Regulatory News:

Mainstay Medical International plc (Bourse: MSTY) (« Mainstay »
ou la « Société » cotée sur Euronext Paris: MSTY.PA et ESM
de la Bourse irlandaise: MSTY.IE) annonce ses résultats pour l’exercice
clos le 31 décembre 2014. Mainstay est une société de dispositifs
médicaux basée en Irlande dont les activités sont basées en Irlande, aux
États-Unis et en Australie. La Société est spécialisée dans le
développement d?un dispositif médical implantable innovant de
neurostimulation, ReActiv8^®, conçu pour les personnes
atteintes de lombalgie chronique. ReActiv8 est conçu pour traiter les
causes sous-jacentes de la lombalgie chronique en aidant à rétablir le
contrôle des muscles qui stabilisent en permanence la colonne lombaire.

Faits marquants

• ReActiv8-A, l’essai clinique de ReActiv8, a commencé en mars 2014. Il
  s?agit d?une étude clinique prospective à une seule branche ouverte à
  un maximum de 96 sujets en Australie et en Europe. Les instruments de
  mesures de l?étude clinique ReActiv8-A sont évalués trois mois après
  le début de la stimulation et sont comparés aux valeurs de base
  pré-implantation. Des informations complémentaires sont disponibles à
  l?adresse https://clinicaltrials.gov/show/NCT01985230.
• La Société est satisfaite des progrès de l?étude clinique ReActiv8-A.
  Le dispositif a été implanté chez plus de 40 sujets au cours de
  l?étude clinique ReActiv8-A et la Société estime que les données
  collectées auprès de ces sujets pourraient suffire pour solliciter le
  marquage CE. La Société prévoit de publier les résultats de l?étude
  clinique ReActiv8-A une fois toutes les données des sujets implantés
  disponibles, auditées et officialisées.
• Nous sommes heureux d’annoncer que des données plus complètes
  concernant l’étude de faisabilité de Mainstay ont été publiées dans le
  journal « Neuromodulation », une revue spécialisée et évaluée par des
  pairs. Cette étude, qui a débuté en 2011, a permis d?évaluer la
  thérapie qui est désormais proposée avec ReActiv8, et une synthèse des
  données obtenues avaient été publiée précédemment. La publication est
  réservée aux abonnés ou disponible à l’achat.
• En janvier 2015, la Société a soumis une demande d?exemption des
  dispositifs expérimentaux (Investigational Device Exemption, ou
  IDE) à la Food and Drug Administration (FDA) afin d?obtenir
  l?autorisation de débuter les essais cliniques de ReActiv8 aux
  États-Unis. La Société prévoit de nombreux échanges avec la FDA afin
  de développer des essais cliniques répondant aux besoins de la
  Société, de la FDA, et aux personnes qui pourraient potentiellement
  bénéficier de ReActiv8.
• En décembre 2014, la Société a annoncé qu’elle avait obtenu la
  certification de son Système de Gestion de la Qualité en conformité
  avec les normes internationales de qualité ISO 13485:2003 et EN ISO
  13485:2012. Cette certification est une condition nécessaire avant
  l?obtention du marquage CE pour ReActiv8.
• La Société continue à élargir son portefeuille de propriété
  intellectuelle, des brevets supplémentaires ayant été déposés au cours
  de l?année 2014.
• Le 2 mai 2014, la Société s?est introduite en Bourse, cotant ses
  actions ordinaires sur l’ESM de l?Irish Stock Exchange et sur Euronext
  Paris. Un montant de 20,9 millions de dollars US (net de frais) a été
  levé dans le cadre de cette introduction en bourse.
• En 2014, les charges d’exploitation ont représenté un montant de 11,1
  millions de dollars, en hausse de 2,7 millions de dollars par rapport
  à 2013 en raison de la hausse des coûts liés à l?essai clinique de
  ReActiv8, et du renforcement de nos équipes.
• La trésorerie disponible au 31 décembre 2014 représente un montant de
  18,3 millions de dollars, et les flux de trésorerie liés aux activités
  d’exploitation pour 2014 ont représenté un montant de 11,4 millions de
  dollars.

M. Peter Crosby, Directeur Général de Mainstay, déclare :
« L?année 2014 a été une année importante pour Mainstay, et les étapes
majeures franchies par la Société sont la preuve des efforts et de
l?implication de notre équipe. Le succès de l’introduction en Bourse de
la Société nous a permis de faire progresser l?étude clinique ReActiv8-A
en Australie et en Europe comme prévu. Les chercheurs qui participent à
l?étude continuent à nous faire part de leur enthousiasme quant au
potentiel de ReActiv8 pour aider le nombre important de personnes
atteintes de lombalgie chronique. La soumission de la demande d’IDE dans
le cadre de la demande d?autorisation d?essais cliniques de ReActiv8 aux
Etats-Unis constitue une étape fondamentale dans le développement de
ReActiv8 sur le marché américain».

À propos de Mainstay Medical

Mainstay est une société irlandaise de dispositifs médicaux qui
développe un dispositif implantable innovant de neurostimulation,
ReActiv8, pour les personnes souffrant de lombalgie chronique
invalidante. La lombalgie est l?une des principales causes de limitation
de l?activité et d?absence au travail dans les pays développés, faisant
peser un poids économique significatif sur les individus, les familles,
la société, l?économie et les gouvernements.

La société est basée à Dublin, en Irlande, elle dispose d?activités
basées aux États-Unis et en Australie, et est cotée sur Euronext Paris
et sur l?ESM de l’Irish Stock Exchange.

A propos de la lombalgie chronique

Une des causes reconnues de la lombalgie chronique est un
affaiblissement du contrôle par le système nerveux central des muscles
qui stabilisent la colonne vertébrale du bas du dos, et l?instabilité de
la colonne vertébrale peut provoquer des maux de dos. ReActiv8 est conçu
pour stimuler électriquement les nerfs responsables de la contraction de
ces muscles et ainsi de contribuer à restaurer le contrôle musculaire et
d?améliorer la stabilité de la colonne vertébrale, ce qui permet au
corps de récupérer de la lombalgie chronique.

Les personnes atteintes de lombalgie chronique invalidante ont
généralement une qualité de vie réduite et un niveau très élevé de la
douleur, du handicap, de la dépression, de l’anxiété et des troubles du
sommeil. Leur douleur et leur handicap peuvent persister malgré les
meilleurs traitements médicaux disponibles, et seulement un faible
pourcentage de cas résulte d’un état pathologique identifié, ou d?un
défaut anatomique qui peut être corrigée par la chirurgie rachidienne.
Leur capacité à travailler ou à être productif est sérieusement affectée
par ce mal, et les journées de travail perdues, les prestations
d’invalidité et le recours aux prestations de santé pèsent sur
l?économie.

Further information can be found at www.mainstay-medical.com

Forward looking statements

This announcement 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? or ?will?, 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 announcement 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 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 announcement. In addition, even if the Company?s
results of operations, financial position and growth, and the
development of the markets and the industry in which the Company
operates, are consistent with the forward looking statements contained
in this announcement, 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, 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, currency fluctuations,
changes in its business strategy, political and economic uncertainty.
The forward-looking statements herein speak only at the date of this
announcement.

Mainstay Medical International plc and its subsidiaries

Annual Report

for the year ended 31 December 2014

Mainstay Medical International plc
Table of contents
Corporate and shareholder information			3
Chairman?s statement			4
Biographies of Directors			5
Directors? Report			7
Corporate Governance Report			15
Directors? Responsibilities Statement			19
Independent Auditor?s Report			20
Consolidated statement of profit or loss and other comprehensive income			22
Consolidated statement of financial position			23
Consolidated statement of changes in shareholders? equity			24
Consolidated statement of cash flows			25
Notes to the consolidated Financial Statements			26
Parent Company Financial Statements			44

Forward looking statements

This Annual 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? or ?will?, 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 Annual 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 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 Annual Report. In addition, even if the Company?s
results of operations, financial position and growth, and the
development of 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, 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, currency fluctuations,
changes in its business strategy, political and economic uncertainty.
The forward-looking statements herein speak only at the date of this
Annual 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
				Antoine Papiernik, 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
				County Dublin, Ireland
Registered number				539688
Website				www.mainstay-medical.com
ISIN / Symbol				IE00BJYS1G50 / MSTY.PA (Paris) and MSTY.IE
Solicitors				McCann FitzGerald
				Riverside One
				Sir John Rogerson?s Quay
				Dublin 2, Ireland
Independent Auditor				KPMG
				Chartered Accountants
				1 Stokes Place
				St Stephen?s Green
				Dublin 2, Ireland
Principal Bankers				HSBC
				Bank of Ireland
ESM Adviser and Broker				J&E Davy
				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 France)				Société Générale Securities Services
				32 rue du Champ de Tir
				CS 30812
				44308 Nantes Cedex 3, France

Mainstay Medical International plc
Chairman?s Statement

Dear Shareholder

2014 was a year of continued progress on the path to commercialisation
of ReActiv8^®, and I am pleased to present the Annual Report
for Mainstay Medical International plc and its subsidiaries (the
?Group?).

Business review

The successful initial public offering in 2014 marked a major milestone
in the Company?s progress and allowed us to move to the next stage of
development as a publicly listed company. The design of ReActiv8 was
completed. The ReActiv8-A clinical trial is now at an advanced stage in
Australia and Europe and we are pleased with its progress. Over 40
subjects have been implanted in the ReActiv8-A clinical trial and the
Company believes that data from these subjects may be sufficient to
apply for a CE Mark. The Company plans to announce data from the
ReActiv8-A clinical trial after the outcome data from all implanted
subjects are available, audited and adjudicated.

In January 2015, the Company submitted an application to the US Food and
Drug Administration (?FDA?) for approval to start a clinical trial of
ReActiv8 under an Investigational Device Exemption (?IDE?). The Company
anticipates that there will be multiple interactions with the FDA to
develop a clinical trial that meets the needs of the Company, the FDA
and the people who could potentially benefit from ReActiv8. Upon
successful completion of the trial and if the results support it, the
Company plans to submit an application for a Pre-Market Approval (?PMA?)
which is required to start commercialisation in the United States.

A detailed review of our 2014 activities can be found in the Directors?
Report on page 7 of this report.

Finance

Cash on hand as at 31 December 2014 was $18.3 million. Operating
expenses before exceptional items were $11.1 million during the year
ended 31 December 2014 (2013: $8.4 million) and relate to the ReActiv8-A
clinical trial activities, research and development, and general and
administrative expenses.

Outlook

Mainstay looks forward to continuing progress with the ReActiv8-A
clinical trial as it works towards the goal of obtaining CE Mark and
commencing commercialisation of ReActiv8.

Directors and Staff

I would like to thank all my fellow Directors, staff, consultants and
study investigators for their support and dedication, which has enabled
the continued success of the Company. I look forward to the future with
confidence.

Yours faithfully,

Oern Stuge MD
Chairman
18 March 2015

Mainstay Medical International plc
Board of Directors
Biographies
of Directors

Oern Stuge MD

Dr. Oern R. Stuge is the independent non-executive Chairman of the
Board. He is an international executive with 25+ years of experience in
the life science sector. He is the owner of Orsco Lifesciences AG,
through which he holds several executive & non-executive board
memberships & advisory roles.

Prior to founding Orsco, Oern Stuge worked for 12 years for Medtronic,
Inc. in different roles including Senior Vice President (SVP) &
President Europe & Central Asia, and SVP & President Cardiac Surgery. He
was a member of the Medtronic Executive Committee & Operating Committee.
Dr. Stuge has been credited for successfully transforming Medtronic?s
global Cardiac Surgery business and accelerating the growth in its
neurological and cardiovascular business in Europe, Middle East & Africa.

Dr. Stuge earned an MD from University of Oslo, and an MBA from IMD,
Switzerland.

Peter Crosby

Mr. Peter Crosby has been a Board member of the ultimate holding company
of the Group since he was appointed CEO of Mainstay Medical in mid-2009.
Mr. Crosby was instrumental in founding the Group and raising the 2010
and 2012 financing rounds, and completing the 2014 IPO. He is an
internationally experienced medical device executive who has been chief
executive officer or chairman of 7 medical device companies (public and
private) in four countries.

Mr. Crosby has contributed to the development and introduction to the
global market of dozens of medical devices over a career spanning more
than 30 years. After working for 5 years in a hospital environment, Mr.
Crosby entered industry as one of the first three employees of Cochlear,
and continued his career with executive roles in many more companies. He
has direct experience in active implantable medical devices, including
cardiac pacemakers and defibrillators (Telectronics Pacing Systems),
cochlear implants (Cochlear), left ventricular assist devices
(Ventracor), Neuromodulation (Mainstay Medical), ultrasound (Ausonics,
NeoVision), software (Cardicomm Solutions), and in-vitro diagnostics
(First Medical, Ischemia Technologies). Mr. Crosby has raised capital
for many medical device companies, and has been directly involved in the
sale of several companies.

Mr. Crosby graduated with a Bachelor of Electrical Engineering and a
Masters in Engineering Science (Biomedical Engineering) from the
University of Melbourne, Australia. He is a named inventor on over 25
patents and patent applications, primarily in the field of biomedical
engineering.

David Brabazon

Mr. David Brabazon is a co-founder of Adapt Pharma Limited and serves as
Chief Financial Officer and a board member. Adapt Pharma Limited is a US
focused speciality pharmaceuticals business with its corporate
headquarters in Ireland. Mr. Brabazon previously was a co-founder and
Chief Financial Officer of Azur Pharma plc, which merged with Jazz
Pharmaceuticals plc in early 2012. Mr. Brabazon continued to serve in
the merged business as Senior Vice President of Finance and Company
Secretary until late 2012. Prior to Azur Pharma, Mr. Brabazon served as
Vice President of Finance and Group Financial Controller of Elan
Corporation plc.

Mr. Brabazon is a chartered accountant and holds a Masters of Accounting
degree from University College Dublin, Ireland and a Master of Business
Administration degree from INSEAD, France. David serves as a director of
Headway (Ireland) Limited which provides support and services to people
affected by brain injury.

Antoine Papiernik

Mr. Antoine Papiernik is a Non-Executive Director of the Company and is
a Managing Partner at Sofinnova Partners, which he joined in 1997.
Sofinnova has been an initial investor and Antoine has been an active
board member in public companies like Actelion, Auris, ProQR, Novus
Pharma (then sold to CTI), Movetis (then sold to Shire), Mainstay
Medical, Pixium Vision and Stentys which went public respectively on the
Zürich stock exchange, the NASDAQ, the Milan Nuovo Mercato, the Belgium
Stock Exchange, the Irish Stock Exchange and EuroNext Paris, in Cotherix
(initially NASDAQ listed, then sold to Actelion), CoreValve (sold to
Medtronic), Fovea (sold to Sanofi Aventis) and Ethical Oncology Science
(EOS sold to Clovis Oncology). He has also invested, for Sofinnova, in
and is a board member of private companies ReCor, MD Start, Shockwave
Medical, and Reflexion Medical. Antoine has an MBA from the Wharton
School of Business, University of Pennsylvania. In 2012 and 2011 Antoine
was selected by Forbes for its ?Midas List? of the world?s top venture
capital investors. Antoine is one of the only Europeans on the list, and
one of the few life science investors as well.

Manus Rogan PhD

Dr. Manus Rogan is a Managing Partner and co-founder of Fountain
Healthcare Partners. He has over 26 years of investment and operating
experience in the life science sector in both the US and Europe. Dr.
Rogan earned a PhD in chemistry from the University of York (sponsored
by GlaxoSmithKline) and an MBA from Trinity College Dublin.

Dr. Rogan began his career in product development at GlaxoSmithKline in
the UK and in 1996 joined Elan Corporation?s business development group.
For four years he was responsible for licensing products and drug
delivery technologies in Europe and Japan. In 2001, Dr. Rogan joined
Elan?s Corporate Venture Capital group in New York where he invested in
private and public biotechnology companies. Investments included Sirna
(acquired by Merck, 2006) and Beyond Genomics (IPO, 2011). In his 7
years at Elan, Manus concluded over twenty five investment and
technology licensing transactions involving companies in the US, Europe
and Japan. Manus currently serves on the board of Opsona Therapeutics
and Mainstay Medical. He recently stepped down as Chairman of the Irish
Venture Capital Association (?IVCA?) and previously represented Fountain
Healthcare Partners on the board of Amarin Corporation.

Dan Sachs MD

Dr. Dan Sachs is a physician entrepreneur, and founder of KSpine Inc.,
Respicardia, Inc., Mainstay Medical Inc., and Amphora Medical, Inc. all
venture-backed medical device companies. He was previously a venture
capital investor with Investor Growth Capital and Spray Venture
Partners, and served as Instructor in Medicine on the faculty of Harvard
Medical School in the Division of Emergency Medicine.

Dr. Sachs earned an MD from the University of Michigan, and MBA from
Harvard Business School.

Mainstay Medical International plc
Directors? Report

We are pleased to report on the progress of Mainstay Medical
International plc (?Mainstay? or the ?Company?) and present the annual
report of the Company and its subsidiaries (the ?Group?) for the year
ended 31 December 2014.

Principal activities

Mainstay is a medical device company which is developing an innovative
implantable neurostimulation medical device, ReActiv8, for people with
Chronic Low Back Pain (?CLBP?). ReActiv8 is designed to address the root
cause of CLBP by helping to restore control to the muscles that
dynamically stabilise the lumbar spine. The design and development of
ReActiv8 has been completed and the ReActiv8-A clinical trial is at an
advanced stage.

Key performance indicators

Current key performance indicators, used by management to measure
performance and exercise control over operations are summarised below:

Securing funds – The Group has financed its operations to date
principally through placements of equity. The management team continues
to develop and strengthen relationships to explore further financing
options. These may include strategic partnering, private placement or
public offering of equities or debt.

Effective monitoring of use of funds – Management prepare budgets
and rolling forecasts to track and monitor use of funds. Actual
expenditure is measured against budget, and is reported to and evaluated
by the Directors on a monthly basis.

Achieving milestones – The Group has defined the strategic
activities and milestones leading to commercialisation of ReActiv8.
These include:

• Conclusion of product design and development of ReActiv8
• Conducting the ReActiv8-A clinical trial
• Quality System Certification
• Obtaining CE Mark
• European commercialisation of ReActiv8
• Obtain approval for an IDE from the FDA to start a clinical trial of
  ReActiv8 in the US
• Conducting a clinical trial of ReActiv8 under the IDE to generate data
  to file a PMA application with the FDA
• Following PMA approval, start of US commercialisation of ReActiv8.

Progress towards these milestones is reported by the management team to
the Board on a regular basis.

Business review

Corporate developments – The Company was incorporated and
registered in Ireland on 17 February 2014 as a public limited company.
Following a reorganisation on 3 April 2014, the Company became the
ultimate holding company of the Group. The Company together with its
operating subsidiaries Mainstay Medical Limited, MML US, Inc. and
Mainstay Medical (Australia) Pty. Limited now form the Mainstay Medical
Group. Prior to this reorganisation, Mainstay Medical Limited had been
the holding company of the Group.

On 2 May 2014, the Company listed its ordinary shares on the ESM of the
Irish Stock Exchange and Euronext Paris. Total proceeds of $20.9 million
(net of issue costs) were raised by way of a capital increase in
conjunction with the listing of the entire issued ordinary share capital
of the Company (the ?IPO?). The proceeds are being used by Mainstay to
fund clinical trial activities to obtain CE Mark, which is required for
initial commercialisation of ReActiv8 in Europe.

Feasibility study – A Mainstay Sponsored Feasibility study on the
therapy to be delivered by ReActiv8 was conducted in Europe, and summary
data have been previously reported. We are pleased to announce that more
complete data of the Mainstay Sponsored Feasibility study have been
published in the peer reviewed journal, Neuromodulation. The paper is
available to subscribers or for purchase from the journal.

Product design & development – Engineering development of
ReActiv8 including the proprietary Implantable Stimulation Leads and
Implantable Pulse Generator was completed.

ReActiv8-A trial – The purpose of the ReActiv8-A clinical trial
is to investigate ReActiv8 as a treatment for adults with debilitating
CLBP for whom surgery is not indicated (see http://clinicaltrials.gov/show/NCT01985230).
The ReActiv8-A clinical trial is a prospective single arm clinical trial
with up to 96 subjects at sites in Australia and Europe. Outcome
measures for the ReActiv8-A trial are assessed at a three month endpoint
after activation of stimulation and compared to baseline prior to
implant.

The first subjects in the ReActiv8-A clinical trial were recruited in
Australia following approval in March 2014 by Ethics Committees in
Australia. In June the ReActiv8-A clinical trial was expanded to sites
in Belgium following receipt of authorisation from the Belgian Federal
Agency for Medicines and Health Products (?FAGG?) and the Central Ethics
Committee, and in July 2014 authorisation from the UK Medicines and
Healthcare Products Regulatory Agency (?MHRA?) and the Central Ethics
Committee allowed expansion of the ReActiv8-A clinical trial to include
clinical trial sites in the United Kingdom.

We are pleased with the progress of the ReActiv8-A clinical trial. Over
40 subjects have been implanted as part of the ReActiv8-A clinical trial
and the Company believes that data from these subjects may be sufficient
to apply for a CE Mark. The Company plans to announce data from the
ReActiv8-A clinical trial after the outcome data from all implanted
subjects are available, audited and adjudicated.

US clinical trial and regulatory process – In January 2015, the
Company submitted an application to the FDA for approval to start a
clinical trial of ReActiv8 under an IDE. The Company anticipates that
there will be multiple interactions with the FDA to develop a clinical
trial that meets the needs of the Company, the FDA and the people who
could potentially benefit from ReActiv8.

Upon successful completion of the trial and if the results support it,
the Company plans to submit an application for a PMA which is required
to start commercialisation in the United States.

Quality Management System – In December 2014, the Company
announced that it had achieved certification of its Quality Management
System in compliance with the international quality standards ISO
13485:2003 and EN ISO 13485:2012. The certification granted by the
Company?s Notified Body, BSI Group-Medical Devices, covers the
operational activities for developing and bringing to market implantable
stimulation systems in the area of pain management. This ISO 13485
certification was achieved after passing the audits of our Quality
Management System at all our facilities in Ireland, Australia and the
USA.

Financial review

Income Statement ? Mainstay is at a pre-revenue stage. Operating
expenses related to on-going activities (excluding exceptional items)
were $11.1 million during the year ended 31 December 2014 (2013: $8.4
million). On-going activities include the ReActiv8-A clinical trial
activities, research and development, and general and administrative
expenses.

Research and development expenses reflect costs incurred for research,
development and design of the Group?s product ReActiv8. Research and
development expenses were $2.6 million during the year ended 31 December
2014 (2013: $4.0 million). Clinical and regulatory expenses relate to
the ongoing ReActiv8-A clinical trial and regulatory activities.
Clinical and regulatory expenses were $4.0 million during the year ended
31 December 2014 (2013: $0.9 million).

Net loss attributable to equity holders after exceptional items was
$82.5 million (2013: $10.3 million). As referred to in the Company?s
2014 Half Year Financial Results announcement, this includes a non-cash
exceptional item of $66.5 million associated with requirements under
International Financial Reporting Standards (?IFRS?) to ?fair value?
financial derivative instruments related to preference shares in issue
prior to the Company?s listing. All of these preference shares converted
on a one for one basis to ordinary shares immediately prior to the
listing and accordingly such fair value movements through profit or loss
will not arise in future periods.

Statement of financial position ? Cash on hand at 31 December
2014 was $18.3 million. Operating cash out flows for the year ended 31
December 2014 were $11.4 million (2013: $7.1 million). Total assets of
the Group were $18.8 million (2013: $10.0 million).

Principal risks and uncertainties

The principal risks and uncertainties faced by the Group remain
substantially unchanged from the disclosures included in the IPO
prospectus. A detailed discussion of these risk factors was included in
the IPO prospectus (on pages 24 to 38, and summarised on pages 17 to
18), and these risk factors are listed below. This IPO Prospectus can be
found on the Company?s website:

• The Group has incurred significant operating losses and may not be
  able to achieve or subsequently maintain profitability.
• The Group will likely require additional funds in the future in order
  to meet its capital and expenditure needs and further financing may
  not be available when required or could significantly limit the
  Group?s access to additional capital.
• The Group?s future financial performance is entirely dependent on the
  commercial success of ReActiv8, its only product at the date of this
  report.
• The Group operates in a highly regulated environment and regulatory
  approval is required before the Group can market or sell ReActiv8.
• 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 the Group?s target
  markets may delay, prohibit or reduce potential sales.
• The Group is 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.
• Attracting physicians and subjects to perform clinical trials and meet
  clinical trial objectives is costly and uncertain.
• Even if the Group has obtained regulatory approval for its products,
  there is no guarantee that the products will perform as intended.
• There is no certainty that the market for ReActiv8 to address people
  with CLBP will develop as currently anticipated by the Group or at all.
• The success of ReActiv8 depends on its acceptance and adoption by
  medical professionals.
• Active implantable medical devices such as ReActiv8 carry risks
  associated with the surgical procedure for implant or removal of the
  device, use of the device, or associated with the therapy delivered by
  the device.
• The Group?s business exposes the Group to an inherent risk of
  potential product liability claims relating to the manufacturing,
  clinical trials, market and sale and recall of an active implantable
  medical device.
• Competition in the medical device industry is intense and expected to
  increase.
• Other treatments for CLBP may emerge which could compete with ReActiv8.
• Any inability to fully protect and exploit the Group?s intellectual
  property may adversely impact the Group?s financial performance and
  prospects.
• The Group could become subject to intellectual property litigation
  that could be costly, result in the diversion of management?s time and
  efforts, require the Group to pay damages, prevent the Group from
  marketing ReActiv8 or other products and/or reduce the margins for
  ReActiv8.
• The Group depends on confidentiality agreements with third parties to
  maintain confidential information.
• The Group?s success is partly contingent on third party payment from
  government providers, healthcare insurance providers or other public
  or private sources.
• Manufacturing issues may arise that are detrimental to the Group.
• The Group depends on third party suppliers for the manufacture of
  ReActiv8. Disruption of the supply chain, or failure to achieve
  economies of scale could have a material adverse effect on the Group.
• Compliance with regulation for quality systems for medical device
  companies is difficult, time consuming and costly. The Group may be
  found to be non-compliant, for example as a result of future changes
  in or interpretation of the regulations regarding quality systems in
  certain jurisdictions.
• The Group may be unable to attract and retain management and other
  personnel it needs to succeed.
• In some markets the Group will depend on distributors over which the
  Group has little or no control.
• The Group relies on third parties for management services,
  manufacturing, marketing, regulatory advice and other services that
  are crucial to its business.
• Information Technology (?IT?) forms a key support requirement with the
  Group?s business. Any failure of the Group?s IT systems could present
  a substantial risk to its business continuity.
• US ?anti-inversion? tax laws could negatively affect the Group?s
  results.
• The Group is exposed to foreign exchange risk.