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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">The Merger Parties</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">LivaNova</font></div><div style="line-height:120%;padding-bottom:12px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">LivaNova was incorporated on February 20, 2015 for the purpose of merging Cyberonics and Sorin, which Mergers were completed on October 19, 2015 (subsequent to the periods reported herein). Prior to the completion of the Mergers, the principal executive offices of Cyberonics and Sorin were located in Houston, Texas, and Milan, Italy, respectively. However beginning October 19, 2015, the principal executive offices of both companies, under the LivaNova masthead, were relocated to London, United Kingdom.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Cyberonics</font></div><div style="line-height:120%;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Cyberonics is a medical device company, incorporated in 1987, with core expertise in neuromodulation. Cyberonics developed and markets its VNS Therapy® System, an implantable medical device that delivers a unique form of therapy, using pulsed electrical signals applied to the vagus nerve for the treatment of refractory epilepsy and treatment-resistant depression. Cyberonics has also obtained CE mark approval to sell its VITARIA</font><font style="font-family:inherit;font-size:9pt;"><sup style="vertical-align:top;line-height:120%;font-size:6pt">TM</sup></font><font style="font-family:inherit;font-size:10pt;"> System, a treatment for chronic heart failure, in the European Economic Area. The device remains investigational for chronic heart failure elsewhere in the world, including the U.S. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:12px;text-align:justify;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Sorin</font></div><div style="line-height:120%;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Sorin is a multinational corporation and global leader in the field of medical devices for the treatment of cardiovascular diseases. Sorin develops, produces and distributes medical devices for cardiac surgery and the treatment of cardiac rhythm dysfunctions. Through steady growth and expansion, Sorin has become a market leader in medical technologies for treating cardiovascular disease, and has become the global leader in the cardiopulmonary market. Sorin is focused on two main therapeutic areas: cardiac surgery, consisting of systems and disposable biomedical devices for extracorporeal circulation during heart surgery and implantable prostheses to replace or repair native heart valves; and cardiac rhythm management, consisting of implantable devices, monitoring systems and accessories for cardiac rhythm dysfunctions.</font></div></div>
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Contingencies</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">LivaNova had no contingencies as of September 30, 2015.</font></div></div>
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Foreign Currency Transactions. </font><font style="font-family:inherit;font-size:10pt;">The currency of the primary economic environment in which LivaNova will operate, LivaNova’s “functional currency,” is the U.S. dollar. The transactional gains and losses arising during the periods covered by this report arise from a certain stock subscription receivable (see “Note 4 - Related Party Transactions”) which is denominated in pound sterling and reflect changes in value of the receivable, as measured in U.S. dollars, as a result of foreign currency exchange rate variances.</font></div></div>
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:12px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">LivaNova PLC (formerly known as Sand Holdco PLC and Sand Holdco Limited), is a public limited company incorporated under the laws of England and Wales, (“LivaNova”). LivaNova was formed, along with its wholly owned subsidiary, Cypher Merger Sub, Inc., a Delaware corporation, (“Merger Sub”) on </font><font style="font-family:inherit;font-size:10pt;">February 20, 2015</font><font style="font-family:inherit;font-size:10pt;">, for the purpose of facilitating the business combination of Cyberonics, Inc., a Delaware corporation, (“Cyberonics”), and Sorin S.p.A., a joint stock company organized under the laws of Italy (“Sorin”). </font></div><div style="line-height:120%;padding-bottom:12px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In this Form 10-Q we are reporting the shell company results for LivaNova and Merger Sub for the three months ended </font><font style="font-family:inherit;font-size:10pt;">September 30, 2015</font><font style="font-family:inherit;font-size:10pt;"> and for the period from </font><font style="font-family:inherit;font-size:10pt;">February 20, 2015</font><font style="font-family:inherit;font-size:10pt;">, LivaNova’s date of incorporation, to </font><font style="font-family:inherit;font-size:10pt;">September 30, 2015</font><font style="font-family:inherit;font-size:10pt;">. As of September 30, 2015, LivaNova was a wholly owned subsidiary of Sorin, and Merger Sub, also a shell company, was wholly owned by LivaNova and was the sole subsidiary of LivaNova. Prior to September 30, 2015, and during the period reported herein, LivaNova did not conduct any activities other than those incidental to the formation of it and Merger Sub and matters contemplated by the Merger Agreement (as defined below). </font></div><div style="line-height:120%;padding-bottom:12px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On </font><font style="font-family:inherit;font-size:10pt;">October 19, 2015</font><font style="font-family:inherit;font-size:10pt;">, subsequent to the period ended September 30, 2015 as reported herein, and pursuant to the terms of a definitive Transaction Agreement entered into by LivaNova, Cyberonics, Sorin and Merger Sub, dated </font><font style="font-family:inherit;font-size:10pt;">March 23, 2015</font><font style="font-family:inherit;font-size:10pt;"> (the “Merger Agreement”), Sorin merged with and into LivaNova, with LivaNova continuing as the surviving company (the “Sorin Merger”), immediately followed by the merger of Merger Sub with and into Cyberonics, with Cyberonics continuing as the surviving company and as a wholly-owned subsidiary of LivaNova (the “Cyberonics Merger”, and together with the Sorin Merger, the “Mergers”). As a result of the Mergers, LivaNova became the holding company of the combined businesses of Cyberonics and Sorin. On October 19, 2015, LivaNova’s ordinary shares were listed for trading on NASDAQ Global Market (“NASDAQ”) and the London Stock Exchange (“LSE”) under the trading symbol “LIVN”. Events subsequent to September 30, 2015, including the completion of the Mergers, are not reflected in the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q other than through disclosure.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For further information regarding the parties to the Merger, refer to the section entitled “Note 2 - The Merger Parties”. For further information regarding the Mergers, refer to the section entitled “Note 6 - Subsequent Events”.</font></div><div style="line-height:120%;padding-bottom:12px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Basis of presentation.</font><font style="font-family:inherit;font-size:10pt;"> The accompanying unaudited condensed consolidated financial statements of LivaNova have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.” and such principles, “U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. All intercompany accounts and transactions have been eliminated. Accordingly, they may not include all of the information necessary for complete financial statements in conformity with U.S. GAAP. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of LivaNova and its subsidiary, operating as a shell company, for the periods presented and are not indicative of the results that may be expected for any other interim period or the transitional year from April 25, 2015 to December 31, 2015. </font></div><div style="line-height:120%;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Foreign Currency Transactions. </font><font style="font-family:inherit;font-size:10pt;">The currency of the primary economic environment in which LivaNova will operate, LivaNova’s “functional currency,” is the U.S. dollar. The transactional gains and losses arising during the periods covered by this report arise from a certain stock subscription receivable (see “Note 4 - Related Party Transactions”) which is denominated in pound sterling and reflect changes in value of the receivable, as measured in U.S. dollars, as a result of foreign currency exchange rate variances.</font></div></div>
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Related Party Transactions</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of September 30, 2015, a stock subscription receivable of </font><font style="font-family:inherit;font-size:10pt;">$76 thousand</font><font style="font-family:inherit;font-size:10pt;"> was due from Sorin.</font></div></div>
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Shareholder Equity</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> LivaNova’s authorized ordinary share capital consists of voting shares, par value of </font><font style="font-family:inherit;font-size:10pt;">£1.00</font><font style="font-family:inherit;font-size:10pt;">. As of </font><font style="font-family:inherit;font-size:10pt;">September 30, 2015</font><font style="font-family:inherit;font-size:10pt;"> outstanding ordinary voting shares consisted of </font><font style="font-family:inherit;font-size:10pt;">one</font><font style="font-family:inherit;font-size:10pt;"> share issued to Sorin. LivaNova’s authorized redeemable share capital consists of non-voting shares, par value </font><font style="font-family:inherit;font-size:10pt;">£1.00</font><font style="font-family:inherit;font-size:10pt;">. As of </font><font style="font-family:inherit;font-size:10pt;">September 30, 2015</font><font style="font-family:inherit;font-size:10pt;"> outstanding redeemable non-voting shares consisted of </font><font style="font-family:inherit;font-size:10pt;">50,000</font><font style="font-family:inherit;font-size:10pt;"> shares issued to Sorin in return for a certain stock subscription receivable, see “Note 4 - Related Party Transactions”.</font></div></div>
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">Subsequent Events</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Effective </font><font style="font-family:inherit;font-size:10pt;">October 19, 2015</font><font style="font-family:inherit;font-size:10pt;">, following the completion of the Mergers, LivaNova became the holding company of the combined businesses of </font><font style="font-family:inherit;font-size:10pt;">Cyberonics</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">Sorin</font><font style="font-family:inherit;font-size:10pt;">, and LivaNova’s ordinary shares were listed, under the ticker symbol “</font><font style="font-family:inherit;font-size:10pt;">LIVN</font><font style="font-family:inherit;font-size:10pt;">”, on NASDAQ and the LSE.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Prior to the Mergers, shares of Cyberonics common stock were registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and listed on NASDAQ, and Sorin Ordinary Shares were listed on the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A. (the “Italian Stock Exchange”). Shares of Cyberonics common stock and the Sorin ordinary shares were suspended from trading on NASDAQ and the Italian Stock Exchange, respectively, prior to the open of trading on October 19, 2015. NASDAQ filed a Form 25 on Cyberonics’ behalf to provide notice to the SEC regarding the withdrawal of shares of Cyberonics common stock from listing and to terminate the registration of such shares under Section 12(b) of the Exchange Act.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The issuance of LivaNova ordinary shares in connection with the Mergers was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Registration Statement on Form S-4 (File No. 333-203510), as amended, filed with the SEC by LivaNova and declared effective on August 19, 2015. Further, pursuant to Rule 12g-3(a) under the Exchange Act, LivaNova is deemed to be a “successor” issuer to Cyberonics under the Exchange Act. As such the ordinary shares of LivaNova are deemed to be registered under Section 12(b) of the Exchange Act, and LivaNova is subject to the informational requirements of the Exchange Act and the rules and regulations promulgated thereunder.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Based on the relative voting rights of Cyberonics and Sorin shareholders immediately following completion of the Mergers and the premium paid by Cyberonics for Sorin ordinary shares, and after taking into consideration all relevant facts, Cyberonics is considered to be the acquirer for accounting purposes. As a result, future quarterly filings on Form 10-Q and annual reports on Form 10-K will account for the Mergers as a reverse acquisition and the Mergers will be reported as a business combination using the acquisition method of accounting. As a result of the Mergers, on </font><font style="font-family:inherit;font-size:10pt;">October 19, 2015</font><font style="font-family:inherit;font-size:10pt;">, LivaNova issued </font><font style="font-family:inherit;font-size:10pt;">48.8 million</font><font style="font-family:inherit;font-size:10pt;"> ordinary shares.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">KPMG LLP (“KPMG”) was the independent auditor that audited Cyberonics’ financial statements for the fiscal years ended April 25, 2014 and April 24, 2015. In connection with the consummation of the Mergers, on October 19, 2015, the Audit & Compliance Committee (the “Audit Committee”) of LivaNova’s board of directors approved the engagement of PricewaterhouseCoopers S.p.A. (“PricewaterhouseCoopers”) as LivaNova’s independent registered public accountants to audit the financial statements of LivaNova and its consolidated subsidiaries for the transitional fiscal period beginning April 25, 2015 and ending on December 31, 2015, such engagement to be effective immediately. Accordingly, the Audit Committee of LivaNova’s board of directors will dismiss KPMG as the independent registered public accountants of Cyberonics upon completion by KPMG of its review, in accordance with auditing standards generally accepted in the United States of America, applicable to the interim financial information of Cyberonics to be included in the Transition Report on Form 10-Q to be filed by LivaNova with the Securities and Exchange Commission (the “SEC”) for the period beginning on April 25, 2015 and ending on October 18, 2015. </font></div><div style="line-height:120%;padding-bottom:8px;text-align:left;text-indent:12px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On September 8, 2015, the LivaNova Board of Directors also entered into a service agreement with Vivid Sehgal, effective October 19, 2015, pursuant to which Mr. Sehgal became the Chief Financial Officer of LivaNova. On October 19, 2015, the LivaNova Board of Directors entered into a service agreement with André-Michel Ballester pursuant to which Mr. Ballester became LivaNova’s Chief Executive Officer, effective October 19, 2015.</font></div></div>