Final Results

27 April 2015

Lifeline Scientific, Inc.

("Lifeline" or the "Company")

Final Results

Results for the twelve months ended 31 December 2014

Lifeline Scientific (AIM: LSIC), the transplantation technology company, announces results for the year ended 31 December 2014, a strong year of growth with revenues and operating profits ahead of previous market expectations. The installed base of Lifeline's core product, LifePort Kidney Transporter, grew to 193 transplant programmes in 28 countries.

Financial Highlights

• Transplantation products and services revenues up 7% to US$34.6m (2013: US$32.4m)

§ LifePort® single-use consumable sales up 12% to US$20.6m (2013: US$18.4m)

§ North American revenues up 12% to US$27.3m (2013: US$24.3m)

§ Revenues outside of North America reaching US$7.3m (2013: US$8.0m)

• Gross profit up 9% to US$21.6m (2013: US$19.9m)

• Operating profit before and after non-recurring items increased to US$2.4m (2013: US$1.9m after, or US$0.9m before non-recurring items)*

• Net income increased to US$3.5m after non-recurring items, and US$2.2m before (2013: US$2.9m after or US$0.9m before non-recurring items) †

• Net cash generated from operations of US$1.8m (2013: US$ 0.4m cash used)

• Cash of US$3.3m as of 31 December 2014 (as of 30 June 2014: US$2.5m)

*adjustment of US$1.0m favourable legal settlement

†in 2014, adjustment for release of US$1.3m deferred tax allowance. In 2013, adjustment for legal settlement and for release of US$1.0m deferred tax valuation allowance

Operational Highlights

· Transplant programme customers worldwide increased by 21% to 193 (2013:160)

· Strong geographical expansion globally:

§ Strong growth in North America, sales up 12% to US$27.3m (2013: US$24.3m)

§ Sales in China increased by over 51% to US$1.9m (2013: US$1.3m)

§ Sales in Strategic Europe and Rest of World (outside of the Americas and China) of US$4.84m (2013: US$4.85m)

§ 27% growth in Strategic Europe and Rest of World LifePort proprietary disposable sales

· New key accounts established for LifePort and preservation solutions in several of the largest transplant regions in the US

· LifePort Kidney Transporters specified by the transplant community in France to support their national ECD programme where more than 100 LifePorts are currently in use

· 37 new issued patents added to the Company's portfolio

· Chinese FDA approval for Lifeline's full line of organ preservation solutions at year-end

· Further clinical evidence published supporting LifePort Kidney Transporter

David Kravitz, Chief Executive Officer of Lifeline, said: "2014 saw continued growth of LifePort adoption and use, especially within leading transplant programmes in our established North American market, as well as China and Europe. Expanding our presence within emerging markets in South America with an emphasis on Brazil will be a strong focus and we presently expect significant pick-up in trading there during the course of 2015. I am encouraged about the prospects of the business in 2015, both in terms of potential for delivering continued growth in revenues and operating profit and building shareholder value."

For further information:

About Lifeline Scientific Inc.

Lifeline Scientific, Inc. is a Chicago-based global medical technology company with regional offices in Brussels and Sao Paulo. The Company's focus is the development of innovative products that improve transplant outcomes and lower the overall costs of transplantation. Its lead product, LifePort Kidney Transporter, is the global market-leading medical device for hypothermic machine preservation (HMP), of donor kidneys. LifePorts and novel solutions designed for preservation of other organs are in development, with LifePort Liver Transporter next in line for commercial launch. For more information please visit www.lifeline-scientific.com

About LifePort Kidney Transporter

Created with the challenges of organ recovery and transport in mind, LifePort Kidney Transporter is a proprietary medical device designed to help improve kidney preservation, evaluation and transport prior to transplantation. It has been widely studied in clinical trials throughout the world and is the standard of care for machine preservation of kidneys. Employed by surgeons in over 190 leading transplant programmes in 28 countries, LifePorts have successfully preserved over 55,000 kidneys indicated for clinical transplant. For more information please visit www.organ-recovery.com

About LifePort Liver Transporter

LifePort Liver Transporter is modelled upon the clinically proven technology platform of LifePort Kidney Transporter. The Company's early liver HMP prototype was successfully used under a US FDA Investigational Device Exemption in clinical transplant studies by surgeons at New York-Presbyterian Hospital/Columbia University Medical Center. LifePort Liver Transporter and the Company's proprietary machine preservation solution, Vasosol®, are in the process of US and European regulatory registrations. The system is designed to help improve outcomes in liver transplantation by enabling the clinical use of hypothermic machine perfusion, and has been developed in consultation with clinical and research teams specializing in liver transplantation at Columbia University Medical Center and the University of Chicago. The system employs a rugged, streamlined ergonomic design for ease of use and transportability from donor bedside to recipient operating room. For more information please visit: http://www.organ-recovery.com/pipeline.php

CHAIRMAN'S STATEMENT

I am delighted to report another solid year of growth with full-year revenues and an operating profit ahead of previous expectations. Operating profit before non-recurring items has increased significantly during the year to US$2.4m (2013: US$0.9m), built on strong sales of the Company's lead products in new and existing programmes across the world.

Full-year revenues grew by 6.0% to US$35.2m (2013: US$33.2m).

Transplantation products and services revenues increased by 7.0% to US$34.6m (2013: US$32.4m), with much of the growth driven by significant orders from North America, China and France for the Company's flagship LifePort Kidney Transporter and related products and consumables.

A key measure of performance is the sale of our proprietary LifePort Kidney Transporter single-use consumables. Sales of these higher margin products increased by 12.3% from last year to US$20.6m (2013: US$18.4m). Sales of proprietary consumables associated with LifePort Kidney Transporter now represent 59.5% of transplantation related revenues (2013: 56.7%). Revenues increased by 8.7% for all of our single-use consumables, including our branded flush and preservation solutions.

Revenues from North America rose by 12.3% to US$27.3m (2013: US$24.3m), driven by additional penetration in existing accounts and conversion of new accounts to Lifeline's full suite of products. Sales outside of North America reached US$7.3m (2013: US$8.0m), with sales in China increasing by 51.3% to US$1.9m (2013: US$1.3m) and sales to our Brazilian distributor falling to US$0.6m (2013: US$1.9m). The decline in sales in Brazil was largely a function of the complexities and long lead times around product importation, yet clinician demand for Lifeline's products continues to increase and the Company continues to see strong opportunity for future growth. We are working on solutions to these issues and expect a significant pick up in Brazilian revenues as they are resolved.

Gross profit increased by 8.8% to US$21.6m (2013: US$19.9m) with a gross margin of 61.3% (2013: 59.8%), representing an increase over last year of US$1.7m. This was due primarily to the growth in proprietary consumable sales in 2014.

Operating profit before and after non-recurring items (US$2.4m) increased significantly over last year (2013: US$1.9m after; US$0.9m before non-recurring items). The 2013 adjustment was namely the recognition of a favourable US$1.0m legal settlement from a third party. Reported pre-tax profit increased to US$2.3m (2013: US$1.9m), with adjusted pre-tax profit, excluding all non-recurring items of US$2.3m (2013: US$0.9m).

The Company will report basic earnings per share of US$0.18, and US$0.12 adjusted for a non-recurring item of deferred tax allowance release (2013: US$0.15 reported and US$0.04 adjusted for 2013 non-recurring items of litigation settlement and deferred tax allowance release).

Net cash generated from operations for the period was US$1.8m (2013: Net cash used US$0.4m), reflecting an increase in profitability and lower investments in cash for working capital in the year. The cash position of the Company remains healthy, with cash balances as of 31 December 2014 of US$3.3m (30 June 2014: US$2.5m) and a revolver balance of US$2.1m (30 June 2014: US$1.0m). Note that US$1.1m of the revolver increase over the period refinanced higher-interest long-term debt in September 2014. Overall R&D spending in 2014 decreased slightly, in line with expectations, to US$2.6m (2013: US$2.9m).

Revenues for the period since the year-end are in line with the Company's expectations. We have seen consistent demand from our core markets in the US and Europe, and we remain optimistic about future growth prospects in Brazil and China. As well, efforts continue in earnest to advance the regulatory registrations of LifePort Liver Transporter and preparations for product launch pending regulatory clearance.

I would like to thank the Board of Directors and staff for their excellent work throughout the year and their valuable contribution to the strong performance of the business. We start 2015 well positioned to advance on the opportunities available to us and I look forward to reporting on the continued success of the Group over the coming year.

John Garcia

Chairman

Chief Executive Officer's Review

We delivered our eighth straight year of revenue growth in 2014 as worldwide market demand continued for our transplant products and services. Operating profit also grew significantly over 2013. Positive patient outcomes and strong clinician support continued to be the main drivers of transplant programme adoption. The Company saw particularly solid performance within North America as well as further significant orders from China and France for our flagship LifePort Kidney Transporter and related portfolio of products.

These achievements were reached in parallel with completing development and technical performance validations of our LifePort Liver Transporter system, along with good progress in preparation for regulatory approvals in the US and EU as we aim for commercial availability in 2015.

By year-end, LifePort Kidney Transporters were operating in 193 transplant programmes in 28 countries, an increase of 33 new transplant programmes from 2013.

Territories Progress

North America

We achieved strong growth in the North American market in 2014, with transplantation product and service sales reaching US$27.3m (2013: US$24.3m). This region remains the largest contributor to our revenue base, accounting for 78.9% of worldwide sales (2013: 75.2%). We anticipate this performance continuing in 2015, supported by growth from new accounts for our full product line in some of the largest transplant regions in the US, including the San Francisco Bay area, the Greater Miami/South Florida region, Indiana, and South Carolina. LifePort Kidney Transporters are now the standard for machine preservation of kidneys in 81% of US Organ Procurement Organisations and in all provinces of Canada.

Strategic Europe/Rest of World

Sales in Strategic Europe/Rest Of World (ROW), which we define as sales from outside of the Americas and China, were steady in 2014 (US$4.84m), compared to 2013 (US$4.85m). Encouraging within these figures is the 27.2% growth in LifePort proprietary single-use consumables.

France, one of the largest markets in Europe for kidney transplants (2,673 deceased donor transplants in 2013), has chosen LifePort as the standard of care for machine preservation of kidneys. It is the first country in Europe to adopt a national programme for machine preservation of all of its Expanded Criteria Donor (ECD) kidneys while it is already mandatory in France to machine perfuse kidneys Donated After Cardiac Death (DCD).

Our Company won a competitive tender to supply LifePort Kidney Transporters to the French national transplant service, Agence de la biomédecine, in November 2013. Today 31 of France's 35 renal transplant programmes are routinely preserving their ECD kidneys with LifePort while more than one hundred LifePort Kidney Transporters are installed nationwide. An estimated 625 LifePort preserved ECD kidneys were reported as successfully transplanted last year in France, an increase of 220% from 2013. We presently expect strong LifePort usage to continue in 2015.

Other highlights from 2014 include the expansion of LifePort Kidney Transporter into new clinical transplant centres in Spain and Italy, increased adoption in the major transplant centres of Scandinavia, and the start of a national machine preservation programme for DCD kidneys in Israel.

Market access negotiations in Germany continued throughout the year. We advanced contract negotiations and a harmonised national clinical protocol for Germany's formal evaluation and potential national implementation of LifePort reimbursement. Clinical data supports that LifePort adoption could improve outcomes and lower overall costs of transplantation in Germany, principally by way of reducing Delayed Graft Function and related remedial treatments. The Company has been working closely with and encouraged by German transplant community clinical leaders to persist in our efforts to secure national reimbursement.

South America

Brazil continues to be a significant potential market for our Company's products, with approximately 129 transplant programmes estimated to perform over 4,000 kidney transplants annually from deceased donors. The Company has established Agência Nacional de Vigilância Sanitária (ANVISA) regulatory approvals for LifePort Kidney Transporter and its full line of related single-use consumables and solutions, and is working on regulatory clearances for our next-generation LifePort Kidney Transporter 1.1.

Whilst the pace of progress in Brazil has been slower than we wish due to long lead times and complexities around product importation, clinical experience and enthusiasm for LifePort continues to grow. Surgeon demand for LifePort, driven by compelling patient outcomes, has come from both small and large-scale transplant centres. At the Hospital do Rim, the largest renal transplant centre in the world (reporting an estimated 900 transplant procedures each year), data collection from their 75-patient LifePort clinical study is nearing completion. Preliminary data indicates LifePort's ability to significantly help improve post-transplantation outcomes and reduce the time transplant recipients spend in hospital.

During 2014 we worked closely with leading Brazilian transplant surgeons and organ procurement organisations along with Brazilian health ministry leaders to develop a pragmatic solution to challenges associated with the importation of our products. This effort remains a top priority for the Company in 2015. Despite these challenges, the Company recorded sales to its Brazilian distributor of US$0.6m (2013: US$1.9m). Our preservation solutions business is starting to grow with 3,409 liters sold in 2014 (2013: 3,200). We expect to see significant pick-up in product sales in 2015.

Elsewhere in South America, we are introducing LifePort Kidney Transporter and our preservation solution products. We anticipate that key markets outside Brazil for 2015 will be Colombia and Panama where we have secured arrangements with specialist regional distributors and renal transplant surgeons are requesting our products.

China

Substantial progress continues in China toward making our full product line available for commercialisation. In February of 2015, we announced the receipt of Chinese FDA approvals for our SPS-1 and KPS-1 organ preservation and flush solutions, and we remain optimistic that LifePort Kidney Transporter will achieve regulatory approval in the first half of 2015.

While our products continue to be imported by our China based distributor and employed under clinical research protocols, our sales there increased in 2014 by 51.3% to US$1.9m (2013: US$1.3m).

China's national transplant system continues to modernise and LifePort's clinical results as reported by Chinese surgeons remain strong. Based upon this progress, we are optimistic that China may become one of the largest national venues for the Company's products and services. Currently, China reports having a network of over 165 licensed renal transplant centres, with the opening of further centres expected within the next 3-5 years due to rising demand based on the rapid rise of end-stage renal disease. Recently, China's health ministry estimated that over 300,000 patients are on waiting lists for organ transplantation.

New clinical experience

Clinical adoption and use of LifePort Kidney Transporter are growing as rapidly as the body of scientific evidence supporting its value in improving patient outcomes, reducing patient waiting lists and post-transplant costs of care.

The University of British Columbia recently published data from an analysis of more than 100,000 deceased donor kidney transplants between 1995 and 2010. The study found that hypothermic machine perfusion was associated with a reduced risk of Delayed Graft Function (DGF) in all types of deceased donor kidneys except the very lowest risk deceased donors. Gill J et al, Transplantation. 2014 97(1)

Around the world, surgeons are keen to share their clinical experiences with machine perfusion. A number of single-centre comparative trials have now been completed evaluating LifePort machine perfusion to the historical standard, static cold storage. These include a study from Dublin, Ireland, demonstrating the benefit of machine perfusion of ECD kidneys in reducing the incidence of DGF and significantly improving key markers of renal health-serum creatinine levels at one and three months post-transplant. (Forde J. et al, Irish Journal of Medical Science. Dec. 2014) A further single-centre study from Spain found similar results, with a reduced incidence of DGF and reduced hospital stay in a population that had received machine perfused ECD kidneys. This finding was particularly important as 80% of Spain's donor population are categorised as ECDs. This has led to other key Spanish transplant centres recently implementing a LifePort programme. (Gόmez, V. et al, Transplantation Proceedings, 2012)

Recently, transplant surgeons in Birmingham, UK, (the second largest volume renal transplant programme in the UK) have reported that longer cold ischaemic time does not jeopardise outcomes in renal transplantation if kidneys are machine perfused. As a result, a standard protocol has been implemented whereby every kidney unlikely to be implanted before 8pm is kept overnight on LifePort for transplantation the following day. This new protocol has reportedly led to a better quality of life for the clinical transplant staff and inspired the installation of a LifePort programme in Belfast, Northern Ireland, where typically busy surgical schedules during daylight hours cause limited availability of operating theatres and delays in transplant procedures. (World Transplant Congress 2014, Abstract #D2683)

In Brazil, where rates of DGF run at between 60% to 70% and hospital stays are on average 20 days post-transplantation, the advent of LifePort machine perfusion offers the potential to significantly improve patient outcomes and reduce the cost of transplantation in this developing nation. Recent experience in the Hospital Israelita Albert Einstein (Einstein) has demonstrated a reduction of more than five days in hospital stay for those patients receiving machine perfused kidneys compared to those receiving statically cold stored kidneys (13.8 days vs. 19 days). Based upon this evidence, Einstein reports that nearly all deceased donor kidneys are placed on LifePort prior to transplantation. (World Transplant Congress 2014, Abstract C1862)

In December 2014, an important clinical study of hypothermic machine perfusion of 31 donor livers for transplant was published in the American Journal of Transplantation. The study used a prototype of LifePort Liver Transporter and the Company's new proprietary Vasosol machine perfusion solution (Vasosol). It examined the use of hypothermic machine perfusion versus static cold storage for "orphan" donor livers (defined as donated livers that had been rejected by all other transplant centres within the originating United Network for Organ Sharing region, and were otherwise likely to be discarded). During the post-transplantation twelve-month follow-up, as compared to the standard of static preservation in a cool box filled with ice, there were significantly fewer complications and patients were able to spend less time in the hospital.

The authors concluded that hypothermic machine perfusion assists in the safe use of such marginal livers, even those rejected by multiple centres. They proposed that the incorporation of this technique into clinical practice will help close the gap between organ supply and demand, improving both clinical and economic outcomes of liver transplantation. (Guarrera, JV, et al. American Journal of Transplantation. 2015)

Organ preservation solutions

As with the past several years, we remain the largest provider of preservation solutions used in transplantation. Our offering of preservation solutions continues to be a helpful convenience for clients and an important revenue source for the Company. We anticipate future growth in this sector in North America with a considerable contribution from China and Brazil. Europe should also be a source of revenue growth upon granting of our solution CE mark, which we anticipate in 2015.

New product innovations

LifePort Liver Transporter

Final development, component and systems validations and regulatory registration for LifePort Liver Transporter and Vasosol solution were a key focus in 2014. We also successfully completed requisite bench testing and large animal pre-clinical studies of both machine and ex-vivo liver performance under typical organ procurement, transport and surgical suite conditions. Our development efforts were buoyed by very encouraging published clinical data suggesting important clinical benefits of hypothermic machine preservation for recovering marginal donor livers for transplantation. While timing for achievement of regulatory clearances cannot be predicted, we are making good progress and continue to prepare for commercial availability in 2015.

As incidence of end-stage liver disease rises, transplant waiting lists continue to grow throughout the world. In response, surgeons are trying to find ways to expand the pool of available donors without reducing graft and patient survival. The opportunity for LifePort machine perfusion to help enable the use of older and more marginal donor organs is promising and could potentially offer new hope for many people waiting for a life-saving liver transplant.

Universal SealRing (USR) cannula

Our new proprietary USR cannula was conceived nearly three years ago to enable LifePort preservation of kidneys with compromised vascular access, a donor population that includes living donor kidneys and represents nearly 40% of all kidneys transplanted worldwide. Since then, this new cannula has gone through rigorous development and testing by our Company in close collaboration with clinical transplant specialists. This effort is starting to show promise. Recent clinical results have proven the Universal SealRing works safely and effectively with traditional donor organs and uniquely enables the use of deceased donor kidneys that have limited vascular access and might otherwise have been discarded. In 2014, we saw rapid adoption of the USR cannula with 73% of customers in North America now using it routinely in deceased donor transplantation and in two centres, for the first time, in living donor transplant procedures.

LifePort Kidney Transporter "rolling" cover

The LifePort Kidney Transporter "rolling" cover is another product innovation that came out of our close collaboration with the clinical community. Designed with significant input from clinical organ procurement and logistics experts to give enhanced protection and manoeuvrability to the LifePort Kidney Transporter while in transit, this product has enabled commuter rail and airline companies to accept the unattended transportation of LifePort while fully operational. France is the first country to adopt the Transporter Cover and we anticipate additional sales in the EU region and beyond in 2015.

Research innovations

The Company continues to sponsor research within the transplant community aimed at advancing the state of the art of organ, tissue, and cell preservation. While not material to our overall operating budget, our sponsorship is generally provided through contractual transfers of our products or support services in exchange for certain intellectual property rights. Our research interests follows stated priorities of the major US and European clinical transplant societies in three main areas: basic science, translational science (including pre-clinical models designed to advance translation of validated mechanistic discoveries to clinical applications), and clinical science.

During 2014, our most potentially promising and important research programmes included:

Basic science

· Development and validation of perfusate derived biomarkers of renal and hepatic graft dysfunction.

Translational science

· An adherence monitoring study to help define predictors of chronic rejection, cancer and infections after transplant.

· Development of patient point of care assays for remote monitoring and measurement of immunosuppressant drug levels and key biomarkers of patient health.

· Development and validation of surrogate markers for long-term outcomes in kidney and liver allografts.

· Research to determine the effects of our unique ice-free cryopreservation system on protective immunity in allogeneic tissue for transplantation.

· Research on the effects of maintaining vascular flow during machine preservation for reducing reperfusion injury and determining sufficiency of oxygenation levels during LifePort machine preservation.

Clinical science

· Reduction of post-transplant complications in renal and liver allografts.

· Optimising organ utilisation by improving organ viability through machine perfusion based interventions in the pre‑transplant period including ex vivo conditioning.

· Improving post-transplant outcomes, patient experience and clinician support, by addressing the challenges of post-transplant therapeutics adherence.

Intellectual property

Our strategy for growth and creating intrinsic Company value includes a keen focus on intellectual property protection. We routinely seek patent coverage in geographically important regions for important discoveries that are relevant to our present and envisioned future business. During 2014, the Company added 37 new issued patents to its portfolio. This new intellectual property covers LifePort organ preservation and related technology, along with our cell and tissue preservation innovations. The Company's IP portfolio now includes 65 US issued and 27 US pending patents, and 133 international issued and 86 international pending patents.

Outlook

We are very encouraged by the continued growth of LifePort adoption and use, especially within leading transplant programmes in our established North American market, China and Europe. Further revenue growth in the US will come from use of machine perfusion in a wider range of deceased donor kidneys, as surgeons continue to recognise the benefits of machine perfusion for improving patient outcomes and enabling more life-saving transplants. LifePort's regulatory approval in China is presently expected in the first half of 2015, which will enable a national product launch of our full product line in this large emerging market.

While our efforts in Brazil have been slowed by excess bureaucracy and long lead times for product importation, clinician demand and patient outcomes success in key Brazilian transplant centres is strong and growing. As Brazil is one of the three largest untapped national markets for LifePort, we will maintain a strong focus there and we expect a significant pick-up in trading during 2015. LifePort Kidney Transporter and our preservation solutions should gain traction in new markets within South America, led by Colombia and Panama. We also anticipate broader use of LifePort in France to support the country's planned efforts to expand its pool of available donors, while Switzerland is expected to follow France's success with LifePort and introduce a national LifePort programme for all their ECD kidneys.

Our LifePort Liver Transporter system's regulatory approval will also be a key focus in 2015. We anticipate demand from surgeons as the clinical community looks to find new ways to deliver more and better quality livers for transplantation in the hope of reducing the number of people who die on waiting lists each year.

Overall, we are optimistic about the prospects of Lifeline Scientific and look forward to another solid performance in 2015. We see continued growth in revenue and operating profit, and as we continue to drive our planned new product and territory expansion initiatives to build shareholder value for the long-term.

As our success comes by way of immense dedication and effort of all who comprise our global organisation, I thank my colleagues for their unwavering services throughout the year. I am also grateful to our shareholders, customers, distributors and vendors for their support and encouragement throughout 2014. Together, we are building a growing and sustainable business while serving a noble worldwide effort of doctors and healthcare professionals to bring life-saving transplants to thousands of patients suffering from end-stage organ disease.

David Kravitz

Chief Executive Officer

Consolidated Balance Sheets

31 December 2014 and 2013

The accompanying footnotes are an integral part of the consolidated financial statements.

Consolidated Statements of Operations

Years Ended 31 December 2014 and 2013

The accompanying footnotes are an integral part of the consolidated financial statements.

Consolidated Statements of Comprehensive Income (Loss)

Years Ended 31 December 2014 and 2013

The accompanying footnotes are an integral part of the consolidated financial statements.

Consolidated Statements of Changes in Stockholders' Equity

Years Ended 31 December 2014 and 2013

The accompanying footnotes are an integral part of the consolidated financial statements.

Consolidated Statements of Cash Flows

Years Ended 31 December 2014 and 2013

The accompanying footnotes are an integral part of the consolidated financial statements.

Note 1 - Industry Operations

Lifeline Scientific, Inc. (the "Company") is a US corporation whose common shares trade publicly on the AIM Market on the London Stock Exchange (AIM:LSI.c). The Company is in the business of delivering, to targeted medical markets, a portfolio of related proprietary technologies, which include devices, solutions, and protocols designed to maximise the use and availability of organs, tissues, and cells. The Company serves the kidney transplant market today with its LifePort product line, and also sells solutions to service the broader organ transplant industry. All sales are generated from US contract manufacturing. During the year ended 31 December 2014, revenue earned from customers by geographic location was: 79.25% within North America, 13.75% within Europe, and 7.00% from other foreign markets. During the year ended 31 December 2013, revenue earned from customers by geographic location was: 75.90% within North America, 14.54% within Europe, and 9.56% from other foreign markets. As of 31 December 2014, 95.97% of the Company's long-lived assets are within the US. A LifePort Liver product line is planned for a commercial launch during the year ending 31 December 2015 and other organ-related products are in development. The Company views itself as operating as one segment. 

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The Company was incorporated in the state of Delaware as Organ Recovery Systems, Inc. on 1 October 1998. On 20 December 2007, the Company changed its name to Lifeline Scientific, Inc. The Company is consolidated with the following subsidiaries:

ORS Europe, NV *

Cell and Tissue Systems, Inc. **

Organ Recovery Systems, Inc. *

ORS Representacoes do Brasil LTDA*

* A wholly-owned subsidiary

** 49.00% owned prior to 19 December 2014; a wholly-owned subsidiary afterwards

Intercompany balances and transactions have been eliminated in consolidation.

The Consolidation Topic of accounting principles generally accepted in the US ("US GAAP") requires consolidation by the primary beneficiary where the variable interest entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The application of this guidance resulted in the consolidation of Cell and Tissue Systems, Inc. ("CTS"), which was created during the year ended 31 December 2005 and was deemed to be a variable interest entity. CTS was primarily formed to meet regulatory requirements in order to enhance its ability and capacity to apply for funding from available government sources. All grant revenue reported in the consolidated statements of operations is related to CTS, and this constitutes all of CTS' revenue. The Company contributed US$490 for the 49.00% ownership needed to form the variable interest entity. CTS had an accumulated deficit as of 31 December 2013.

In accordance with the requirements of the accounting standard under US GAAP that establishes accounting and reporting standards for non-controlling interests in a subsidiary in consolidated financial statements, the Company classified the non-controlling interest of CTS within the equity section of the consolidated balance sheets and separately reports the amounts attributable to controlling and non-controlling interests in the consolidated statements of operations for the year ended 31 December 2013.

On 19 December 2014, the Company acquired the remaining outstanding 51.00% stock of CTS for $510. No gain or loss was recorded in connection with this transaction as the Company has already been consolidating CTS. The non-controlling interest was derecognized in connection with the acquisition of the equity interest not already owned. The difference between the non-controlling interest and the consideration paid is reflected in the equity of the Company.

Also on 19 December 2014, the Company jointly formed Tissue Testing Technologies LLC ("T3") with another party. T3 was formed to meet regulatory requirements in order to obtain research grants from various government sources. Under the terms of the operating agreement, the Company owns 49.00% of T3 and the other party owns 51.00%. The Company did not make an investment and T3 had substantially no activity during the year ended 31 December 2014.

Cash and Cash Equivalents

The Company considers all money market accounts and short-term investments with an original maturity of three months or less and US Treasury money markets to be cash equivalents. The majority of cash and cash equivalents as of 31 December 2014 and 2013 were held through a single financial institution, and the balances held at times exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Receivables

Receivables are carried at original invoice or closing statement amount less estimates made for doubtful receivables. Management of the Company determines the allowance for doubtful accounts by reviewing and identifying troubled accounts on a monthly basis and by using historical experience applied to an aging of accounts. In general, a receivable is considered to be past due if any portion of the receivable balance is outstanding for more than 90 days past its terms. The Company does not charge interest on past due receivables. Receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received.

Inventories

Inventories are valued at the lower of cost (first-in, first-out) or market. As of 31 December 2014, the Company has an allowance of $190,000 for slower-moving inventories. No such allowance was provided by the Company as of 31 December 2013.

Depreciation and Amortisation

The Company's policy is to depreciate or amortise the cost of property and equipment over the estimated useful lives of the assets using the straight-line method. The cost of leasehold improvements is amortised over the estimated useful lives, or the applicable lease term, if shorter.

Long-Lived Assets

Long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. The Company periodically reviews the carrying value of long-lived assets to determine whether or not an impairment to such value has occurred. Management of the Company believes that no impairment of long-lived assets exists as of 31 December 2014 and 2013.

Intangibles

The cost of intangible assets are being amortised over the remaining lives of the assets as follows:

Professional and regulatory fees associated with obtaining the licenses that enable the Company to sell its products (i.e. certification marks) are capitalised and amortized over the shorter of the useful lives of the related licenses or twenty years. Legal fees associated with filings for patents that are pending are capitalised if management of the Company believes that it is probable that such patent applications will be successful. Patent costs are not amortised until the patent is obtained. During the year ended 31 December 2010, the Company signed an agreement that allows for the licensing of technology to support the Company's product development efforts. The agreement is being amortised over the remaining estimated life of the licensed technology, or ten years.

Goodwill

Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. In accordance with accounting for goodwill under US GAAP, goodwill is not amortised, but instead tested for impairment on an annual basis. The Company has applied Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2011-08, "Testing Goodwill for Impairment," in connection with the performance of the annual goodwill impairment test. Under ASU 2011-08, entities are provided with the option of first performing a qualitative assessment on none, some, or all of its reporting units to determine whether further quantitative impairment testing is necessary. An entity may also bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. Goodwill must be tested on an annual basis or if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. During the years ended 31 December 2014 and 2013, the Company was not required to record any impairments to the carrying value of goodwill.

Deferred Rent

Minimum rent expense is recognised over the term of the lease. The Company recognises minimum rent starting when possession of the property is taken from the landlord. When a lease contains a predetermined fixed escalation of the minimum rent, rent expense is recognised on a straight-line basis. Any difference between the recognised rent expense and the amounts payable under the lease is reported as deferred rent in the consolidated balance sheets. The Company records include a tenant allowance on its facility lease in Itasca, Illinois, which is recorded as a component of deferred rent and amortised as a reduction to rent expense over the term of the lease. Future payments for common area maintenance, insurance, real estate taxes, and other occupancy costs to which the Company is obligated are excluded from minimum lease payments.

Fair Value of Financial Instruments

US GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. US GAAP describes three approaches to measuring the fair value of assets and liabilities: the market approach, the income approach, and the cost approach. Each approach includes multiple valuation techniques. US GAAP does not prescribe which valuation technique should be used when measuring fair value, but does establish a fair value hierarchy that prioritises the inputs used in applying the various techniques. Inputs broadly refer to the assumptions that market participants use to make pricing decisions, including assumptions about risk. Level 1 inputs are given the highest priority in the hierarchy while Level 3 inputs are given the lowest priority. Assets and liabilities carried at fair value are classified in one of the following three categories based on the nature of the inputs to the valuation technique used:

· Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data.

· Level 3 - Unobservable inputs that are not corroborated by market data. These inputs reflect management of the Company's best estimate of fair value using its own assumptions about the assumptions a market participant would use in pricing the asset or liability.

The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximates their fair values because of the short-term nature of these instruments. The carrying value of the revolving line of credit and long-term debt approximates their fair values as the stated interest rates approximate current market interest rates of revolving lines of credit and long-term debt with similar terms.

Product Warranty

Estimated future costs applicable to products sold under warranty are charged to expense in the year of sale, and the related liability is classified as current and have been included in other accrued expenses. A summary of the account activity for the warranty accrual is as follows during the years ended 31 December 2014 and 2013.

Revenue Recognition

Product sales revenue is recognised upon shipment of product to the client. Service fee revenue is recognised when services are performed. Deferred and unbilled revenue is recognised in the consolidated balance sheets.

Grant revenue is recognised when earned. Grant revenues are deemed earned to the extent of the total allowable expenditures incurred, which are specified in the grant contract. In some cases, a portion of the grant revenue is paid at the time the grant is initiated. These advances are deferred and recognised using the proportional performance model. Unbilled services are at times recorded for revenue recognised to date and relate to amounts that are currently unbillable to the client pursuant to contractual terms.

The Company sells extended warranties on its LifePort product for a specific period of months. This revenue is deferred and recognised over the term of the warranties on a straight-line basis.

Shipping and Handling Costs

Shipping and handling costs billed to customers of US$170,534 and US$178,778 are netted with expense and have been included in cost of sales on the consolidated statements of operations during the years ended 31 December 2014 and 2013, respectively.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of property and equipment, bad debts, intangibles, and accrued expenses for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. The carrying value of the Company's deferred tax assets is dependent upon its ability to generate sufficient taxable income in the future. The Company has established a valuation allowance against its net deferred tax assets to reflect the uncertainty of realising the deferred tax benefits, given past historical losses and a limited history of significant earnings. A valuation allowance is required when it is more likely than not that all or a portion of a deferred tax asset will not be realised. The Company is subject to US federal, state, and local taxes as well as foreign taxes in Belgium and Brazil. During the years ended 31 December 2014 and 2013, respectively, US$1,300,000 and US$1,000,000 of the valuation allowance was reversed to reflect the likelihood of future taxable income, which will most likely result in the utilisation of a portion of the Company's net operating loss carryforwards.

The Company's consolidated financial statements provide for any related US tax liabilities on earnings of foreign subsidiaries that may be repatriated, aside from qualifying undistributed earnings of certain foreign subsidiaries that are intended to be indefinitely reinvested in operations outside of the US.

The Company accounts for unrecognised tax benefits in accordance with US GAAP, which prescribes a more likely than not threshold for consolidated financial statement presentation and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognised as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognised is the largest amount of tax benefit that is greater than 50.00% likely of being realised on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded.

Stock Options

In accordance with US GAAP, the Company accounts for the cost of employee services received in exchange for an award of equity instruments utilising the grant date fair value of the award. Stock-based awards that do not require future service (i.e., vested awards) are expensed immediately. The expense associated with stock-based employee awards that require future service are amortised over the relevant service period.

Management Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The estimates included by the Company in these consolidated financial statements relate to warranty reserves, the allowance for doubtful accounts, the allowance for excess and obsolete inventories, the useful lives of patents, the useful lives of depreciable property and equipment, and the valuation allowance for deferred tax assets.

Research and Development

Expenditures relating to the development of new products and procedures are expensed as incurred.

Foreign Currency Translation

The financial position and results of operations of the Company's foreign subsidiaries are measured using the subsidiary's local currency as the functional currency. Assets and liabilities of the foreign subsidiaries are translated to US dollars using exchange rates in effect as of the consolidated balance sheet dates. Income and expense items are translated at monthly average rates of exchange. The resultant translation gains or losses are included as part of the components of stockholders' equity designated as a component of other comprehensive income.

Subsequent Events

The Company has evaluated subsequent events through 3 April 2015, the date the consolidated financial statements were available to be issued. No reportable subsequent events occurred through 3 April 2015.

Contingencies

During the year ended 31 December 2013, the Company settled a dispute with a third party. Under the settlement, the Company is owed $1,000,000, payable through April 2015. The Company recognized the settlement amount as a reduction to selling, general, and administrative expenses in the consolidated statements of operations for the year ended 31 December 2013. As of 31 December 2014 and 2013, respectively, the Company has recorded the current portion of this settlement of $152,174 and $456,522 in prepaid expenses, deposits, and other in the consolidated balance sheets. As of 31 December 2013, the Company has recorded the non-current portion of this settlement of $152,174 in other non-current assets in the consolidated balance sheets. During the years ended 31 December 2014 and 2013, respectively, the Company received payments totalling $456,522 and $391,304. The third party is current with the settlement terms.

In addition to the aforementioned matter, from time to time, the Company may experience litigation arising in the ordinary course of business. These claims are evaluated for possible exposure by management of the Company and their legal counsel. The Company believes that the ultimate resolution of any such matters will not have a material adverse effect on its consolidated financial position.

Note 3 - Concentrations

As of 31 December 2014, two vendors accounted for 60.23% and 10.29% of accounts payable, respectively. As of 31 December 2013, two vendors accounted for 27.06% and 12.95% of accounts payable, respectively. During the year ended 31 December 2014, two vendors accounted for 21.14% and 16.81% of purchases, respectively. During the year ended 31 December 2013, two vendors accounted for 12.73% and 12.31% of purchases, respectively.

As of 31 December 2014, one customer accounted for 20.76% of customer receivables. As of 31 December 2013, two customers accounted for 15.11% and 12.87% of customer receivables, respectively.

The Company receives the majority of its grant revenue under several grant contracts from the National Institutes of Health. During the years ended 31 December 2014 and 2013, the Company earned US$416,861 and US$761,902, respectively. The receivable balances from the National Institutes of Health were US$13,883 and US$44,705 as of 31 December 2014 and 2013, respectively.

Note 4 - Inventories

Note 5 - Property and Equipment

During the years ended 31 December 2014 and 2013, the Company recognised depreciation expense of US$891,584 and US$743,821, respectively.

Note 6 - Intangibles

Intangible assets consist of the following:

During the years ended 31 December 2014 and 2013, the Company abandoned patents issued and patents pending with an original cost of US$29,304 and US$95,897, respectively.

During the years ended 31 December 2014 and 2013, the Company recognised amortisation expense of US$193,458 and US$201,862, respectively.

The following schedule by year represents future intangible amortisation, assuming certification mark fees and patent pending costs will be reclassified as issued and amortisation will begin at the midpoint of the following year:

Note 7 - Financing Agreements

During August 2009, the Company entered into a two-year working capital line of credit agreement with Silicon Valley Bank ("SVB") to support potential future cash needs of the Company. This line of credit agreement, and subsequent amendments provided for a revolving line of credit not to exceed an aggregate principal amount of US$3,000,000, limited to qualifying receivables as defined, and granted a security interest in and lien upon all of the assets of Lifeline Scientific, Inc. and Organ Recovery Systems, Inc. in favour of SVB. The maturity of the line of credit agreement was 21 September 2014. The outstanding principal under the revolving line of credit accrued interest at an annual rate of 1.25% above the prime rate (3.25% as of 31 December 2013). In addition, a US$750,000, 36 month term loan at a 5.50% unsecured or a 2.75% secured rate was made available to the Company, of which the Company drew upon US$525,000 (at a secured rate of 2.75%) during the year ended 31 December 2012 to support the Company's growth plans. The financing agreements contained financial covenants which required the Company to maintain a required minimum tangible net worth (as defined) as of 31 December 2013.

As of 31 December 2013, there were no amounts outstanding on the line of credit and the outstanding balance on the term loan was US$218,750.

On 18 September 2014, the Company entered into a new loan and security agreement with The PrivateBank and Trust Company ("PB"). At close, the Company used proceeds from the loan and security agreement to repay the subordinated loan payable to IWT of $1,081,393 and satisfy all amounts under the previous SVB loan agreement of US$1,089,755. The loan and security agreement provides for a revolving line of credit, not to exceed an aggregate principal amount of US$6,000,000 but limited to qualifying receivables and inventories, as defined. The outstanding principal under the loan and security agreement accrues interest at PB's prime rate (3.25% as of 31 December 2014). The loan and security agreement contains financial covenants which require the Company to maintain a minimum tangible net worth, as defined, and a minimum fixed charge coverage ratio, as defined. The Company was in compliance with its financial covenants as of 31 December 2014. The loan and security agreement is secured by substantially all assets of the Company and expires 17 September 2015. As of 31 December 2014, there was US$2,171,147 outstanding on the revolving line of credit.

Note 8 - Long-Term Debt

Maturities on long-term debt other than capital leases are as follows as of 31 December 2014:

The following is a schedule by year of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of 31 December 2014:

Assets held under capital lease as of 31 December 2014 and 2013 had a cost of US$127,757 and US$82,348, respectively, and accumulated depreciation of US$42,386 and US$10,964, respectively.

Note 9 - Income Taxes

Income tax benefit consists of the following components for the years ended 31 December 2014 and 2013:

A reconciliation of income tax benefit, with amounts determined by applying the statutory US federal income tax rate to income before income taxes is as follows for the years ended 31 December 2014 and 2013:

The net deferred tax assets in the accompanying consolidated balance sheets include the following components as of 31 December 2014 and 2013:

The income tax benefit differs from the federal statutory tax rate generally as a result of changes in the valuation allowance, permanent differences such as meals and entertainment expenses, state income taxes, and foreign income taxes. A valuation allowance has been provided to reduce the deferred tax assets to the amount that is more likely than not to be realised.

The Company has federal net operating loss carryforwards totalling US$58,479,000 as of 31 December 2014, which may be used to offset future taxable income. If not used, the carryforwards will expire in future years as follows:

As a result of changes in ownership at the IPO date, the Company estimates there will be future limitations on the utilisation of operating loss carryforwards pursuant to Internal Revenue Code Section 382. Any unused annual loss limitation carries forward to future year. The annual limitation on loss carryforwards that could be utilised is approximately US$2,600,000 through the year ended 31 December 2014 and 31 December 2013. The cumulative unused loss limitation which carried into the year ended 31 December 2014 was approximately US$16,766,000.

The Company files tax returns in the US federal and various state jurisdictions, along with Belgium and Brazil foreign tax jurisdictions. The Company's tax years extending back to the year ended 31 December 2010 remain open to examination for both federal and state jurisdictions. The Company's policy is to recognise interest and penalties related to uncertain tax positions as a component of income tax expense. A summary of the activity related to unrecognised tax benefits is as follows during the years ended 31 December 2014 and 2013:

The Company does not expect the total amount of unrecognised tax benefits to significantly change during the next 12 months.

Cash payments for income taxes were US$139,000 and US$106,000 during the years ended 31 December 2014 and 2013, respectively.

Note 10 - Common Stock

In accordance with its third amended and restated certificate of incorporation dated 20 December 2007, the total number of shares the Company is authorised to issue is 30,000,000, all of which is designated as common stock with US$0.01 par value. Each share of common stock entitles the holder to one vote on each matter submitted to a vote of the stockholders of the Company. The holders of the common stock shall be entitled to receive dividends when, and if, declared by the Board of Directors of the Company.

Note 11 - Stock Options

In December 2007, the Company approved a Second Amended and Restated Stock Option and Restricted Stock Plan (the "2007 Plan"). As of 31 December 2014 and 2013, the 2007 Plan reserves 2,339,572 and 2,333,606 shares of common stock respectively for grant (or 12.00% of the issued and outstanding common stock). The 2007 Plan permits granting of awards of restricted stock. Options granted may include nonqualified options as well as incentive stock options. The 2007 Plan is currently administered by the Board of Directors of the Company.

The 2007 Plan gives broad power to the Board of Directors of the Company to administer and interpret the 2007 Plan, including the authority to select the individuals to be granted options and restricted stock, and to prescribe the particular form and conditions of each option or restricted stock granted. The 2007 Plan shall continue in effect for a term of ten years unless terminated sooner under provisions of the 2007 Plan. It is the Company's policy to issue new stock certificates to satisfy stock option exercises.

During the years ended 31 December 2014 and 2013, the Company granted 17,500 and 219,000 nonqualified stock options, respectively, to employees and directors of the Company. The options were granted at the fair market value of the common stock on the date of the grant, have a ten year contractual term, and vest over four years.

A summary of option activity under the 2007 Plan as of 31 December 2014 and 2013 and the changes during the years ended 31 December 2014 and 2013 is as follows:

A summary of the Company's nonvested options under the 2007 Plan as of 31 December 2014 and 2013 and changes during the years ended 31 December 2014 and 2013 is presented as follows:

The following is a summary of the Company's stock options outstanding and stock options exercisable under the 2007 Plan as of 31 December 2014:

The Company recognised compensation expense of US$303,596 and US$281,248 during the years ended 31 December 2014 and 2013, respectively. As of 31 December 2014, there was approximately US$223,576 of total unrecognised compensation cost related to nonvested share-based compensation arrangements granted under the 2007 Plan. That cost is expected to be recognised over a weighted-average period of 0.82 years.

68,800 options were exercised during the year ended 31 December 2014 at a weighted average price of £0.39. As a result of utilising a cashless exercise option, 49,714 shares were issued related to these options. 30,000 options were exercised during the year ended 31 December 2013 at a weighted average price of £0.39. As a result of utilising a cashless exercise option, 21,761 shares were issued related to these options.

Fair value was estimated as of the grant date based on a Black-Scholes option pricing model using the following weighted average assumptions during the years ended 31 December 2014 and 2013:

When estimating forfeitures, the Company considers historical terminations as well as anticipated retirements.

Note 12 - Operating Leases

The Company conducts its operations in facilities leased under a number of operating leases. Rent expense under these agreements amounted to US$489,410 and US$492,444 during the years ended 31 December 2014 and 2013, respectively.

The following is a schedule by year of future minimum lease payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of 31 December 2014:

Note 13 - Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share include the dilutive effect of stock options and warrants, using the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share for the years ended 31 December 2014 and 2013:

Note 14 - Employee Benefit Plan

The Company sponsors a limited employer matching 401(k) plan for all employees of the Company. The plan provides for contributions in such amounts as determined by the Board of Directors of the Company, and the employer match is discretionary. Contributions of US$86,349 and US$86,573 were made during the years ended 31 December 2014 and 2013, respectively.

Note 15 - Other Cash Flow Information

Cash payments of interest were US$105,947 and US$95,841 during the years ended 31 December 2014 and 2013, respectively.

During the year ended 31 December 2014, the Company acquired vehicles via leases considered to be capital leases. The capital lease obligation for these assets was US$36,405.

See Notes 9 and 11 for additional noncash transactions.

Note 16 - Board Remuneration

During the years ended 31 December 2014 and 2013, the Company's Board of Directors earned remuneration in the form of current benefits for their activities as directors. In addition, David Kravitz's remuneration reflects his role as Chief Executive Officer of the Company. Note that compensation amounts are as follows:

In addition, David Kravitz received other current benefits in the form of health and life insurance coverage during the years ended 31 December 2014 and 2013 of US$33,460 and US$31,297, respectively. Mr. Kravitz also received US$6,094 of 401(k) contributions from the Company during the years ended 31 December 2014. The Directors did not receive any post-employment or share-based payments from the Company during the years ended 31 December 2014 and 2013.

Note 17 - Related Party Transactions

During the year ended 31 December 2010, the Company entered into a consulting agreement with a company in which Steven Mayer, a member of the Company's Board of Directors, is a director. Mr. Mayer performs the consulting services. Fees for services rendered under the consulting agreement were US$91,750 and US$120,000 and have been included in selling, general, and administrative expenses in the consolidated statements of operations during the years ended 31 December 2014 and 31 December 2013, respectively.

Additionally, during the years ended 31 December 2014 and 2013, the Company did business with a company in which David Kravitz and Steven Mayer are directors and have an ownership interest. Fees for research and development related products and services rendered were US$351,000 and US$324,500 during the years ended 31 December 2014 and 2013, respectively. During the year ended 31 December 2014, the Company placed net assets of $421,532 which were required for an independent clinical research study into service, which are reflected in property and equipment, net in the consolidated balance sheet as of 31 December 2014. As of 31 December 2013, the Company had net assets of US$402,500 which were included in prepaid expenses, deposits, and property and equipment.