REG - Tissue Regenix Group - Final results for the year ended 31 December 2024
Wed 07:02
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RNS Number : 3349O Tissue Regenix Group PLC 25 June 2025
Tissue Regenix Group plc
('Tissue Regenix', the 'Group' or the 'Company')
Final results for the year ended 31 December 2024
Investor presentation
Tissue Regenix Group plc (AIM: TRX), the regenerative medical devices company,
announces its audited results for the year ended 31 December 2024.
Financial Highlights(1)
· Revenue growth for the Group of 9%
o BioRinse® revenues increased by 4% to USD21.0m (2023: USD20.1m), driven
by growth in the Group's core allograft and DBM product lines
o dCELL® revenues increased by 23% to USD7.6m (2023: USD6.2m) as the
commercial reorganisation implemented in 2022 continued to mature
· Record adjusted EBITDA profitability of USD1.9m (2023: USD0.7m)
o This increase in adjusted EBITDA was driven by increased sales revenue and
aided by management of administrative expenses to achieve operating leverage
· Gross profit of USD13.6m (2023: USD13.0m)
· Cash position at 31 December 2024 of USD1.9m (2023: USD4.7m). Undrawn
debt facility to fund further growth
(1) Based on the decision of the Board to divest the Company's interest in the
German joint venture GBM-V, the figures in this review do not include the
revenues, profits or assets of GBM-V
(2) During 2024, the Group reported expenses associated with its strategic
review of USD124k (2023: nil). The Group considers these expenses to be
exceptional and accordingly are excluded from the calculation of Adjusted
EBITDA and EBITDA
Operational Highlights
· Signed BioRinse agreements with nine new strategic partners or
stocking distributors who target specialties such as the spine and dental
markets
· Restructuring of the dCELL commercial business continued to provide
growth opportunities and record revenues for this division
o Added 41 new distributors for dCELL in 2024 across existing regions
· In June 2024, Tissue Regenix acquired the building in San Antonio
that the Company has occupied since 2021 as part of the Phase 1 and 2
expansion plans
o The efficiencies and changes implemented since 2020-2021 have positively
impacted the Group's processing capacity requirements and needs, inducing a
review of the Company's preliminary plans for the Phase 2 expansion. An
approach has been identified which more closely meets the needs of how the
Group processes tissue and provides flexibility to process different tissue
types in a more efficient manner. The Company is in the process of finalising
the new plans, with construction expected to start in 2025
· In 2024, the Group processed 34% more musculoskeletal and dermis
donors than in 2023. This allowed the Company to meet the demand for finished
products and support the growth of the demineralised bone matrix and
DermaPure® businesses. This resulted in 13% more shipped units Y-o-Y
Post-period end
· David Cocke, Chief Financial Officer, has announced his intent to
retire in 2025. David plans to remain with the Group until a replacement is
identified and an orderly transition period has taken place
Jonathan Glenn, Chair of Tissue Regenix, commented: "It has been another
successful year for the Group, reporting record adjusted EBITDA profitability
and top line growth across all divisions. Our commitment to the 4S strategy
and our growth pillars has provided a strong foundation for the business which
now continues to deliver year-on-year.
"In November 2024, we announced a strategic review of the business which
included soliciting offers for the Company. During this review, it was
determined that the Company's valuation during this period bore no resemblance
to Tissue Regenix's prospects or record of strong delivery. Despite varying
degrees of interest in the Company, the equity value could not be used as a
basis for a strategic transaction, and the strategic review was concluded in
April 2025. The Board's priorities remain in the best interests of our
shareholders, and we continue to look forward with a solid business that is
constantly adapting to create greater efficiencies and deliver greater
shareholder value.
"Finally, I would like to thank David for his contribution to the business
over the last four years, a period in which the business has achieved
profitability and consecutive record revenue growth. On behalf of the Board
and the Group, I wish David all the best in his retirement."
Investor Briefing
Daniel Lee, Chief Executive Officer, and David Cocke, Chief Financial Officer,
will host a live online presentation relating to the final results via the
Investor Meet Company platform at 2pm (BST) on Tuesday 1 July 2025. The
presentation is open to all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and register for the
presentation here:
https://www.investormeetcompany.com/tissue-regenix-group-plc/register-investor
(https://www.investormeetcompany.com/tissue-regenix-group-plc/register-investor)
For more information, please contact:
Tissue Regenix Group plc
Daniel Lee, Chief Executive Officer via Walbrook PR
David Cocke, Chief Financial Officer
Cavendish Capital Markets (Nominated Adviser and Broker)
Geoff Nash/Giles Balleny/Edward Whiley +44 (0) 20 7220 0500
Nigel Birks - Life Science Specialist Sales
Harriet Ward - ECM
Walbrook PR (Financial PR and IR) Tel: +44 (0)20 7933 8780
Alice Woodings / Lianne Applegarth Tissue Regenix@walbrookpr.com (mailto:TissueRegenix@walbrookpr.com)
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
("MAR") EU no.596/2014. Upon the publication of this announcement via
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.
About Tissue Regenix (www.tissueregenix.com (http://www.tissueregenix.com) )
Tissue Regenix is a leading medical device company in regenerative medicine.
The Company's patented decellularisation technology (dCELL®) removes DNA and
other cellular material from animal and human soft tissue, leaving an
acellular tissue scaffold that is not rejected by the patient's body and can
be used to repair diseased or damaged body structures. Current applications
address many crucial clinical needs in sports medicine, foot and ankle
injuries, and wound care.
In August 2017, Tissue Regenix acquired CellRight Technologies®. This
biotech company specialises in regenerative medicine and is dedicated to
developing high-quality, innovative tissue scaffolds to enhance healing
opportunities in defects created by trauma and disease. CellRight's human
tissue products may be used in spine, trauma, general orthopaedic, dental and
ophthalmological surgical procedures.
Tissue Regenix Group plc
Chair & Chief Executive Officer's Statement
It has been another successful year for the Group, reporting record adjusted
EBITDA profitability and top line growth across all divisions. Our commitment
to the 4S strategy and our growth pillars has provided a strong foundation for
the business which now continues to deliver year-on-year.
In November 2024, we announced a strategic review of the business which
included soliciting offers for the Company. During this review, it was
determined that the Company's valuation during this period bore no resemblance
to Tissue Regenix's prospects or record of strong delivery. Despite varying
degrees of interest in the Company, the equity value could not be used as a
basis for a strategic transaction, and the strategic review was concluded in
April 2025. The Board's priorities remain in the best interests of our
shareholders, and we continue to look forward with a solid business that is
constantly adapting to create greater efficiencies and deliver greater
shareholder value.
Finally, I would like to thank David for his contribution to the business over
the last four years, a period in which the business has achieved profitability
and consecutive record revenue growth. On behalf of the Board and the Company,
I wish David all the best in his retirement.
Jonathan Glenn
Chair
2024 performance
The Group delivered a positive performance in 2024, continuing on a growth
trajectory and once again achieving profitability expectations. We saw record
adjusted EBITDA profitability and 9% overall revenue growth for the Group. Our
dCELL division recorded top line growth of 23% during FY2024, the lead across
our divisions. This improvement was achieved through the continued adoption of
our products through our strategic partners working alongside our direct
distribution activities. The current economic climate, as well as general ebbs
and flows of business tempered our overall growth compared to an incredibly
strong three years prior, however, we will use our diversity and flexibility
to continue to manage these challenges in 2025. Execution, hard work and the
dedication of all the employees of the Group provided the foundation needed
for our 2024 achievements and the bright future which lies ahead for Tissue
Regenix.
Strategy and Growth Pillars
Our focus on the 4S strategy - Supply, Sales Revenue, Sustainability and Scale
- continues to provide the solid foundation of how we operate, execute and
drive growth and generate value for our shareholders.
Tissue Supply remains an area of investment and focus. It is a very dynamic
market as the source and quality can vary which impacts our ability to sustain
and grow our business. Supply also refers to our focus on processing capacity
to supply products to customers on a timely basis. We consistently identify
opportunities for efficiencies which we can employ to enhance our throughput.
Sales and Sustainability are measured through our revenue and profitability
growth as well as opportunities to maximise the gift of tissue donation to
improve the quality of life of patients. Scale is meeting growth expectations
by expanding domestic and global opportunities with tissue in regenerative
medicine.
Our growth pillars have been defined as Base Business, Tissue Partnerships,
Market Expansion and Regulatory Evolution. We believe that these growth
pillars represent defined tactical activities and areas of focus which drive
growth moving forward.
1. Base Business
Our core businesses with our existing and new partners/distributors through
the BioRinse and dCELL product lines are the primary drivers of the business.
Our customers expect a level of service, and we remain flexible and
responsive to our customer needs. We have supported growth opportunities using
our existing capacity and continual focus on operational efficiencies to
ensure a supply of products in existing and growing surgical specialties
augmented by product enhancements. This growth will also be supported by our
current infrastructure and planned capacity enhancements.
BioRinse
The BioRinse portfolio is a very diverse business which generates the bulk of
our revenue, reporting sales of USD21,012K (2023: USD20,133K), driven by the
U.S. spine, orthopaedics and dental markets. The 4% year on year ('YoY')
divisional revenue growth did not reflect the 13% increase in unit shipments
of BioRinse finished goods products as the decline in higher per unit priced
Release Donor Tissue was offset by increases in our core processed/finished
tissue products. We continue to see growth opportunities led by confidence in
our demineralised bone matrix ('DBM'), sports medicine and dental products. We
realised greater than 32% revenue growth from the prior year from these top
three product groups and these portions of the business will continue to drive
our growth in 2025.
In 2024, we signed BioRinse agreements with nine new strategic partners or
stocking distributors who target specialties such as the spine and dental
markets.
Two areas where this division encountered headwinds in 2024 and impacted
overall growth were our Released Donor Tissue ('RDT') and birth tissue
products. In particular, the wound care marketplace for birth tissue products
experienced the greatest headwinds in 2024. Two issues have impacted this
business. The first surrounds the proposed Centers for Medicare & Medicaid
Services ('CMS') changes for products which will be reimbursed in the
outpatient setting for diabetic and venous leg ulcers and second is what has
been described as "skyrocketing cost trends" where products receiving the
highest reimbursement garner distribution and customers. These issues impacted
the amnion business for one of our strategic partners and resulted in a
significant decrease in sales volume over the prior year, in particular during
H2 2024 (H1 +11% YoY vs H2 -67% YoY). Though our amnion business in
ophthalmology remains strong, we expect the wound care business to remain in
flux through 2025. Our plan is to shift our resources to those segments of our
business which continue to experience growth.
dCELL
In 2024, the restructuring of the dCELL commercial business continued to
provide growth opportunities for this division. dCELL is a more direct
business for our organisation as we sell branded products through our regional
sales management team who in turn manage distributors in their respective
territories. This business is highly impacted by Group Purchasing Organization
approvals, so we have placed management in areas which align with our
approvals. To increase our depth and breadth in regions where we already have
established business, we added 41 new distributors over the year. Our direct
business has a focus with orthopaedic, podiatric, plastic and general
surgeons. Our partnership with ARMS Medical provides the opportunity to expand
into women's health through dermis-based products addressing urogynecological
procedures. Combined these efforts resulted in 23% revenue increase year on
year by the end of 2024. Our dCELL division reported sales of USD7,634K (2023:
USD6,183K), record revenue for this division.
During 2024, we also supported increased market acceptance of our DermaPure
products through articles in clinical publications such as Foot and Ankle
Orthopedics and Bioengineering. Both manuscripts highlighted the clinical
advantages of using human dermal matrices processed using the dCELL
technology.
The OrthoPure XT product currently is the only non-human biologic tissue graft
produced using the dCELL technology and is available to the European Union
('EU') market for certain ligament reconstruction procedures. In 2024, we
introduced this product into the Swiss market and made a distribution change
in Germany. Our partner, Geistlich, based on their success with the products
in Italy, earned the opportunity to expand their distribution. During the
European Society of Sports Traumatology, Knee Surgery and Arthroscopy meeting
in Milan in 2024, Geistlich hosted a lunch symposium where the initial
positive Italian experiences at the Rizzoli Clinic with the OrthoPure XT were
presented. The manuscript from the five-year clinical experience from the
initial regulatory approval study has been completed and submitted in May
2025.
GBM-V
In December 2024, our Board took the decision that the operations of this
not-for-profit German joint venture were not strategic to the operations of
the business and started to consider options to divest the business. We have
embraced the diversity of opportunities with various tissue products, but the
not-for-profit structure and market dynamics of this joint venture have
historically reduced the growth rate of the Group and reduced its profit
margins whilst also requiring management resource. We will announce more on
this in due course as we look to focus on our more profitable divisions.
2. Tissue Partnerships
Our focus on tissue Supply is a foundation for our own growth, as it drives
our internal capacity but is also an opportunity for our organisation to
provide tissue to other processors in need of specific tissue types. Any
supply
volumes which exceed our internal needs creates opportunities to develop
relationships with other tissue processors. In turn, we use these
opportunities to obtain tissue which we may need from other processors.
Historically, the tissue industry works with recovery agencies, but we have
been an advocate of working with tissue processors along with recovery
agencies. This is done to meet the global need for tissue products and to help
ensure that the gift of human tissue donation is maximised in a timely and
efficient manner.
There are definite trends for the types and quantities of tissue that may be
in demand by other tissue processors and to meet this demand we constantly
review and look for opportunities to work with others. In 2024, we saw a
downturn in the opportunities with existing RDT customers, and the regulatory
approvals needed for new outside the U.S. tissue processors were significantly
delayed. As a result, for the entire year we were impacted by a 37% decline in
RDT which was exacerbated in H2 2024 (H1 2024 -5% YoY; H2 2024 -68% YoY). The
regulatory approval situation in the U.S. and elsewhere remains slow and the
recent political changes and discussion on tariffs has not improved the
situation. The uncertainty regarding tariffs has caused some customers to
adopt a wait and see position prior to ordering or formalizing commitments. We
do believe that as the approvals are received, we can put our RDT business
back on a growth trajectory.
3. Market Expansion
We have stated that our two-pronged approach to broaden the markets for our
products will encompass identifying and initiating activities in additional
surgical specialties through institutions where we have an existing base
business and expansion into geographic markets where there is a need for
allograft tissue-based products but currently have limited availability.
Our allograft tissue business in the EU demonstrated growth ahead of
expectations. This growth was partially limited by ongoing delays in obtaining
regulatory approvals for exporting tissue from our EU distribution centre. We
continue to identify partners in the EMEA markets and rely on their knowledge
of their local markets and regulatory approval processes to continue our
expansion.
Our expansion into additional surgical specialties was supported by the
development of case reports which highlight the versatility of our DermaPure
dermal product. Acellular dermal matrix products are used in numerous surgical
specialties, but other dermal allograft products lack the benefits provided by
the dCELL process used to produce DermaPure. In 2024 we developed case studies
which highlighted the use of DermaPure in augmenting tissue in surgical
oncology procedures such as esophagectomy and Whipple procedures, augmenting
tendon repairs in the foot and ankle including Achilles lengthening, and
replacing tissue lost due to spider bites and amputation repairs. We will
continue to expand and demonstrate the benefits of this versatile tissue.
OrthoPure XT, our xenograft tissue device, was designed to meet the clinical
need for an off-the-shelf graft for certain ACL ligament reconstruction
procedures. The receipt of the CE Mark provided opportunities to distribute
the product in EU markets (currently, Italy, Switzerland, Germany) and the UK.
Our OrthoPure XT business demonstrated growth in 2024. The CE Mark is accepted
in other markets, so we received regulatory approval to distribute this device
in New Zealand and are currently establishing distribution opportunities. Our
efforts to receive regulatory approval in Australia encountered regulatory
delays so we are currently assessing additional approaches to this market. We
will continue to identify opportunities to distribute this product in markets
which recognise the CE Mark.
4. Regulatory Evolution
The bulk of our revenue comes from allograft tissue-based products which are
regulated by Section 361 HCTP (Human, Cell, and Tissue Products) in the U.S.
The requirements mandated for Section 361 products place limits on how the
products can be produced and how they are used and marketed; if one works
beyond these limits then the product will need to be regulated as a medical
device. Our facility in San Antonio has been established to meet the
requirements of producing Section 361 products. In 2024, we began the
evolution of our processes and facility to become one that is capable of
meeting medical device requirements. By the end of 2024, we had implemented
the changes required to meet medical device contract manufacturing
requirements for the U.S. Food and Drug Administration ('FDA'). Our next phase
in 2025 will be to meet the requirements for ISO 13485 contract manufacturer
requirements which is aligned with the immediate needs for our organisation.
We will then make plans to be an ISO 13485 product manufacturer as we bring
online products which are regulated as medical devices in the global market. A
medical device registration is rare for a U.S. tissue processor of our scale.
All of this is to give us the opportunity to innovate with human tissue and
broaden opportunities for Tissue Regenix to distribute tissue into markets
which regulate human tissue allografts as devices.
Growth highlights from our strategic partners and distributors
In 2024, growth from our hybrid commercial model was highlighted by increased
demand by our internal commercial distribution, existing commercial partners,
and identification of additional accounts or strategic
partnerships/distributor relationships.
For BioRinse, our DBM, dental and sports medicine grafts all grew YoY in the
23 - 78% range. This was due to many factors which included our diversity of
products (sports medicine, spine, general orthopaedic, dentistry), existing
strategic partners, and product improvements.
For dCELL, the 23% growth was achieved by increasing our presence in existing
accounts and increasing our number of distributors. The YoY revenue increase
was driven primarily by the 86% increase in number of units shipped of our
meshed DermaPure products and the accompanying 62% increase in revenue. Our
meshed DermaPure products along with additional new products will continue to
drive revenue growth for this division in 2025.
Demand for our BioRinse, dCELL and OrthoPure XT products will continue to
drive our organic growth in 2025.
Operations and Planning for the Future
For our allograft tissue business, the supply of donor tissue is directly
linked to our growth plans. In 2024 we adjusted our tissue intake to meet the
shifts we noted in our finished goods for our commercial partners and RDT
demand. Overall, we sourced 12% fewer donors than in 2023. These shifts
reflected the demands for our own processing of musculoskeletal ('MS') donors
and demand from other tissue processors.
In 2024, we processed 34% more MS and dermis donors to meet the demand for
finished products and support the growth of our DBM and DermaPure businesses.
This resulted in 13% more shipped units YoY which was reflected in the 11%
more distribution orders.
Though we have additional processing headroom from our Phase 1 expansion, we
initiated a review of our Phase 2 expansion needs. The efficiencies and
changes we have implemented since 2020-2021 have positively impacted our
processing capacity requirements and needs. In mid-2024 we presented to our
Board preliminary plans for our Phase 2 expansion which differs from our
previous plans. With capital efficiency and flexibility in mind, we have
identified an approach where we will create an additional large clean room
where we will have multiple laminar flow hoods and work areas. This approach
more closely meets the needs of how we process tissue and gives us flexibility
to process different tissue types in a more efficient manner. Previously we
considered building additional traditional clean rooms which also comes with
additional construction cost, time and operational costs. We are in the
process of finalising and confirming our designs with the plan to solicit
proposals and initiate construction as dictated by business need.
In June 2024, we announced the purchase of our building in Universal City,
Texas, which, until then was leased as part of our Phase 1 and 2 expansion
plans. We negotiated in the lease a purchase option for the building at a
pre-set price through November 2024. This was a logical option as we had
invested a significant amount of capital to prepare the facility for our
long-term plans. The appraisal determined that the purchase option was below
the fair market value of the property. Coupled with fixed interest rates and
no cash down payment requirement from our lenders, these factors made it an
attractive opportunity for the Company to buy the building. The mortgage
payments are on par with the historic lease payments and will not be subject
to standard increase clauses. The purchase makes strong financial and
commercial sense for the Group as we consider our expansion plans.
Strategic Process
In November 2024, we announced that we had initiated and were conducting a
review of the Company's strategic options which included soliciting offers for
the Company. The Company engaged a financial adviser to contact a limited
number of potential counterparties to assess whether such parties could put
forward a proposal that would deliver greater value to Tissue Regenix's
shareholders than pursuing a standalone independent strategy. There was no
certainty that any offer would be made as a result of contact with these
potential counterparties, nor as to the terms which our Board would deem
reasonable in the best interests of our shareholders. Despite continued
positive performance and news, the Company's valuation during this period bore
no resemblance to the prospects or typical valuation for a business in this
sector. The Board believed that despite varying degrees of interest in the
Company, the equity value could not be used as a basis for a strategic
transaction. In early April 2025, the Board determined that, based on
discussions to date, an appropriate offer was not forthcoming, discussions
with any interested parties were terminated and the strategic process was
concluded.
Outlook
As has been widely reported, we have already seen great changes and
uncertainty in 2025 in the U.S. and around the globe which have created
additional political, regulatory and financial headwinds. We cannot control
these elements of change, but our priority remains in delivering our existing
strategies. Sales Revenue and Sustainability will continue to be the focus of
our 4S's and executed through the growth pillars in 2025. The strategy has
built a strong foundation, and we will continue to build from this foundation
a more robust company for the future.
The BioRinse products will continue to be the dominant revenue contributor in
2025. Whilst the headwinds we encountered during the year have not ended, we
are confident with our product range, our positioning and our ability to
continue to grow. Growth will come from existing and new partners in spine,
sports medicine and dentistry. Our dCELL business will also become a more
significant contributor of growth as we develop greater penetration into the
markets we currently serve and expand into other surgical specialties as
clinicians become familiar with the versatility of our products. We plan to
augment our inventory of donor tissue through partnerships with other
processors. As we receive additional regulatory approvals, any excess
inventories will be managed through distribution to other processors globally
who have a need for tissue which is ready to be processed.
Growth of our geographic outreach with our human tissue dCELL and BioRinse
portfolios may be tempered due to trading issues with the EU and other
markets. We remain optimistic that the delayed regulatory approvals for our
RDT opportunities will change for the positive. Our unique xenograft tissue
product, OrthoPure XT, will continue to develop traction in existing markets
and as it is introduced into additional EU markets in 2025. We also have
activities associated with rationalising our cost structure to provide for
additional efficiencies.
In 2025, we will complete plans to initiate our Phase 2 capacity expansion to
provide more flexibility for the future. In addition to our organic growth
plans, we will continue to look at other opportunities or avenues to
inorganically Scale the business for additional longer-term growth.
We have a well-placed, well-resourced and well-regarded business with the
right strategy in place to allow us to grow significantly in the coming years.
Whilst we encountered a wide variety of events during 2024 that were in no way
foreseeable, we managed our way through them with proficiency and adaptability
which has allowed us to not only meet profit expectations but to place the
Company in a very secure position. We are excited about the future and believe
the Company is well placed to take advantage of all the opportunities in front
of us.
As a final note, David Cocke, our Chief Financial Officer since January 2021,
has announced his intent to retire in
2025. A formal date has yet to be determined but David plans to remain with
the organisation until a replacement is identified allowing an orderly
transition period. We would like to thank David for his significant
contribution to the business and a further announcement will be made in due
course.
Jonathan Glenn
Chair
24 June 2025
Daniel Lee
Chief Executive Officer
24 June 2025
Tissue Regenix Group plc
Financial Review
This financial review does not include the revenues, profits or assets of
GBM-V which are presented as discontinued operation and disposal group held
for sale in the Consolidated Statement of Income and Consolidated Statement of
Financial Position respectively. Where appropriate, comparative numbers
related to the Consolidated Statement of Income in respect of GBM-V have been
adjusted.
Consolidated Statement of Income
Revenue
During the year ended 31 December 2024, revenue increased by 9% to USD28,646k
(2023: USD26,316k).
The Group experienced growth across its key business segments for the year, as
more fully described below:
· The BioRinse segment increased top-line sales by 4% to USD21,012k
(2023: USD20,133k), driven by growth in our core allograft and DBM product
lines.
· Revenue from the dCELL division increased by 23% to USD7,634k (2023:
USD6,183k) as the commercial reorganisation implemented in 2022 continued to
mature.
Cost of sales and gross profit
Gross profit for the year was USD13,621k (2023: USD12,980k). Gross margin
percentage was 47% (2023: 49%).
Included in costs of sales is cost of product - USD12,377k (2023: USD11,633k)
- and third-party commissions - USD2,298k (2023: USD1,703k).
Administrative expenses
During 2024, administrative expenses decreased by USD446k, or 3%, to
USD13,148k (2023: USD13,594k), driven primarily by reduced staffing costs in
the BioRinse segment.
Strategic Review Expenses
During 2024, the Group reported expenses associated with its strategic review
of USD124k (2023: nil). The Group considers these expenses to be exceptional
and accordingly are excluded from the calculation of Adjusted EBITDA and
EBITDA
Adjusted EBITDA
During 2024, the Group reported adjusted EBITDA of USD1,879k (2023: USD689k).
This increase in adjusted EBITDA was driven by increased sales revenue, gross
profit and aided by management of administrative expenses to achieve operating
leverage. In 2024, EBITDA was USD1,516k (2023: USD347k) and is adjusted for
share- based payments of USD363k (2023: USD342k).
Finance income/charges
Finance income of USD10k (2023: USD26k) primarily represented interest earned
on cash deposits. Finance charges for the year were reported at USD923k (2023:
USD1,301k) and related primarily to interest charges and associated costs in
respect of the MidCap Financial Trust ('MidCap') loan arrangement. Finance
charges in 2023 included USD248k relating to a financing fee associated with
the former MidCap loan termination.
Loss for the year
The loss for the year was USD681k (2023: loss: USD1,657k), resulting in a
basic loss per share of 0.96 cents (2023: loss per share: 2.43 cents).
Adjusting for the impact of discontinued operations on the loss for the year,
the loss for the year from continuing operations was USD853k (2023:
USD1,877k), resulting in a basic loss per share of 1.20 cents (2023: loss per
share 2.67 cents). The reduction in the loss for the year was driven by the
increase in sales revenue, gross profit and lower administrative and finance
expenses.
Taxation
The Group continues to invest in developing its product offering and, as such,
is eligible to submit enhanced research and development tax claims, enabling
it to exchange tax losses for a cash refund. In the year to December 2024, a
refund of USD190k was receivable (2023: USD352k). The year-on-year reduction
was a result of the continued transition into commercial activities and away
from research and development activities.
Income tax payable in the U.S. amounted to USD630k (2023: USD310k). Gross tax
losses carried forward in the UK were USD60,898k (2023: USD60,361k). The Group
does not currently pay tax in the UK. A deferred tax asset has not been
recognised as the timing and recoverability of the tax losses remain
uncertain.
Consolidated Statement of Financial Position
As at December 2024, the Group had net assets of USD29,056k (2023:
USD29,355k), of which cash in hand totalled USD1,870k (2023: USD4,650k).
Inventory levels increased 35% at USD14,006k (2023: USD10,358k) as the
headwinds faced in our RDT business led to a build-up of certain tissue types.
Intangible assets increased to USD15,767k (2023: USD15,135k) in the year. A
further USD770k of development costs, relating primarily to clinical research
and systems development, were capitalised in the year (2023: USD450k). The
balance of movements in this account relate to amortisation, exchange
adjustments and reclassification from property, plant and equipment.
The Directors carried out the annual impairment review, as required by IAS 36,
to determine whether there was any requirement for an impairment provision in
respect of goodwill as at 31 December 2024.The results of the test indicated
that the recoverable amount of the Group's non-current assets was at least
equal to the carrying amount of those assets and, therefore, no provision for
impairment was required as at 31 December 2024 (2023: USD nil). See notes 4
and 15.
Working capital increased in the year to USD13,245k (2023: USD9,705k), driven
by an increase in inventory as noted in the discussion of inventory levels
above, slightly offset by an increase in trade and other payables. The
Consolidated Statement of Financial Position includes income tax receivable of
USD190k (2023: USD352k) in respect of UK research and development tax credits.
Loans and borrowings
Borrowings include the USD7,249k debt facility from MidCap (2023: USD5,985k).
The USD3,030k borrowings relates to the Group's purchase of its former
leasehold property in San Antonio in June 2024 (2023: USD3,410k in respect of
all leases). The MidCap debt facility includes USD1,542k in respect of the
term loan and USD5,829k in respect of the revolving credit facility, net of
USD122k of capitalised debt issue costs. In January 2023, the Group elected to
increase its current revolving credit facility from USD5,000k to USD10,000k
and extend the maturity until 2028. In June 2024 the Group exercised an option
to increase the revolving credit facility to USD6,000k. In February 2025
another option was exercised to increase the revolving credit facility to
USD7,000k. Repayment of the term loan in equal instalments commenced in
February 2024. See Note 21.
Dividend
No dividend has been proposed for the year to 31 December 2024 (2023: nil).
Accounting policies
The Group's consolidated financial information has been prepared in accordance
with UK-adopted International Accounting Standards ('UK-adopted IAS'). The
Group's significant accounting policies, which have been applied consistently
throughout the year, are set out on pages 45 to 53.
Going concern
The Group financial statements have been prepared on a going concern basis
based on cash flow projections, approved by the Board for the Group, for the
period to 31 December 2026 (the 'Cash Flow Projections'). Funding requirements
are reviewed on a regular basis by the Group's Chief Executive Officer and
Chief Financial Officer and are reported to the Board at each Board meeting,
as well as on an ad hoc basis if requested. Until sufficient cash is generated
from its operations, the Group remains reliant on cash reserves of USD1.9
million at 31 December 2024 and the ongoing support of MidCap (borrowings of
USD7.4 million at 31 December 2024 with USD3.0 million additional credit
available from February 2025), and other lending institutions (borrowings of
USD3.0 million at 31 December 2024) to meet its working capital requirements,
capital investment programme and other financial commitments.
In compiling the Cash Flow Projections, the Board has considered a downside
scenario regarding the effect of reduced and delayed revenues due to slower
market uptake of the Group's product offerings. The Cash Flow Projections
prepared by the Board, including the downside scenario, indicate that the
Group will still have cash reserves at the end of the forecast period. The
Group's Cash Flow Projections assume that the MidCap revolving credit facility
and other credit facilities are available throughout the forecast period. The
availability of the MidCap facility is dependent upon compliance with a
rolling 12-month revenue covenant that is measured on a monthly basis. The
other credit facility contains a debt service covenant related to the
CellRight Technologies, LLC business unit which is measured on an annual
basis. The Cash Flow Projections, including the downside scenario, indicate
compliance with these covenants throughout the forecast period.
In summary, the Directors have considered their obligations in relation to the
assessment of the going concern basis for the preparation of the financial
statements of the Group and have reviewed the Cash Flow Projections, including
the downside scenario. On the basis of their assessment, they have concluded
that the going concern basis remains appropriate for use in these financial
statements.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out on pages 13
to 15.
Cautionary statement
The strategic report, containing the strategic and financial reports of the
Group, contains forward-looking statements that are subject to risk factors
associated with, amongst other things, economic and business circumstances
occurring from time to time within the markets in which the Group operates.
The expectations expressed within these statements are believed to be
reasonable but could be affected by a wide variety of variables beyond the
Group's control. These variables could cause the results to differ materially
from current expectations. The forward-looking statements reflect the
knowledge and information available at the time of preparation.
David Cocke
Chief Financial Officer
24 June 2025
Tissue Regenix Group plc
Consolidated Statement of Income
For the year ended 31 December 2024
2024 2023
Notes USD'000 USD'000
Continuing operations
Revenue 5 28,646 26,316
Cost of sales (15,025) (13,336)
Gross profit 13,621 12,980
Administrative expenses (13,148) (13,594)
Strategic review expenses 8 (124) -
Operating profit/(loss) 349 (614)
Finance income 6 10 26
Finance charges 7 (923) (1,301)
Loss on ordinary activities before taxation 8 (564) (1,889)
Taxation 10 (289) 12
Loss for the year from continuing operations (853) (1,877)
Discontinued operations
Profit from discontinued operations, net of tax 11 172 220
Loss for the year (681) (1,657)
Loss for the year attributable to:
Owners of the parent company (713) (1,713)
Non-controlling interest 25 32 56
(681) (1,657)
Loss for the year from continuing operations attributable to:
Owners of the parent company (853) (1,877)
Non-controlling interest 25 - -
(853) (1,877)
Profit for the year from discontinued operations attributable to:
Owners of the parent company 140 164
Non-controlling interest 25 32 56
172 220
Loss per Ordinary Share
From continuing operations
Basic and diluted, cents per share 12 (1.20) (2.67)
From continuing and discontinued operations
Basic and diluted, cents per share 12 (0.96) (2.43)
.
Tissue Regenix Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
USD'000 USD'000
Loss for the year (681) (1,657)
Other comprehensive (loss)/income
Items that may be subsequently reclassified to profit or loss:
Foreign currency translation differences (181) 241
Foreign currency translation differences on discontinued operations 96 (46)
(85) 195
Total comprehensive loss for the year (766) (1,462)
Total comprehensive loss for the year attributable to:
Owners of the parent company (798) (1,518)
Non-controlling interest 32 56
(766) (1,462)
Total comprehensive loss for the year from continuing operations attributable
to:
Owners of the parent company (938) (1,682)
Non-controlling interest - -
(938) (1,682)
Total comprehensive profit for the year from discontinued operations
attributable to:
Owners of the parent company 140 164
Non-controlling interest 32 56
172 220
Tissue Regenix Group plc
Consolidated Statement of Financial Position
As at 31 December 2024
2024 2023
Notes USD'000 USD'000
Assets
Non-current assets
Property, plant and equipment 13 8,115 5,748
Right-of-use assets 14 194 3,270
Intangible assets 15 15,767 15,135
24,076 24,153
Current assets
Inventory 16 14,006 10,358
Trade and other receivables 17 4,575 3,730
Corporation tax receivable 190 352
Cash and cash equivalents 18 1,870 4,650
Disposal group held for sale 19 629 -
21,270 19,090
Total assets 45,346 43,243
Liabilities
Non-current liabilities
Loans and borrowings 21 (9,855) (8,753)
Deferred tax 22 (280) (400)
(10,135) (9,153)
Current liabilities
Trade and other payables 20 (4,856) (3,783)
Taxation payable (602) (310)
Loans and borrowings 21 (610) (642)
Disposal group held for sale 19 (87) -
(6,155) (4,735)
Total liabilities (16,290) (13,888)
Net assets 29,056 29,355
Equity
Share capital 23 15,951 15,950
Share premium 24 134,356 134,253
Merger reserve 24 16,441 16,441
Reverse acquisition reserve 24 (10,798) (10,798)
Reserve for own shares 24 (1,257) (1,257)
Share-based payment reserve 24 1,069 1,088
Cumulative translation reserve 24 (1,848) (1,763)
Retained deficit 24 (124,095) (123,764)
Equity attributable to owners of the parent company 29,819 30,150
Non-controlling interest 25 (763) (795)
Total equity 29,056 29,355
The consolidated financial statements were approved by the Board of Directors
and authorised for issue on 24 June 2025 and are signed on its behalf by:
Daniel Lee
Chief Executive Officer
Tissue Regenix Group plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Tissue Regenix Group plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
USD'000 USD'000
Operating activities
Loss before taxation from continuing operations (564) (1,889)
Profit before taxation from discontinued operations 172 220
(392) (1,669)
Adjustments for:
Finance income (10) (26)
Finance charges 923 1,301
Depreciation of property, plant and equipment 431 395
Depreciation of right-of-use assets 107 132
Amortisation of intangible assets 508 450
Share-based payments 363 342
Unrealised foreign exchange (gain)/loss (20) 84
Operating cash inflow before movements in working capital 1,910 1,009
(Increase)/decrease in inventory (3,840) 524
(Increase)/decrease in trade and other receivables (930) 1,073
Increase/(decrease) in trade and other payables 1,182 (1,836)
Net cash (used in)/generated from operations (1,678) 770
Research and development tax credits received 175 270
Taxation paid (132) -
Net cash (used in)/generated from operating activities (1,635) 1,040
Investing activities
Interest received 11 26
Purchase of property, plant and equipment (3,299) (413)
Capitalised development expenditure & purchase of intangible assets
(770) (450)
Net cash used in investing activities (4,058) (837)
Financing activities
Proceeds from exercise of share options 104 74
Proceeds from loans and borrowings 4,273 -
Repayment of loans and borrowings (20) (238)
Repayment of leases (174) (140)
Interest paid on loans and borrowings (819) (567)
Fees paid on loans and borrowings - (355)
Lease interest payments (81) (284)
Other interest payments (4) (2)
Net cash generated from/(used in) financing activities 3,279 (1,512)
Net decrease in cash and cash equivalents (2,414) (1,309)
Cash and cash equivalents at beginning of year 4,650 5,949
Effect of movements in exchange rates on cash held (21) 10
Cash and cash equivalents at end of year 2,215 4,650
Continuing operations 1,870 4,338
Discontinued operations 345 312
2,215 4,650
Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1. Corporate information
Tissue Regenix Group plc (the 'Company' and, together with its subsidiaries,
the 'Group') is a public company limited by shares, domiciled and incorporated
in England and Wales under the Companies Act 2006. Its registered number is
05969271.
The address of the registered office is Unit 3, Phoenix Court, Lotherton Way,
Garforth LS25 2GY.
The nature of the Group's operations and its principal activity is that of an
international medical technology company focused on commercialising two
platform technologies, dCELL, addressing soft tissue needs, and BioRinse,
providing sterile bone and soft tissue allografts.
2. Adoption of new and revised standards
Standards adopted during the year
The Group has adopted all of the new or amended Accounting Standards and
interpretations issued by the International Accounting Standards Board
('IASB') that are mandatory and relevant to the Group's activities for the
current reporting period.
The following new and revised Standards have been adopted but have not had any
material impact on the amounts reported in these financial statements:
Amendments to IAS 1 - Classification of liabilities as current or non-current
Amendments to IFRS 16 - Lease liability in a sale and leaseback
Amendments to IAS 1 - Non-current liabilities with covenants
Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements
Standards issued but not yet effective
Any new or amended Accounting Standards or interpretations that are not yet
mandatory (and in some cases, had not yet been endorsed by the UK Endorsement
Board) have not been early adopted by the Group for the year ended 31 December
2024. They are as follows:
Amendments to IAS 21 - Lack of exchangeability
Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an
investor and its associate or joint venture
IFRS 18 - Presentation and disclosures in financial statements
IFRS 19 - Subsidiaries without public accountability: disclosures
Amendments to the SASB standards to enhance their international applicability
Amendments to IFRS 9 and IFRS 7 regarding the classification and measurement
of financial instruments
Annual improvements to IFRS accounting standards - Volume 11
IFRS S1 - General requirements for disclosure of sustainability - related
financial information
IFRS S2 - Climate-related disclosures
The Directors have not yet considered the impact adoption of these Standards
or interpretations in future periods will have on the financial statements of
the Company or the Group.
3. Significant accounting policies
Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under those standards.
The financial statements have been prepared on the historical cost basis.
Historical cost is generally based on the fair value of the consideration
given in exchange for assets.
The financial statements are presented in United States dollars ('USD'). All
amounts have been rounded to the nearest thousand, unless otherwise indicated.
As described below, the Directors continue to adopt the going concern basis in
preparing the consolidated and the Company financial statements.
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these financial statements.
The preparation of the financial statements in compliance with UK-adopted
International Accounting Standards requires management to make estimates and
the Directors to exercise judgement in applying the Group's accounting
policies. The significant judgements made by the Directors in the application
of these accounting policies that have a significant impact on the financial
statements and the key sources of estimation uncertainty are disclosed in note
4.
Going concern
The Group financial statements have been prepared on a going concern basis
based on cash flow projections, approved by the Board for the Group, for the
period to 31 December 2026 (the 'Cash Flow Projections'). Funding requirements
are reviewed on a regular basis by the Group's Chief Executive Officer and
Chief Financial Officer and are reported to the Board at each Board meeting,
as well as on an ad hoc basis if requested. Until sufficient cash is generated
from its operations, the Group remains reliant on cash reserves of USD1.9
million at 31 December 2024 and the ongoing support of MidCap (borrowings of
USD7.4 million at 31 December 2024 with USD3.0 million additional credit
available from February 2025), and other lending institutions (borrowings of
USD3.0 million at 31 December 2024) to meet its working capital requirements,
capital investment programme and other financial commitments.
In compiling the Cash Flow Projections, the Board has considered a downside
scenario regarding the effect of reduced and delayed revenues due to slower
market uptake of the Group's product offerings. The Cash Flow Projections
prepared by the Board, including the downside scenario, indicate that the
Group will still have cash reserves at the end of the forecast period. The
Group's Cash Flow Projections assume that the MidCap revolving credit facility
and other credit facilities are available throughout the forecast period. The
availability of the MidCap facility is dependent upon compliance with a
rolling 12-month revenue covenant that is measured on a monthly basis. The
other credit facility contains a debt service covenant related to the
CellRight Technologies, LLC business unit which is measured on an annual
basis. The Cash Flow Projections, including the downside scenario, indicate
compliance with these covenants throughout the forecast period.
In summary, the Directors have considered their obligations in relation to the
assessment of the going concern basis for the preparation of the financial
statements of the Group and have reviewed the Cash Flow Projections, including
the downside scenario. On the basis of their assessment, they have concluded
that the going concern basis remains appropriate for use in these financial
statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiary undertakings (together 'the Group') made up to
31 December each year.
Subsidiary undertakings are those entities controlled directly or indirectly
by the Company. Control is achieved when the Company is exposed to, or has
rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. In
assessing control, the Group takes into consideration potential voting rights.
The acquisition date is the date on which control is transferred to the
acquirer. The financial results of subsidiaries are included in the
consolidated financial statements from the date that control commences until
the date that control ceases. Losses applicable to the non-controlling
interests in a subsidiary are allocated to the non-controlling interests even
if doing so causes the non-controlling interests to have a deficit balance.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated.
Non-controlling interest
Non-controlling interests are measured at their proportionate share of the
acquiree's identifiable net assets at the date of acquisition. Changes in the
Group's interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. Losses applicable to the non-controlling
interests are allocated to the non-controlling interests even if doing so
causes the non-controlling interests to have a deficit balance.
Controlled joint venture
In January 2016, the Group entered a joint venture establishing GBM-V GmbH, a
company incorporated in Germany. The Group controls the majority of the voting
rights, and, consequently, the results for this entity are consolidated in
full within these financial statements with the recognition of a
non-controlling interest within equity.
Goodwill
Goodwill arising on the acquisition of a subsidiary undertaking is the
difference between the fair value of the consideration payable and the fair
value of the identifiable assets, liabilities and contingent liabilities
acquired. Goodwill is tested annually for impairment as described below.
Foreign currencies
The individual financial statements of each component entity are presented in
the currency of the primary economic environment in which the entity operates
(the 'functional currency'). For the purposes of the consolidated financial
statements, the results and the financial position of each Group entity are
expressed in USD, which is the presentation currency for the consolidated
financial statements.
In preparing the financial statements of the individual companies,
transactions in currencies other than the functional currency of each group
company ('foreign currencies') are translated into the functional currency at
the rates of exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated into the functional currency at the rates
prevailing on the reporting date. Non-monetary assets and liabilities carried
at fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign currency are
not retranslated.
Foreign exchange differences are recognised in the profit or loss in the
period in which they arise, except for foreign exchange differences on
monetary items receivable from or payable to a foreign operation for which
settlement is neither planned nor likely to occur and which, therefore, form
part of the net investment in the foreign operation. Foreign exchange
differences arising on the translation of the Group's net investment in
foreign operations are recognised within the cumulative translation reserve
via the statement of other comprehensive income. On disposal of foreign
operations and foreign entities, the cumulative translation differences are
recognised in the income statement as part of the gain or loss on disposal.
For the purpose of presenting company and consolidated financial statements,
the assets and liabilities of the Company, and the Group's component entities
that have a functional currency other than USD, are translated using exchange
rates prevailing at the end of each reporting period. Income and expense items
are translated at the average exchange rates for the period unless exchange
rates fluctuate significantly during that period, in which case the exchange
rates at the date of transactions are used. Foreign exchange differences
arising, if any, are recognised in other comprehensive income and accumulated
in equity. Equity items are translated at the exchange rates at the date of
transactions, and foreign exchange differences arising, if any, are
accumulated directly in equity.
On the disposal of a foreign operation (e.g. a disposal of the Group's entire
interest in a foreign operation, a disposal involving loss of control over a
subsidiary that includes a foreign operation or a loss of joint control over a
jointly controlled entity that includes a foreign operation), all of the
accumulated exchange differences in respect of that operation attributable to
the Group are reclassified to profit or loss. Where there is no change in the
proportionate percentage interest in an entity then there has been no disposal
or partial disposal, and accumulated exchange differences attributable to the
Group are not reclassified to profit or loss.
Fair value adjustments arising on the acquisition of a foreign operation are
treated as assets and liabilities of the foreign operation and translated at
the rate of exchange prevailing at the end of each reporting period. Exchange
differences arising are recognised in equity.
Research and development
Research costs are charged to profit and loss as they are incurred. An
intangible asset arising from development expenditure on an individual project
is recognised only when all of the following criteria can be demonstrated:
· It is technically feasible to complete the product, and management is
satisfied that appropriate regulatory hurdles have been or will be achieved.
· Management intends to complete the product and use or sell it.
· There is an ability to use or sell the product.
· It can be demonstrated how the product will generate probable future
economic benefits.
· Adequate technical, financial and other resources are available to
complete the development or use or sell the product.
· Expenditure attributable to the product can be reliably measured.
Such intangible assets are amortised on a straight-line basis from the point
at which the assets are ready for use over the period of the expected benefit
and are reviewed for an indication of impairment at each reporting date. Other
development costs are charged against profit or loss as incurred since the
criteria for capitalisation are not met.
The costs of an internally generated intangible asset comprise all directly
attributable costs necessary to create, produce and prepare the asset to be
capable of operating in the manner intended by management. Directly
attributable costs include employee costs incurred on technical development,
testing and certification, materials consumed and any relevant third-party
costs. The costs of internally generated developments are recognised as
intangible assets and are subsequently measured in the same way as externally
acquired intangible assets. The assets are reviewed for indicators of
impairment, but they are not amortised until completion of the development
project.
Property, plant and equipment and right-of-use assets
Property, plant and equipment assets are stated at their historical cost of
acquisition less any provision for depreciation or impairment.
Depreciation is provided on all property, plant and equipment assets at rates
calculated to write each asset down to its estimated residual value evenly
over its expected useful life, as follows:
Buildings
over 39 years
Laboratory
equipment over 5-7
years
Computer
equipment over
3 years
Fixtures and
fittings
over 5 years
Land is not depreciated.
A right-of-use asset is recognised at commencement of the lease and initially
measured at the amount of the lease liability plus any incremental costs of
obtaining the lease and any lease payments made when or before the leased
asset is available for use by the Group. The right-of-use asset is
subsequently measured at cost less accumulated depreciation and any
accumulated impairment losses. Right-of-use assets are depreciated over the
shorter of the useful life of the asset and the lease term, unless the title
to the asset transfers at the end of the lease term, in which case it is
depreciated over the useful life.
Intangible assets
Intangible assets are stated at fair value at acquisition. They are
subsequently held at cost less any provision for impairment or amortisation.
Intangible assets are amortised through administrative expenses within the
income statement over their expected useful life as follows:
Trademarks
over 5 years
Customer
relationships
over 10 years
Process and information technology over 10 years
Supplier
agreements
over 5 years
Impairment of property, plant and equipment, right-of-use and intangible
assets
At each reporting date, the Group reviews the carrying amounts of its
property, plant and equipment and right-of-use assets to determine whether
there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any).
In respect of goodwill and intangible assets with an indefinite life, the
Group performs an annual impairment review as required by IAS 36.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units ('CGUs')).
Discounted cash flow valuation techniques are generally applied for assessing
recoverable amounts using Board- approved forward-looking cash flow
projections and terminal value estimates, together with discount rates
appropriate to the risk of the related CGUs.
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately.
Inventories
Inventories are recognised at the lower of cost and net realisable value. Cost
is determined using the first in, first out method and represents the purchase
cost, including transport, for raw materials, together with a proportion of
manufacturing overheads based on normal levels of activity for work in
progress and finished goods. In cases where monetary amounts cannot be
observed directly, judgements and assumptions are used to arrive at accounting
estimates. The effect of any change in an accounting estimate is recognised by
adjusting the carrying amount of inventory in the period of change.
Appropriate provisions for estimated irrecoverable amounts are recognised in
the income statement when there is objective evidence that the assets are
impaired.
Non-current assets or disposal groups classified as held for sale
Non-current assets, or disposal groups comprising assets and liabilities are
classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. For
non-current assets or assets of disposal groups to be classified as held for
sale, they must be readily available for immediate sale in their present
condition and their sale must be highly probable.
Such assets or disposal groups are generally measured at the lower of their
carrying amount and fair value less costs of disposal.
An impairment loss is recognised for any initial or subsequent write down of
the non-current assets and assets of disposal groups to fair value less costs
of disposal. A gain is recognised for any subsequent increase in fair value
less costs of disposal but not in excess of any cumulative impairment
previously recognised.
Once classified as held for sale, intangible assets and property, plant and
equipment are no longer amortised or depreciated. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be
recognised.
Non-current assets classified as held for sale, and the assets of disposal
groups classified as held for sale are presented separately on the face of the
Statement of Financial Position, in current assets. When applicable, the
liabilities of disposal groups classified as held for sale are presented
separately on the face of the Statement of Financial Position, in current
liabilities.
Share-based payments
Share options
Equity settled share-based payment transactions are measured with reference to
the fair value at the date of grant, recognised on a straight-line basis over
the vesting period, based on management's estimate of shares that will
eventually vest. The fair value of options is measured using a binomial model
where the performance conditions of grants are market-based, the Monte Carlo
model where there are multiple performance conditions and the Black-Scholes
model where there are non-market related performance conditions. See note 26
for more information on performance conditions.
At each reporting date before vesting, the cumulative expense is calculated,
representing the extent to which the vesting period has expired and
management's best estimate of the achievement or otherwise of non-market
conditions and the number of equity instruments that will ultimately vest. The
movement in cumulative expense since the previous reporting date is recognised
in the Consolidated Statement of Income, with a corresponding entry in equity.
The grant by the Company of options and share-based compensation plans over
its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution. The fair value of employee
services received, measured by reference to the grant date fair value, is
recognised over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity in the parent entity
accounts.
Jointly held shares
Where an employee acquires an interest in shares in the Company jointly with
the Tissue Regenix Employee Share Trust, the fair value of the option at the
purchase date is recognised on a straight-line basis over the vesting period.
The fair value benefit is measured using a binomial valuation model,
considering the terms and conditions upon which the jointly owned shares were
purchased.
Financial assets and liabilities
Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised on the Group's
Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument and are initially measured at fair
value. Transaction costs are included as part of the initial measurement,
except for financial assets measured at fair value through profit or loss.
Financial assets are subsequently measured at either amortised cost or fair
value depending on their classification. Classification is determined based on
both the business model within which such assets are held and the contractual
cash flow characteristics of the financial asset unless an accounting mismatch
is being avoided.
Financial liabilities are subsequently measured at either amortised cost or
fair value.
Derecognition of financial assets and financial liabilities
The Group derecognises a financial asset only when the contractual rights to
cash flows from the asset expire or it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks
and rewards of ownership and continues to control the transferred asset, the
Group recognises its retained interest in the asset and an associated
liability for the amount it may have to pay. If the Group retains
substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset or financial liability, a gain or loss
is recognised in profit or loss.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial
assets that are measured at amortised cost. The measurement of the loss
allowance depends upon management's assessment at the end of each reporting
period as to whether the financial instrument's credit risk has increased
significantly since initial recognition, based on reasonable and supportable
information that is available without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk
since initial recognition, a 12-month expected credit loss allowance is
estimated. This represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible within the
next 12 months. Where a financial asset has become credit impaired or where it
is determined that credit risk has increased significantly, the loss allowance
is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the
probability-weighted present value of anticipated cash shortfalls over the
life of the instrument discounted at the original effective interest rate.
Trade and other receivables
Trade and other receivables do not carry any interest and are initially
recognised at fair value. They are subsequently measured at amortised cost
using the effective interest rate method less any provision for impairment.
An expected credit loss ('ECL') model, as introduced under IFRS 9, broadens
the information that an entity is required to consider when determining its
expectations of impairment. Under this model, expectations of future events
must be taken into account, and this will result in the earlier recognition of
larger impairments against trade and other receivables.
In applying the ECL model management considers the probability of a default
occurring over the contractual life of its trade receivables balances on
initial recognition of those assets.
Impairment provisions are recognised for the Group as follows, representing
the expected credit losses over the contracted life of these balances:
Not
overdue
0% of aged receivables
0 - 3 months
overdue 0%
of aged receivables
3 - 4 months
overdue 25%
of aged receivables
4 - 5 months
overdue 50%
of aged receivables
Over 5 months overdue
100% of aged receivables
Trade and other payables
Trade and other payables are not interest-bearing and are initially recognised
at fair value. They are subsequently measured at amortised cost using the
effective interest method.
Borrowings
Borrowings are interest-bearing and are initially recognised at fair value
less the directly attributable costs of issue. They are subsequently measured
at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on a term of not
greater than three months. The Group places its funds with financial
institutions with an A rating or higher.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
issued by the Group are recognised at the proceeds received, net of direct
issue costs.
The costs of an equity transaction are accounted for as a deduction from
equity to the extent that they are incremental costs directly attributable to
the equity transaction that would otherwise have been avoided.
Leases
On commencement of a contract that gives the Group the right to use assets for
a period of time in exchange for consideration, the Group recognises a
right-of-use asset and a lease liability unless the lease qualifies as a
'short-term' lease (where the term is 12 months or less with no option to
purchase the leased asset) or a 'low-value' lease (where the underlying asset
is USD5,000 or less when new).
The lease liability is initially measured at the present value of the lease
payments during the lease term discounted using the interest rate implicit in
the lease or the incremental borrowing rate if the interest rate implicit in
the lease cannot be readily determined. The lease term is the non-cancellable
period of the lease plus extension periods that the Group is reasonably
certain to exercise and termination periods that the Group is reasonably
certain not to exercise. Lease payments include fixed payments less any lease
incentives receivable, variable lease payments dependent on an index or a rate
and any residual value guarantees.
The lease liability is subsequently increased for a constant periodic rate of
interest on the remaining balance of the lease liability and reduced for lease
payments. Interest on the lease liability is recognised in profit or loss.
Variable lease payments not included in the measurement of the lease
liability, as they are not dependent on an index or rate, are recognised in
profit or loss in the period in which the event or condition that triggers
those payments occurs.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the Statement of Income except to the extent that it relates
to items recognised directly in equity or other comprehensive income, in which
case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
Statement of Financial Position date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill, the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the
Statement of Financial Position date.
Revenue
Revenue is measured as the fair value of the consideration received or
receivable in exchange for transferring goods to a customer, net of discounts,
VAT and other sales-related taxes. The Group recognises revenue when it
transfers control over a good or service to a customer. In some instances, for
a small proportion of the business, goods are held by third parties (e.g.
hospitals) and revenue is recognised upon utilisation within surgical
procedures.
Bill-and-hold sales
The Group has bill-and-hold arrangements with customers, and this revenue is
recognised when the Group considers that performance obligations have been met
and they meet the following criteria:
· The reason for the bill-and-hold arrangement must be substantive
(usually, the arrangement has been requested by the customer to facilitate
their shipping arrangements).
· The product must be identified separately as belonging to the
customer (that is, it cannot be used to satisfy other orders).
· The product must be ready for physical transfer to the customer.
· The Group cannot have the ability to use the product or direct it to
another customer.
Strategic review expenses
Strategic review expenses comprise all expenditure incurred in respect of
projects undertaken by management for the development of strategic plans for
the Group. This includes any associated third-party professional adviser
costs, and all such costs would be incremental to the Group's usual
administrative costs.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing the
performance of the operating segments and making strategic decisions, has been
identified as the Board of Directors.
Discontinued operations
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group, and which:
· Represents a separate major line of business or geographical area of
operations;
· Is part of a single co-ordinated plan to dispose of a major separate
line of business or geographic area of operations; or
· Is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held for sale.
The results of discontinued operations are presented separately on the face of
profit or loss and other comprehensive income. The comparative statement of
profit or loss and other comprehensive income is re-presented as if the
operation had been discontinued from the start of the comparative year.
4. Critical accounting judgements and key sources of
estimation uncertainty
In the application of the Group's accounting policies, which are described in
note 3, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of the assets and liabilities that are
not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both the current
and future periods.
The following are the critical judgements and estimations that the Directors
have made in the process of applying the Group's accounting policies and that
have the most significant effect on the amounts recognised in the financial
statements.
Recoverability of non-current assets
The Directors are required by IAS 36 Impairment of assets to carry out an
annual impairment review in respect of goodwill to determine whether there was
any requirement for an impairment provision in respect of the Group's goodwill
at 31 December 2024.
The carrying amount of non-current assets at 31 December 2024 was USD24.1
million (2023: USD24.2 million).
Critical judgements
The Group's non-current assets include intangible assets and goodwill arising
on the acquisition of CellRight Technologies LLC, plus certain property, plant
and machinery and right-of-use assets. It is the Directors judgement that the
recoverable amount of these assets cannot be determined individually and that
this is the smallest identifiable group of assets whose output has an active
market and which generate largely independent cash flows from other assets or
group of assets. It is, therefore, the Directors judgement that these assets
should be considered to be a single cash generating unit ('CGU'). Only the
assets included in the CGU are subject to impairment review.
Estimations
The aggregate carrying value of the CGU was assessed for impairment based on
value in use, which requires the Directors to estimate the future cash flows
expected to arise from the CGU using a suitable discount rate in order to
calculate present value. The future cash flows expected to arise were
calculated using a discount rate of 18.3% (2023: 18.3%) based on the weighted
average cost of capital.
The impairment test indicated that the recoverable amount was at least equal
to the carrying amount of the assets and, therefore, no provision for
impairment was required at 31 December 2024 (2023: nil). See note 15.
The key inputs to the cash flow forecast are revenues, gross margin and
overheads, future anticipated capital expenditure and movements in working
capital. The key estimation relates to sales growth, which is inherently
difficult to forecast in a rapidly growing market, and it is possible that any
or all of these key assumptions may change, which may then impact the
estimated recoverable amount of the CGU and require a material adjustment to
the carrying value of the assets in future periods.
Inventory
Critical judgements
Inventories are recognised at the lower of cost and net realisable value. Cost
is determined using the first in, first out method and represents the purchase
cost, including transport, for raw materials, together with a proportion of
manufacturing overheads based on normal levels of activity for work in
progress and finished goods. At 31 December 2024, the Directors made a
judgement with regard to the costs used in determining the value of the
Group's inventory, and determined that certain costs not previously included
should now form part of the carrying amount of inventory.
Estimates
The effect of any change in an accounting estimate is recognised by adjusting
the carrying amount of inventory in the period of change, and the total impact
at 31 December 2024 was to increase the carrying value of inventory by USD1.3
million.
Classification and recoverability of a disposal group
Critical judgements
At 31 December 2024, the Directors had undertaken an active plan to dispose of
its controlling interest in the assets and liabilities of GBM-V GmbH. The
Directors consider that the net assets are available for immediate sale in
their present condition, and that a sale is highly probably within twelve
months. As a result, the Directors consider the assets and liabilities meet
the definition of a disposal group held for sale under IFRS 5 and have
reclassified them as such at 31 December 2024. See note 19.
Estimates
In accordance with the measurement criteria of IFRS 5, the disposal group held
for sale has been measured at the lower of its carrying amount and fair value
less costs to sell. The Directors have based their estimation of fair value on
indicative offers received to date and the offer most likely to proceed to
completion. As a result, no impairment loss was recognised on classification
as a disposal group held for sale.
Discontinued operations
Critical judgements
GBM-V GmbH is considered to represent a component of the Group which
represents a separate geographical area of operations and whose cash flows can
be clearly distinguished from the rest of the Group. The Directors, therefore,
consider that it meets the criteria of IFRS 5 to be presented as discontinued
operations at the time the assets and liabilities meet the criteria to be
classified as held for sale.
Discontinued operations have been presented as a single amount on the face of
the Consolidated Statement of Income and Statement of Comprehensive Income.
The Consolidated Statement of Income and Statement of Comprehensive Income for
the prior period has been restated to conform to this presentation. See note
11.
5. Segmental information
The following table provides disclosure of the Group's revenue by geographical
market based on the location of the customer:
Continuing Continuing
2024 2023
USD'000 USD'000
US 27,581 25,327
Rest of World 1,065 989
28,646 26,316
Analysis of revenue by customer
During the year ended 31 December 2024, the Group had one customer who
individually exceeded 10% of revenue. This customer generated 23% of revenue
(2023: one customer who generated 13% of revenue).
Operating segments
In accordance with IFRS 8, the Group has derived the information for its
operating segments using the information used by the chief operating
decision-maker, who has been identified as the Board of Directors.
Subsequent to the operations of GBM-V being classified as discontinued
operations, the Board of Directors has determined that the Group has two
operating segments for internal management, reporting and decision-making
purposes, namely dCELL and BioRinse.
Central overheads, which primarily relate to operations of the Group function,
are not allocated to an operating segment.
Revenue from all operating segments derives from the sale of biological
medical devices.
Refer to the Business Overview on page 2 for more details on the Group's
operating segments and operations.
Segmental information is presented below.
dCELL BioRinse Central Total
2024 2024 2024 2024
USD'000 USD'000 USD'000 USD'000
Statement of Income
Continuing operations
Revenue 7,634 21,012 - 28,646
Gross profit 3,739 9,882 - 13,621
Depreciation (3) (470) (62) (535)
Amortisation - (451) (57) (508)
Operating profit/(loss) 827 2,822 (3,300) 349
Net finance income/(charges)
4 (920) 3 (913)
Profit/(loss) before taxation
831 1,902 (3,297) (564)
Taxation (168) (121) - (289)
Profit/(loss) for the year
663 1,781 (3,297) (853)
dCELL BioRinse Central Total
2023 2023 2023 2023
USD'000 USD'000 USD'000 USD'000
Statement of Income
Continuing operations
Revenue 6,183 20,133 - 26,316
Gross profit 2,839 10,141 - 12,980
Depreciation (4) (423) (84) (511)
Amortisation - (450) - (450)
Operating profit/(loss) 340 1,838 (2,792) (614)
Net finance income/(charges)
4 (1,296) 17 (1,275)
Profit/(loss) before taxation
344 542 (2,775) (1,889)
Taxation 202 (190) - 12
Profit/(loss) for the year
546 352 (2,775) (1,877)
BioRinse Central Total
2024 GBM-V 2024 2024
dCELL USD'000 (held for sale) USD'000 USD'000
2024 2024
USD'000 USD'000
Statement of Financial Position
Non-current assets 2,436 21,487 - 153 24,076
Current assets 4,085 16,082 629 474 21,270
Total assets 6,521 37,569 629 627 45,346
Non-current liabilities - (10,135) - - (10,135)
Current liabilities (920) (4,504) (87) (644) (6,155)
Total liabilities (920) (14,639) (87) (644) (16,290)
Net assets 5,601 22,930 542 (17) 29,056
Capital expenditure - 184 6 59 249
Additions to intangible assets 531 237 - 2 770
BioRinse Central Total
2023 2023 2023
dCELL USD'000 GBM-V USD'000 USD'000
2023 2023
USD'000 USD'000
Statement of Financial Position
Non-current assets 1,946 21,987 6 214 24,153
Current assets 5,030 12,649 807 604 19,090
Total assets 6,976 34,636 813 818 43,243
Non-current liabilities - (9,123) - (30) (9,153)
Current liabilities (693) (3,345) (200) (497) (4,735)
Total liabilities (693) (12,468) (200) (527) (13,888)
Net assets 6,283 22,168 613 291 29,355
Capital expenditure 165 167 9 54 395
Additions to intangible assets 334 116 - - 450
6. Finance income
Continuing Continuing
2024 2023
USD'000 USD'000
Bank interest receivable 9 24
Other interest received 1 2
10 26
7. Finance charges
Continuing Continuing
2024 2023
USD'000 USD'000
Interest on loans and borrowings 797 603
Fees on loans and borrowings - 248
Interest on lease liabilities 81 284
Amortisation of debt cost 41 163
Other interest paid 4 3
923 1,301
8. Loss on ordinary activities before taxation
The loss before taxation for the year has been arrived at after charging:
Continuing Continuing
2024 2023
USD'000 USD'000
Depreciation of property, plant and equipment 428 379
Depreciation of right-of-use assets 107 132
Amortisation of intangible assets 508 450
Rentals subject to 'short lease' exemption 6 6
Expensed inventory 11,833 9,702
Staff costs including share-based payments 10,037 8,035
Strategic review expenses* 124 -
Foreign exchange losses 53 15
Auditor's remuneration:
Fees payable for the audit of the parent company and consolidated financial
statements
96 74
Fees payable for the audit of subsidiary entity financial statements pursuant
to legislation
78 70
174 144
*Strategic review expenses relate to costs incurred in respect of the Boards
review of the Company's strategic options as announced in November 2024. It
includes associated third-party professional adviser costs which are
incremental to the Group's usual administrative costs.
9. Staff costs
The average monthly number of employees (including Directors) was:
Continuing Continuing
2024 2023
Number Number
Directors 6 6
Laboratory and administration staff 86 76
92 82
Their aggregate remuneration comprised:
Continuing Continuing
2024 2023
USD'000 USD'000
Wages and salaries 9,644 8,791
Social security costs 574 559
Other pension costs 37 34
Share-based payments 363 342
10,618 9,726
Included within wages and salaries are other staff benefits provided to
employees. The cost of providing these benefits is USD0.6 million (2023:
USD0.6 million).
Included within group salaries is USD38,824 capitalised to development costs,
and USD0.6 million included within the carrying value of inventory.
Refer to the Directors' Remuneration Report for details regarding the
remuneration of the highest paid Director and the total amounts for Directors'
remuneration in accordance with Schedule 5 to the Accounting Regulations.
10. Taxation
Continuing Continuing
2024 2023
USD'000 USD'000
Current tax:
UK R&D tax credit (15) (202)
Adjustments in respect of prior periods (206) -
Foreign taxation 630 310
409 108
Deferred tax:
Origination and reversal of temporary differences (120) (120)
Tax charge/(credit) for the year 289 (12)
The charge/(credit) for the year can be reconciled to the loss per the
Consolidated Statement of Income as follows:
Continuing Continuing
2024 2023
USD'000 USD'000
Loss on ordinary activities before tax (395) (1,889)
Loss multiplied by the standard rate of corporation tax for UK companies of
25% (2023: 23.52%)
(99) (444)
Effects of:
Surrender of tax losses for R&D tax credit refund
119 233
Deduction for R&D expenditure (27) (115)
Remeasurement of deferred tax for changes in tax rates
(206) (22)
Adjustments in respect of prior period current and deferred tax
(10) 122
Movement in deferred tax not recognised on unutilised tax losses
(101) 226
Expenses not deductible for tax purposes 733 108
Origination and reversal of timing differences (120) (120)
Tax charge/(credit) on loss for the year 289 (12)
The enacted UK corporation tax rate of 25% forms the basis for the UK element
of the deferred tax calculation following the UK budget in 2021, when the
Chancellor announced an increase to the main rate of corporation tax in the UK
to 25% from April 2023.
Unrelieved tax losses carried forward, as detailed below, have not been
recognised as a deferred tax asset as there is currently insufficient evidence
that the asset will be recoverable in the foreseeable future. The losses are
related to UK operations and must be utilised in relation to the same
operations.
Continuing Continuing
2024 2023
USD'000 USD'000
Tax losses
Losses available to carry forward 60,898 60,361
Unrecognised deferred tax asset at 25% (2023: 25%)
15,224 15,090
11. Discontinued operations
During the year ended 31 December 2024, the Board took the decision that the
operations of the Group's not-for-profit joint venture, GMB-V, were not
strategic to the operation of the business and were, therefore, committed to a
plan to sell the operations or group of assets, and an active programme to
locate a buyer and complete a sale was undertaken.
The operations of GMB-V have been presented as discontinued operations for the
year ended 31 December 2024. A single amount is presented on the face of the
Consolidated Statement of Income, comprising the post-tax result of
discontinued operations. The Consolidated Statement of Income for the prior
period has been restated to conform to this presentation.
The results of the discontinued operations, which have been included in the
Consolidated Statement of Income for the year ended 31 December 2024, were as
follows:
2024 2023
USD'000 USD'000
Revenue 3,114 3,177
Cost of sales (2,104) (2,117)
Gross profit 1,010 1,060
Administrative expenses (835) (824)
Depreciation (3) (16)
Profit before taxation 172 220
Taxation - -
Profit from discontinued operations, net of tax
172 220
Profit per Ordinary Share
Basic and diluted, cents per share 0.20 0.24
During the year, the discontinued operations contributed USD59,567 inflow
(2023: USD129,678 inflow to the Group's net cash inflow) to the Group's net
cash outflow from operating activities, USD6,056 (2023: USD9,056) to outflow
from investing activities and USD nil (2023: nil) to net cash inflow from
financing activities.
12. Loss per Ordinary Share
Basic loss per Ordinary Share is calculated by dividing the net loss for the
year attributable to owners of the parent company by the weighted average
number of Ordinary Shares in issue during the year, excluding own shares held
jointly by the Tissue Regenix Employee Share Trust and certain employees.
Due to the losses incurred from continuing operations in the years reported,
there is no dilutive effect from the existing share options and jointly owned
shares.
The calculation of the basic and diluted loss per Ordinary Share is based on
the following data:
Continuing and discontinued operations Continuing and discontinued operations
Continuing operations 2024 Continuing 2023
2024 USD'000 operations USD'000
USD'000 2023
USD'000
Losses
Losses for the purpose of basic and diluted loss per Ordinary Share being net
loss for the year attributable to owners of the parent company
(853) (681) (1,877) (1,713)
Number Number Number Number
Number of shares
Weighted average number of Ordinary Shares for the purpose of basic and
diluted loss per Ordinary Share
70,994,026 70,994,026 70,426,760 70,426,760
Basic and diluted, cents per share (1.20) (0.96) (2.67) (2.43)
The Company has options issued over 2,532,440 (2023: 2,585,537) Ordinary
Shares and warrants issued over 30,968 (2023: 30,968) Ordinary Shares, and
there are 161,128 (2023: 161,128) jointly owned shares that are potentially
dilutive. See note 26.
13. Property, plant and equipment
Land and buildings Laboratory equipment Fixtures and fittings Computer equipment
USD'000 USD'000 USD'000 USD'000 Total
USD'000
Cost
At 31 December 2022 5,093 3,036 970 1,045 10,144
Additions 18 135 10 232 395
Disposal - (11) - (2) (13)
Exchange adjustment - 75 40 38 153
At 31 December 2023 5,111 3,235 1,020 1,313 10,679
Reclassification - - - (517) (517)
Exercise of option to purchase
3,340 - - - 3,340
Additions 45 183 14 7 249
Disposal - (3) (52) (118) (173)
Assets held for sale - (111) (78) (25) (214)
Exchange adjustment - (33) (18) (11) (62)
At 31 December 2024 8,496 3,271 886 649 13,302
Depreciation
At 31 December 2022 378 2,315 917 794 4,404
Charge for the period 132 193 17 53 395
Disposal - (11) - (2) (13)
Exchange adjustment - 73 39 33 145
At 31 December 2023 510 2,570 973 878 4,931
Reclassification - - - (107) (107)
Exercise of option to purchase
371 - - - 371
Charge for the period 197 206 14 11 428
Discontinued operations
- 3 - - 3
Disposal - (3) (52) (118) (173)
Assets held for sale - (111) (72) (22) (205)
Exchange adjustment - (32) (17) (12) (61)
At 31 December 2024 1,078 2,633 846 630 5,187
Carrying amount
At 31 December 2024 7,418 638 40 19 8,115
At 31 December 2023 4,601 665 47 435 5,748
At 31 December 2022 4,715 721 53 251 5,740
Property, plant and equipment with a carrying amount of USD5.2 million (2023:
USD5.7 million) have been pledged to secure borrowings of the Group. The Group
is not permitted to pledge these assets as security for other borrowings or to
sell them to another entity.
Reclassification
During the year ended 31 December 2024, certain assets previously classified
as computer equipment were reclassified as intangible assets. See note 15.
Option to purchase
In June 2024, the Group exercised an option to purchase 1740 Universal City
Boulevard, San Antonio, a property previously held as a right-of-use asset
under the terms of a lease. The cost and accumulated depreciation of the
building have been reclassified from right-of-use assets. See note 14.
The carrying value of the property at 31 December 2024 was USD2.9 million on
which the Bank of San Antonio has a first lien security interest, Universal
City Business Park LLC has a second lien security lien and MidCap holds a
third lien security interest. See note 21.
14. Right-of-use
assets
Land and buildings USD'000 Laboratory equipment
USD'000 Total
USD'000
Cost
At 31 December 2022 3,545 - 3,545
Additions - 195 195
Exchange adjustment 10 - 10
At 31 December 2023 3,555 195 3,750
Exercise of option to purchase (3,340) - (3,340)
Exchange adjustment (3) - (3)
At 31 December 2024 212 195 407
Depreciation
At 31 December 2022 342 - 342
Charge for the period 128 4 132
Exchange adjustment 6 - 6
At 31 December 2023 476 4 480
Charge for the period 78 29 107
Exercise of option to purchase (371) - (371)
Exchange adjustment (3) - (3)
At 31 December 2024 180 33 213
Carrying amount
At 31 December 2024 32 162 194
At 31 December 2023 3,079 191 3,270
At 31 December 2022 3,203 - 3,203
Option to purchase
At 31 December 2023, the Group had a ten-year fixed lease over US land and
buildings, which included an option to purchase within the first five years,
being up to November 2024. The Directors considered the potential cash outflow
arising as a result of financing the option to purchase against the potential
cost of ongoing lease payments, the potential market value of the property,
which an independent appraisal indicated would be in excess of the fixed
option exercise price, and the commercial advantages of taking ownership and
control of the property. As a result, the Directors decided that it would be
beneficial to exercise the option to purchase and this was completed in June
2024. The cost and accumulated depreciation of the building have been
reclassified as property, plant and equipment. See note 13.
15. Intangible assets
Process and information technology
Development Computer Customer relationships USD'000 Supplier agreements
costs software Goodwill USD'000 Trademarks USD'000 Total
USD'000 USD'000 USD'000 USD'000 USD'000
Cost
At 31 December 2022 2,579 - 19,458 3,000 799 1,500 600 27,936
Additions 450 - - - - - - 450
Exchange adjustment 136 - - - - - - 136
At 31 December 2023 3,165 - 19,458 3,000 799 1,500 600 28,522
Reclassification - 517 - - - - - 517
Additions 768 2 - - - - - 770
Disposal (1,238) - - - - - (1,238)
Exchange adjustment (40) (2) - - - - - (42)
At 31 December 2024 2,655 517 19,458 3,000 799 1,500 600 28,529
Amortisation
At 31 December 2022 1,176 - 7,871 1,619 799 810 600 12,875
Charge for the period - - - 300 - 150 - 450
Exchange adjustment 62 - - - - - - 62
At 31 December 2023 1,238 - 7,871 1,919 799 960 600 13,387
Reclassification - 107 - - - - - 107
Charge for the period - 58 - 300 - 150 - 508
Disposal (1,238) - - - - - - (1,238)
Exchange adjustment - (2) - - - - - (2)
At 31 December 2024 - 163 7,871 2,219 799 1,110 600 12,762
Carrying amount
At 31 December 2024 2,655 354 11,587 781 - 390 - 15,767
At 31 December 2023 1,927 - 11,587 1,081 - 540 - 15,135
At 31 December 2022 1,403 - 11,587 1,381 - 690 - 15,061
Development costs represent expenditure on clinical evaluation studies
relating to the Group's products. The assets are reviewed for indicators of
impairment but are not amortised until completion of the development project.
Computer software represents third-party purchased software which is amortised
over 3 years, and software development costs which are reviewed for indicators
of impairment but are not amortised until completion of the development
project.
Goodwill, customer relationships, trademarks, process and information
technology and supplier agreements relate to the acquisition of CellRight
Technologies LLC in 2017.
Goodwill represents the excess of the consideration paid over the fair value
of the assets acquired.
Customer relationships represent the fair value attributed to the customer
base existing on acquisition. The carrying value of these assets is USD0.8
million, and the remaining useful life is 2.6 years.
Trademarks relate to registered trademarks acquired in the acquisition, which
have now been amortised in full.
Process and information technology represent the fair value attributed to
in-house developed technology for each product group, 'trade secrets' and
in-house developed information technology. The carrying value of these assets
is USD0.4 million, and the remaining useful life is 2.6 years.
Supplier agreements relate to agreements for the supply of human tissue, which
have now been amortised in full.
The assets acquired on the acquisition of CellRight Technologies are subject
to annual impairment testing as described below.
Reclassification
During the year ended 31 December 2024, certain assets previously classified
as property, plant and equipment were reclassified as intangible assets. See
note 13.
Impairment of intangible assets
The Group considers the assets arising on the acquisition of CellRight
Technologies LLC to be a single CGU and tests for impairment on an annual
basis, or more frequently where there are any indicators of impairment. The
aggregate carrying value is compared against the expected recoverable amount
of the unit by reference to the present value of the future net cash flow
expected to be derived from the asset, its value in use.
Value in use is estimated based on future cash flow discounted to present
value using a pre-tax discount rate of 18.3% (2023: 18.3%), which still
reflects increases in the risk-free interest rate inherent in the calculation
of the weighted average cost of capital. An impairment charge arises where the
carrying value exceeds the value in use.
The inputs into cash flow forecasts are based on the most recent
budgets/forecasts approved and reviewed by the Directors for the following
year, extended forward for the next four years based on expected growth within
the CGU over that period. At the end of year five, a terminal value is
calculated using a long-term growth assumption of 2% (2023: 2%).
The key inputs to the cash flow forecasts are:
· revenues (based on estimates of revenue growth with both new and
existing customers based on an understanding of the needs of those customers
and having regard to independent market assessments of market growth);
· gross margin and overheads (based on existing gross margins and
adapted for appropriate increases based on the anticipated growth of the
business);
· future anticipated capital expenditure (adjusted based on expected
future growth); and
· movements in working capital.
The key assumption within the cash flow forecasts relates to sales growth
which is inherently difficult to forecast in a rapidly growing market. Across
the five-year forecast period, the compound annual growth rate ('CAGR') is
16.8% (2023: 20.5%).
At 31 December 2024, the impairment test prepared by the Directors indicates a
recoverable amount based on value in use of USD74 million (2023: USD68.2
million) compared with a CGU carrying amount of USD33.5 million (2023: USD32.6
million). The Directors, therefore, do not consider that an impairment charge
is appropriate for the year ended 31 December 2024 (2023: nil). However, in
drawing this conclusion, the Directors note the importance of achieving the
anticipated CAGR and have calculated that an impairment arises in the event
that the CAGR falls to 5.2% (2023: 12.4%) across the five-year period.
16. Inventory
2024 2023
USD'000 USD'000
Raw materials and consumables 6,715 4,518
Work in progress 6,411 5,133
Finished goods, including goods for resale 880 707
14,006 10,358
Inventory of finished goods, including goods for resale, is presented net of a
provision of USD0.2 million (2023: USD0.2 million).
At 31 December 2024, the Group has recognised the impact of a change in
accounting estimates in the carrying amount of inventory. The change arose as
a result of a change in the measurement technique used for inventory and
resulted in an increase of USD1.3 million in the carrying value at 31 December
2024.
17. Trade and other receivables
2024 2023
USD'000 USD'000
Trade receivables 3,653 3,027
VAT recoverable 195 49
Other receivables 54 77
Prepayments and accrued income 673 577
4,575 3,730
The Directors consider that the carrying amount of trade and other receivables
approximates to their fair values.
2024 2023
USD'000 USD'000
Trade receivables 3,740 3,087
Less: allowance for expected credit losses (87) (60)
3,653 3,027
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses
provided for above are as follows:
Allowance for expected credit losses 2024 Allowance for expected credit losses 2023 USD'000
Expected credit loss Carrying amount 2024 USD'000 Carrying amount 2023
Rate USD'000 USD'000
Not overdue 0% 3,285 - 2,835 -
0-3 months overdue 0% 86 - 161 -
3-4 months overdue 25% 20 6 5 1
4-5 months overdue 50% 117 29 35 8
Over 5 months overdue 100% 232 52 51 51
3,740 87 3,087 60
The average credit term with customers is 40 days (2023: 40 days).
Movements in the impairment allowance for trade receivables are as follows:
2024 2023
USD'000 USD'000
At 1 January 60 84
Increase during the year 117 120
Receivables written off during the year as uncollectable (8) (31)
Unused amounts reversed (82) (113)
At 31 December 87 60
18. Cash and cash equivalents
Cash and cash equivalents held by the Group at 31 December 2024 were USD1.9
million (2023: USD4.7 million). The Directors consider that the carrying
amount of these assets approximates to their fair value and do not believe
that the Group is exposed to any significant credit risk on its cash.
19. Disposal group held for sale
During the year ended 31 December 2024, the Board took the decision that the
operations of the Group's not-for-profit joint venture, GMB-V, were not
strategic to the operation of the business and were, therefore, committed to a
plan to sell the operations or group of assets, and an active programme to
locate a buyer and complete a sale was undertaken.
At 31 December 2024, assets and liabilities of GMB-V, the sale of which is
highly probably to take place within twelve months, have been classified as a
disposal group held for sale and presented separately in the Statement of
Financial Position.
In accordance with the measurement criteria of IFRS 5, the disposal group held
for sale has been measured at the lower of its carrying amount and fair value
less costs to sell. The Directors have based their estimation of fair value on
indicative offers received to date and the offer most likely to proceed to
completion. As a result, no impairment loss was recognised on classification
as a disposal group held for sale.
At 31 December 2024, the disposal group comprised the following assets and
liabilities:
USD'000
Carrying value
Plant and equipment 9
Inventory 192
Trade and other receivables 83
Cash and cash equivalents 345
629
Trade and other payables (87)
Carrying value under IFRS 5 542
20. Trade and other payables
2024 2023
USD'000 USD'000
Trade payables 2,714 1,207
Taxes and social security 34 35
Accruals 2,108 2,541
4,856 3,783
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs.
The Group has financial risk management policies to ensure that all payables
are paid within the credit time frame and no interest is generally charged on
balances outstanding.
21. Loans and borrowings
2024 2023
USD'000 USD'000
MidCap term loan 1,542 2,000
MidCap revolving credit 5,829 4,148
7,371 6,148
Capitalised debt issue costs (122) (163)
Net MidCap borrowings 7,249 5,985
Other borrowings 3,030 -
Lease liabilities 186 3,410
10,465 9,395
2024 2023
USD'000 USD'000
Current loans and borrowings
MidCap borrowings 500 458
Other borrowings 45 -
Lease liabilities 65 184
610 642
Non-current loans and borrowings
MidCap borrowings 6,749 5,527
Other borrowings 2,985
Lease liabilities 121 3,226
9,855 8,753
10,465 9,395
Remaining contractual maturity analysis
The following table details the Group's remaining contractual maturity for its
loans and borrowings. The table has been drawn up based on the undiscounted
cash flows based on the earliest date on which the loans and borrowings are
required to be paid. The table includes both principal and interest cash
flows.
2024 2023
USD'000 USD'000
Maturity analysis
Less than 6 months 773 762
6 months to 1 year 765 794
1 year to 2 years 1,469 4,211
2 years to 5 years 10,495 6,275
13,502 12,042
The movement in loans and borrowings during the year was:
2024 2023
USD'000 USD'000
At 1 January 9,395 9,608
Cash flows - financing activities - loans and borrowings - advances
4,273 -
Cash flows - financing activities - loans and borrowings repayments
(194) (378)
Cash flows - investing activities - exercise of option
(3,050) -
Non-cash movements - additions to right-of-use assets
- 195
Non-cash movements - movement in amortised loan costs
41 (35)
Non-cash movements - net effect of foreign exchange
- 5
At 31 December 10,465 9,395
MidCap facility
In June 2019, the Group signed a US bank facility with MidCap, the terms of
which were revised in January 2023 as follows:
· The facility includes a term loan and a revolving credit facility,
which originally incurred interest at LIBOR rate plus 6.75% and LIBOR rate
plus 4.5% respectively. The LIBOR rate was replaced by Secured Overnight
Financing Rate ('SOFR') when LIBOR was discontinued. The floor SOFR rate is
3%.
· The extension of the maturity date of both the term loan and the
revolving credit facility to 1 January 2028. The term loan is being repaid
over 48 months commencing February 2024.
· An early payment of the exit fee of USD0.25 million (initially due on
1 June 2024) relating to the USD5.5 million term loan which was repaid in
2019. This fee was charged against the revolving credit facility in the year
ended 31 December 2023. An exit fee of 4.5% on the remaining balance of the
term loan (USD0.09 million) will be due on maturity or earlier settlement if
applicable.
· An increase in the funds available under the terms of the revolving
credit facility up to USD10 million (with a fee payable in respect of each
facility expansion of 0.5%).
Debt issue costs are capitalised against the loan and are amortised over the
life of the facilities. No costs were capitalised during the year ended 31
December 2024 (2023: USD0.2 million).
In June 2024, Midcap released its collateral claim on 1740 Universal City
Boulevard and now has a third lien security interest on this property. See
note 13. In respect of the term loan, Midcap now has a first lien security
interest in all assets of the Company other than this property. The carrying
amount of these assets at 31 December 2024 is USD5.2 million (2023: USD4.6
million). See note 13.
In June 2024, the Group exercised its option to increase the revolving line of
credit by USD1.0 million to USD6.0 million to support the working capital
growth of the business. This was further increased by USD1.0 million to USD7.0
million in February 2025.
The revolving credit is subject to a rolling 12-month revenue covenant, which
is measured on a monthly basis. The Group was in full compliance with the
terms of the covenant in the periods reported.
Other borrowings
In June 2024, the Group exercised an option to purchase 1740 Universal City
Boulevard, San Antonio, US., a property previously subject to the terms of a
lease. See note 14.
The exercise price of the option was USD3.1 million which was financed by
further borrowing as follows:
· Under the terms of an agreement dated 13 June 2024, the Group
received a loan of USD 2.6 million from the Bank of San Antonio. The loan
bears interest at a rate of 7.29% and the principal and accrued interest are
repayable by monthly payments of USD18,983 commencing June 2024 until June
2029 ('the Maturity date'). At the maturity date, the entire principal and
accrued interest remaining is payable in full. The Bank of San Antonio has a
first lien security interest in the property. See note 13.
The borrowings have an annual debt service covenant and the Group was in full
compliance with the terms of the covenant in the periods reported
· Under the terms of an agreement dated 13 June 2024, the Group
received a loan of US 0.5 million from Universal City Business Park, LLC. The
loan bears interest at a rate of 8.25% and the principal and accrued interest
are repayable by monthly payments of USD3,607, commencing 1 August 2024 until
1 July 2029 ('the Maturity date'). At the maturity date, the entire principal
and accrued interest remaining is payable in full. Universal City Business
Park, LLC has a second lien security interest in the property. See note 13.
Lease liabilities
The Group leases properties used for its operations in the UK and the US.
· UK land and buildings: Five-year fixed lease, which included a break
clause in 2023 not exercised.
· US property, plant and equipment: Five-year fixed leases.
The Group's average effective borrowing rate for leases at 31 December 2024
was 9.6% (2023: 9%).
Disclosure of additions to and carrying amounts of right-of-use assets by
class has been provided in note 14.
At 31 December 2023, the Group had a ten-year fixed lease over US land and
buildings, which included an option to purchase within the first five years,
being up to November 2024. The Directors considered the potential cash outflow
arising as a result of financing the option to purchase against the potential
cost of ongoing lease payments, the potential market value of the property,
which an independent appraisal indicated would be in excess of the fixed
option exercise price, and the commercial advantages of taking ownership and
control of the property. As a result, the Directors decided that it would be
beneficial to exercise the option to purchase and this was completed in June
2024.
Effect of leases on financial performance
2024 USD'000 2023
USD'000
Depreciation of right-of-use assets 107 132
Interest expense 81 284
188 416
22. Deferred tax liabilities
2024 2023
USD'000 USD'000
At 1 January 400 520
Release to the income statement (120) (120)
At 31 December 280 400
The deferred tax liability relates to intangible assets recognised on the
acquisition of CellRight Technologies LLC. See note 15.
23. Share capital
2024 USD'000 2023
USD'000
Allotted, issued and fully paid
Ordinary Shares of 0.1 pence 92 91
Deferred Shares of 0.4 pence 6,783 6,783
Deferred Shares of 9.9 pence 9,076 9,076
15,951 15,950
As permitted by the provisions of the Companies Act 2006, the Company does not
have an upper limit to its authorised share capital.
The Ordinary Shares are fully paid and entitle the holder to full voting
rights, to full participation and to distribution of dividends.
The Deferred Shares are not listed on the Alternative Investment Market
('AIM') of the London Stock Exchange, do not give the holders any right to
receive notice of, or to attend or vote at, any general meetings and have no
entitlement to receive a dividend or other distribution other than to a return
of capital in the event of a winding up (and only after the holders of the
Ordinary Shares have received the sum of £1 million per share).
On 28 April 2023, the Company consolidated every 100 Ordinary Shares of 0.1
pence each into one 'Consolidated Ordinary Share of 10 pence each'.
Immediately following the consolidation, each Consolidated Ordinary Share was
subdivided into one New Ordinary Share of 0.1 pence each and one New Deferred
Share of 9.9 pence each. The New Ordinary, and New Deferred Shares have the
same rights as the existing Ordinary and Deferred Shares, respectively.
Due to the difference in functional and presentation currencies of the parent
company, foreign exchange differences can arise between the allotted, issued
and fully paid share capital, which is presented at historical rates of
exchange.
Issued Ordinary Share capital
Immediately prior to the share consolidation on 28 April 2023, the Company
issued 10 Ordinary Shares of 0.1 pence each at nil consideration to allow for
an exact consolidation of 100:1.
On 6 September 2023, the Company issued 216,519 Ordinary Shares of 0.1 pence
each at a price of 27.6 pence per share, raising gross proceeds of USD74,693
(£59,759), in respect of the exercise of share options.
On 27 June 2024, the Company issued 821,167 Ordinary Shares of 0.1 pence each
at a price of 10 pence per share, raising gross proceeds of USD103,889
(£82,117), in respect of the exercise of share options.
Movements in share capital during the period were as follows:
Ordinary Deferred Shares of 9.9p Number Deferred Shares of 0.4p Number
Shares of 0.1p
Number
At 1 January 2023 7,035,794,890 - 1,171,971,322
Share issue 10 - -
Immediately prior to share consolidation 7,035,794,900 - 1,171,971,322
Share consolidation (6,965,436,951) - -
Post-consolidation subdivision of shares 70,357,949 70,357,949 1,171,971,322
Allotment of shares 216,519 - -
At 31 December 2023 70,574,468 70,357,949 1,171,971,322
Allotment of shares 821,167 - -
At 31 December 2024 71,395,635 70,357,949 1,171,971,322
24. Reserves
Reserves of the Group represent the following:
Share premium
Consideration paid in excess of the nominal value of shares allotted, net of
the costs of issue.
Merger reserve
Consideration and nominal value of the shares issued during a merger where the
fair value of the assets transferred differ.
Reverse acquisition reserve
Retained earnings of a reverse acquisition.
Reserve for own shares
Shares held on trust for the benefit of employees - Employee Benefit Trust.
Share-based payment reserve
Accumulated charges/(credits) made under IFRS 2 in respect of share-based
payments.
Cumulative translation reserve
Foreign exchange differences arising on the translation of foreign operations
and any net gain/(loss) on the hedge of net investment in foreign
subsidiaries. The cumulative translation reserve also represents the net
effect of the fact that the functional currency of the parent undertaking is
GBP while its reporting currency in respect of the consolidated financial
statements is USD, resulting in exchange differences on translation of the
parent undertaking's equity.
Retained deficit
All current and prior period retained profits and losses.
25. Non-controlling interest
2024 2023
USD'000 USD'000
As at 1 January (795) (851)
Attributable profit for the year 32 56
As at 31 December (763) (795)
The non-controlling interest has a 50% (2023: 50%) equity holding in GBM-V
GmbH.
During the year ended 31 December 2024, the Board was committed to a plan to
sell the operations or group of assets of GBM-V GmbH, and an active programme
to locate a buyer and complete a sale was undertaken.
The operations of GMB-V have been presented as discontinued operations for the
year ended 31 December 2024. A single amount is presented on the face of the
Consolidated Statement of Income, comprising the post-tax result of
discontinued operations. The Consolidated Statement of Income for the prior
period has been restated to conform to this presentation. See note 11.
26. Share-based payments
The Company operates a number of share incentive plans, under which Directors
and certain employees have been granted options to subscribe for the Company's
Ordinary Shares.
Details of the share options and EBT shares outstanding at 31 December 2024
were as follows:
Unapproved options Weighted average exercise price
EMI options Number EBT shares SAYE options LTIP options Total
Number Number Number Number Number
Outstanding at 31 December 2022
5,155 4,969 161,128 207,464 1,791,705 2,170,421 54p
Granted - - - - 787,041 787,041 10p
Exercised - - - (216,519) - (216,519) 27.6p
Expired adjustment
- - - 9,055 - 9,055 27.6p
Lapsed - (3,334) - - - (3,334) 9.88p
Outstanding at 31 December 2023
5,155 1,635 161,128 - 2,578,746 2,746,664 42p
Granted - - - - 768,071 768,071 0.1p
Exercised - - - - (821,167) (821,167) 10p
Outstanding at 31 December 2024
5,155 1,635 161,128 - 2,525,650 2,693,568 38.5p
Exercisable at 31 December 2024
- - 161,128 - - 161,128 £5
The information shown above has been restated to reflect the share
consolidation, that became effective on 28 April 2023, in all periods
presented. See note 23.
The options outstanding at 31 December 2024 had an estimated weighted average
remaining contractual life of 7.4 years (2023: 7.5 years) with an exercise
price ranging between 0.1 pence and £19.75, as follows:
· 3,154 with an exercise price of £19.75
· 3,636 with an exercise price of £11
· 161,128 with an exercise price of £5
· 1,757,579 with an exercise price of 10 pence
· 768,071 with an exercise price of 0.1 pence
The latest date for exercise of the options is 17 July 2034 and, unless
otherwise agreed, the options are forfeited if the Director or employee leaves
the Group before the options vest, or in respect of those options that have
already vested, are not exercised within an agreed time period.
Unapproved share incentive plan
The Company has granted awards under the unapproved share incentive plan, some
of which qualify as Enterprise Management Incentives ('EMI'), which have a
three-year share price performance condition.
· 1,519 EMI options have a share price performance condition under
which the price of the Company's Ordinary Shares must reach £25 in year 1,
£30 in year 2 and £35 in year 3 for a minimum of 30 consecutive days.
· 3,636 EMI options have a share price performance condition under
which the price of the Company's Ordinary Shares must reach £15 in year 1,
£20 in year 2 and £30 in year 3 for a minimum of 30 consecutive days.
· The unapproved share options have a share price performance condition
under which the price of the Company's Ordinary Shares must reach £25 in year
1, £30 in year 2 and £35 in year 3 for a minimum of 30 consecutive days.
Share options that are not exercised within 10 years from the date of grant
will expire.
Save As You Earn ('SAYE') scheme
The Company operates a SAYE share option plan, under which Directors and
certain employees have been granted options to subscribe for the Company's
Ordinary Shares. Employees must pay into the plan for a minimum of three years
before options can be exercised. At the end of the scheme, employees can
exercise their options or elect to have their contributions refunded.
Share options that are not exercised within 10 years from the date of grant
will expire.
There were no awards outstanding under this plan at 31 December 2024.
Long-Term Incentive Plan ('LTIP')
The Company operates an LTIP share option plan, under which Directors and
certain employees have been granted options to subscribe for the Company's
Ordinary Shares.
Awards vest based on a three-year performance period and are granted in two
tranches:
· Tranche 1 - awards vest according to a market-related performance
condition which is based on the growth in the Company's Total Shareholder
Return ('TSR') over the performance period. The percentage of the TSR tranche
awards that vest is as follows:
Percentage of TSR tranche awards that vest
Company's TSR growth
Less than 50% Nil
At least 50% but less than 75% 25%
At least 75% but less than 100% 50%
100% or more 100%
The Remuneration Committee may use its discretion to adjust the percentage of
TSR awards that are deemed to vest at the end of the vesting period. A likely
reason is that the Committee considers that the Group's strong operating
performance is not reflected in the Company's share price due to prevailing
market conditions outside the Company's control.
· Tranche 2 - awards vest according to non-market performance
conditions as follows:
20% based on annual revenue targets;
20% based on annual profitability targets; and
20% based on personal performance targets.
Awards made under all plans are equity-settled. The Company has no legal or
constructive obligation to repurchase or settle the options in cash.
Share options that are not exercised within 10 years from the date of grant
will expire.
At 31 December 2024, 1,010,260 awards had been granted with market-related
performance conditions (tranche 1) and 1,515,390 awards had been granted with
non-market performance conditions (tranche 2).
Shares held in employee benefit trust ('EBT')
The Company also operates a jointly owned EBT share scheme for senior
management, under which the trustee of the Company-sponsored EBT has acquired
shares in the Company, jointly with a number of employees. The shares were
acquired pursuant to certain conditions, set out in Jointly Owned Equity
agreements ('JOEs'). Subject to meeting the performance criteria conditions
set out in the JOEs, the employees are able to benefit from most of any
future increase in the value of the jointly owned EBT shares. The
portion available is calculated based on the price of the Company's Ordinary
Shares at the time the employee wishes to take their portion.
Grant of LTIP options
On 17 July 2024, the Company issued 768,071 share options with an exercise
price of 0.1 pence per Ordinary Share under the LTIP.
· 307,228 of the awards were issued with a market related performance
condition (tranche 1).
· 460,843 of the awards were issued with non-market performance
conditions (tranche 2).
The performance period is the three years from 1 January 2024 to 31 December
2026.
The fair value of the market related performance options has been calculated
using the Monte Carlo model as it is considered to be a more appropriate model
for options granted with multiple performance conditions. The fair value of
the options granted with non-market performance conditions has been calculated
using the Black-Scholes model.
The significant inputs into the models for the IFRS 2 valuation were as
follows:
Grants in year
768,071
Options
Exercise price (pence) 0.1
Expected volatility (%) 40
Expected life (years) 3
Risk-free rates (%) 4.2
Expected dividends -
The expected volatility was calculated using the historic volatility of the
Company's TSR for the period 2014 to 2024.
The fair value of the options granted during the year was USD0.4 million. The
share price at the date of grant was 68.5 pence per Ordinary Share.
In the year ended 31 December 2024, the Company recognised a total expense of
USD0.4 million (2023: USD0.3 million) in respect of employment-related
securities.
On 27 June 2024, the Company issued 821,167 Ordinary Shares of 0.1 pence each
at a price of 10 pence per share, raising gross proceeds of USD103,889
(£82,117), in respect of the exercise of share options.
Warrants
In 2019, warrants were issued to MidCap as part of the Group's new borrowing
facilities. Options over 30,968 shares were granted at an exercise price of
£5.74. These options are equity-settled and remain exercisable. The weighted
average remaining contractual life is 4.5 years (2023: 5.5 years).
27. Financial instruments
Financial risk management objectives
Management provides services to the business, coordinates access to domestic
and international financial markets and monitors and manages the financial
risks relating to the operations of the Group. These risks include capital
risk, cash flow interest rate risk, credit risk, liquidity risk and foreign
currency risk.
The policies for managing these risks are regularly reviewed and agreed by the
Board.
The Group does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as going concerns while maximising the return to shareholders
through the optimisation of the debt and equity balance. The Group's overall
strategy is to minimise costs and liquidity risk.
The capital structure of the Group consists of cash and cash equivalents,
interest-bearing loans and borrowings (including leases) and equity
attributable to owners of the parent company, issued share capital, reserves
and retained earnings.
The Group plans its capital requirements on a regular basis and, as part of
this review, the Directors consider the cost of capital and the risks
associated with each class of capital.
Categories of financial instruments
2024 2023
USD'000 USD'000
Financial assets measured at amortised cost
Cash and cash equivalents 1,870 4,650
Trade receivables 3,653 3,027
Other receivables 54 77
5,577 7,754
2024 2023
USD'000 USD'000
Financial liabilities measured at amortised cost
Trade payables 2,714 1,207
Accruals 2,108 2,541
Loans and borrowings 10,587 9,395
15,409 13,143
Fair value of financial instruments
The Directors consider that the carrying amount of its financial instruments
approximates to their fair value.
Interest rate risk management
The Group's policy on interest rate management is agreed at Board level and is
reviewed on an ongoing basis.
The risk in the potential movement in interest received on cash surpluses held
is limited due to little movement on deposit interest rates.
The Group's main interest rate risk arises from long-term loans and borrowings
that incur interest charges at a fixed rate above established parameters. See
note 21. The Directors have performed a sensitivity analysis for the impact of
changes in the interest rate charged on its loans and borrowings from MidCap
and have determined that a 1% (increase)/decrease in the interest rate would
result in an additional (charge)/credit to the income statement of USD0.07
million (2023: USD0.06 million).
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations, resulting in financial loss to the Group.
The maximum exposure to credit risk at the reporting date in respect of
recognised financial assets is the carrying amount, net of any provisions for
impairment of those assets. The Group does not hold any collateral.
Credit risk arising from trade receivables is mitigated by a robust procedure
including credit reviews on all customers and establishing a credit allowance
that reflects any known risk.
Generally, financial assets are written off when there is no reasonable
expectation of recovery.
The credit risk on liquid funds (cash) is considered to be limited as a result
of the Group's policy that the counterparties are financial institutions with
an A rating or higher, assigned by international credit rating agencies.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which has built an appropriate liquidity risk management framework
for the management of the Group's short-medium and long- term funding and
liquidity management requirements. The Group manages liquidity risk by
maintaining adequate cash reserves and by continually monitoring forecast and
actual cash flow.
With the exception of loans and borrowings, outlined in note 21, the Group's
financial liabilities mature within six months.
The Group does not face a significant liquidity risk with regard to its lease
liabilities, which are monitored by the Board.
At 31 December 2024, the Group was compliant with all the terms relating to
the MidCap facilities.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies,
with the result that exposure to exchange rate fluctuations arises.
Other than small amounts of cash balances that are held in currencies other
than the functional currency of the relevant entity, the majority of its
monetary assets and monetary liabilities are denominated in the functional
currency of the relevant entity. As a result, there is limited exposure to
fluctuations in exchange rates that would impact the income statement of the
Group.
The financial statements of certain of the Group's foreign subsidiaries are
denominated in currencies that differ from the Group's presentation currency.
As a result, the Group is exposed to movements in USD in respect of foreign
exchange differences arising on the translation of recognised assets and
liabilities, which may impact equity.
The Group does not normally hedge against the effects of movements in exchange
rates.
Foreign currency sensitivity analysis
The carrying amounts of the Group's monetary assets and liabilities that are
denominated in a different currency to the functional currency of the relevant
entity are immaterial, and, as a result, the Group has not undertaken foreign
currency sensitivity analysis in respect of the income statement.
The carrying amounts of the Group's assets and liabilities, including those
that may give rise to net gain/(loss) on the hedge of net investment in
foreign subsidiaries, denominated in currencies that differ from the Group's
presentation currency, and that, which, may therefore, have an impact on
equity, are as follows:
2024 2024 2023 2023
GBP Euro GBP Euro
USD'000 USD'000 USD'000 USD'000
Assets 57,493 629 47,050 813
Liabilities (8,591) (87) (70,307) (200)
48,902 542 (23,257) 613
Sensitivity analysis has been performed to indicate how equity would have been
affected by changes in the exchange rate between GBP/Euro and USD. The
analysis is based on the weakening and strengthening of USD by 5%. The
sensitivity analysis includes assets and liabilities denominated in a currency
that differs from the Group's presentation currency and adjusts their
translation at the period end for a 5% change in foreign currency rates.
The table below details the Group's sensitivity to a 5% decrease in USD
against GBP/Euro. A negative number below indicates a decrease in equity where
USD weakens 5% against GBP/Euro. For a 5% strengthening of USD, there would be
an equal and opposite impact on equity, and the balance below would be
positive.
2024 2023
USD'000 USD'000
Equity 2,472 (1,132)
28. Related party transactions
Amounts due from subsidiaries
The Group has taken advantage of the exemptions contained within IAS 24
Related Party Disclosures from the requirement to disclose transactions
between group companies as these have been eliminated on consolidation.
Remuneration of key management personnel
Key management personnel are regarded as being members of the Company's Board
of Directors. The governance section of this report includes persons other
than Board members who are not considered key management personnel in terms of
decision making, and they are, therefore, not included in the related party
disclosure.
The remuneration of key management personnel of the Group is set out below in
aggregate for each of the categories specified in IAS 24 Related Party
Disclosures.
2024 2023
Charges for the year Amounts Charges for the year Amounts
USD'000 owing USD'000 owing
USD'000 USD'000
Salary and other benefits 943 136 1,196 423
Social security costs 23 - 23 -
966 136 1,219 423
Share-based payments 179 - 176 -
1,145 136 1,395 423
The amounts outstanding are unsecured and will be settled in cash. No
guarantees have been given or received.
All transactions with related parties have been conducted on an arm's length
basis.
For more information on the salaries and fees, bonuses and benefits included
above, see the Directors' Remuneration Report.
29. Ultimate controlling party
The Directors believe that there is no ultimate controlling party.
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