Secures Credit Facilities of up to $20m

RNS Number : 0471B

Tissue Regenix Group PLC

04 June 2019

 

Tissue Regenix Group plc

Secures Credit Facilities of up to $20m

Leeds, 4 June 2019 - Tissue Regenix Group (AIM:TRX) ("Tissue Regenix", or the "Company" and together with its subsidiaries, the "Group"), the regenerative medical devices company, announces that it has and certain of its subsidiaries have unconditionally entered into agreements with MidCap Financial Trust ("MidCap Financial") to access a revolving credit facility and a term loan credit facility (the "Facilities") of up to $20 million.  Funding of $10.5 million is initially available to the Group, of which it plans to draw down an initial $7.5 million immediately. 

Use of Proceeds

The initial net proceeds of the Facilities and any further funding drawn down in due course, will be used to invest in additional capital expenditure to sustain future business growth, generate further clinical and health economic real world data to support brand differentiation within dCELL and BioRinse, and for general corporate and working capital purposes.

Terms of the Facilities

The Facilities will consist of a $15.0 million secured, 5-year term loan (the "Term Loan"), and a $3.0 million revolving line of credit with a potential further $2.0 million (the "Revolver"). Under the terms of the agreements, the Term Loan will be divided into three tranches, which will become available, dependent on certain conditions being met.  Tranche one consists of $7.5 million ("Tranche One"). Tranche two consists of $5.0 million and is available from February 2020 to April 2020 ("Tranche Two").  The final tranche of $2.5 million is available from February 2021 to April 2021 ("Tranche Three").

Under the terms of the Term Loan, the three tranches are dependent on the following conditions:

a)   Tranche One, unconditional and drawn down immediately following execution of the agreements for the Facilities;

b)   Tranche Two, to be drawn between February and April 2020, contingent upon $5.0 million net equity proceeds and subject to agreed revenue targets for the from dCELL and BioRinse product sales; and

c)    Tranche Three, to be drawn between February and April 2021, contingent upon agreed revenue targets from dCELL and BioRinse product sales.

The Term Loan is interest-only for the first 12 months from closing with a 12 month interest-only extension available upon satisfying certain conditions followed by straight-line amortisation. Interest on the outstanding balance of the Term Loan shall be payable at an annual rate of one month US LIBOR plus 6.75% subject to a one month US LIBOR floor of 2.25%.

The Revolver will be available for 60 months, which provides a further $3.0m available at close and draw down at the Company's discretion, subject to sufficient borrowing base (accounts-receivable and finished-goods inventory) being available as security for the loan. The Revolver also includes a $2m uncommitted element. Interest on the outstanding balance of the Revolver will be payable monthly in arrears at an annual rate of one month US LIBOR plus 4.5% subject to a one month US LIBOR floor of 2.25%, with an annual rate of 0.5% payable on the capital amount exercised but undrawn on the Revolver, payable monthly in arrears. 

Additionally, the Company has agreed to grant MidCap Funding XXVIII Trust with 3.00% warrant coverage (the "Warrants") on the $15.0 million Term Loan, representing approximately $0.45 million in total.   The Company entered into a warrant instrument with MidCap Funding XXVIII Trust on 3 June 2019 (the "Warrant Instrument") for the first $7.5m of the Term Loan drawn.  The exercise price for the warrants in the Warrant Instrument is equal to the ten day VWAP for the ten previous days ahead of execution of the Warrant Instrument.  Similar warrant instrument agreements will be entered into on the drawdown of Tranche Two and Tranche Three.

Steve Couldwell CEO of Tissue Regenix commented: "I am pleased that we have secured access to these credit facilities, which will enable the Company to continue meeting the growing demand for our products. It also allows us to focus on our stated strategy and further invest in the growth of the business as we strive to reach profitability in the near term, whilst limiting dilution for shareholders."

"These proceeds will be invested in the commercialisation and development of the business, as well as undertaking real world clinical data collection programs which we believe will highlight the differentiated characteristics of our dCELL® and BioRinse products. We will work closely with MidCap Financial to ensure the utilisation of the facilities work in the best interest of current shareholders and the Company."

The information contained in this Announcement is inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon publication of this Announcement, this inside information is now considered to be in the public domain.

For more Information:

Tissue Regenix Group plc Caitlin Pearson, Head of Communications	Tel: [phone]
Stifel Nicolaus Europe Limited (Nominated Adviser and Broker) Jonathan Senior / Alex Price / Ben Maddison	Tel:  [phone]
FTI Consulting  Brett Pollard / Victoria Foster Mitchell / Mary Whittow	Tel: [phone]

About Tissue Regenix

Tissue Regenix is a leading medical devices company in the field of regenerative medicine. Tissue Regenix was formed in 2006 when it was spun-out from the University of Leeds, UK. The Company's patented decellularisation ('dCELL^®') technology removes DNA and other cellular material from animal and human soft tissue leaving an acellular tissue scaffold which is not rejected by the patient's body and can then be used to repair diseased or worn out body parts. Current applications address many critical clinical needs such as sports medicine, heart valve replacement and wound care.

In November 2012 Tissue Regenix Group plc set up a subsidiary company in the United States - 'Tissue Regenix Wound Care Inc.' and January 2016 saw the establishment of joint venture GBM-V, a multi- tissue bank based in Rostock, Germany.

In August 2017 Tissue Regenix acquired CellRight Technologies^®, a biotech company that specialises in regenerative medicine and is dedicated to the development of innovative osteoinductive and wound care scaffolds that enhance healing opportunities of defects created by trauma and disease. CellRight's human osteobiologics may be used in spine, trauma, general orthopedic, foot & ankle, dental, and sports medicine surgical procedures.

About MidCap Financial Trust

MidCap Financial Trust is a middle market-focused, specialty finance firm that provides senior debt solutions to companies across all industries. MidCap Financial is headquartered in Bethesda, MD, with offices in Chicago and Los Angeles, and provides a broad array of products intended to finance growth and manage working capital. For more information, visit www.midcapfinancial.com.

MidCap Financial Trust refers to MidCap FinCo Designated Activity Company, a private limited company domiciled in Ireland, and its subsidiaries, including MidCap Financial Services, LLC. MidCap Financial Services, LLC employs all personnel and provides sourcing, due diligence and portfolio management services to MidCap FinCo Designated Activity Company pursuant to a services agreement. MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, pursuant to an investment management agreement.

 

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