Dr. Ronald Li reports

NOVOHEART HOLDINGS INC. ANNOUNCES AGM RESULTS, RECEIVES GOVERNMENTAL FUNDING TO EXPAND R&D TEAM, AND REPORTS SECOND QUARTER 2018 FINANCIAL RESULTS

Novoheart Holdings Inc. has been awarded two internship grants from the Innovation and Technology Commission (ITC) of Hong Kong to support the recruitment of local graduates. These have provided financial support toward the expansion of the R&D (research and development) team in Hong Kong, allowing the company to recruit and train top talent, in conjunction with its expansion into the brand new 5,300-square-foot facility in the Hong Kong Science Park, and thus accommodate additional commercial drug screening contracts. The two new internship grants total approximately $150,000, in addition to approximately $1.8-million that Novoheart has been awarded through various schemes from ITC for supporting the development of MyHeart platform.

Second quarter 2018 financial results

Novoheart reports financial results for the three and six months ended Dec. 31, 2017. Amounts are in accordance with international financial reporting standards (IFRS).

"We are very pleased with Novoheart's progress over the past quarter. Commercially, we successfully completed, in December, 2017, our second contract with a global pharmaceutical company which required us to design and generate engineered human heart chambers that carried a hereditary disease, triggering an additional final payment," said Dr. Ronald Li, chief executive officer of Novoheart. "In addition, we signed a new commercial contract with New York-based Sumocor to test their candidate therapeutics on our MyHeart platform to provide thorough preclinical assessment of efficacy and cardiotoxicity in preparation for filing an investigational new drug (IND) application with the FDA [U.S. Food and Drug Administration]."

Dr. Li continued: "As we move ahead for the remainder of fiscal year 2018, we expect to continue to focus on expanding our commercial footprint via new contracts with global pharmaceutical companies and biotechnology firms. It is clear that Novoheart's MyHeart platform adds tremendous value to the drug screening and development processes, and we will continue to expand our presence in these areas."

"Scientifically, we progressed on several fronts," said Dr. Kevin Costa, chief scientific officer. "In the past three months alone, we filed two provisional patents, one for a three-tier screening system and one for our proprietary multiorganoid bioreactor platform. Secondly, we published a landmark study demonstrating the use of machine learning to accelerate drug screening. These milestones all signify our constant and persistent efforts to maintain our technological excellence. Ultimately, the new technology enhances Novoheart's capacity and further expands its ability to identify promising bioactive therapeutics, classify toxicity of unknown drugs, and pioneer innovative methods of addressing diseases and disorders. Taken collectively, Novoheart is on track to launch the significantly enhanced MyHeart platform 2.0 in 2018 with higher sensitivity, accuracy, capacity as well as throughput."

Recent business highlights:

• Signed commercial agreement with Sumocor to develop novel therapeutics for heart failure;
• Completed second commercial contract with a global pharmaceutical company, with the results to be publicized and announced;
• Filed two patents for three-tier drug screening system and new multiorganoid bioreactor platform;
• Published landmark study demonstrating the use of machine learning for accelerating drug screening.

Financial results for the second quarter of 2018

The company recorded net loss of $1,660,675 (loss per share of two cents) for the three months ended Dec. 31, 2017, compared with a net loss of $780,106 (loss per share of 15 cents) for the three months ended Dec. 31, 2016. On a year-to-date basis, the company recorded a net loss of $7,933,244 (loss per share of 15 cents) for the six months ended Dec. 31, 2017, compared with a net loss of $1,216,229 (loss per share of 23 cents) for the six months ended Dec. 31, 2016. The increase in net loss on a year-to-date basis was due primarily to the completion of the reverse takeover transaction, for which the company incurred a non-cash loss on completion of reverse takeover of $5,213,597.

Operating expenses for the second quarter of 2018 were $1,737,289, compared with operating expense of $867,165 for the second quarter of 2017. Operating expenses for the six months ended Dec. 31, 2017, and 2016 were $2,820,756 and $1,362,190, respectively. The increase in operating expenses is primarily related to an increase in intellectual property and patent expenses, and general and administrative expenses. The increase in intellectual property and patent expenses is due to fees incurred for the intellectual property licensing agreements that the company entered into during calendar year 2017. The increase in general and administrative expenses is primarily due to increases in professional and regulatory fees due to the reverse takeover listing and the listing on the Frankfurt Stock Exchange, as well as the increase in staffing costs resulting from the buildout of the company's management team.

The company earned other income of $53,856 and $110,665 in the three and six months ended Dec. 31, 2017, compared with other income of $68,308 and $135,271 in the three and six months ended Dec. 31, 2016. Other income is earned from the agreement with a global pharmaceutical partner. Work for the agreement was completed in December, 2017.

Liquidity and outstanding share capital

As at Dec. 31, 2017, the company had cash of $4,723,926. As at Feb. 26, 2018, there were 93,462,025 common shares issued and outstanding and 4,203,576 common shares issuable upon the exercise of outstanding stock options (of which none are exercisable) at an exercise price of 50 cents per share. The company also has 972,037 purchase warrants outstanding with an exercise price of 50 cents, expiring in September, 2019.

Results of annual general meeting

Novoheart is pleased to announce the results of its annual general meeting of shareholders held on Feb. 23, 2018. Shareholders elected six directors to the company's board, being Dr. Ronald Li, Dr. Camie Chan, Victor Chang, Ricky Chiu, Allen Ma and James Topham.

The shareholders also approved all other matters proposed, including the appointment of KPMG LLP, chartered accountants, as auditor of the company for the ensuing year, the reapproval of the company's stock option plan and the approval of the company's restricted share unit plan, pursuant to which 2,803,860 shares are reserved for issuance. In combination, all share compensation arrangements of the company, including the RSU plan, will not exceed 10 per cent of the issued and outstanding common shares. The RSU plan remains subject to final acceptance by the TSX Venture Exchange.

About Novoheart Holdings Inc.

Novoheart is a global stem-cell biotechnology company dedicated to human heart engineering with offices and laboratories in the United States, Canada and Hong Kong. Novoheart's scientific team has pioneered a range of bioengineering technologies collectively known as the MyHeart platform, including the world's first human mini-heart, novoHeart (otherwise known as a human heart in a jar), that is fully capable of pumping and ejecting fluid.

            CONDENSED CONSOLIDATED INTERIM STATEMENTS OF (LOSS) AND COMPREHENSIVE (LOSS)
                                                                                                                     
                                                     Three months ended Dec. 31,   Six months ended Dec. 31,
                                                              2017         2016           2017         2016
Operating expenses
Research and development                              $    377,043  $   344,366   $    615,838  $   604,334
Intellectual property and patent                           103,781       33,019        361,339       51,263
General and administrative                                 906,165      470,732      1,470,424      671,709
Share-based compensation                                   295,500            -        300,222            -
Depreciation                                                54,800       19,048         72,933       34,884
                                                         1,737,289      867,165      2,820,756    1,362,190
(Loss) from operations                                  (1,737,289)    (867,165)    (2,820,756)  (1,362,190)
Government grants                                           16,310        6,126         21,687       11,984
Other income                                                53,856       68,308        110,665      135,271
Finance expense                                             (1,263)        (488)        (1,768)        (661)
Foreign exchange gain (loss)                                 7,711       13,113        (29,475)        (633)
Non-cash (loss) on completion of reverse takeover                -            -     (5,213,597)           -
                                                            76,614       87,059     (5,112,488)     145,961
Net (loss) for the quarter                              (1,660,675)    (780,106)    (7,933,244)  (1,216,229)
Other comprehensive income (loss)
Foreign currency translation adjustment                    (17,215)      23,632        (58,041)     (14,115)
Comprehensive (loss) for the quarter                    (1,677,890)    (756,474)    (7,991,285)  (1,230,344)
(Loss) per share -- basic and diluted                  $     (0.02) $     (0.15)  $      (0.15) $     (0.23)

We seek Safe Harbor.