Half-year Report

Trellus Health plc

("Trellus Health", the "Company" or the "Group")

Half-year Report

Trellus Health Plc (AIM: TRLS), the AIM listed provider of scientifically validated, resilience-based, connected health solutions for chronic condition management, announces its maiden unaudited half-year report for the six months ended 30 June 2021 following admission to trading on AIM on 28 May 2021.

About Trellus Health

Trellus Health is a leading pioneer in resilience-driven care and the first digital health company focused on the intersection of chronic physical conditions and mental health. Trellus Health's digital-first chronic care management solution integrates convenient telehealth access to a licensed multidisciplinary care team with a suite of tools for resilience assessment, education and behaviour modification, remote monitoring, health maintenance and prevention.

Through its TrellusElevate™ connected care platform and companion App, the Company coordinates expert whole-person care, addressing both clinical and behavioural health together, in context, to improve outcomes and reduce healthcare costs for patients, employers, and the healthcare system. The Company is initially focused on Inflammatory bowel disease ("IBD"), which includes the chronic incurable conditions of Crohn's Disease and ulcerative colitis, but considers its approach to have potential utility and demand across many chronic conditions.

Financial Highlights

·    Successful admission to AIM with fundraising of gross proceeds of c. $40.4m (£28.5m) at the 40p issue price.

·    In-licensed IP underlying product technology for $0.5m.

·    Approximately $1.7m capital investment in technology platform development at the end of June 2021.

·    Net cash of $39.7m (31 December 2020: $3.7m).

·    Adjusted EBITDA* loss of $1.36m (period from inception 15 July 2020 to 31 December 2020: $0.8m loss).

* Earnings before interest, tax, depreciation and amortisation adjusted for exceptional items

Post-period end

·    First Demonstration contract with Mount Sinai Employee Health Plan announced in August 2021.

·    TrellusElevate^TM Platform V1.0 launched in July; companion App is available for download on the App Store and Google Play.

·    Over 150 proprietary digital behavioural skills modules available through TrellusElevate^TM.

·    Managed Services Organization Agreement executed with Connected Health Medicine PC to deliver resilience-based multidisciplinary care using licensed clinical professionals trained on the GRITT^TM methodology via the TrellusElevate^TM platform.

·    Appointment of Aled Stevenson as UK Managing Director to complement key executive hires in product development, technology, conversational AI, and clinical operations during H1 2021.

Commenting on recent developments and outlook, Julian Baines, Non-executive Chairman of Trellus, said:

"We are very pleased with the rate of progress made since IPO and remain confident in continuing to deliver against key operational milestones in accordance with our plans. Our immediate strategy is focused on developing and enhancing the TrellusElevate^TM platform, which was launched in July, and we have already hit an early key milestone by securing our first demonstration contract with the Mount Sinai Health system employee health plan.

"We continue to anticipate signing contracts for additional new demonstration programmes with health plans over the coming months. These will not only assess feasibility, engagement and satisfaction, but also demonstrate the health economics studies of our solutions. Data from these projects are expected to reinforce what we already know from previous studies, that IBD patients show significant improvements in resilience and reductions in unplanned healthcare by using our proprietary methodology and resilience-driven multidisciplinary care model.

"We are also very pleased with the progression of our dialogue with large organisations outside of health plans and employers, including those within the pharmaceutical industry, who have recognised the potential value of our platform to support their goals, as well as third parties interested in applying our methodology to other illnesses."

A copy of the investor presentation is available here: https://trellushealth.com/investors/annual-interim-reports/

The Company will also host a live online presentation today at 4.30pm today through the digital platform Investor Meet Company. Investors can sign up for free via:

https://www.investormeetcompany.com/trellus-health-plc/register-investor

A recording of the presentation and responses to the Q&A sessions will also be available afterwards.

About Trellus Health plc (www.trellushealth.com)

Trellus Health (LSE: TRLS) is a leading pioneer in resilience-driven care and the first digital health company focused on the intersection of chronic physical conditions and mental health. Trellus Health's digital-first chronic care management solution integrates convenient access to a licensed multidisciplinary care team with a suite of tools for resilience assessment, education and behavior modification, remote monitoring, health maintenance and prevention. Through its TrellusElevate™ connected care platform and companion App, the company coordinates expert whole-person care, addressing both clinical and behavioral health together, in context, to improve outcomes and reduce healthcare costs for patients, employers, and the healthcare system.

 Trellus Health is commercialising the provision of digital chronic condition management solutions for employers and health plans that utilise the scientifically validated resilience-based methodology and a proprietary HIPAA-compliant technology platform called TrellusElevate™ to coordinate and deliver personalised care remotely via telehealth. The Company is initially focused on Inflammatory bowel disease ("IBD"), which includes the chronic incurable conditions of Crohn's Disease and ulcerative colitis, but considers its approach to have potential utility and demand across many chronic conditions.

The TrellusElevate™ platform is the Company's proprietary connected health platform that incorporates the proprietary methodology and learnings on resilience from clinical research and practice conducted at the Mount Sinai IBD Center for more than five years. The proprietary methodology and resilience-driven multidisciplinary care model have been scientifically validated to demonstrate meaningful improvements in patient outcomes and over 85 per cent. reduction in unplanned healthcare utilisation (emergency department visits and hospitalisations) which the directors of the Company believe indicates the potential for significant cost savings for healthcare payers.

The company was founded by Dr. Marla C. Dubinsky, MD and Dr. Laurie Keefer, PhD, both with decades of combined experience in IBD and psychogastroenterology, respectively. Trellus Health's patent-pending GRITT^TM resilience assessment and personalized treatment methodology was developed and validated at the Mount Sinai Health System to build resilience and wellness for improved outcomes at lower cost.

Shares in Trellus Health were admitted to trading on AIM in May 2021, under the ticker TRLS.  For more information on Trellus Health, visit www.trellushealth.com.

CHAIRMAN'S STATEMENT

I am very pleased to present the inaugural interim report for Trellus Health plc following our successful admission to AIM in May 2021.

Trellus Health was established in July 2020 to commercialise digital chronic condition management solutions for employers and health plans, using our proprietary technology platform, TrellusElevate™, in combination with a scientifically validated, resilience-based methodology based on more than five years of clinical research and practice conducted on hundreds of patients at the Mount Sinai IBD Center, in New York. Whilst the Company's initial focus is on IBD, we believe that there is demand for this solution to be used across many chronic conditions to deliver meaningfully improved healthcare outcomes as well as reducing expensive, unplanned care, such as emergency department visits and hospitalisations.

We are confident that with modest incremental development to our technology platform, we will be able to:

·    deliver coordinated multidisciplinary care from licensed health professionals via telehealth;

·    reinforce clinical plan adherence in partnership with specialist care providers (rather than disintermediating them);

·    modify behaviours to build patient resilience over time through proven interventions;

·    engage and educate patients and specialist care providers;

·    continually monitor and analyse clinical and behavioural markers; and

·    significantly improve healthcare outcomes and reduces expensive, unplanned care.

AIM Admission

On 28 May 2021, we concluded a successful fundraising and the Company's shares were admitted to trading on the AIM market of the London Stock Exchange. We were delighted that the fundraising was significantly oversubscribed, generating around $38.5m in net funds that will be deployed in driving the commercialisation of our solutions, as we strive to enable and deliver personalised and more cost-effective care for all people living with chronic conditions.

We are hugely grateful to all of our shareholders for their support in this endeavour. We were pleased to welcome new institutional investors at our AIM IPO, and we continue to enjoy the support of investors such as the Icahn School of Medicine at Mount Sinai ("ISMMS"), as well as investors who became Trellus Health shareholders via the distribution in specie undertaken by EKF Diagnostics Holdings plc of its original investment in the Company's share capital. Many of the latter increased their shareholding via the Restricted Offer, which formed part of the IPO fundraising and was also significantly oversubscribed. Having raised funds at an issue price of 40 pence, I am very pleased to note that the shares are currently over 50% higher, and we are progressing well at this early stage of our AIM journey.

As we said in our AIM Admission Document, it is our intention to deploy the funds raised for the following purposes:

·    to pay amounts due under the ISMMS licence agreement;

·    to continue the development and enhancement of the TrellusElevate^TM platform, including developing the conversational artificial intelligence technology in managing and providing support to patients;

·    for commercialisation, marketing and business development;

·    for general corporate overheads, including other planned capital expenditure;

·    for research and academic collaboration purposes and geographic expansion purposes;

·    to pursue scientific development and partnerships; and

·    for the balance to be made available as contingency and providing additional working capital.

Key Investment Strengths & Strategy

When we came to the public markets, we spoke extensively with investors about the strong position that Trellus Health has in the market to co-ordinate expert, whole-person care for people living with chronic conditions, and in doing so demonstrate the compelling economic case for Trellus Health's resilience-based, digital care management solution. We believe this will drive wide-scale adoption by self-insured employers and healthcare payers looking to reduce the significant cost of unplanned healthcare utilisation associated with the high-cost /high-need chronic condition patients. At the time of our AIM IPO, we identified the key strengths of the Trellus Health equity story and model and I believe it is helpful to set them out again, below:

·    Large addressable markets of chronic and mental health conditions and Inflammatory Bowel Disease (IBD), representing respectively over $3 trillion and $30-50 Billion total annual costs in the US.

·    Exclusive license with ISMMS, the medical school of the Mount Sinai Health System, to commercialise the patent-pending GRITT^TM (Gaining Resilience Through Transitions) methodology for IBD and seven other chronic disease categories.

·    Compelling health economics and societal benefits: Scientifically validated GRITT^TM methodology deployed at the IBD Center at Mount Sinai resulted in patients achieving a 70 per cent. increase in resilience and a corresponding 88-90 per cent. reduction in emergency department visits and hospitalisations, indicating significant potential cost savings for healthcare payers.

·    Democratisation of access to expert resilience-driven care: the Company's connected health solution and GRITT^TM resilience methodology will be delivered digitally via the TrellusElevate^TM platform and companion mobile app, and through convenient telehealth interactions with a dedicated licensed multidisciplinary care team that monitors and coordinates care in collaboration with patients' clinical care Providers.

·    Rapid expected commercialisation with attractive business model: the Company expects initial revenue in 2021 through demonstration projects with healthcare payers, as its connected care management solution and GRITT^TM behavioral methodology are not currently subject to FDA regulation. The Company's digitally-delivered solution and value-based recurring revenue model will present attractive unit economics, high margins, cash generation, and forward visibility, [principally] as a function of the number of engaged patients in the program.

·    Highly experienced leadership team and Scientific Advisory Board: The Company's Founders and executive team have extensive collective experience across clinical, commercial, and technological areas, and are supported by the Scientific Advisory Board (SAB) comprising ten pre-eminent experts consisting of IBD clinicians, researchers, nutritionists, and experts on Positive Psychology.

·    Data advantage: The Company's longitudinal database will eventually provide a valuable source of predictive analytics for improving care, measurement and improvement of its own services, and the ability to inform drug discovery, development, and health policy.

·    Strong growth potential: The Company expects to capitalise rapidly on its existing qualified pipeline of payer and pharmaceutical industry opportunities. Management believes that relatively modest adaptations of its GRITT^TM methodology and technology platform will enable the Company to address other costly and widespread chronic conditions and to expand internationally.

Recent progress and outlook

Post-period end we were delighted to announce that we had achieved our first key milestone, by signing an agreement with the Mount Sinai Health System employee health plan, one of the largest self-insured employer health plans in New York State, to provide an IBD demonstration programme.

Not only does this allow Trellus Health to begin generating revenues, it also provides an opportunity to build up important data whilst assessing the feasibility, engagement and satisfaction of our digital chronic condition management solution in a real-life setting, using our resilience based digital care management solution for Mount Sinai employees living with IBD. This initial demonstration programme is expected to commence before the end of 2021 with conclusions from the final programme report expected in 2022.

Additional demonstration programmes are being designed to illustrate the potential health economics and return on investment to users of our digital chronic condition management solutions.  We believe that these studies will generate data to drive demand for greater adoption, whilst simultaneously generating additional revenues for the Company.

In July 2021, the Company launched its TrellusElevate^TM Platform V1.0.  Access to the TrellusElevate^TM platform and companion App are now available to authorized subscribers via the web, App Store and Google Play. V1.0 of the platform elegantly digitizes the GRITT^TM IP licensed from ISMMS last year, enabling scalability and broad access to this scientifically-validated, whole-person care management methodology. The platform enables care coordination, communication, scheduling, and remote patient monitoring, so our patients never feel alone in their journey to improve their wellness. The platform also collects and monitors clinical lab results and patient reported outcomes to notify patients, their GI Providers, and the patient's care team of indicators of rising risk of disease flares or other signals important to their health, such as reduced resilience. Patients and their GI Providers are also sent automated wellness and safety reminders about vaccinations or necessary laboratory testing, depending on their disease severity or therapeutic regimen.

In addition to software development, the Company has developed a robust library of over 150 proprietary digital behavioural skills modules available through the TrellusElevate^TM platform. These interactive skills modules complement and further educate patients about behaviour modification and resilience building concepts they review with their care team using Trellus technology. This library is complemented by a rich collection of carefully curated "Featured Content" for patients about topics such as diet and nutrition, lifestyle, exercise and stress relief. All of the skills modules and Featured Content are available to patients 24/7 via the TrellusElevate^TM platform.

Another important milestone achieved post-period end was the execution of a Management Services Organization (MSO) Agreement with Connected Health Medicine PC ("Connected Health"), a New York state licensed Professional Corporation or PC that will provide multidisciplinary patient care services via telehealth. Trellus will provide Connected Health with the technology necessary to offer digitally enabled chronic care management services through PC's licensed multidisciplinary care team, utilizing GRITT^TM resilience assessment and methodology via TrellusElevate™. --

This agreement represents the first in a series of partnerships that will enable Trellus Health's proprietary technology platform and resilience-building methodology to be scaled geographically for licensed clinical care coordination and delivery across the United States. The Company intends to secure similar agreements with the goal of enabling licensed multidisciplinary care utilizing the GRITT^TM methodology and TrellusElevate^TM Platform in several US states before the end of 2021 in conjunction with potential demonstration programmes with various health plans and employer groups. The Company will engage in a continuous process of geographic expansion across the US, with the goal of enabling telehealth delivery of the GRITT Methodology via TrellusElevate across the majority of the United States by the end of 2022.

Talent acquisition is essential to achieve our ambitious growth targets, and we were fortunate to secure key executive hires in product development, technology, conversational AI, and clinical operations during the first half of 2021. Post-period end, we appointed Aled as Managing Director, UK to oversee geographic expansion through research and development initiatives. A 19-year veteran of Astra Zeneca, Aled is based in Wales and has an extensive network of professional contacts across Great Britain. He has already commenced discussions with several NHS Trusts regarding potential demonstration programmes.

We are very pleased with the rate of progress made since IPO and remain confident in continuing to deliver against key operational milestones in accordance with our plans. Our immediate strategy is focused on developing and enhancing the TrellusElevate^TM platform, which was launched in July, and we have already hit an early key milestone by securing our first demonstration contract with the Mount Sinai Health system employee health plan.

We continue to anticipate signing contracts for additional new demonstration programmes with health plans over the coming months. These will not only assess feasibility, engagement and satisfaction, but also demonstrate the positive health economic impact of our solutions. Data from these projects are expected to reinforce what we already know from previous studies, that IBD patients show significant improvements in resilience and reductions in unplanned healthcare by using our proprietary methodology and resilience-driven multidisciplinary care model.

We are also very pleased with the progression of our dialogue with large organisations outside of health plans and employers, including those within the pharmaceutical industry, who have recognised the potential value of our platform to support their goals, as well as third parties interested in applying our methodology to other illnesses.

We look forward to updating our shareholders as we make further progress in commercialisation, and I thank you again for your continued support.

Julian Baines, MBE

Non-Executive Chairman

22 September 2021

FINANCIAL REVIEW

The results presented cover the period from 1 January 2021 to 30 June 2020. The comparative information covers the period from incorporation on 15 July 2020 to 31 December 2020.

Income Statement

The Group is currently in its development phase and therefore has not yet commenced revenue earning. As this is the inaugural reporting period, no comparative similar period has been given. The Group's presentational currency is United States Dollar.

Administrative costs and operating loss

Administrative costs are $1.36m before exceptional items including share-based payment. The major items of expenditure are personnel costs of $1m after capitalisation of development costs, legal, accounting and fees associated with the set-up of the group of $0.17m and general and administrative expenses $0.19m. In addition, the depreciation is $0.003m, share based payment charge is $0.04m and exceptional item relating to listing costs if $0.17m.  Operating loss for the period is $1.57m.

Balance sheet

Non-current assets

Non-current assets represent property, plant and equipment of $0.03m representing equipment and computers and intangibles of $2.2m

The intangibles include $0.5m licence fee paid to Mount Sinai which will be amortised from July 2021 and internally developed Trellus Elevate platform $1,7m.

Cash

The Group had cash on hand at 30 June 2021 of $39.7m following the completion of the fundraise on IPO.

Capital restructure

On 6 May 2021 the Company issued bonus shares to the holders of the Ordinary Shares, the A Shares and the Golden Share of £0.0001 each, in each case on the basis of five additional shares for every one share held by the shareholder on 6 May 2021 ("Bonus Issue"). Following the Bonus Issue, the issued share capital of the Company consisted of 541,350,000 shares, consisting of (i) 373,350,000 Ordinary Shares, (ii) 167,999,994 A Shares and (iii) 6 Golden Shares. As a result of the Bonus Issue, the Company's share premium account increased by $64,000 which, when capitalised and added to the existing share capital, gave a total nominal value of £54,135. Following the Bonus Issue, the Company re-registered as a public limited company on 12 May 2021.  On 24 May 2021, the 6 Golden Shares and the 167,999,994 A Shares were converted into Ordinary Shares, on a one-for-one basis, resulting in a share capital of 541,350,000 ordinary shares of £0.0001 each ("Conversion"). The 541,350,000 ordinary shares of £0.0001 each were then consolidated into 90,225,000 ordinary shares of £0.0006 on 24 May 2021.

New issue of share capital

The Company completed a public listing on the AIM market on 28 May 2021 and equity fundraising of $38.5m net of fees and related charges. Following the placing, subscription and restricted offer, on Admission the Enlarged Share Capital of the Company consisted of 161,475,000 ordinary shares.

Dividend

As we stated in our Admission Document, at present we believe that it is more prudent to retain cash to fund the development of the Company rather than pay a dividend.

Salim Hamir

CFO and Company Secretary

22 September 2021