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INTELLECTUAL PROPERTY COMMERCIALISATION DIVISION www.umip.com UMIP Premier Fund Update... OUR SEED FUND RUNNING SINCE MARCH 2008 The UMIP Premier Fund (UPF) is now past its fifth birthday and officially out of its investment phase. That said, we recently completed our latest new investment in Arago Technology Ltd. Arago is a University spin-out commercialising composite cross arm technology for electricity distribution pylons. A composite cross arm allows the conductor cable to be attached directly to the end of a cross-arm without the need for a vertical insulator. This allows the conductors to be raised higher off the ground which in turn permits greater power transmission capacity from an existing line or the construction of new lines of lower overall height. The upgrade and new-build capability is potentially a huge global opportunity. This investment is the thirteenth investment of the UPF in a spin-out company. We also completed 28 investments into Proof-of-Principle (PoP) projects since the start of the fund. As the fund is now formally into its 5-year realisation phase (the non-trivial task of getting a return on our investment) it no longer makes sense to make new PoP investments as the typical time it takes to obtain a financial return is in excess of the remaining life of the fund. So the fund is now closed to new PoP investments although it can invest further into existing PoP projects. 4 MTI's experience of investing in PoP projects originating from UMIP has been overwhelmingly positive and it has been a privilege to work with such talented scientists, and in some cases entrepreneurs, on such cutting edge and exciting projects. Although the UPF no longer invests in PoP projects, UMIP has ensured that PoP program will continue in the normal way. Many of the early PoP projects are now well established and those that have the potential for subsequent commercialisation are beginning to emerge, with some of them being spun-out already. The process of spinning out is often a complex one involving negotiations and formal legal agreements with academics. It is always an interesting process with some of the interpersonal relationships, team building and forming and negotiations being the most interesting elements of all. For academics it creates a fascinating insight into the commercial reality of how valuable and complex deals get done and for us investors it creates another opportunity to work with quite brilliant people. The ultimate end products are also worthy of the effort with some UPF spin-outs now several years old and are beginning to ramp up sales, bringing in multi-millions in new investment every year and are selling lots of products. Mark Rahn Investment Manager MTI Partners (Managers of the UMIP Premier Fund) Please click here to view UMIP's Portfolio of Technologies www.theupf.com