CIC Interim Report 2022

Unaudited Half Year Report for the six months ended 30 September 2022

Welcome to Cambridge Innovation Capital

Cambridge Innovation Capital (CIC) is a leading venture capital investor backing and building category-leading deep tech and life sciences companies.

Our focus on the Cambridge ecosystem, and unique relationship with the University of Cambridge, provides us with access to excellent investment opportunities.

We have now raised in excess of £0.5 billion from a geographically diverse range of institutional and strategic investors and currently manage a portfolio of 32 deep tech and life science companies in fields as diverse as surgical robotics, flexible electronics, microbiome science, genomic diagnosis, quantum computing software, peptide technology and AI decision-making software.

With our knowledge, experience and connections we support our portfolio and community to positively impact society, whilst remaining focused on our commercial objective to optimise value for our stakeholders.

IDENTIFYING AND NURTURING GROWTH OPPORTUNITIES THROUGH UNCERTAIN TIMES

EDWARD BENTHALL CHAIRPERSON

Our rate of investment has slowed over the last six months, a deliberate response to the economic and political uncertainty and the volatility of stock markets, but it has been a busy period, nonetheless. We have continued to seize opportunities where we have strong conviction, engaged in thoughtful collaboration to support our portfolio companies and worked to build out our team.

In the period, equity attributable to shareholders has declined by 14% to £354 million, or 116.9p per share. Our listed companies have been affected by prevailing negative market sentiment and we have also impaired some of our privately held portfolio where we have felt it appropriate to do so. I am pleased to report that the majority of our portfolio companies have over 12 months of runway, but where companies have short term cash needs, we have adjusted the valuations to reflect market conditions. We have reserved funds for further investment into our balance sheet portfolio, which we believe will be sufficient to support our portfolio through to exit over the next few years.

Fund II, which we closed at £225 million on 31 March 2022, has completed two new investments: Cambridge GaN Devices, a fabless semiconductor company which is developing and commercialising energy-efficient, Gallium Nitride-based integrated circuits for power electronics; and Unlikely AI, which is developing a languagefocused AI platform technology. With these investments Fund II has invested

£22 million across eight companies which means we are well-funded to take advantage of what we expect to be a profitable period for investing over the next year or two. The pipeline of new investments in both the life sciences and the deep tech sectors remains strong.

Since the period end, we have sold Audio Analytic to a large US technology company. Whilst the return to CIC is modest, I am pleased that the Audio Analytic team will be retained in Cambridge, meaning that another world-leading US business is establishing an R&D presence in the city. Fund II has added Mosaic Therapeutics, a targeted oncology company to its portfolio. Mosaic is a spin-out from the Wellcome Sanger Institute, the third spin-out that we have led from this world-leading genomics research institute.

We are committed to making a positive contribution to the community in which we operate. We are working with the University of Cambridge and Cambridge Enterprise, under the umbrella of Innovate Cambridge, to assemble all the key stakeholders needed to formulate, promote and deliver a shared vision for the Cambridge ecosystem over the next decade and beyond. We have also developed an ESG toolkit to help our portfolio companies establish, monitor and report good governance and a strong commitment towards zero carbon. We are making this toolkit available to other VC businesses who have expressed an interest in learning from our experience.

CONTENTS

HALF YEAR REVIEW

How we create value 02

Delivering strong performance 06

FINANCIAL STATEMENTS

Consolidated statement of comprehensive income 11

Consolidated statement of financial position 12

Consolidated statement of changes in equity 13

Consolidated statement of cash flows 14

Notes to the consolidated financial statements 15

COMPANY INFORMATION IBC

Against the backdrop of market volatility and macroeconomic challenges, CIC is building stability for the long term: developing the team, supporting the ecosystem and helping its portfolio companies embed net zero strategies from the outset.

HOW WE CREATE VALUE...

Our focus on the Cambridge ecosystem and unique position, as a preferred investor for the University of Cambridge and co-founders of two accelerators, provides us with unparalleled access to emerging opportunities in one of Europe’s leading innovation hubs.

...Through a clear strategic FOCUS...

We have maintained our position and reputation as the leading investor in the Cambridge ecosystem, allowing us to select companies with the potential for superior returns for the benefit of our stakeholders.

BE THE FIRST CHOICE FOR ENTREPRENEURS, START-UPS AND INVESTORS WHO WANT TO BUILD A BUSINESS IN CAMBRIDGE

Consolidate our position as a leading investor in the Cambridge ecosystem

Strengthen our reputation for deep domain and operational expertise

Continue to recruit and retain a world-class team with a unique set of skills

Strive to add value to every interaction

SELECT AND NURTURE COMPANIES THAT HAVE THE POTENTIAL TO DELIVER SUPERIOR RETURNS

Identify knowledge intensive and intellectual property rich companies with a clear path to commercialisation

Execute our rigorous screening and approval process

Invest in companies that have the potential to disrupt whole markets and sectors

Optimise each investment by taking a hands-on approach and adding value

Influence corporate strategy and business development

Implement management changes and incentives

Facilitate access to capital markets and M&A advisers

Expedite realisations, as and when appropriate

DRIVE GROWTH AND REALISE VALUE FOR OUR STAKEHOLDERS

...Delivering strong performance...

EXPANDING AND SUPPORTING OUR EXISTING PORTFOLIO

In August 2022, we invested in Cambridge GaN Devices (CGD), a fabless semiconductor company that develops a range of energy-efficient gallium nitride-based (GaN) power devices to make greener electronics possible. CGD was spun-out of the University of Cambridge to push the limits of semiconductor properties based on decades of research to develop green solutions for everyday electronics, respecting our planet’s natural resources, and creating a more sustainable future for the generations to come. This transaction has not been announced yet.

In May 2021, we participated in Storm Therapeutics’ Series B round alongside new and existing investors in the business. Storm is discovering and developing novel small molecule therapies targeting RNA modifying enzymes for oncology and other diseases and was recently named as one of Fierce Biotech’s “Fierce 15”, designating it as one of the most exciting biotechnology companies in the industry. This award highlights Storm’s dedication to developing novel treatments for the unmet medical need of patients, and its successes at the forefront of the RNA modification field. This transaction has not been announced yet.

CUMULATIVE NUMBER OF PORTFOLIOS COMPANIES

During the period, we invested funds that we had committed to Epitopea’s £10.3 million seed financing that was announced earlier in the year. Epitopea aims to bring transformative benefits to cancer patients by uncovering a new class of untapped tumour-specific antigens (TSAs), to create immunotherapies that target broad cancer patient populations in both solid and haematological cancers. The seed funding will be used to build the company’s executive team, advance further research on this new class of antigens, and catalyse their translation into novel cancer immunotherapeutics, including therapeutic vaccines, cell therapies, and TCR-based biologics.

During the period, we participated in Unlikely AI’s $20 million seed round. The funds raised will boost the development of Unlikely AI’s ambitious, fresh approach to artificial intelligence and expand its team. Unlikely AI was founded by William Tunstall-Pedoe, best known for his role in the development of Amazon Alexa and a member of our Advisory Panel. His first start-up, Evi Technologies (formerly True Knowledge), developed technology for natural language understanding and question-answering. Evi launched a voice assistant with the same name in 2012 that saw millions of downloads in the first few months. The company was then acquired by Amazon, where the technology, team and know-how were used to create, launch and further develop Alexa.

Sep-22 Mar-22 Mar-21 Mar-20 Mar-19

Sep-22 Mar-22 Mar-21 Mar-20 Mar-19

Sep-22 Mar-22 Mar-21 Mar-20 Mar-19

DRIVING COMMERCIAL PROGRESS

BICYCLE THERAPEUTICS (NASDAQ: BCYC), a biotechnology company pioneering a new and differentiated class of therapeutics based on its proprietary bicyclic peptide (Bicycle®) technology, announced that Genentech, a member of the Roche Group, has exercised its second option to initiate a new programme, expanding the exclusive strategic collaboration agreement with Bicycle to discover, develop and commercialise novel Bicycle®-based immuno-oncology therapies.

Bicycle and Genentech are collaborating on the discovery and pre-clinical development of novel Bicycle-based immunotherapies against multiple targets. Pursuant to the terms of the February 2020 agreement, Genentech was granted two collaboration expansion options, each of which gave Genentech the right to add

one additional programme to the collaboration in exchange for a $10 million payment to Bicycle. In October 2021, Genentech exercised its first expansion option, and has now exercised its second expansion option, triggering an additional $10 million payment. None of the compounds in Bicycle’s wholly owned oncology pipeline, including its immuno-oncology candidates, are included in the collaboration.

CMR SURGICAL, the global robotics business, announced that its Versius® Surgical Robotic System has been used in 5,000 surgical procedures and is routinely used by surgeons across Europe, the Middle East, Asia, Australia and Latin America. Designed to offer high utilisation in operating rooms, Versius® is being used to perform a wide variety of both routine and complex procedures across a range of specialties including gynaecology, colorectal surgery, thoracic surgery, general

surgery and urology – from hernia repairs and hysterectomies to radical prostatectomies and lower anterior resections.

CMR also announced that it had launched partnerships with two tele-mentoring companies, Teladoc Health and SurgEase Innovations, to enhance its ongoing training support for surgical teams. Tele-mentoring systems utilise specialised monitors, sound systems and cameras to allow trainers and surgical preceptors to provide real-time guidance and technical assistance during surgical procedures irrespective of geography, to provide expert clinical support for surgical team as they master the Versius® technology. This additional remote assistance is provided to surgical teams as part of CMR’s comprehensive step-wise training programme, which utilises enhanced virtual reality technology, extensive supervised training and preceptor support.

AT 30 SEPTEMBER 2022, OUR CUMULATIVE PORTFOLIO (REALISED AND UNREALISED) HAD A VALUE OF:

£0.5bn

PRAGMATIC SEMICONDUCTOR worked with researchers in the US on the first programmable processor designed specifically for a plastic process technology. PragmatIC and its partners have previously demonstrated the world’s first non-silicon ARM processor and also designed the iconic 6502 processor for its flexible plastic technology, but this is the first project to explore the performance, power, size and yield trade-offs of the technology. This is the first time that a microprocessor has been developed specifically for PragmatIC’s FlexIC Foundry service, using bespoke chip architectures designed by researchers at the University of Illinois.

RIVERLANE, the quantum engineering company building the world’s first operating system for error corrected quantum computing, and Rigetti (NASDAQ: RGTI) a pioneer in hybrid quantum-classical computing, announced a partnership backed by Innovate UK to tackle syndrome extraction on superconducting quantum computers. Syndrome extraction is a crucial step in quantum error correction, the greatest challenge to be solved to develop useful quantum computers that can process more data with far greater accuracy than is possible today. Useful quantum computers can unlock previously impossible scientific possibilities and transform a range of vital industries, including healthcare, sustainable energy and advanced materials.

AUGMENTING OUR TEAM

Venture capital is a people business and our people are our greatest strength. We are constantly working hard to ensure we maintain an inclusive and collaborative culture – which we see as critical to our success.

We have built a team with a unique set of skills and experiences that are well suited to the Cambridge ecosystem and supporting the companies we are building within it. Our team has variously created, backed and sold university spin-out businesses in both Europe and North America and several have a PhD from one of the Universities of Cambridge or Oxford.

The individual and collective experiences of the team helps them to understand, and empathise with, the challenges facing an entrepreneur striving to build a deeptech or life sciences business. We also have access through our wider network to some of the ecosystem’s world-leading academics and entrepreneurs.

As we continue to grow, we strive to attract and retain the best talent, with a strong focus on excellence and integrity. During the period, we were delighted to welcome Rowan Chapman to the Board, Tori Denman to strengthen our investor relations activities and Mihriban Tuna as an Entrepreneur in Residence.

Rowan has been appointed as a Non-executive Director and brings more than 20 years of experience as an executive business leader. Over her career, she has served on multiple corporate boards and executed numerous partnerships and investments.

Rowan is a co-founder of Initiate Studios, a life sciences incubator founded in 2020, where she partners

with entrepreneurs to launch new companies. Previously, she served as Head of Johnson & Johnson Innovation (NYSE: JNJ) for Western North America, Australia and New Zealand. Prior to that, Rowan led teams at General Electric Company (NYSE: GE), including as Head of Healthcare Investing at GE Ventures and Head of Precision Diagnostics at GE Healthcare. Before GE, she held operational roles in early and growth stage start-ups and was a Partner at Mohr Davidow Ventures for over 11 years, gaining extensive experience as an investor and board member for a wide variety of life science technology and data-enabled companies. Rowan holds a PhD in Biochemistry and Molecular Biology and a BA in Biochemistry from the University of Cambridge and carried out post-doctoral research at the University of California San Francisco.

Tori is our Investor Relations Manager, working across our funds under management. She has ten years of professional experience, gained in a variety of corporate finance advisory and investment management roles, and has worked for small privately owned investment managers and global public companies with Jones Lang LaSalle and Lazard. In this time she has worked in the UK, Europe and the Middle East, transacting or funding approximately £1 billion of assets. Before joining us, Tori had a career break to pursue charitable work and raise a family. Tori holds a PG Diploma in Real Estate from LSBU and an MA in Modern Languages from the University of Oxford.

Mihriban is Entrepreneur in Residence with the Life Sciences team. She brings 20 years of experience in biologics drug development across biotech and pharma. Prior to joining CIC, Mihriban was Chief Scientific Officer at Adaptate Biotherapeutics (acquired by Takeda Pharmaceutical Company), Senior Vice President, Drug Discovery, at F-star Therapeutics (NASDAQ:FSTX) and an early employee at Domantis (acquired by GSK). Mihriban holds a BSc in Biology from Middle East Technical University, a PhD in Biochemistry from University of Sussex and an MBA from University of Cambridge Judge Business School.

Each member of our team is passionate about building the Cambridge ecosystem, drawing on their knowledge and experience to make a positive difference to the community in which we live and work.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six months ended 30 September Year ended 31 March

Note 2022 £ 2021 £ 2022 £

Revenue 2,072,054 817,073 4,994,106 Fair value changes in investments 5 (62,735,699) 34,201,181 48,438,356

Administrative income/(expenses) 4,596,710 (7,083,359) (14,782,721)

Other operating income 17,144 17,098 48,986

Operating (loss)/profit (56,049,791) 27,951,993 38,698,727

Finance income 235,587 447,060 507,525

Finance costs (37,379) – (27,708) Share of net losses of associates accounted for using the equity method 6 (67,859) (48,729) (120,623) (Loss)/profit before taxation (55,919,442) 28,350,324 39,057,921

Income tax – – (210,148) (Loss)/profit after tax (55,919,442) 28,350,324 38,847,773

Total comprehensive (expense)/income for the period is attributable to Owners of Cambridge Innovation Capital Limited (55,908,322) 28,350,324 38,882,732 Non-controlling interests (11,120) – (34,959) (55,919,442) 28,350,324 38,847,773

All activities derive from continuing operations.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 September At 31 March

Note 2022 £ 2021 £ 2022 £

Assets

Non-current assets

Property, plant and equipment 390,347 30,696 402,677 Right-of-use assets 1,790,971 – 1,889,335 Investments held at fair value 5 338,867,183 389,339,099 398,298,000 Investments accounted for using the equity method 6 305,318 445,071 373,177 341,353,819 389,814,866 400,963,189

Current assets

Trade and other receivables 7 622,592 1,599,958 2,710,911 Cash and cash equivalents 35,560,493 28,646,042 40,056,836 36,183,085 30,246,000 42,767,747

Total assets 377,536,904 420,060,866 443,730,936

Liabilities

Non-current liabilities Lease liabilities (1,642,609) – (1,731,781)

Current liabilities

Trade and other payables 8 (21,469,667) (26,779,942) (31,781,008) Lease liabilities (175,274) – (141,564) (21,644,941) (26,779,942) (31,922,572)

Total liabilities (23,287,550) (26,779,942) (33,654,353)

Net assets 354,249,354 393,280,924 410,076,583

Equity

Issued share capital 9 30,165 28,749 30,165

Share premium account 25,063,978 – 25,063,978

Capital redemption reserve 3,503 3,503 3,503

Share based payment reserve 3,090,737 3,343,750 3,090,737

Capital reserve 192,367,800 240,821,352 255,092,652

Retained earnings 133,021,783 149,083,570 126,205,253

Capital and reserves attributable to owners of Cambridge Innovation Capital Limited 353,577,966 393,280,924 409,486,288

Non-controlling interests 671,388 – 590,295

Total equity 354,249,354 393,280,924 410,076,583

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to owners of Cambridge Innovation Capital Limited Note

Issued share capital £

Share premium account £

Capital redemption reserve £

Share based payment reserve £

Capital reserve £

Retained earnings £ Total £

Noncontrolling interests £

Total equity £

– – – – – 28,350,324 28,350,324 28,350,324

At 1 April 2021 32,252 120,803,271 49,992,656 3,343,750 206,620,171 29,615,157 410,407,257 410,407,257 Profit for the period and total comprehensive income

Fair value changes in investments 5 – – – – 34,201,181 (34,201,181) – –

Transactions with owners

Capital reduction 9 – (120,803,271) (49,992,656) – – 170,795,927 – –

Buyback of ordinary shares (including expenses)

9 (3,503) – 3,503 – – (45,476,657) (45,476,657) (45,476,657)

At 30 September 2021 28,749 – 3,503 3,343,750 240,821,352 149,083,570 393,280,924 393,280,924 Profit for the period and total comprehensive income

– – – – – 10,532,408 10,532,408 (34,959) 10,497,449

Fair value changes in investments 5 – – – – 14,271,300 (14,271,300) – – –

Transactions with owners

Share capital issued (net of expenses) 9 1,416 25,063,978 – – – – 25,065,394 625,254 25,690,648 Share based payments – – – (253,013) – – (253,013) – (253,013)

Dividends paid – – – – – (19,139,425) (19,139,425) – (19,139,425)

At 31 March 2022 30,165 25,063,978 3,503 3,090,737 255,092,652 126,205,253 409,486,288 590,295 410,076,583 Loss for the period and total comprehensive expense

– – – – (55,908,322) (55,908,322) (11,120) (55,919,442)

Fair value changes in investments 5 – – – – (62,724,852) 62,724,852 – – –

Transactions with owners

Share capital issued (net of expenses) 92,213 92,213

At 30 September 2022 30,165 25,063,978 3,503 3,090,737 192,367,800 133,021,783 353,577,966 671,388 354,249,354

CONSOLIDATED STATEMENT OF CASH FLOWS

Six months ended 30 September Year ended 31 March

Note 2022 £ 2021 £ 2022 £

Cash flows from operating activities

Operating (loss)/profit (56,049,791) 27,951,993 38,698,727

Adjustments for:

Fair value changes in investments 5 62,735,699 (34,201,181) (48,438,356) Non-cash items included in other operating income – 9,671 –Share based payments – – (253,013) Depreciation 164,431 7,443 119,722

Finance costs (37,379)

Decrease/(increase) in trade and other receivables 2,039,439 (323,447) (2,024,403) (Decrease)/increase in trade and other payables (10,311,341) 4,163,228 8,904,292

Cash used in operating activities (1,458,942) (2,392,293) (2,993,031)

Income tax paid – – (50,148) Net cash used in operations (1,458,942) (2,392,293) (3,043,179)

Cash flows from investing activities

Purchase of property, plant and equipment (53,737) (21,554) (432,713) Purchase of investments held at fair value 5 (3,141,076) (8,853,737) (16,819,621)

Transactions with non-controlling interests 92,213 – 460

Proceeds from sale of investments – 49,859,995 64,325,838 Interest received 120,661 756 64,005 Net cash (used in)/generated from investing activities (2,981,939) 40,985,460 47,137,969

Cash flows from financing activities

Purchase of right-of-use assets – – (16,798) Proceeds from issue of shares – – 25,065,394 Buyback of shares (including expenses) – (45,476,657) (45,476,657) Principal elements of lease payments (55,462) – –Dividends paid – – (19,139,425) Net cash used in financing activities (55,462) (45,476,657) (39,567,486)

Net change in cash and cash equivalents (4,496,343) (6,883,490) 4,527,304 Cash and cash equivalents at beginning of the period 40,056,836 35,529,532 35,529,532 Cash and cash equivalents at end of the period 35,560,493 28,646,042 40,056,836

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Cambridge Innovation Capital Limited is incorporated in England and Wales and domiciled in the UK, the address of its registered office being 22 Station Road, Cambridge, CB1 2JD. Cambridge Innovation Capital Limited and its wholly owned subsidiaries form the “Group” and the Group’s consolidated financial information presented herein is in sterling. The Group backs world-leading life sciences and technology companies with an affiliation to Cambridge, Europe’s leading capital for innovation.

2. BASIS OF PREPARATION

The Group’s cash is sufficient to meet the investment requirements and operational needs of the Group for at least a year from the date of approval of the Half Year Report. As a result, the Half Year Report for the six months ended 30 September 2022 has been prepared:

• on a going concern basis and under the historical cost convention, as modified by the revaluation of certain financial assets and financial liabilities at fair value through the income statement; and

• in accordance with IAS 34 “Interim financial reporting”.

The Half Year Report does not include all the notes typically included in an annnual financial report. Accordingly, this report should be read in conjunction with the Annual Report for the year ended 31 March 2022. The accounting policies adopted in the Half Year Report are consistent with those of the previous financial year and corresponding half year reporting period.

The preparation of the Half Year Report in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial information, are disclosed in note 4.

3.

SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

The Half Year Report includes the financial information of the Company and entities controlled by it (its subsidiary undertakings). Control is achieved when the Group:

• has power over the subsidiary undertaking;

• is exposed or has rights to a variable return from its involvement with the subsidiary undertaking; and

• has the ability to use its power to affect its returns.

The Group reassesses whether or not it controls a subsidiary undertaking if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Group has less than a majority of the voting rights, it considers that it has power over the company when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the company unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group’s voting rights in a company are sufficient to give it such power, including:

• the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Group, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made.

The financial information of the subsidiary undertakings is prepared for the same reporting period as the Company, using consistent accounting policies. Subsidiary undertakings are consolidated from the date on which control is transferred to the Group and would cease to be consolidated from the date on which control is transferred out of the Group. Intra-group transactions, profits and balances are eliminated in full on consolidation.

Fund investments (see note 5) are not considered to be subsidiary undertakings and, therefore, are not included in the consolidated financial information.

ASSOCIATES

Associates are accounted for using the equity method of accounting. Under the equity method, interests in associates are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income.

REVENUE

Revenue relates to management fees that are generally earned as a fixed percentage of funds under management and are recognised as the related services are provided. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of VAT. Revenue is recognised when the Group satisfies its performance obligations, in line with IFRS 15. All revenue is generated within the United Kingdom.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price and costs directly attributable to bringing the asset to its working condition for its intended use.

Depreciation on assets is calculated, using the straight-line method, to allocate the cost to their residual values over their estimated useful lives, as follows:

• leasehold improvements, five years;

• furniture and equipment, three years; and

• computer equipment, three years.

LEASES

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments) less any lease incentives receivable; and

• variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case, the Group’s estimated incremental borrowing rate is used, being the rate that the Group would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost and comprise: the amount of the initial measurement of the lease liability; any lease payments made at or before the commencement date; any initial direct costs; restoration costs; less any lease incentives received.

Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Where the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

INVESTMENTS

The Group classifies all its investments (equity and loans), which are not subsidiaries or associates, as financial assets at fair value through profit or loss. These financial assets are initially recognised at fair value, which is normally the transaction price, and subsequently carried at fair value with any changes in fair value recognised in profit or loss in the period in which they arise.

The Group measures the fair value of its investments in line with International Private Equity and Venture Capital Valuation 2018 Guidelines, endorsed by the British Ventures Capital Association.

The fair values of investments in quoted companies are based on bid prices in an active market at the reporting date.

For the Group’s investments in unquoted companies, where there are often no current earnings, no short-term future earnings or positive cash flows, it is often difficult to make reliable cash flow forecasts. The Group considers that fair value estimates based entirely on observable market data are of greater reliability than those based on assumptions. In such circumstances, the price of recent investment is considered to be the best estimate of fair value at the date of investment and is, therefore, used as the de facto starting position for any fair value estimate made by the Group. Accordingly, where there has been a recent investment by a third party, the price of that investment will also provide the starting position for fair value, subject to adjustment for any subsequent milestones or impairments.

Where the Group considers that the price of recent investment, unadjusted, is no longer relevant and there are limited or no comparable companies or transactions from which to infer value, the Group carries out an enhanced assessment based on milestone analysis and industry and sector analysis.

When appropriate, the Group may consider the use of external advisers to assess the reasonableness of any change in fair value estimated by the Group.

The following factors are considered in the assessment of the fair value of any investment:

• where the investment was made recently, its cost will generally provide the basis of fair value. The length of period for which it remains appropriate to use the price of a recent investment depends on the specific circumstances of the investment and the stability of the external environment;

• the price of any recent third-party investment; and

• where the equity structure of a portfolio company involves different class rights in a sale or liquidity event, the Group takes these rights into account when forming a view of the value of its investment.

At each measurement date, or if the Group considers that there is a reason to believe that the fair value might have changed between measurement dates, an assessment is made of the required adjustment to the fair value estimate of the investment. Wherever possible, the adjustment is based on objective data from the company in which the investment was made.

When applying the milestone analysis approach to investments in companies in early or development stages, the Group seeks to determine whether there is an indication of change in fair value based on a consideration of performance against any milestones that were set at the time of the investment, as well as taking into consideration key market drivers for the investee company and the overall economic environment.

Where deterioration in value is assessed to have occurred, the Group reduces the carrying value of the investment to reflect the estimated decrease. In these circumstances, the fair value of the investment is reduced by 25%, 50%, 75% or 100%, as judged appropriate by the Group.

If there is evidence of positive developments and value creation unrelated to recent investments, the Group may increase the fair value estimate of the investment. However, it is often difficult to determine the specific value attributable to those positive developments and the costs and risks associated with realising that value.

Factors which the Group considers in its assessment of the fair value of an investment include, inter alia: technical measures, such as product development phases and patent approvals; financial measures, such as changes in the rate of cash consumption; changes in profitability expectations; and market and sales measures, such as product development phases, market launches and geographic expansions.

TRADE AND OTHER RECEIVABLES

Trade and other receivables are classified as loans and receivables and are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the consolidated statement of comprehensive income.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash in hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less.

FINANCIAL LIABILITIES

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities, unless required to be categorised as at fair value through profit or loss, are recorded initially at fair value and subsequently at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance cost in the consolidated statement of comprehensive income. A financial liability is derecognised only when the obligation is extinguished.

SHARE BASED PAYMENTS

OPTIONS

OVER SHARES HELD BY THE EMPLOYEE BENEFIT TRUST

The Group operates an equity-settled, share based payment compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee service received in exchange for the grant of the options is recognised as an expense over the vesting period. The total amount expensed over the vesting period is determined by reference to the fair value of the options granted. At each reporting date, the entity revises its estimates of the number of options that are expected to vest and recognises the impact of the revision to original estimates, if any, in the consolidated statement of comprehensive income, with a corresponding adjustment to equity. The social security contributions payable in connection with the grant of options is considered an integral part of the grant itself, and the charge is treated as a cash-settled transaction.

OPTIONS OVER SHARES ISSUED IN ACCORDANCE WITH THE GROUP’S INCENTIVE SCHEMES

The Group operates a share based payment compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. Given that it is the Directors’ intention that such options will be settled in the form of cash, the options are accounted for as cash-settled and such options are measured at fair value at the balance sheet date. The Group recognises a liability at the balance sheet date based on these fair values, taking into account the estimated number of options that will actually vest and the current proportion of the vesting period. Changes in the value of this liability are recognised in the consolidated statement of comprehensive income. The social security contributions payable in connection with the grant of options is considered an integral part of the grant itself, and the charge is treated as a cash-settled transaction.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

PENSION COSTS

The Group makes payments for each employee to a defined contribution scheme or a scheme of their choice. The assets of the defined contribution scheme are held separately from the Group in independently administered funds. Contributions made by the Group are charged to the consolidated statement of comprehensive income in the period to which they relate.

MANAGEMENT INCENTIVE PLAN

The Group operates a management incentive plan for all employees. Before any payment to a participant becomes due, the Group must first have returned the aggregate capital raised from shareholders, together with a compounded hurdle rate of 8% per annum. At the point at which the hurdle rate has been exceeded, a provision is included for the unrealised gain due to participants. The provision is measured by reference to net assets, with movements in the provision charged/credited to the consolidated statement of comprehensive income within administrative expenses.

TAXATION

Taxation expense comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred taxation assets and liabilities are not discounted.

CURRENT TAX

Current tax is the amount of income tax payable in respect of the taxable profit for the period or prior periods. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

DEFERRED TAX

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

EQUITY

Equity comprises the following:

• share capital represents the nominal value of equity shares;

• share premium represents the excess over nominal value of the fair value of consideration received for equity;

• capital redemption reserve reflects the buyback of share capital;

• share based payment reserve represents equity-settled share based remuneration until such instruments are exercised;

• capital reserve represents fair value gains and losses on investments, which are initially recorded through the statement of comprehensive income, but are transferred to the capital reserve to track the cumulative gains and losses; and

• retained earnings represents retained profits less accumulated losses.

4. CRITICAL ACCOUNTING ESTIMATES

In determining and applying accounting policies, judgement is often required in respect of items where the choice of specific policy, accounting estimate or assumption to be followed could materially affect the reported results or the net asset position of the Group. Management considers that certain accounting estimates and assumptions relating to the valuation of investments are critical accounting estimates. The treatment of equity investments has been detailed in note 3.

5. INVESTMENTS HELD AT FAIR VALUE

Portfolio companies £

Fund investments £ Total £

At 1 April 2021 394,624,812 1,512,131 396,136,943 Investments 7,969,174 891,796 8,860,970 Realisations (49,859,995) – (49,859,995) Fair value changes in investments 34,201,181 – 34,201,181

At 30 September 2021 386,935,172 2,403,927 389,339,099

Investments 7,395,218 1,782,679 9,177,897 Realisations (14,456,171) – (14,456,171) Fair value changes in investments 14,412,356 (175,181) 14,237,175

At 31 March 2022 394,286,575 4,011,425 398,298,000

Investments 2,220,607 1,084,275 3,304,882 Realisations – – –Fair value changes in investments (62,714,004) (21,695) (62,735,699)

At 30 September 2022 333,793,178 5,074,005 338,867,183

The Directors have determined that the Company meets the definition of an investment entity as set out in IFRS 10, “Consolidated Financial Statements” and, therefore, investments that are held as part of the Group’s investment portfolio are carried in the consolidated statement of financial position at fair value even though the Group may have significant influence over these companies.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

At 30 September 2022, the Group held investments in the following entities:

Country of registation Primary instrument % held Portfolio companies

Audio Analytic Limited England and Wales Series A Preferred shares 18.5%

AudioTelligence Limited England and Wales A Preferred shares 31.3%

Bicycle Therapeutics plc England and Wales Ordinary shares 5.9%

Carrick Therapeutics Limited Ireland Preferred shares 9.1%

Centessa Pharmaceuticals plc England and Wales Ordinary shares 0.7%

CMR Surgical Limited England and Wales Preferred shares 6.8%

Congenica Limited England and Wales A Ordinary shares 17.5%

Cytora Limited England and Wales B Preferred shares 4.3%

Exvastat Limited England and Wales Series A shares 54.4%

Fluidic Analytics Limited England and Wales Series A shares 0.6%

Geospock Limited England and Wales Series A1 Preferred shares 22.6%

Imagen Limited England and Wales Series A shares 42.6%

Immutrin Limited England and Wales Seed shares 29.6%

Microbiotica Limited England and Wales Seed shares 14.0%

Origami Energy Limited England and Wales A Ordinary shares 11.9%

PervasID Limited England and Wales Ordinary shares 6.6%

PetMedix Limited England and Wales B Preferred shares 12.1%

Polyprox Therapeutics Limited England and Wales Ordinary shares 24.9%

PragmatIC Semiconductor Limited England and Wales A Ordinary shares 23.4%

Predictimmune Limited England and Wales A Ordinary shares 4.8%

Riverlane Limited England and Wales Ordinary Preferred shares 22.4%

Secondmind Limited England and Wales Series A Preferred shares 11.8% Sense Biodetection Limited England and Wales B Preferred shares 16.3%

Storm Therapeutics Limited England and Wales A Preferred shares 15.2% Swim.ai Incorporated Delaware, United States Series B Preferred stock 15.1% Undo Limited England and Wales B Preferred shares 6.9%

Fund investments

Cambridge Innovation Capital II LP England and Wales Loan 5.1%

Cambridge Innovation Capital II (USD) LP England and Wales Capital 0.0%

Start Codon Fund I Limited Partnership England and Wales Loan 16.0%

Start Codon Carry Limited Partnership Scotland Capital 3.1% DeepTech Labs Fund I Limited Partnership England and Wales Loan 42.9%

All of the Group’s investments are in unquoted entities, except for Bicycle Therapeutics plc and Centessa Pharmaceuticals plc, which are listed on Nasdaq.

At 30 September 2022, the Group had committed, subject to certain milestone provisions contained in the relevant legal documentation, to make further investments of $1.3 million and £1.4 million (30 September 2021: £nil; 31 March 2022: $1.3 million) in portfolio companies and £10.8 million (30 September 2021: £8.6 million; 31 March 2022: £3.1 million) as fund investments. As these relate to future investments they have not been included in the Half Year Report.

Please also see the post balance sheet events disclosed in note 11.

6. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Details of the Group’s interests in associated undertakings are as follows:

At 30 September At 31 March

Entity Principal activity Registered address 2022 2021 2022 Start Codon Limited Life science accelerator Milner Therapeutics Institute, Puddicombe Way, Cambridge, CB2 0AW

Accelerator Advisory Limited (trading as Deeptech Labs) Technology accelerator c/o Mills & Reeve LLP, Botanic House, 100 Hills Road, Cambridge, CB2 1PH

7. TRADE AND OTHER RECEIVABLES

26.6% 26.6% 26.6%

27.9% 27.9% 27.9%

At 30 September At 31 March 2022 £ 2021 £ 2022 £

Trade debtors 1,008 486,935 2,062,175 Prepayments and accrued income 547,670 1,079,502 542,594

Other receivables 73,914 33,521 106,142 622,592 1,599,958 2,710,911

All amounts are short term. The carrying values of receivables are considered reasonable approximations to fair value. All of the receivables have been reviewed for indicators of impairment.

8. TRADE AND OTHER PAYABLES

At 30 September At 31 March 2022 £ 2021 £ 2022 £

Trade payables 158,600 54,726 433,571

Social security and other taxes 184,359 100,479 92,274 Accruals and deferred income 20,866,708 26,624,737 30,995,163

Other payables 260,000 – 260,000 21,469,667 26,779,942 31,781,008

All trade and other payables are unsecured, interest free and payable on demand. The carrying values of trade and other payables are all in pounds sterling and are considered reasonable approximations to fair value.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

9. EQUITY

At 30 September At 31 March At 30 September At 31 March 2022 Number 2021 Number 2022 Number 2022 £ 2021 £ 2022 £

Allotted, called up and fully paid Special share of £0.0001 1 1 1 – – –

Ordinary shares of £0.0001 each 301,645,780 273,321,701 301,645,780 30,165 27,332 30,165 Class A commitment shares of £0.00005 each – 28,324,079 – – 1,416 –

301,645,781 301,645,781 301,645,781 30,165 28,748 30,165

The Company has issued one special share to the University of Cambridge that:

• entitles the University of Cambridge to be issued ordinary shares for no consideration if, on the issue of ordinary or class A commitment shares to third parties, its founding shareholding falls below 5% of the then in issue ordinary and class A commitment shares;

• carries no right to participate in the income of the Company;

• carries no right to receive notice of, or to attend, speak or vote at, any general meeting of the Company;

• entitles the holder to the nominal value of the special share on a return of assets on liquidation or capital reduction or otherwise; and

• is not transferable.

The ordinary and class A commitment shares carry equal voting rights, equal rights to income and distributions of assets on liquidation, or otherwise, and no right to fixed income.

During the year ended 31 March 2022, the Company:

• issued 28,324,079 (2021: 49,555,367) class B commitment shares at a subscription price of £0.88495 (2021: £0.88495) each that immediately paired up with the same amount of class A commitment shares, with each pair of class A and class B commitment shares converting into one new ordinary share;

• completed a capital reduction whereby the share premium account and the capital redemption reserve were cancelled and the amount arising from such cancellation was credited to retained earnings; and

• bought back at £1.29 each, and subsequently cancelled, 35,033,253 ordinary shares.

At 30 September 2022, the Cambridge Innovation Capital Limited Employee Benefit Trust held 1,167,371 ordinary shares of £0.0001 each (30 September 2021: 2,438,235; 31 March 2022: 1,167,371).

10. POST BALANCE SHEET EVENTS

Following the year end, the Group invested a further £1.2 million in investments held at fair value.

11. CONTROLLING PARTY

There is no ultimate controlling party.

COMPANY INFORMATION

COMPANY REGISTRATION NUMBER

08243718

REGISTERED OFFICE

22 Station Road Cambridge CB1 2JD

OFFICERS

Edward Benthall Chairperson

Andrew Williamson Managing Partner

Rob Sprawson Partner and Chief Financial Officer

Humphrey Battcock Non-executive Director

Clive Birch Non-executive Director

Rowan Chapman Non-executive Director

Anne Ferguson-Smith Non-executive Director

Andy Neely Non-executive Director

Nick Richards Company secretary

BANKERS

Barclays Bank PLC

9-11 St Andrew’s Street Cambridge CB2 3AA

LEGAL ADVISERS

Taylor Wessing LLP 5 New Street Square London EC4A 3TW

Fried, Frank, Harris, Shriver & Jacobson LLP 100 Bishopsgate London EC2N 4AG

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP The Maurice Wilkes Building St John’s Innovation Park Cowley Road Cambridge CB4 0DS

SWISS REPRESENTATIVE

First Independent Fund Services Limited Klausstrasse 33 CH-8008 Zurich

SWISS PAYING AGENT

Helvetische Bank AG Seefeldstrasse 215 CH-8008 Zurich

LOCATION WHERE THE RELEVANT DOCUMENTS MAY BE OBTAINED

The Information Memorandum, the Articles of Association, as well as the annual and half year reports of the Company, may be obtained free of charge from the Swiss representative.

PLACE OF PERFORMANCE AND JURISDICTION

In respect of the shares offered in Switzerland to Qualified Investors, the place of performance is at the registered office of the Swiss representative. The place of jurisdiction is at the registered office of the representative or at the registered office or place of residence of the investor.

The production of this report supports the work of the Woodland Trust, the UK’s leading woodland conservation charity. Each tree planted will grow into a vital carbon store, helping to reduce environmental impact as well as creating natural havens for wildlife and people.

Cambridge Innovation Capital 22 Station Road Cambridge CB1 2JD www.cic.vc +44 (0)1223 856593