Tissue Regenix : Annual Report for year ended 31 December 2020

Focusing on the development of regenerative products

Annual Report and Financials

for year ended 31 December 2020

Stock Code: TRX

TISSUE REGENIX GROUP ("TISSUE REGENIX") IS AN INTERNATIONAL, PIONEERING MEDICAL TECHNOLOGY COMPANY

CONTENTS

Overview	02
Who we are	02
Highlights	03
Chairman's statement	04
At a glance	08
Product pipeline	09
Strategic report
Capacity Expansion Project	10
Our markets	12
Our divisions	13
Business model	14
Our strategic growth drivers	16
Future milestones:
strategy in action	20
Key performance indicators	22
Our management team	24
CEO
operational review	28
Financial overview	34
Risks	38
Sustainability	44
s172 statement	46
Governance
Profile of the current Directors	50
Corporate governance	52
Directors' remuneration report	58
Directors' report	60
Statement of Directors'
responsibilities	62
Financials
Independent Auditor's Report	63
Consolidated statement
of comprehensive income	69
Consolidated statement
of financial position	70
Consolidated statement
of changes in equity	71
Consolidated statement
of cash flows	72
Notes to the consolidated
financial statements	73
Company statement
of changes in equity	97
Company statement
of financial position	98
Company statement
of cash flows	99
Notes to the Company
financial statements	100
Notice of Annual General
Meeting	105

01

TISSUE REGENIX GROUP PLC

WHO WE ARE

TISSUE REGENIX GROUP

Focusing on the development of regenerative products using our two platform technologies, dCELL®, addressing soft tissue needs, and BioRinse®, providing sterile bone allografts.

We are currently helping to transform the treatment of patients in key surgical applications: BioSurgery, Orthopaedics (sports medicine/spine), Dental, General, Plastic Surgery, Urology/Gynaecology, Ophthalmology, and Cardiac.

Investment case

01		Two novel regenerative
	medicine platforms for the
		treatment of soft tissues,
02		bone and birth tissues
	International
	manufacturing
	capabilities
03		Expansive distribution
		and commercialisation
		opportunities
04		Innovative product
		portfolio and pipeline
05		Tissue processing
	science and
	development expertise
06		Differentiated clinical
		outcomes

Our vision

To establish Tissue Regenix as a global leader in the science and innovation of regenerative medicine. Transforming patient care and delivering favourable health economic outcomes.

Our values

Dedication to

patients

Passion for

innovation

Drive for

excellence

Uncompromising

integrity

Group snapshot

• £12.8m revenue FY2020
• £9.6m cash at 31 December 2020
• £13.8m (net) equity fundraise, June 2020
• Capacity expansion programme commenced in San Antonio
• Distribution via strategic partners, direct specialist sales and distribution partners
• Two new product launches undertaken during 2020

02

ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2020

HIGHLIGHTS

Financial

• Completed an equity fundraise via placement of ordinary shares raising net proceeds of £13.8m, June 2020
• Implemented cost reduction initiatives reducing the overhead cost base by £400,000

Revenue growth by product

Annual growth (including impact of FX)

	FY18	FY19	FY20
BioRinse®	31%	5%	11%
dCELL®	79%	25%	(22)%

£12.8m

Group sales decreased (2019: £13.0m) -2%, driven by:

• Orthopaedics and Dental revenue of £7.4m, +11% (£2019: £6.7m)
• Joint venture GBM-v achieved sales of £2.1m (2019: £2.1m)
• DermaPure® sales decreased by 22% to £3.3m (2019: £4.2m)

£9.6m

Cash balance at 31 December 2020 (2019: £2.4m)

Operational

Operations

• Capacity expansion programme commenced in San Antonio, July 2020
• CE Mark approval for OrthoPure® XT, June 2020
• Relocation of UK facility to Garforth, Leeds, October 2020
• Operational improvement initiatives implemented at San Antonio facility

OVERVIEW

R&D, Clinical

• 19 new DermaPure® clinical case studies undertaken for new applications
• 2 case studies commenced for BioRinse® orthopaedic applications
• OrthoPure® XT prospective and two-year follow up clinical data white papers publicly available
• Continuation of OrthoPure® XT clinical data collection

Commercial

• New strategic collaboration with a top 10 global healthcare company for white label manufacturing
• EU and UK distribution agreements signed for OrthoPure® XT
• Additional commercial opportunities secured for growth product lines such as AmnioWorks™, diversifying the sales portfolio

Management / Governance

• Daniel Lee appointed as Chief Executive Officer
• Jonathan Glenn appointed interim Non-Executive Chairman
• Corporate governance review undertaken and initiatives being implemented

Post balance sheet events

• Trevor Phillips and Brian Phillips
  (no relation) appointed as Independent Non-Executive Directors
• David Cocke appointed Chief Financial Officer, January 2021
• Restructuring of US Operations, estimated to save c.$700k on an annualised basis, January 2021
• Occupation of initial phase of the facility expansion in San Antonio, Texas, March 2021
• Jonathan Glenn appointed Non-Executive Chairman, February 2021

77	4
Product Line
employees	Extensions
	in Pipeline

3	7
Global
Manufacturing	Countries
Supplied to
Facilities

03