TIDMTRX
RNS Number : 6529J
Tissue Regenix Group PLC
15 April 2020
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR)
Tissue Regenix Group plc
US Government backed loan secured and trading and operational
update and commentary on the potential impact of COVID-19
pandemic
US Government backed loan extends Tissue Regenix's cash
runway
Leeds, 15 April 2020 - Tissue Regenix Group (AIM:TRX) ("Tissue
Regenix", the "Group" or the "Company"), the regenerative medical
devices company, announces that it has secured a US Government
backed loan to assist with the potential impact of the ongoing
COVID-19 pandemic. The Group also provides a trading update to 31
March 2020 and an operational update on the impact of COVID-19.
US Government backed loan
A US Government backed loan of $629,000 has been agreed, and
funds received, through one of the Company's banking providers to
assist with overhead costs experienced in the US during the
COVID-19 pandemic (the "Loan"). The Loan has a two year term and
carries a 1% annual interest rate deferred for 6 months, however,
under the Loan agreement, the total amount of the Loan will not
require repayment if the funds are used to support employee
payroll, healthcare, utilities and rent payments within the US
during the next two months. The Company intends to use the funds to
support these activities and therefore expects the Loan to meet the
criteria and not require repayment in the future.
Trading update to 31 March 2020
Q1 revenues as at 31 March increased by 18% year-on-year,
confirming no material impact on sales following the cyber security
incident experienced at the San Antonio facility in January
2020.
The Group had a cash position of GBP1.7m as at 31 March 2020.
The Company previously announced, on 30 March 2020, that its
available cash would fund the working capital requirements of the
Company until at least the end of the second week of May 2020.
Following receipt of the Loan, as well as ongoing implementation of
cost saving initiatives, the Board now expects the cash runway to
extend to at least the second week of July 2020.
The Board continues to be encouraged by discussions with
potential investors however, there is no guarantee that any such
discussions will result in near-term funding being made available
to the Company. Should this funding not be forthcoming before the
Company's available cash runway expires then the Board will be
required to take action to protect the interests of creditors and
which, if necessary, is likely to result in a material reduction in
any resulting value attributable to shareholders.
COVID-19 Update
As first announced on 30 March 2020, during this pandemic, the
Company implemented UK and US government-led policies in relation
to the COVID-19 pandemic, and by undertaking certain initiatives,
has ensured the continuation of processing functions at its
facility in San Antonio, Texas.
To date, the Company continues to experience no disruption in
its supply chain and there is sufficient inventory of all required
equipment and donor materials, which has meant there has been no
disruption to processing at this facility.
At the Company's UK facility in Leeds, where the processing of
the porcine product portfolio is undertaken, sufficient inventory
to meet near-term demand has been manufactured and therefore,
production has been halted and technical staff furloughed until the
advice from the UK Government is amended.
The continued re-prioritisation of health care professionals has
led to a notable decline in the number of elective procedures
undertaken at hospitals, which to date has been most evident in
urogynaecology and dental applications. Timing remains unclear as
to when elective procedures will recommence in a more normalised
manner, however, the Company is working closely with partners and
distributors to ensure that once procedures are recommenced,
sufficient inventory will be available to meet demand.
As a result of these uncertainties surrounding the level and
duration of disruption from COVID-19, the Group is unable to
determine how long it will take to catch-up on postponed surgical
procedures thereafter. Therefore, whilst sales have not been
materially impacted to date, the Board is currently not in a
position to provide clarity on the outlook for 2020 or beyond.
Further updates will be provided once there is greater visibility
on the trading environment.
Gareth Jones, Interim Chief Executive Officer of Tissue Regenix
Group, commented:
"The COVID-19 pandemic is a difficult and uncertain time for a
number of businesses. However, we are encouraged by our ability to
implement initiatives to address government advice and ensure the
health and well-being of our employees and stakeholders, whilst
continuing to process our product portfolio at our facility in San
Antonio. Securing additional funds through the US Government backed
loan offers a level of financial security during these uncertain
times, and provides an extended cash runway, allowing for the
continuation of ongoing discussions with potential investors."
The person responsible for this announcement is, Gareth Jones,
Interim CEO.
For more Information:
Tissue Regenix Group plc Tel: 0330 430 3073
Caitlin Pearson Head of Communications
--------------------------------------------- --------------------
Stifel Nicolaus Europe Limited (Nominated Tel: 0207 710 7600
Adviser and Broker)
Jonathan Senior / Alex Price / Ben Maddison
--------------------------------------------- --------------------
FTI Consulting Tel: 0203 727 1000
Simon Conway / Victoria Foster Mitchell
/ Mary Whittow
============================================= ====================
About Tissue Regenix
Tissue Regenix is a leading medical devices company in the field
of regenerative medicine. Tissue Regenix was formed in 2006 when it
was spun-out from the University of Leeds, UK. The company's
patented decellularisation ('dCELL(R) ') technology removes DNA and
other cellular material from animal and human soft tissue leaving
an acellular tissue scaffold which is not rejected by the patient's
body and can then be used to repair diseased or worn out body
parts. Current applications address many critical clinical needs
such as sports medicine, heart valve replacement and wound
care.
In November 2012 Tissue Regenix Group plc set up a subsidiary
company in the United States - 'Tissue Regenix Wound Care Inc.',
January 2016 saw the establishment of joint venture GBM-V, a multi-
tissue bank based in Rostock, Germany.
In August 2017 Tissue Regenix acquired CellRight Technologies(R)
, a biotech company that specializes in regenerative medicine and
is dedicated to the development of innovative osteoinductive and
wound care scaffolds that enhance healing opportunities of defects
created by trauma and disease. CellRight's human osteobiologics may
be used in spine, trauma, general orthopedic, foot & ankle,
dental, and sports medicine surgical procedures.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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