from operating

activities

Net loss for the half year (13,275) (8,842)

Add/(less) non-cash items

Depreciation 52 54

Finance income (10) -

Finance expense 986 784

Share-based compensation 11 1,296 942

Add/(less) changes in working

capital

Trade and other receivables 12 (273)

Inventory (831) -

Trade and other payables 1,274 293

Taxes paid (238) (114)

Interest paid (656) (389)

Net cash used in operations (11,390) (7,545)

Cash flow from investing

activities

Acquisition of property and (35) (21)

equipment

Net cash used in investing (35) (21)

activities

Cash flow from financing

activities

Gross proceeds from issue of 4 33,737

shares

Transaction costs on issue of - (27)

shares

Repayment of borrowings 8 (750) -

Net cash (outflow)/inflow from (746) 33,710

financing activities

Net (decrease)/increase in cash (12,171) 26,144

and cash equivalents

Cash and cash equivalents at 36,670 16,624

beginning of year

Cash and cash equivalents at 30 24,499 42,768

June 2017

The accompanying notes form an integral part of these condensed consolidated

Financial Statements.

Mainstay Medical International plc

Notes to the condensed consolidated Financial Statements

1 General information and reporting entity

Mainstay Medical International plc (the Company) is a company incorporated

and registered in Ireland. Details of the registered office, the officers

and advisers to the Company are presented on the Corporate and Shareholder

Information page.

The Half Year Report and condensed consolidated Financial Statements for the

periods ended 30 June 2017 and 30 June 2016 comprise the results of the

Company and of its subsidiaries (together the Group).

At 30 June 2017, the Group comprises the Company and its operating

subsidiaries Mainstay Medical Limited, Mainstay Medical Distribution

Limited, Mainstay Medical GmbH, MML US, Inc. and Mainstay Medical

(Australia) Pty. Limited.

The Company's shares are quoted on Euronext Paris and ESM of the Irish Stock

Exchange.

Mainstay is a medical device company focused on bringing to market

ReActiv8(R),

a restorative implantable neurostimulation system to treat disabling Chronic

Low Back Pain (CLBP).

2 Basis of preparation

Statement of compliance

The condensed consolidated Financial Statements have been prepared in

accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

They do not include all the information and disclosures necessary for a

complete set of IFRS Financial Statements. However, selected explanatory

notes are included to explain events and transactions that are significant

to an understanding of the changes in the Group's financial position and

performance since the last annual consolidated financial statements as at

and for the year ended 31 December 2016.

The comparative information provided in the condensed consolidated Financial

Statements relating to the periods ended 30 June 2016 and 31 December 2016

does not comprise the statutory financial statements of the Group. Those

statutory financial statements for the year ended 31 December 2016 on which

the auditors gave an unqualified audit opinion, have been delivered to the

Companies Registry Office.

The half year ended 30 June 2017 is the first period in which the Group has

recognized revenue, following CE Marking approval for the Group's product,

ReActiv8, in May 2016. Therefore, except for revenue recognition, related

warranties and trade and other receivables, (refer to significant accounting

policies below), there are no significant or material changes to judgements

or estimates used in these condensed consolidated Financial Statements

compared with those used in the consolidated Financial Statements for the

year ended 31 December 2016.

The condensed consolidated Financial Statements were authorized for issue by

the Board of Directors, on 04 September 2017.

Going concern

The Directors note the following relevant matters:

- The Group has an accumulated retained losses reserve of $108 million and a

reorganization reserve of $44.6 million as at 30 June 2017 (31 December

2016: $94.7 million and $44.6 million respectively).

- The Group had operating cash out-flows of $11.4 million for the 6 months

ended 30 June 2017 (year ended 31 December 2016: $16.7 million).

- The Group has funded operations to date through the proceeds of equity

funding of approximately $85 million and as at 30 June 2017, debt with an

outstanding debt principal of $14.25 million. The Group will require

additional funding.

- The group expects to incur losses due to the ongoing investment in

research and development, clinical and commercial activities.

- The Group has cash of $24.5 million as at 30 June 2017 ($36.7 million as

at 31 December 2016).

The Directors have considered the conditions noted above and other factors,

the potential of the Group to raise additional funding, and the potential to

manage expenditure and believe that the Group will have sufficient funds to

be able to meet its liabilities as they fall due for a period of at least 12

months from the date of the Financial Statements and are satisfied that the

Financial Statements should be prepared on a going concern basis.

Currency

The condensed consolidated Financial Statements are presented in US Dollars

($), which is the functional and presentational currency of the Company.

Balances in the condensed consolidated Financial Statements are rounded to

the nearest thousand ($'000) except where otherwise indicated.

Basis of consolidation

The condensed consolidated Financial Statements comprise the consolidated

results of Mainstay Medical International plc and its subsidiaries.

Significant accounting policies

The condensed consolidated Financial Statements have been prepared applying

the accounting policies that were applied in the preparation of the Group's

consolidated Financial Statements for the year ended 31 December 2016

prepared in accordance with IFRS, as adopted by the EU and available on the

Company's website (www.mainstay-medical.com). These accounting policies have

been applied consistently for all periods presented. New accounting policies

implemented during the half year ended 30 June 2017 are listed below:

a) Revenue recognition

Revenue is measured at the fair value of the consideration

received/receivable for the sale of goods to external customers net of value

added tax and discounts. The Group recognizes revenue when the amount of

revenue can be reliably measured and when it is probable that future

economic benefits of the transaction will flow to the Group. Revenue from

the sale of goods is recognized when significant risks and rewards of

ownership of the goods are transferred to the buyer. This may arise on

shipment, delivery or in accordance with specific terms and conditions

agreed with customers and provided there are no material remaining

performance obligations required of the Group. Discounts are provided for

based on agreements or contracts with customers, agreed promotional

arrangements and accumulated experience. Discounts are recorded in the same

period as the original revenue. Service revenues (relating to training and

implant support) are recognized when the related services are rendered.

When a customer is invoiced or cash is received but conditions for

recognition of the related revenues have not been met, revenue is deferred

until all conditions are met.

The Group occasionally sells goods and services as a bundled arrangement.

Such sales are unbundled based on the relative fair value of the individual

goods and services components and each component is recognized separately in

accordance with the Group's recognition policy.

b) Warranties

The Group offers a warranty on certain components of our product. The Group

estimates the costs that may be incurred under its warranties and records a

liability in the amount of such costs at the time the product is sold. The

amount of the reserve recorded is equal to the net costs to repair or

otherwise satisfy the obligation.

c) Financial instruments

Non-derivative financial assets

Financial assets are initially recognized on the date they are originated

and when the Group obtains contractual rights to receive cash flows. The

Group derecognizes financial assets when the contractual rights to cash

flows expire or it transfers the right to receive cash flows in a

transaction which transfers substantially all the risks and rewards of

ownership of the asset.

Trade and other receivables

Trade and other receivables are recognized initially at fair value and

subsequently measured at amortized cost using the effective interest method

less provision for impairment.

d) Impairment of trade and other receivables

The Group evaluates customer accounts with past-due outstanding balances,

and analyses customer credit worthiness, payment patterns and trends. Based

upon a review of these accounts and management's analysis and judgement, we

estimate the future cash flows expected to be recovered from these

receivables. The amount of the impairment on doubtful receivables is

measured individually and recorded as a specific allowance against the

customer's receivable balance. The allowance is re-evaluated and adjusted

periodically as additional information is received. The net movement in the

provision for impairment of receivables is included within the income

statement.

In addition, the Group applied the standards listed below for the first time

in the current period:

- Disclosure initiative (amendments to IAS 7) (effective 1 January 2017)

- IAS 12 (amended) - recognition of deferred tax assets for unrealized

losses (effective 1 January 2017)

None of these have had any material impact on the Group's implementation of

accounting policies or on its reported results.

A number of new standards and amendments to standards are effective for

future periods:

- IFRS 15 - Revenue from contracts with customers (effective 1 January 2018)

- IFRS 9 - Financial Instruments (effective 1 January 2018)

- IFRS 2 (amended) - Share Based Payments (effective 1 January 2018)

- IFRS 16 - Leases (effective 1 January 2019)

The above listed new standards and amendments to standards with an effective

date after 1 January 2018 are not expected to have a material impact on the

Group's results.

3 Segment reporting

Due to the nature of the Group's current activities, the Group considers

there to be one operating segment Active Implantable Medical Devices

(AIMDs). The results of the Group are reported on a consolidated basis to

the Chief Operating Decision Maker of the Group, the Chief Executive

Officer. There are no reconciling items between the Group's reported

consolidated statement of profit or loss and other comprehensive income and

statement of financial position and the results of the AIMDs segment.

The Group has operations in Europe, the US and Australia. The non-current

assets held in these jurisdictions are detailed below:

($'000) 30 June 2017 31 December 2016

Ireland 60 75

Germany 7 -

United States 171 180

Australia - -

Total non-current assets 238 255

4 Revenue

($'000) Half year ended 30 Half year ended 30

June 2017 June 2016

Revenue arising from the 242 -

sale of goods

Revenue arising from the 8 -

sale of services

250 -

5 Earnings per share

As the Group is incurring operating losses, there is no difference between

basic and diluted earnings per share.

Half year ended Half year ended

30 June 2017 30 June 2016

Weighted average number of 6,612,012 4,476,421

ordinary shares in issue

Loss per share 2.01 1.98

6 Taxes

Current income tax assets and liabilities for the current and prior periods

are measured at the amount expected to be recovered from or paid to the

relevant taxation authorities. The tax charge has been prepared based on the

Group's best estimate of the weighted average tax rate that is expected for

the full financial year. The tax rates and tax laws used to compute the

amount are those used in Ireland, Germany, the United States and Australia.

The Group has unrecognized potential deferred tax assets in relation to

carryforward losses and other temporary differences. These potential assets

are not recognized because future taxable profits against which they can be

utilized are not sufficiently certain. The availability of these losses does

not expire. Further information on these unrecognized potential deferred tax

assets is available in the 2016 Annual Report.

($'000) Half year ended Half year ended

30 June 2017 30 June 2016

Income tax in Ireland - -

Income tax in other jurisdictions 131 71

Total income tax charge 131 71

7 Trade and other receivables

($'000) 30 June 31 December

2017 2016

Trade receivables, net 105 -

VAT and sales tax receivable 64 100

Prepaid expenses and other current 708 789

assets

Total 877 889

8 Interest bearing loans and borrowings

IPF Debt Financing

On 24 August 2015, Mainstay Medical Limited entered into an agreement with

IPF Partners for a debt facility of up to $15 million. The facility was

available to be drawn in three tranches. Each tranche has a repayment term

of 60 months from drawdown, with interest only payments for the first 12

months.

The initial tranche (Tranche A) of $4.5 million was received on 9 September

2015. The interest rate on Tranche A is 3-month Euribor plus a margin of

12.5%.

A second tranche (Tranche B) of $6 million was received on 3 December 2015.

The interest rate on Tranche B is 3-month Euribor plus a margin of 11.5%.

A third tranche (Tranche C) of $4.5 million was received on 28 July 2016.

The interest rate on Tranche C is 3-month Euribor plus a margin of 10.5%.

Other expenses directly associated with the facility of $466,000 were

deferred and are amortized to profit or loss over the term of the loan on an

effective interest rate basis.

The facility is secured by way of fixed and floating charges over the assets

and undertakings of Mainstay Medical Limited, and the Mortgage Debenture

includes customary terms and conditions. In addition, Mainstay Medical

International plc has created a first fixed charge in favor of IPF over its

present and future shares held in Mainstay Medical Limited.

The terms of the agreement include a requirement that Mainstay Medical

Limited hold a minimum cash balance of $2 million, or achieve revenue

targets within an agreed timeframe. It also includes monthly and quarterly

reporting requirements. The Group is not in breach of any covenants at 30

June 2017 and has not been in breach at any reporting date.

($'000) 30 June 31 December

2017 2016

Loans and borrowings - current

Term loan 2,775 2,025

Deferred finance cost (91) (91)

Accrued interest 322 334

Total current loans and borrowings 3,006 2,268

Loans and borrowings - non-current

Term loan 11,475 12,975

Deferred finance cost (25) (142)

Accrued interest 669 443

Total non-current loans and 12,119 13,276

borrowings

Total loans and borrowings 15,125 15,544

9 Called up share capital

The Company's ordinary shares are quoted in Euro and have been translated in

US Dollars at the rates prevailing at the date of issue.

On 2 May 2014, the Company listed its ordinary shares on the ESM of the

Irish Stock Exchange and on 5 May 2014, the Company listed its ordinary

shares on Euronext Paris.

Authorized and Issued Share Capital

Authorized 30 June 31 December

2017 EUR 2016 EUR

20,000,000 ordinary shares of EUR0.001 20,000 20,000

each

40,000 deferred shares of EUR1.00 each 40,000 40,000

60,000 60,000

Issued, called up and fully paid 2017 $ 2016 $

6,612,452 (31 December 2016: 6,611,952) 8,556 8,555

ordinary shares of EUR0.001 each

40,000 deferred shares of EUR1.00 each 55,268 55,268

63,824 63,823

In $'000 64 64

During the half year ended 30 June 2017, 500 warrants over ordinary shares

were exercised by the holders and the Company issued 500 ordinary shares.

Proceeds of $3,850 were received on issue of the shares.

10 Financial instruments

Financial risk management

In terms of financial risks, the Group has exposure to credit risk,

liquidity risk and market risk (comprising foreign currency risk and

interest rate risk). This note presents information about the Group's

exposure to each of the above risks together with the Group's objectives,

policies and processes for measuring and managing those risks.

Risk management framework

Mainstay's Board of Directors has overall responsibility for the

establishment and oversight of the Group's risk management framework. The

Group's risk management policies are established to identify and analyze the

risks faced by the Group, to set appropriate risk limits and controls and to

monitor risks and adherence to the limits. Risk management systems and

policies will be reviewed regularly as the Group expands its activities and

resource base to take account of changing conditions.

The Group has no significant concentrations of financial risk other than

concentration of cash with individual banks. During January 2017, the Group

made its first commercial sale of ReActiv8, and consequently the six-month

period ended 30 June 2017 is the first period during which the group is

exposed to credit risk arising on trade receivables. Further information is

provided under credit risk below. There has been no other significant change

during the half year, or since the end of the half year to the types or

quantum of financial risks faced by the Group or the Group's approach to the

management of those risks.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or

counterparty to a financial instrument fails to meet contractual

obligations, and arises principally from the Group's cash and cash

equivalents and trade and other receivables. Credit risk is managed on a

Group basis. The maximum exposure to credit risk is represented by the

carrying amount of each asset. The carrying value of receivables is a

reasonable approximation of fair value. The Group's objective is to manage

credit risk.

The Group maintained its cash balances with its principal financial

institutions throughout the year, and the Group limits its exposure to any

one financial institution by holding cash balances across several financial

institutions. The Group's principal financial institutions have investment

grade ratings at 30 June 2017. The credit rating status of the Group's

principal financial institutions is reviewed by the Audit Committee or the

Board annually. The cash balance is reported to the Board of Directors on a

monthly basis, and a monthly review of all cash balances held at each

institution is carried out by the CFO. The Group maintains most of its cash

in USD denominated accounts. The Group held cash and cash equivalents of

$24.5 million as at 30 June 2017.

The Group's credit risk management policy and process in relation to trade

receivables involves carrying out credit checks where appropriate, and by

active credit management. The utilization of credit limits is regularly

monitored. In addition, it involves periodically assessing the financial

reliability of customers, taking into account their financial position, past

experience and other factors. As at 30 June 2017 our trade and other

receivables balances amounted to $105,000, and we have not recognized any

impairment losses at this time. The total outstanding balance as at 30 June

2017 was received post period end.

The below table provides an analysis of aging of receivables as at 30 June

2017:

($'000) Cur- 1 - 30 31 - 60 61 - 90

rent Days Days Days

Trade and other 86 19 - -

receivables

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its

financial obligations as they fall due.

Since inception the Group has funded its operations primarily through (i)

the issuance of equity securities and (ii) debt funding. The Group continues

to explore funding strategies (e.g.: equity, debt, partnering) to support

its activities into the future. Adequate additional financing may not be

available on acceptable terms, or at all. The Group's inability to raise

capital as and when needed would have a negative impact on the Group's

financial position and its ability to pursue its business strategy.

Foreign currency risk

The Group's reporting currency is the US Dollar. The Group's exposure to

foreign currency risk arises through expenditure incurred in Euro and

Australian Dollars.

The Group's Australian subsidiary has an Australian Dollar functional

currency. Mainstay Medical Distribution Limited and Mainstay Medical GmbH

have a Euro functional currency.

The Group did not have material asset or liability amounts in foreign

currencies at 30 June 2017 other than trade payables and accruals (net of

cash) of EUR540,000 and AU$36,000. A strengthening (or weakening) of the US

Dollar against the Euro of 5% would have (decreased)/increased the loss for

the period by $27,000 (June 2016: $84,000). Any reasonable or likely

movement between the US Dollar and the Australian Dollar is considered not

likely to have a material impact on the Group's statement of profit or loss

and other comprehensive income.

Interest rate risk

The Group's cash balances are maintained in short term access accounts and

carry a 0% rate of interest.

At 30 June 2017, the principal outstanding on MML's loan from IPF was

$14,250,000. This loan carries a variable rate of 3-month Euribor plus a

margin ranging from 10.5% to 12.5%. The terms of the debt agreement

stipulate that if Euribor is less than zero, it is deemed to be zero. Any

change in the Euribor rate above zero will directly affect the amount of

interest repayable on this debt.

A 25-basis point increase in Euribor above zero would have increased the

loss for the period by $35,189.

11 Share based payments

Share Options

The terms and conditions of the Group's share option plan are disclosed in

the most recent, published, Annual Report. The charge of EUR1.3 million for

the half year ended 30 June 2017 (30 June 2016: $0.9 million) is the grant

date fair value of various share options granted in the current and prior

years, which are being recognized within the statement of profit or loss and

other comprehensive income over the vesting period related to service.

30,000 options were granted in the six months ended 30 June 2017 (30 June

2016: 47,500 options).

Warrants

On 2 December 2011, Silicon Valley Bank provided Mainstay Medical Limited

(MML) with a loan of $2,000,000. This loan was repaid in full on 7 March

2014.

In connection with these borrowings, MML issued immediately exercisable

warrants to purchase up to 13,000 shares at $7.70 per share with an

expiration date of 2 December 2021. The fair value of these warrants on the

date of issue was $69,000.

As at 30 June 2017 6,445 warrants were outstanding. During July 2017, all

the remaining warrants were exercised by the holder.

12 Contingencies

The Directors and management are not aware of any contingencies that may

have a significant impact on the financial position of the Group.

13 Related party transactions

There were no balances due to or from related parties as at 30 June 2017 and

30 June 2016.

Key management compensation and Directors' remuneration

>The Group defines key management as its non-executive directors, executive

directors and senior management. Details of remuneration for key management

personnel are provided below:

($'000) 30 June 2017 30 June 2016

Salaries 876 715

Non-executive directors' fees 111 108

Other remuneration 595 512

Payroll taxes 102 63

Share based payments 931 788

Pension 11 11

Total remuneration 2,626 2,197

14 Events subsequent to 30 June 2017

There were no events subsequent to the half year ended 30 June 2017 that

would have a material impact on the condensed consolidated Financial

Statements.

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05.09.2017 Veröffentlichung einer Corporate News/Finanznachricht,

übermittelt durch DGAP - ein Service der EQS Group AG.

Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.

Die DGAP Distributionsservices umfassen gesetzliche Meldepflichten,

Corporate News/Finanznachrichten und Pressemitteilungen.

Medienarchiv unter http://www.dgap.de

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