Annual Report and Financials
for year ended 31 December 2021
Contents
Business overview
Strategic report
Chairman’s Statement
Chief Executive Officer’s Statement
Financial Review
Market Overview
Principal Risk and Uncertainties
Section 172 Statement
Governance
Management Team
Board of Directors
Corporate Governance Statement
Directors’ Remuneration Report
Directors’ Report
Directors’ Responsibilities Statement
Financial Statements
Independent Auditor’s Report
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Statement of Changes in Equity
Company Statement of Financial Position
Notes to the Company Financial Statements
Other
Notice of Annual General Meeting
Company and Adviser Information
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Annual Report and Accounts 2021 1
Business Overview
Tissue Regenix Group plc (AIM: TRX) is an international, pioneering medical technology company in the field of
regenerative medicine, focusing on the development of tissue engineering 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, and Ophthalmology.
More details on our platform technologies are contained below:
dCELL®
Our 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 damaged body parts. Current applications address many critical clinical needs, such
as foot and ankle surgery, orthopedics, sports medicine, urological-gynaecological and wound care. This business
segment operates primarily under the TRX BioSurgery brand.
BioRinse®
Our BioRinse® technology is primarily utilised to provide a natural bone filler solution, tested for osteoinductivity
which can stimulate and regenerate native bone growth. This process has the potential to provide superior clinical
outcomes as it contains 100% allograft bone, tested to demonstrate the presence of the key natural bone growth
factors, and available in various physical forms. This business segment operates primarily under the CellRight
Technologies brand.
The Group’s main facility is in San Antonio, Texas, and is used for human tissue and processing dCELL® and
BioRinse® products. As part of the Phase 1 expansion, completed in 2021, we relocated facilities designated for
distribution and frozen tissue storage as well as adding two clean rooms at the existing San Antonio facility,
bringing the total number of clean rooms to seven. We also have facilities in Leeds, UK, for processing porcine
tissue and OrthoPure® XT, as well as our controlled joint venture GBM-v in Rostock Germany for our human tissue
in the EU.
2 Tissue Regenix Group plc
Chairman’s Statement
Introduction
Despite the ongoing challenges posed by the COVID-19 pandemic, in 2021 we saw continued positive momentum
in creating long-term sustainable shareholder value. The Group returned to double digit revenue growth, thanks
largely to an exceptionally strong performance in the US.
I would like to extend my thanks to the Executive team and all our employees for what has been achieved over the
last year. The Group has delivered robust financial and operational performances and ended the period in a strong
financial position that supports the current business growth plan.
Clear strategy
Our ambition is to create a commercially focused global regenerative medicine company addressing soft tissues
and bone, operating in a high-growth sector with a multi-billion-dollar addressable market. Through its platform
technologies, the Group can commercialise its regenerative medicine products, helping to transform the treatment
of patients in key surgical applications. The main focus of the Group’s strategy is the commercialisation of its
product portfolio.
2021 has seen significant delivery of our strategy within our four key areas of focus (Supply, Sales Revenue,
Sustainability and Scale), providing clear strategic direction of the Group’s ambitions and delivering shareholder
value – The following are notable achievements in the period:
Accelerated market penetration in the US, the largest healthcare market in the world:
l
l The BioRinse® division performed strongly in 2021, aided by the completion of the first phase of the
manufacturing expansion
l The Group saw a strong comparative sales performance due to its diverse surgical specialties
New partnership agreements:
l
l During the year we identified and signed additional opportunities and distribution agreements that target
products and therapeutic areas which are complementary to our current processing activities to diversify
the Group’s sales portfolio further
l The Group was successful in signing new strategic partners and expanded its customer base following
the acquisition of three of the Group’s existing strategic partners by larger organisations, where we
benefit from greater market penetration
l The Group also secured additional donor sourcing agreements in the US
Phase 1 manufacturing facility expansion in San Antonio, Texas:
l
l Completed on time and on budget
l The completion of the manufacturing expansion increases the Group’s revenue generation potential and
processing efficiency as well as providing additional donor storage capacity
Reorganisation of US dCELL® divisional operations:
l
l The Group completed restructuring of the operational and commercial activities for the dCELL® division
which will provide an opportunity to increase new customer wins as well as increased penetration and
upsell of existing accounts
Expansion of product portfolio and additional product line extensions:
l
l During the year, the Group successfully launched product line extensions in its dCELL® division;
DermaPure® Meshed, VNEW™ and MatrixND™
Annual Report and Accounts 2021 3
Chairman’s Statement
continued
Board
With confirmation of my appointment as Non-Executive Chairman in February 2021 and other Board appointments
announced in the first quarter of 2021, we now have a strong, commercially focused Board and executive
leadership in Danny Lee and David Cocke, collectively committed to creating long-term sustainable value and
growth of the Group through an increased portfolio offering and market penetration.
In January 2021, Trevor Phillips and Brian Phillips (no relation) were appointed to the Board as Non-Executive
Directors. Brian and Trevor bring a wealth of experience particularly regarding operations and corporate
development in the life sciences industry and financial management, which have been key in driving the Group’s
success during 2021. Brian Phillips is Chair of the Audit Committee and Trevor Phillips is Chair of the Remuneration
Committee.
Shortly following these appointments in January, David Cocke was appointed CFO of the Group alongside Danny
Lee, CEO, based in San Antonio, Texas. David has 30 years’ experience in senior finance and operations roles
having previously been CFO at Aperion Biologics, Inc. and founding NuPak Medical Ltd. in 1997 which was later
acquired by Katena Products, Inc. in 2017.
Financial overview
Trading in the year was robust with a return to double digit revenue growth and in line with management
expectations despite the challenges of the COVID-19 pandemic. A particularly strong growth performance was
seen by the BioRinse® division aided by the completion of the Phase 1 of the manufacturing expansion project.
The Group’s cash position at year end supports our current business growth plan.
2022 Outlook
Despite another year with continuing challenges posed by the pandemic and the postponement of elective
surgeries across all specialties, we continue to make encouraging progress on our strategy, deliver revenue growth,
expand our product portfolio and deliver operational efficiency. Importantly, while we recognise the ongoing
challenges of COVID-19, we continue to see strong demand for our products and the Board is optimistic as we
see a return to pre-pandemic conditions, this demand will drive sales revenue growth as the Group moves towards
profitability.
On behalf of the Board, I would like to thank Danny and David for their excellent leadership along with the rest of
our management team and employees for their hard work to achieve a strong recovery despite the external
challenges over the year. We would also like to thank our shareholders, our business partners and suppliers for
their continued support throughout 2021, and we look forward with optimism for the year ahead.
Jonathan Glenn
Chairman
14 March 2022
4 Tissue Regenix Group plc
Chief Executive Officer’s Statement
In my first full year as CEO of the Group, we have established a clear strategy, accelerated market penetration in
the US and expanded our customer base and product portfolio whilst increasing our processing efficiency and
donor storage capacity. These full year results reflect the progress we have made as we drive towards profitability.
I am pleased to report that the Group performed admirably during 2021 despite the ongoing global challenges
posed by the pandemic when hospitals, governments and healthcare providers postponed elective surgeries
across all specialties. Despite these challenges we continued to make progress and reinvigorate commercial
growth. As our products experienced broader adoption, this growth was supported by the Group’s dedicated and
resilient employees.
Strategy
The tissue engineering market is anticipated to grow significantly and is projected to reach $6.8bn by 2027, growing
at a 14% Compound Annual Growth Rate (CAGR) from 2020 owing to increases in the prevalence of chronic
diseases and trauma emergencies, increased awareness of tissue engineering, and potential pipeline products.
More detail on our markets and opportunities is contained in the Market Overview on page 12.
In 2021, we announced our 4S strategy as the foundation of how we operate and drive our growth:
l Supply – highlighted by the fundamental ability to source donor tissue and having the capacity to produce
various graft products
l Sales Revenue – to distribute the finished grafts to the clinicians and institutions that need these products
to treat patients
l Sustainability – to manage sales revenue along with expenses to be a profitable entity that does not need
additional external capital to operate
l Scale – to utilise the first three S’s to continue to invest and grow the business, license or acquire new
products, technologies and companies
Our focus on the 4Ss across all divisions and departments provides a 360-degree approach and strategic direction
for our future success. We believe this focus will allow the Group to achieve above-market growth rates, as we
have demonstrated in 2021 with a 20% growth rate over 2020.
BioRinse® (Bone)
Orthopaedics and dental markets in the US reported a strong performance in 2021 and our 33% year-on-year
growth we experienced in 2021 surpassed many others in this space. This is indicative of the continued confidence
in our products, strong performance of our distributors and strategic partners, our participation in diverse surgical
specialties and the addition of new distributors.
dCELL® (Soft Tissue)
A strategic review was performed on the dCELL® division with the objective of driving increased sales revenue
momentum. This review indicated that a flatter, more customer-facing commercial organisation could yield
enhanced customer penetration. As a result, we compressed three layers of management into one, pushing our
commercial management closer to the end users and sales channel partners. In addition, in January 2021 we
restructured the operations of this segment to become more efficient and reduce the overhead cost base by c.
$700k on an annualised basis.
As the pandemic continued into 2021, distributors faced numerous challenges with the dCELL® product line due
to the postponement of elective surgical procedures. As a result, sales in this division were flat year-on-year.
However, the demand for our DermaPure® products increased in the urological/gynaecological sector driven by
orders from ARMS Medical, which were up 24% from the previous year.
Annual Report and Accounts 2021 5
Chief Executive Officer’s Statement
continued
The EU and its member countries experienced volatility throughout 2021, especially in elective surgeries.
OrthoPure® XT, the first non-human biologic graft available to the market, is used in the reconstruction of the
Anterior Cruciate Ligament (ACL) and can be used following re-rupture, the reconstruction of other knee ligaments
in multi-ligament procedures following trauma, and primary ACL procedures where the autograft is unavailable or
inadequate.
In mid-2020 we received the CE Mark for OrthoPure® XT and in November 2020 launched the product into a limited
number of European markets. However, the pandemic caused postponement of many elective ACL procedures,
so we plan to relaunch in 2022 when more normal conditions resume. We expect to gain market traction in the
UK and EU and remain confident that OrthoPure® XT will begin to add revenues in 2022.
The pandemic delayed our plans to expand the geographic outreach of our dCELL® and BioRinse® portfolios into
new territories and we anticipate demand for our dCELL® products will resume as surgical procedures return to
pre-pandemic levels. In 2022 we plan to establish a logistical partner and distributors in select European markets
for our human tissue products which will be made possible by our increased processing capacity.
dCELL® product line extensions
We continued to pursue the commercialisation of products which utilise our core technology platforms, provide
product line extensions that are fast to market and address a specific clinical or commercial need.
In 2021 we introduced three new products which utilise our dCELL® technology platform:
l DermaPure® Meshed; used to treat wounds where additional surface area coverage and wound drainage is
needed (approximately 70,000 procedures in the US per annum) and eliminates time consuming manual
meshing in the operating room. Targeted for use by general, plastic and trauma surgeons who treat patients
with conditions that result in loss of integumental tissue (skin), requiring replacement, repair, or
reconstruction
l VNEW™; a pre-cut dermal allograft that can be used in pelvic organ prolapse procedures (approximately
300,000 procedures in the US per annum) which are frequently performed in women post childbirth. ARMS
Medical, our exclusive distributor for this product, placed their initial stocking order in August and re-ordered
in December
l Matrix ND™; a dermal allograft designed for use in dental or oral and maxillofacial procedures for soft tissue
repair coverage and augmentation which was developed to meet the need of our dental partners
(approximately 400,000 procedures in the US per annum). A dental membrane is frequently used in
conjunction with dental bone grafting procedures
Additional product line extensions and product improvements are anticipated during 2022 which will contribute
to our organic growth and support the commercial efforts of our organisation and strategic partners.
GBM-v
Our controlled joint venture in Germany, GBM-v, grew 6% in 2021 despite continued impacts from the pandemic
on elective procedures, specifically for corneal transplants in Germany. The demand for corneal tissue continues
to outpace supply, but the market has been suppressed due to the postponement of elective surgeries with many
patients electing to defer to avoid entering healthcare institutions. We expect this growth to continue and
accelerate as more normalised conditions return.
New strategic partners and distributors
Despite the challenges of the pandemic, we continued to be successful in securing new strategic partners and
distributors and saw a 36% increase in the units shipped in 2021. One partial explanation for this increase in
shipments was the consolidation of several of our strategic partners. Three of these were acquired by larger
entities that have a more significant presence in the marketplace and importantly more distribution outlets. As an
example, one of our BioRinse® customers was acquired in 2021, and orders increased by 142% year-on-year under
6 Tissue Regenix Group plc
Chief Executive Officer’s Statement
continued
the new ownership. We also signed new agreements with four strategic partners and distributors who target
specialty markets such as spinal and dental.
Manufacturing facilities
In February 2021, San Antonio experienced an unprecedented snowstorm and freeze which impacted electrical
and water services throughout the state of Texas. This temporarily affected our ability to process at the facility in
San Antonio, but the power loss did not impact materials in storage in the ultra-low temperature freezers. We were
unable to service customer demand the following week as delivery services had also been impacted and had
limited capacity. During the weeks that followed, the team worked to catch up with demand and service all our
customers. In the future, any impact to the Group due to a power grid failure will be partially addressed through a
battery back-up system to be implemented in 2022.
The relocation in October 2020 of our operations in the UK to Garforth, Leeds and reinitiating the processing of
the OrthoPure® XT product, required the product to be recertified for the CE Mark. The recommendation for
certification of the facility to ISO 13485 was received in February 2021.
In mid-2021 we completed our Phase 1 capacity expansion programme in San Antonio on time and on budget.
The Phase 1 expansion comprised of fitting out approximately half of a 21,000 sq. ft. building that is adjacent to
our existing facility in San Antonio to provide improvements in key areas: donor storage, processing, production,
and distribution.
We moved the bulk of our storage freezer space to the new facility in mid-March and added capacity through
the purchase of new, more efficient ultra-low temperature freezers to triple our donor tissue storage capabilities
which will meet demand over the next 3-5 years. The expansion also included a new distribution facility which
consolidated this function and its personnel to one location. The anticipated labour and time savings in
processing orders was realised in 2021 as we increased unit shipments by 36% with only one additional member
of staff.
The move of freezer storage and personnel into the new building freed up space for processing and production in
the existing facility. Two sterile packaging rooms were added in the existing facility, which brought the total number
of clean rooms to seven. The new sterile packaging rooms and installation of additional processing equipment
increased our BioRinse® portfolio processing capacity by c.50%. Space created by the move to the new building
was also utilised to set up additional workspace for downstream production activities such as final product boxing
and labelling.
When the Phase 1 expansion is up and running at full capacity, the Group’s revenue generation potential will be
c.$30m per year within the existing facility footprint. For Phase 2, it is our intention to build an additional ten clean
rooms in the new facility, which will meet our capacity needs for the next 5–7 years as we grow our portfolio,
markets, customer base and global presence.
The impact of COVID-19
The pandemic continued to stunt the surgical marketplace when hospitals, governments and health care providers
halted elective procedures across all specialties. A partial return to normality occurred in the second quarter of
2021 before the Delta variant affected elective procedures in the third and early fourth quarter of 2021. These
disruptions led to unpredictable demand for our products, however a healthy inventory meant we could respond
as needed to changes in the marketplace.
We remained diligent at all our facilities and implemented the initiatives and guidelines necessary to minimise
disruption. We had already expanded our donor sourcing efforts in 2020 and in 2021 these efforts were further
expanded to other tissue processors for the procurement or disbursement of donor tissue. Tissue processors
have the responsibility to be the stewards of the gift of tissue donation, so we need to consider all avenues for
donor tissue to be utilised in meeting the donor families’ wishes.
Annual Report and Accounts 2021 7
Chief Executive Officer’s Statement
continued
Outlook
Our positive financial performance during such uncertain circumstances has set our trajectory to be even greater
in 2022 as the Group and our partners expect to emerge from the pandemic. In 2021 we saw particularly strong
growth in BioRinse® and with the completion of the manufacturing expansion we expect this solid performance
to continue. As markets start to return to pre-pandemic levels the Group is well positioned to meet the demand
now that we have the capacity and inventory in place to do so.
The implementation of a new commercialisation strategy for the dCELL® products is expected to enable greater
market penetration and we look forward to increasing sales revenue momentum from this segment as well as
our additional product line extensions in 2022.
I am confident in our growth strategy, our products and their potential to benefit patients in what will hopefully be
a less unsettled year ahead. With the changes we have made in 2021 the business is well positioned to service
our customers and drive shareholder value. I look forward to the continuing success of the Group in the coming
year and as we move towards profitability.
Daniel Lee
Chief Executive Officer
14 March 2022
8 Tissue Regenix Group plc
Financial Review
With effect from 1 January 2021, the Group’s presentation currency changed from pounds sterling (“£”) to United
States dollar (“$”) as the Directors considered the USD to be more representative of the geography in which the
Group primarily operates.
Revenue
In the year ended 31 December 2021 revenue increased by 20% to $19,746k (2020: $16,473k).
The financial performance for the year was impacted at times by the ongoing coronavirus pandemic, as Q1 saw
ongoing effects of the initial wave of the pandemic before widespread vaccine rollouts took place in the US, and
the Q3 and early Q4 sales were affected by the Delta variant, before rebounding positively in November and
December 2021.
The BioRinse® segment performed strongly in 2021, aided by the completion of the first phase of the expansion
of the Group’s manufacturing capacity in San Antonio, TX. This unit successfully grew top line sales by 33%, to
$12,711k (2020: $9,562k) as the BioRinse® division used its strong relationships with strategic partners to take
market share in the US.
Revenue from DermaPure®, under the DCell® division, was slower to respond to the easing of the pandemic and
associated restrictions with 2021 sales flat at $4,246k (2020: $4,247k).
The Group’s joint venture, GBM-v, based in Rostock, increased revenues 5% to $2,789k (2020: $2,664k) despite
continued market disruptions from the pandemic that continued throughout 2021.
Cost of sales and gross profit
Gross profit for the year was $8,476k (2020: $7,570k). Gross margin percentage decreased to 43% (2020: 46%).
In 2021 the Group transferred certain excess tissues at a reduced margin in order to honour the gift of tissue
donation and prudently manage the statement of financial position by reducing slow moving inventory. Those
transfers will not recur in future periods. In addition, the Group experienced supply chain driven price increases in
the period. A price increase was put in place in the BioRinse® division to address the cost pressures.
Included in costs of sales is cost of product $10,348k (2020: $7,699k) and third-party commissions $922k
(2020: $ 1,204k).
Administrative expenses
During 2021 administrative expenses before exceptional items decreased by $351k to $12,574k (2020: $12,925k).
Exceptional items
Exceptional items decreased by $7,969k to $355k primarily driven by the impairment charge in 2020
(2020: $8,324k). Restructuring costs of $52k related to a redundancy in the Central segment were charged in
the year.
Restructuring costs of $183k were charged to the DCell® division as a result of a restructuring of that division in
January 2021.
The February 2021 winter storm event in Texas resulted in a charge of $120k at the BioRinse® division relating to
non-productive time and spoilage.
Finance income/charges
Finance income of $3k (2020: $3k) represented interest earned on cash deposits. Finance charges for the year
were reported at $692k (2020: $571k) and related primarily to interest charges and associated costs for the
MidCap loan arrangement.
Annual Report and Accounts 2021 9
Financial Review
continued
Loss for the year
The loss for the year was $4,985k (2020 loss: $12,465k) resulting in a basic loss per share of (0.07 cents) (2020
loss: 0.28 cents).
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
2021, a refund of $534k was receivable (2020: $1,120k). The year-on-year reduction was a result of the business
continuing to move its resources away from research and development to more commercial activities.
Corporation tax payable in the US amounted to $0k (2020: $0k). A corporation tax credit of $157k (2020: $684k)
was recognized in the period. Gross tax losses carried forward in the UK were $73,643k (2020: $69,399k). 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.
Statement of Financial Position
At December 2021, the Group had net assets of $33,392k (2020: $37,817k) of which cash in hand totalled $7,709k
(2020: $12,968k).
Inventory remained stable at $9,719k (2020: $9,604k) as the BioRinse® and DCell® segments managed stock levels
closely to increase inventory turnover while also keeping adequate stock levels to meet customer demand.
Intangible assets increased slightly to $15,064k (2020: $14,845k) in the year. A further $497k of development
costs were capitalised in the year. The balance of movements in this account relate to amortisation.
A full impairment test was performed on each of the Group’s CGUs to determine whether the property, plant and
equipment, right-of-use, or intangible assets have suffered an impairment loss. This assessment resulted in no
indication of impairment and no charges were recognized for the year.
Working capital increased slightly in the year to $9,700k (2020: $9,992k), driven by an increase to inventory from
continued growth in manufacturing activities. The statement of financial position included corporation tax
receivable of $534k (2020: $1,120k) in respect of UK research and development tax credits.
Borrowings/Lease liability
Non-current liabilities include the $4,465k debt facility through MidCap and the $3,072k lease liability related to
the Group’s leasehold in San Antonio, TX (2020: $3,788k and $3,084k respectively). The MidCap debt facility
includes $2,000k of the term loan and $2,465k of the revolving credit facility, net of $184k of capitalised debt issue
costs. More information on these obligations is provided on page 63.
Dividend
No dividend has been proposed for the year to 31 December 2021 (2020: Nil).
Accounting policies
Following the departure from the EU, 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 43 to 50.
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 2023 (the “Cash Flow Projections”). Funding
requirements are reviewed on a regular basis by the Group’s Chief Executive Officer and Chief Financial Officer
10 Tissue Regenix Group plc
Financial Review
continued
and are reported to the Board at each Board meeting, as well as on an ad hoc basis, if requested. The Cash Flow
Projections show that the Group will continue to consume cash over the forecast period. Until sufficient cash is
generated from its operations, the Group remains reliant on cash reserves of $7.7m at 31 December 2021 and
the ongoing support of MidCap Financial Trust (“MidCap”) (borrowings of $4.5m at 31 December 2021) to meet
its working capital requirements, capital investment programme and other financial commitments. Repayment
on the MidCap borrowings is scheduled to begin in July 2023.
The COVID-19 pandemic continued to affect most healthcare businesses in 2021, as the emergence of the Delta
and Omicron variants extended the timeline for a return to normal healthcare procedure volumes. Given the
uncertainty around the level and duration of disruption from COVID-19, it is difficult to determine how long the
current situation may last, and the time taken to catch-up any postponed surgical procedures thereafter.
However, the Board, in compiling the Cash Flow Projections, has considered a downside scenario regarding the
effect of reduced and delayed revenues due to COVID-19 and has undertaken market soundings regarding the
likely timeframe for the recommencement of procedures. It has concluded that there will not be a significant
long-lasting impact on the ability of the business to carry out its commercial activities. 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 also assume that the MidCap facilities are available
throughout the forecast period as the repayment is not due to start until H2 2023. The availability of these facilities
is dependent upon compliance with a rolling twelve-month revenue covenant which is measured on a monthly
basis. The Cash Flow Projections indicate compliance with this covenant throughout the forecast period. In
summary, the Directors have considered their obligations in relation to the assessment of the going concern basis
for preparation of the financial statements of the Group and have reviewed the Cash Flow Projections. On the
basis of their assessment, they have concluded that the going concern basis remains appropriate for use in these
financial statements.
Subsequent development
In January 2022 the Group elected to exercise its option to increase its current revolving credit facility from $3.0m
to $5.0m. Although this financing is not dictated by the current business plan, which is fully funded by the Group’s
year end cash position, the additional liquidity is a prudent measure to provide additional cash resources in the
face of future risks posed by COVID-19.
Future development
The emergence of the Omicron variant in late 2021 has caused disruptions in the US healthcare system and supply
chains worldwide. Although Omicron appears to have milder complications than prior variants, it remains difficult
to predict at what pace a return to pre-pandemic procedural levels will occur.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group are set out on page 12.
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
14 March 2022
Annual Report and Accounts 2021 11
Market Overview
Regenerative Medicine
Regenerative medicine is an interdisciplinary field which focuses on providing safe and reliable ways to repair,
restore, or replace damaged tissues or organs. Tissue engineering is one of the main components of regenerative
medicine. Tissue engineering applies principles of engineering and life sciences towards development of biological
substitutes that restore, maintain, or improve tissue function. For this process, cells and biomolecules are
combined with scaffolds. Scaffolds are artificial or natural structures that provide the foundation for the cells and
biomolecules. Our products and technologies enable the Group to participate in the key areas of tissue engineering:
scaffolds and biomolecules.
Global tissue engineering market
The tissue engineering market is anticipated to grow significantly and is projected to reach $6.8billion by 2027,
growing at a 14% CAGR from 2020 owing to increases in prevalence of chronic diseases and trauma emergencies,
(source:
rise
https://reports.valuates.com/market-reports/ALLI-Auto-1B403/tissue-engineering). Furthermore, growth in the
number of R&D activities coupled with the rise in awareness of tissue engineering in emerging economies are
expected to support the market growth.
tissue engineering, and potential pipeline products
in awareness
related
to
Principal risk and uncertainties
The Directors continually identify, monitor, and manage the risks and uncertainties of the Group. The Group maintains
a comprehensive risk register that is regularly reviewed by the Board as part of these risk management
responsibilities. Risk is inherent in all businesses and the Group acts to manage these risks. Set out below are certain
risk factors which could have an impact on the Group’s long-term performance and mitigating factors adopted to
alleviate these risks. This list does not purport to be an exhaustive summary of the risks affecting the Group.
Commercial
Competition risk
Should there be a competitive product that outperforms one of the Group products we could lose customers and
distribution opportunities. Should a competitor bring a product to market before us they could potentially have an
advantage in gaining market share. We continually monitor the commercial and competitive landscape and look
to stay ahead of the trend with innovative product development and line extensions. The Group works with partners
to identify potential market opportunities. The Group also collects post-marketing clinical data to ensure that the
product offering remains differentiated.
Customer Concentration
The Group has a number of key customers, however, should the Group be overdependent on a single customer
and not maintain a diversified customer base, it could become exposed if that customer reduced their ordering
pattern or move their business elsewhere. In this case, the Group could be subject to material sales revenue losses
and also experience an excess of inventory that had been processed in line with expectations. The Group continues
to augment its product portfolio with line extensions and new product launches providing diversified clinical
applications. During 2021, the Group introduced three new products as line extensions for the dCELL® segment.
The Group is able to reduce this risk with distribution of its products into multiple disciplines and in some cases
with multiple customers in the same discipline and with a hybrid of strategic partners, distributors as well as direct
sales.
Operational
Human resources
The Group has a high level of reliance on the skills and knowledge of its management and employees, many
of whom have considerable sector experience or other specialist expertise, making them attractive to
competitors and not always easy to replace. As the business continues to scale and to expand its market
presence, our requirements for high-calibre people continue to increase. The loss of key staff could potentially
weaken the Group’s operational/management capabilities, potentially impeding its ability to grow or maintain
12 Tissue Regenix Group plc
Market Overview
continued
efficient operations. To mitigate this risk, the Group maintains competitive incentive and reward structures
which are benchmarked against industry standards. The compensation levels are designed to be attractive to
existing employees and enable us to continue to attract high quality applicants for new roles. As a regulated
business, we have clearly defined roles and responsibilities, supported by documented systems and
procedures, to provide a level of continuity in the event an employee leaves the Group. Finally, suitable legal
agreements are in place with management and employees to include necessary confidentiality and
non-compete clauses.
Tissue supply
As our products are based around human and animal tissues, failure to source good quality, ethically handled
tissues could result in the inability to produce products in line with specifications and therefore incur lost sales
revenue, reputational damage, customer dissatisfaction and potential regulatory breaches. To address this risk,
we have an experienced donor services department in the US who has expanded the number of donor agencies
that we work with in the US, whilst in the UK we have two suppliers for the required porcine tissues. All suppliers
are comprehensively qualified to meet the Group’s internal standards and those imposed by third party moderators.
Manufacturing capacity
Our commercial strategy is built around the establishment of successful strategic and distribution partnerships,
which increase the demand on our production and manufacturing capabilities. If we are unable to expand in line
with this demand this could result in a loss of business through customer dissatisfaction and reputational damage.
To address this potential constraint, the Group completed a capacity expansion in H1 2021 which provides a c.50%
increase in processing capacity. In addition, the group has a outsource agreement in place covering a portion of
the dCELL® segment’s production requirements.
Finance and IT
Finance
We require investment into our working capital and infrastructure to bring our product portfolio to market and
service the increasing demand from our current and future customers. Without this, the Group will be unable to
deliver the anticipated future revenue growth. The equity fundraise in June 2020 provided both investment and
working capital, which is expected to fund the Group to profitability, however, the ongoing impact of COVID-19 on
elective surgeries has, and may continue to, alter the timeline to profitability. The Group has elected to increase
its revolving credit facility from $3.0m to $5.0m, which can provide non-dilutive financing. To the extent that
additional funds are required, there are no assurances that these funds could be raised, and if they could, if those
terms would be non-dilutive to current shareholders. To address these risks, the Board has oversight of all
significant cash spends and a well-established control environment, which includes internal forecasting, monthly
reporting and approval limits on all purchase orders. In order to maintain the cash position, the Company reviews
business priorities and demands to ensure that funds are invested in the most appropriate manner to deliver a
return on investment and grow the business.
Information technology
The Company is reliant upon information systems in all aspects of its operations. Any failure of systems could
impact the Group’s ability to process and distribute products, lead to a data security breach, loss of financial
information and have potential financial implications. The Group was subject to a cyber security incident in January
2020. No ongoing material impact to the business was experienced, however, processing and production was
temporarily halted at the San Antonio facility while the restoration and testing of systems was completed. The
Group has since upgraded its IT service providers and implemented additional security procedures. These
procedures are continually reviewed and updated as required. The Group has an established disaster recovery
plan and ensures that secure backups are held off-site in case of a breach. Finally, a global cybersecurity insurance
policy has been put in place to help offset the financial impact of a future breach.
Annual Report and Accounts 2021 13
Market Overview
continued
Clinical/Regulatory
Product liability risk
Should a product fail upon implantation or incur an adverse reaction due to the product properties, the Group
would be at risk of legal action, potential loss of sales revenue through product retraction from the market and
reputational damage. To address these risks, before commercialisation, a series of quality assurance, clinical and
safety checks are run dependent on the nature of the product and comprehensive training is provided. In addition,
the Group maintains quality management systems which are compliant with the local markets in which we
operate. Product liability insurance is in place in case of adverse events.
Licensure/Accreditation
As the Group operates in a highly regulated environment, the loss of a license to manufacture or sell products
within a territory would result in reputational and financial damage to the Company. The Group employs regulatory
experts and consultants for each territory in which manufacturing takes place, or where the Group looks to navigate
a regulatory clearance for a product. The Group maintains quality management systems and has a track record
of positive feedback following external audits and operates in established controlled environments to minimize
potential process variations.
Impact of regulatory changes
In line with licensure and accreditation, the Group operates in a highly regulated environment. Biologics is an
area of high growth and additional regulatory standards and requirements are subject to change in any market
in which we participate. Internally and with the help of regulatory experts, we seek to understand and review
our compliance with any pending regulatory changes. As an example, May 2021 marked the end of the
discretionary compliance and enforcement Policy for Certain Human Cells, Tissues, or Cellular or Tissue-based
Products (HCT/Ps) by the U.S. Food and Drug Administration. This did not require any changes for our Group
at this time.
Political and economic risk
Group performance could be adversely impacted by factors beyond our control such as the economic conditions
in key markets and political uncertainty. The macroeconomic climate and continued uncertainty surrounding the
impact of Brexit on the UK economy and the US political and economic landscape could negatively affect the
Group’s ability to commercialize its products. An economic downturn, fiscal or monetary policy changes, or
unexpected developments linked to worsening economic conditions may have a negative impact on sales revenue
and profit. The Group monitors macroeconomic developments to ensure that it responds swiftly as they
materialise.
COVID-19
The global economy continues to face uncertainty due to the COVID-19 pandemic, which has, and may continue
to have, a significant impact on global healthcare procedures, supply chains, capital markets and commodity
prices as well as effects at the Group level with respect to staffing shortages and supply shortages. In 2021 the
Group remained flexible and proactive in responding to and addressing its needs by enacting enhanced virus
safety protocols and expanding its supply chain while still growing the sales line.
Financial risk management
The Group has instigated certain risk management policies covering financial assets and liabilities which are set
out in note 17 to the financial statements.
14 Tissue Regenix Group plc
Market Overview
continued
Key performance indicators
The Group’s KPIs include a range of financial and non-financial measures. The Board considers the main financial
KPIs for the Group to be sales revenue growth and cash resources (see Chief Executive Officer’s operational review
on page 5). The Board also considers non-financial KPIs such as new distribution agreements signed, measuring
clinical data collection, new account wins, improving the product development portfolio, and increasing
manufacturing capacity and supply.
Annual Report and Accounts 2021 15
Section 172 statement
The Directors acknowledge their duty under S.172 of the Companies Act 2006 and consider that they have, both
individually and together, acted in the way that, in good faith, would be most likely to promote the success of the
Company for the benefit of its members as a whole. In doing so, they have had regard (amongst other matters) to:
the likely consequences of any decision in the long term. The Group's long-term strategy is outlined on page 1
of this report. The principal risks and uncertainties are discussed on page 12 of this report. Throughout the year,
management and Directors look to meet with, and update, institutional and retail investors through a variety of
platforms, whether it be by face-to-face meeting, telephone conversation, annual general meeting, retail investor
forum, website, social media, or news announcements. Key topics of engagement for investors throughout the
year were around: The changes to the Executive management team, changes to the Non-Executive Directors,
completion of the Phase 1 expansion in the BioRinse® segment, the response and implications of the ongoing
COVID-19 pandemic, and full year and interim financial results and reports.
the interests of the Group’s employees. The long-term success of the Group is built around our highly skilled and
experienced workforce. Our technicians are highly specialised, and we have world class processing and development
expertise at all facilities. We look to create an environment where all employees can excel and value both practical
experience as well as academic qualifications. We believe in investing in our workforce to maintain a low turnover
rate and build an agile and adaptive workforce who can successfully navigate the ever-evolving industry landscape
to maintain our competitive positioning. We support employees with further education and qualifications and provide
a remuneration and benefits framework that supports a healthy work/life balance and is competitive with industry
standards. Key topics of engagement for employees throughout the year were around: the response to the ongoing
COVID-19 pandemic and the completion of the capacity expansion project in San Antonio.
the need to foster the Group's business relationships with suppliers, customers and others. Suppliers are
fundamental to the Group’s ability to source high-quality raw materials and ethically sourced and handled tissues.
We look to partner with suppliers who can augment our internal capabilities and build long-term relationships.
Key topics of engagement for suppliers throughout the year were around: The implication of the COVID-19
pandemic, availability of supplies, and any variances to payment practices. In addition, relationships with donor
sources were expanded to include tissue types not commercially distributed by the Group, thereby maximizing
the gift of tissue donation. With respect to customers, they include prestigious key opinion leaders whose expertise
assists with driving the clinical discussion around the differentiating properties of our product portfolio. This type
of engagement and clinical advocacy is crucial as we work to grow our clinical data portfolio, improve product
and brand recognition and increase the number of patients who can benefit from our portfolio. The needs of
customers of the dCELL® division were considered in its reorganisation strategy, as the new approach puts
commercial management closer and therefore more responsive to customer needs. Key topics of engagement
for customers and opinion leaders throughout the year were around: changing practices and expectations
regarding performance of our clinical solutions and new product development opportunities.
the impact of the Group's operations on the community and the environment. The Board is mindful of the
potential social and environmental impacts of the Group’s activities. The Board is committed to minimising the
environmental effect of the Group’s activities wherever possible and seeks rigorous compliance with relevant
legislation. More discussion on the Group’s environmental initiatives is contained in the Corporate Governance
Statement on page 21. The Group also looks to engage with the local communities and support relevant charities
wherever possible.
the desirability of the Group maintaining a reputation for high standards of business conduct. Our intention is
to behave in a responsible manner, operating within the high standard of business conduct and good corporate
governance, as highlighted in the Corporate Governance Statement on page 21.
the need to act fairly as between members of the Group. The Group’s intention is to behave responsibly towards
all its shareholders and treat them fairly and equally, so that they too may benefit from the successful delivery of
the Group’s strategic objectives. The Group’s website https://www.tissueregenix.com. has a section dedicated to
investor matters that details, amongst other things, all financial reports, press releases and other regulatory filings.
The Strategic Report on pages 3 to 16 was approved by the Board on 14 March 2022
On behalf of the Board
Daniel Lee
Chief Executive Officer
14 March 2022
16 Tissue Regenix Group plc
Governance
Management team
We have a senior management team with extensive experience in the healthcare industry. They are challenged
and supported by an experienced and well-balanced Board of Non-Executive Directors, together with the teams
of employees that they lead.
Daniel Lee
Chief Executive Officer (CEO)
Daniel Lee has 30 years’ experience in the medical device and biologics industry, ranging from product innovation
to commercialisation to corporate management. Daniel was appointed CEO in November 2020 after initially joining
the Group as President of U.S. Operations in January 2019. Prior to this, Danny was the Chief Executive Officer for
Scaffold Biologics and Aperion Biologics. His previous senior management roles include global marketing for
OsteoBiologics (acquired by Smith & Nephew Endoscopy in 1996) and marketing activities for Regeneration
Technologies (now RTI Surgical), a leading allograft tissue processor.
Danny spent the first 10 years of his career in R&D with the U.S. Surgical Corporation (now Medtronic). Danny
received his B.E.S. degree in Materials Science and Engineering from the Johns Hopkins University, and his M.S.
in Biomedical Engineering from the University of Alabama at Birmingham. He has 13 patents on implants and
instruments used in orthopaedic and general surgery.
Danny is also a Certified Tissue Bank Specialist (CTBS) from the American Association of Tissue Banks (AATB).
David Cocke
Chief Financial Officer (CFO)
David Cocke has 30 years of experience in the medical device industry holding senior finance and operations
positions. In 1997, David was a founding partner of NuPak Medical, Ltd., an ISO-certified contract manufacturer
of sterile disposable medical devices. NuPak Medical, Ltd. was acquired by Katena Products, Inc. in 2017 and
David remained with the business post-acquisition until joining the Group in January 2021. David was also Chief
Financial Officer at Aperion Biologics from 2008-2017. Prior to this, David was Senior Director for Finance and
Operations at Kinetic Concepts from 1993-1996.
David began his career in the corporate finance sector, working at GE Capital in its Corporate Finance Group and
at Salomon Brothers Inc in its Investment Banking Group.
David received his B.B.A in Business Honors (magna cum laude) from the University of Texas at Austin and his
M.B.A from the University of Virginia’s Darden Graduate School of Business Administration. He has two patents
covering medical devices.
Gerald Sharpe
Vice President – Strategic Partnerships
Gerald Sharpe has over 11 years’ experience in the orthobiologics industry, working for two differentiated allograft
tissue processors. His focus is commercialisation and business development. He joined CellRight Technologies
as Regional Sales Manager in September 2014, before being appointed as Vice President - Strategic Partnerships
in January 2019. Gerald is proficient in the spine, sports medicine, foot and ankle, dental, and ocular markets of
the business.
Prior to joining CellRight, Gerald was Regional Sales Manager and Director of Client Services for TissueNet. His
previous sales roles include Vice President of Business Development for SolomonFX.
Gerald received his Bachelor of Science degree in Marketing from the University of Central Florida.
Christine Rowley
Technical and Operations Director, UK
Annual Report and Accounts 2021 17
Governance
continued
Christine has over 17 years’ experience in the medical device biologics industry, joining Tissue Regenix in 2010.
She has worked in all areas of product development and commercialisation, and has led the development of the
OrthoPure® XT device from product feasibility through to market approval and launch. Christine’s experience covers
a wide range of activities, including new product development, process optimisation and design transfer, design
verification and validation, clinical trial design and execution, regulatory submissions, and quality control, almost
exclusively working with class III xenograft implants.
Christine has held leadership roles within the product development, regulatory, clinical and quality sectors, and
has achieved market clearance of xenograft medical devices in multiple countries worldwide. Christine has several
patents associated with the decellularisation and manipulation of collagenous tissues for potential health care
benefits. Christine has a Bachelor of Science degree in Biological Sciences from the University of Exeter (UK).
Tina Trimble
VP, Donor Services, US
Tina Trimble has over 30 years of tissue banking industry experience and joined CellRight Technologies as VP,
Donor Services in March 2019. Tina has worked with other tissue banks in leadership roles such as Community
Tissue Services, Regeneration Technologies, Tutogen Medical and most recently, Bone Bank Allografts.
Tina is a Certified Tissue Bank Specialist, and currently serves on the American Association of Tissue Banks (AATB)
Exam Committee, American Board of Accredited Tissue Banks, Birth Tissue Council and most recently on the
AATB Board of Governors from 2018-2020 and Chair of the Processing and Distribution Council. Prior to that, Tina
served on the AATB Accreditation Committee, VC Processing and Distribution Council, Education and Program
committees and is currently a member of AORN and ASQ.
Lance Johnson
VP, Quality and Regulatory, US
Lance Johnson has over 30 years’ experience in FDA Requirements and Quality Systems. His experience includes
over 10 years at the executive level for primarily class III medical device implant companies. Prior to joining
CellRight Technologies as VP, QA/RA, Lance was the Vice President of Quality for EndoStim Inc, an active implant
device manufacturer located in Austin, TX. Lance also worked in the xenograft device industry as VP of Quality for
Aperion Biologics, and in the orthopedic spine industry as Quality Manager for Zimmer Spine and Abbott Spine.
In addition to his industry experience, he spent 16 years as an active investigator with the FDA. Lance specialised
in medical device compliance and worked in both the San Francisco and Dallas districts.
He spent 12 years as the resident in charge of the Austin, Texas field office and as contributor to the FDA
international cadre.
Lance received his Bachelor of Science degree in Biotechnology from Oklahoma State University.
Kirsten Lund
Group Finance Director and Company Secretary
Kirsten Lund brings over 11 years of finance experience to the company and was promoted to the position of
Group Finance Director in November 2019 after three years as Group Financial Controller. Kirsten has supported
the CFO, led the finance teams in both the UK and US, and advised the Board on all financial matters relating to
the Group. Starting January 2022 Kirsten has transitioned into the position of EMEA Director and works closely
with the management team to help drive forward the strategy of the business into new markets. Utilising the
knowledge acquired over the years in the healthcare sector, Kirsten provides invaluable experience and
understanding around the Company structure and routes to market.
Kirsten received her Bachelor of Science degree from the University of Derby and successfully completed the
ACCA qualification after joining Tissue Regenix in 2010, qualifying in 2015.
18 Tissue Regenix Group plc
Governance
continued
Patti Gary
VP, Clinical Affairs
Patti J. Gary has nearly 30 years of experience in the medical device and tissue industry. Her experience provides
a unique combination of sales and clinical roles. She joined Tissue Regenix as Senior Director of Clinical Affairs
in July 2013, before being appointed to VP of Clinical Affairs in March 2015.
Prior to joining Tissue Regenix, Patti was Sales Director for PolyRemedy. Her previous roles include Professional
Education Manager, Corporate Healthcare Director and Director of Clinical Services for Systagenix (acquired by
Acelity). Prior to Systagenix, Patti was Post-Acute National Accounts Director and District Sales Manager for
Acelity. Her journey in industry began at Hill-Rom as an Account Manager. Patti was also the owner and President
of Positive Outcomes, Inc. where she developed clinical and financial tools (HealQuest, HealPROtocols and
Healware) to drive standardized processes for wound management. HealPROtocols was acquired by Acelity. Her
depth of knowledge spans clinical, regulatory, reimbursement and sales, all of which have contributed to her
success. Patti is a Registered Nurse and a Certified Wound Care Nurse. She graduated from Louisiana State
University Health Sciences Center School of Nursing.
Annual Report and Accounts 2021 19
Board of Directors
Jonathan Glenn
Non-Executive Chair
Jonathan was most recently CEO of Consort Medical from December 2007 until its acquisition for £505m by
Recipharm AB in early 2020. Jonathan originally joined Consort Medical as Group Finance Director from September
2006 to December 2007, and prior to this, Jonathan was global Head of Finance at Celltech Group plc, and later
Chief Financial Officer of Akubio Ltd, a Cambridge-based developer of instrumentation for the life sciences industry.
Jonathan is a member of the Institute of Chartered Accountants in England and Wales. Jonathan joined the group
in January 2016. He serves on the Audit Committee.
Daniel Lee
Chief Executive Officer
(see details in Management Team above)
David Cocke
Chief Financial Officer
(see details in Management Team above)
Shervanthi Homer-Vanniasinkam
Non-Executive Director
Shervanthi Homer-Vanniasinkam graduated in medicine from Mysore University Medical School in India, and is a
Fellow of both the Royal College of Surgeons of Edinburgh, and the Royal College of Surgeons of England. She
was appointed Consultant Vascular Surgeon at Leeds General Infirmary in 1995, a post she continues to hold. Her
concomitant posts include: Founding Co-Director of the novel medical undergraduate scholarship programme,
EXSEL@Leeds; Founding Professor of Surgery, University of Warwick Medical School & University Hospitals
Coventry and Warwickshire; Professor of Engineering & Surgery, University College London. Professor Homer-
Vanniasinkam joined the group in June 2016. She serves on the Remuneration Committee.
Professor Homer-Vanniasinkam has published over 100 papers and book chapters, delivered over 300
presentations, and has a significant research grant portfolio (several £m, to date). She has an outstanding track
record of national (Universities of Leeds, London, Warwick) and international (Harvard, Yale, Singapore, India)
collaborative research programmes that encompass basic, translational and clinical studies. Professor Homer-
Vanniasinkam is currently a Visiting Scholar at Harvard University and the Yeoh Ghim Seng Visiting Professor of
Surgery at the National University of Singapore.
Trevor Phillips
Non-Executive Director
Trevor Phillips is the current Chairman of the Board at NEPeSMO and has extensive experience in the UK and US
in corporate development, M&A and operations in the pharmaceutical and life science industries, including
previously held positions as Executive Chairman of hVIVO (2017-2020), Chief Operating Officer for Vectura Group
plc (2011-2017) and former CEO and COO of Critical Therapeutics, Inc. (2002-2008). Trevor holds a BSc,
Microbiology from the University of Reading, a PhD, Microbial Biochemistry from Swansea University and an MBA
from Henley Business School. Trevor joined the group in January 2021. He is Chair of the Remuneration Committee
and also serves on the Audit Committee.
Brian Phillips
Non-Executive Director
Brian Phillips is an entrepreneurial investment professional with over 25 years’ experience. Brian is the current
Principal of Ethos partners which he co-founded in 2018 to assist individuals in establishing a portfolio of assets
under private equity investments. Prior to this, Brian was Chief Investment Officer at Greenhill Capital Partners
Europe LLP where he was responsible for setting up their UK business (2006-2010) and Managing Director of LGV
Capital (2000-2006). Brian holds a B.Acc from Glasgow University and qualified as a Chartered Accountant with
KMPG. Brian joined the group in January 2021. He is Chair of the Audit committee and also serves on the
Remuneration Committee.
20 Tissue Regenix Group plc
Corporate Governance Statement
The Board believes in the importance of good corporate governance and is aware of its responsibility for overall
corporate governance, and for supervising the general affairs and business of the Company and its subsidiaries.
The Group is listed on the Alternative Investment Market ("AIM") of the London Stock Exchange and is subject to
the continuing requirements of the AIM Rules. AIM-listed companies are required to apply a recognised corporate
governance code. The Group applies the Quoted Companies Alliance Corporate Governance Code (the “QCA
Code”). The Board considers that it has complied with the QCA Code throughout the year. This section provides
general information on the Group’s adoption of the QCA Code.
Our strategy and business model and approach to risk
Through our platform technologies, we commercialise regenerative medicine products, helping to transform the
treatment of patients in key surgical applications. We aim to implement a business model that ensures our product
portfolios have the market reach to deliver novel tissue engineering solutions to patients.
In 2021, we announced our 4S strategy as the foundation of how we operate and drive our growth:
l Supply – highlighted by the fundamental ability to source donor tissue and having the capacity to produce
various graft products
l Sales Revenue – to distribute the finished grafts to the various patients, clinicians and institutions that need
these products to treat patients
l Sustainability – to manage sales revenue along with expenses to be a profitable entity that does not need
additional external capital to operate
l Scale – to utilise the first three S’s to continue to invest and grow the business, license or acquire new
products, technologies and companies
Our focus on the 4S’s across all divisions and departments provides a 360-degree approach and strategic direction
for our future success. We believe this focus will allow the Group to achieve above-market growth rates.
The Board carefully considers the strengths, weaknesses, opportunities and risks facing the Group, and
endeavours to minimise the impact of weaknesses and risks by employing the necessary mitigating actions. We
process tissues at our facilities in the UK, Europe and North America. The Group has an experienced and dedicated
management and scientific team, and the prominent risks facing the Group are kept under review and updated as
necessary; the Board ensures to review a detailed risk matrix on a rolling basis as part of the formal Board
meetings. Details of risks identified are set out on pages 12 to 14 of this report.
The Group maintains a central finance team, with three team members based in the UK and three in the US. The
Group seeks to operate consistent accounting policies and engages annual external audits from professional
auditors of its financial results and reports, findings from which are presented to the Board. The Board review
monthly financial reports including key performance indicators provided by the CFO in respect of the management
of cash within the business and review against budgets and forecasts. The Group also has a number of operational
controls that all employees are expected to adhere to including management structure, Board reserved matters,
financial monitoring, internal policies, codes of conduct and training, health and safety monitoring and IT controls.
The regulatory and quality teams at each facility maintain a comprehensive quality management system with
each employee having a personal training record. As noted above, the Group regularly audits its suppliers to ensure
that the highest ethical standards are maintained. In respect of its intellectual property rights, the Group engages
a professional patent and trademark attorney to monitor its intellectual property portfolio.
Board of Directors
The Board is responsible for leading and controlling the activities of the Group, with overall authority for the
management and conduct of the Group's businesses, together with its strategy and development. Annual strategy
meetings are held wherein management and the Board interact to review performance and set strategic and
operational plans for the coming year. For more information on our Board of Directors, see page 20.
Annual Report and Accounts 2021 21
Corporate Governance Statement
continued
Composition of the Board
The Board is comprised of three independent Non-Executive Directors, the Non-Executive Chairman, and two
Executive Directors, the Chief Executive Officer and the Chief Financial Officer; reflecting a blend of different
experiences and backgrounds. The function of the Chairman is to supervise and manage the Board and to ensure
its effective control of the business. The Board believes that the composition of the Board brings a desirable range
of skills and experience in light of the Group’s challenges and opportunities as a public company, while at the
same time ensuring that no individual (or a small group of individuals) can dominate the Board’s decision-making.
There is a clear division of responsibility between the Chairman and CEO position, with the Chairman advising
and leading the Board, as well as making himself available to meet with shareholders. The CEO is responsible for
implementing the strategy of the Group and managing day-to-day business activities of the Group. Training is
made available to each Non-Executive Director (NED) to ensure that they are completely aware of their regulatory
responsibilities and requirements. A formal Board appraisal is conducted annually to ensure that the Board
continues to function effectively.
The Board aims to meet formally at least 8 times a year, with provision being made to join via telephone or video
conference if a member of the Board is unable to attend in person. A monthly Board report is produced, and
meeting agendas and Board papers are circulated in advance of each meeting so that the Board can properly
consider the matters to be discussed. Outside of the scheduled meetings, the Board will meet to discuss ad hoc
business events where necessary, and the CEO keeps the Board fully informed of any business developments
that could positively or negatively impact the performance or value of the Company; any business decisions that
require formal Board approval, or any event that could impact the Board or individual member carrying out their
duties and regulatory responsibilities. The Company maintains minutes of formal and ad hoc Board meetings.
The Board added three members in 2021: Trevor Phillips (joined 05 January 2021), Brian Phillips (joined 05 January
2021) and David Cocke (joined 21 January 2021.) No members left the Board in 2021.
In 2021, there were 11 Board meetings. All Directors were present for all meetings. In addition, there were 2 Audit
Committee meetings, with no absences, and 2 Remuneration Committee meetings, again with no absences.
The Non-Executive Directors are appointed through formal non-executive appointment letters, which contain a
three-month notice period. The non-executive appointment letters contain an indicative time commitment of
20 days per annum; however, these indicate that this is an estimate and that all Directors are expected to commit
sufficient time to fully discharge their responsibilities. The Company has not had any issues with regular
non-attendance at meetings. Executive Directors have formal service contracts, which require them to work
full-time in the business and have no other significant outside business commitments. These service agreements
have a maximum of six-months’ notice to terminate.
The Company follows the provisions in its Articles of Association in respect of the retirement and reappointment
of Directors at its Annual General Meeting each year.
The Board is satisfied that it has a suitable balance between independence and knowledge of the business to
allow it to discharge its duties and responsibilities effectively and that effective controls have been put in place.
The Board also operates two sub-committees, the Audit and Remuneration Committees, to ensure compliance
with market regulations.
The Audit Committee’s primary responsibilities are to monitor the integrity of the financial affairs and statements
of the Group, to ensure that the financial performance of the Group and any subsidiary is properly measured and
reported, and to review reports from the Group’s external auditor relating to the accounting and internal controls.
The Audit Committee also recommends to the Board the appointment and reappointment of the external auditor.
The Audit Committee considers the scope and results of the external audit and its cost effectiveness. It also
reviews the fees, independence, and objectivity of the external auditor by discussing with the auditor their annual
assessment regarding their independence, policies and procedures, and analysing the audit and non-audit work.
The Audit Committee also plays a key role in supporting the Board with the ongoing risk assessment and
management framework for the Group.
22 Tissue Regenix Group plc
Corporate Governance Statement
continued
The Group’s external auditor has unrestricted access to the Audit Committee and attends the Audit Committee
meetings throughout the year. The Executive Directors attend the Audit Committee meeting by invitation only.
The Audit Committee comprises of Brian Phillips, Trevor Phillips and Jonathan Glenn. The Audit Committee meets
at least twice per year and is chaired by Brian Phillips who is a Chartered Accountant and has relevant financial
experience.
The Remuneration Committee comprises of Trevor Phillips, Brian Phillips and Shervanthi Homer-Vanniasinkam.
The Remuneration Committee meets no fewer than twice per year and is chaired by Trevor Phillips who has many
years of relevant operational and commercial industry experience.
Risk management and internal control
The Board is responsible for maintaining a sound system of internal controls. These measures are designed to
minimise any potential risks identified and provide reasonable, but not absolute assurance against material
misstatement or loss. The Board confirms that it has established a sound system of internal controls. Some key
features of the internal control system are:
l well established financial reporting and control systems
l the Board actively identifies, evaluates and monitors the risks inherent in the business and ensure that
appropriate controls and procedures are in place to manage these risks
l there is a clearly designed organisation and reporting structure
l the Group has operational, accounting and employment policies in place
In addition, the Board regularly assess the internal control environment under which the business operates and
where appropriate implements additional measures to ensure that adequate controls are maintained.
Employees
The Group places value on the involvement of its employees and they are regularly briefed on the Group’s activities.
The Group closely monitors staff attrition rates which it seeks to maintain at low levels and aims to structure staff
compensation levels at competitive rates to attract and retain high calibre personnel.
Equal opportunities
The Group is committed to ensuring that equal opportunities are provided to all employees and potential
employees, and do not discriminate on the basis of age, gender, ethnicity, religion, disability, sexual orientation, or
marital status. All employees are expected to conduct themselves in an appropriate manner adhering to our
non-discrimination policy. In all aspects of our business the Group looks to act in ways that are compliant with
the applicable laws and regulations, providing our employees with a work environment that is professional, ethical
and fair.
Environment
As with all businesses the emphasis on environmental sustainability is important and subject to increasing scrutiny
and regulation. All employees are involved in the initiatives implemented to decrease the Group’s carbon footprint,
energy consumption and environmental sustainability efforts. During 2021, the Group implemented environmental
sustainability initiatives as noted below:
l Continued to upgrade to LED lighting alternatives in our offices, clean rooms and sterile packaging areas,
including the use of occupancy sensors in the Group’s Phase 1 facility expansion
l Substituted 100% recycled corrugated boxes in certain high volume packaging applications
l Substituted envelopes for boxes in selected finished good packaging applications, which reduced the amount
of paper products used to process these orders
Annual Report and Accounts 2021 23
Corporate Governance Statement
continued
l In its facility expansion, installed high efficiency ultra-low temperature freezers which use natural refrigerants
l Installed an advanced environmental control system in its facility expansion, which has occupant sensitive
thermostats and high efficiency cooling units to minimise electricity usage
Social, community, and human rights
The Board recognises that the Group has a duty to be a good corporate citizen and to respect the laws in the
markets in which it operates. It contributes as far as is practicable to the local communities in which it operates
and takes a responsible and positive approach to employment practices.
The Group, led by the Chief Executive Officer, maintains open and transparent channels of communication with
all employees in order to promote values and behaviours which consistently reflect the Group’s ethos, and to
ensure that employees are aware of Company developments and successes. Operating in an industry based upon
the processing of human and animal derived tissues demands the highest ethical standards, and the Group aspires
to maintain these across all business functions and relations. The Company undertakes regular audit checks to
ensure that partners, suppliers and employees comply with the ethical standards and operate to meet our
expectations.
The Group employs a vigorous code of conduct and ethics to ensure it operates with a level of social responsibility
across the business every day. Through the gift of tissue donation, the Group has the ability to positively impact
hundreds of patients’ lives, therefore, we must treat each gift with the utmost respect and provide the next of kin
with information around how many patients the donation has helped, if requested; something that can often help
in the grieving process.
Relations with shareholders
The Board believes that maintaining regular and transparent dialogue with shareholders is important in order to
ensure that there is a clear understanding of strategic objectives, financial and operational performance and
governance of the Group.
The Group actively engages with its shareholders throughout the year both through direct meetings, website and
social media communications and stock exchange announcements. Commissioned analyst research notes are
made available on the Company’s website as well as clinical case studies and published papers. Senior
management, typically the CEO and CFO aim to meet with, or speak with, significant shareholders at least twice
in a year usually after the interim and preliminary results announcements, to provide an update on strategy and
progress of the Group as a whole, and to receive shareholder feedback. The Group also undertakes several publicly
available updates to all shareholders, through forums such as interviews, trading updates and PR announcements.
In 2021, the Group undertook two ‘Investor Meet Company’ retail investor presentations as part of the full year
and interim results investor roadshows, with 94 individuals attending the preliminary results presentation in April
2021 and 108 individuals attending the interim results presentation in September 2021.
In accordance with AIM Rule 26, there is an Investors section on the Group’s website, which is kept up to date.
Information is provided regarding our business, results and financial performance, investor news and copies of
our Annual Reports and Accounts.
The Group holds an Annual General Meeting (AGM) each year at which all shareholders are welcome to attend
and speak with management. At the AGM, separate resolutions will be proposed for each substantially different
issue. The outcome of the voting on AGM resolutions is disclosed by means of an announcement on the
London Stock Exchange.
24 Tissue Regenix Group plc
Directors’ Remuneration Report
Remuneration policy
The Group’s remuneration policy is designed to provide Executive Directors with a competitive market-based
package in order to reward individual and Group performance and deliver outstanding shareholder returns. The
Remuneration Committee is committed to ensuring that the Group’s key management team is incentivised to
drive sustainable earnings growth and returns to shareholders, thereby creating a genuinely strong alignment of
interests between management and investors.
It is the Group’s policy that Executive Directors should have contracts with an indefinite term providing for a
maximum of six months’ notice. In the event of early termination, the Executive Directors’ contracts provide for
compensation up to a maximum of basic salary for the notice period.
Non-Executive Directors are employed on letters of appointment which may be terminated on no less than three
months’ notice.
Companies with securities listed on AIM do not need to comply with the UKLA Listing Rules.
The Remuneration Committee is, however, committed to maintaining high standards of corporate governance
and disclosure and has applied the guidelines as far as practical given the current size and development of
the Group.
Further details on risk in the remuneration policy is available below.
Remuneration Committee
The Remuneration Committee’s primary responsibilities are to review the performance of the Executive Directors
of the Group and to determine the broad policy and framework for their remuneration and the terms and conditions
of their service and that of senior management (including the remuneration of and grant of options or shares to
such persons under any share scheme adopted by the Group).
The 2021 Remuneration Committee comprises Trevor Phillips as Chair of the Committee, Brian Phillips and
Shervanthi Homer-Vanniasinkam. The Committee meets no fewer than twice in each financial year.
The main elements of the remuneration packages for Executive Directors and senior management are:
Basic annual salary
The base salary is reviewed annually at the beginning of each year. The review process is undertaken by the
Remuneration Committee taking into account several factors, including the current position and development of
the Group, individual contribution and market salaries for comparable organisations.
The Committee also approves the level of the pool for salary reviews for all staff.
Discretionary annual bonus
All Executive Directors and senior managers are eligible for a discretionary annual bonus, which is paid in
accordance with a bonus scheme developed by the Remuneration Committee. This takes into account individual
contribution, business performance and commercial progress, against Corporate and individual goals set at the
beginning of the year, in accordance with the Group’s strategy along with financial results.
Long term incentive plan
The Group has replaced the existing deferred annual bonus (DAB) plan, with a new Long Term Incentive Plan (LTIP)
for Executive Directors and senior management.
The LTIP awards are made annually, with the initial awards made in 2021, to the Executive Directors and those
senior management members recommended to participate by the Executive Directors and approved by the Board.
Awards are based upon a predetermined percentage of an individual’s annual salary and will vest over a period of
three years.
Annual Report and Accounts 2021 25
Directors’ Remuneration Report
continued
The final vesting of the awards is determined by performance against vesting criteria, set by the Remuneration
Committee at the time of grant, and adjudged by the Remuneration Committee in the period prior to the nominated
vesting date.
The goals are set against key aspects of Group performance, defined to be Total Shareholder Return (TSR),
Revenue Growth, Profitability and individual performance against personal performance goals. Weighting is set
at 80% of the vesting directed at Group performance over the period against the three corporate goals and 20%
against personal performance goals. As part of the LTIP rules the Executive Directors are required to use vested
LTIPs to build a shareholding in the Group to a level of 100% of base salary over a period of six years.
Remuneration policy for Non-Executive Directors
Remuneration for Non-Executive Directors is set by the Chairman and the Executive members of the Board. Non-
Executives do not participate in bonus schemes.
Directors’ remuneration
The remuneration of the main Board Directors of Tissue Regenix who served in the year to 31 December 2021
was:
Salary and
fees Bonus
$'000 $'000
Total December Total December
Benefits 2021 2020
$'000 $'000 $'000
John Samuel (resigned 20/03/20) – –
Gareth Jones ~ (resigned 17/11/2020) – –
Randeep Grewal (resigned 4/12/2020) – –
Jonathan Glenn 100 –
Alan Miller (resigned 4/12/2020) – –
Shervanthi Homer- Vanniasinkam 41 –
Daniel Lee (appointed 16/11/20) 290 197
David Cocke (appointed 21/01/21 206 101
Brian Phillips (appointed 05/01/21) 48 –
Trevor Phillips (appointed 05/01/21) 48 –
– – 31
– – 629
– – 65
– 100 39
– – 74
– 41 39
16 503 36
11 318 –
– 48 –
– 48 –
733 298
27 1,058 913
Within 2020 the total bonus payments were $154k and benefits were $30k.
~ Included within the salary is $63k for loss of office and $108k in lieu of notice.
Directors’ shareholdings
Directors’ interests in the shares of the Company, including family interests at 31 December 2021 were:
31-Dec-21
Number
31-Dec-21 31-Dec-20 31-Dec-20
% Number %
Jonathan Glenn 40,600,000
Shervanthi Homer-Vanniasinkam 1,628,222
Trevor Phillips 2,777,770
Brian Phillips 15,322,756
Daniel Lee 3,477,200
David Cocke 3,907,000
0.58 40,600,000 0.58
0.02 1,628,222 0.02
0.04 – –
0.22 – –
0.05 – –
0.06 – –
26 Tissue Regenix Group plc
Directors’ Remuneration Report
continued
Directors’ Interest in LTIPS
At 1 January Exercised Lapsed
2020 during year during year
LTIP scheme options
Daniel Lee (Note 1) – – –
David Cocke (Note 1) – – –
Granted December Exercise
during year 2021 price
28,321,603 28,321,603 0.01 pence
14,649,105 14,649,105 0.01 pence
Note 1. There were employment period and performance conditions in relation to the options granted on 28 April
2021 which are subject to continued service over a period of three years and satisfaction of customary
performance conditions relating to growth in total shareholder return, annual revenue targets, annual profitability
targets and personal performance targets.
On behalf of the Board
Trevor Phillips
Chairman of the Remuneration Committee
14 March 2022
Annual Report and Accounts 2021 27
Directors’ Report
The Directors present their report and consolidated financial statements for Tissue Regenix Group plc, and its
subsidiary undertakings for the year ended 31 December 2021.
Principal activity
The principal activity of the Group is the exploitation of innovative platform technologies in the field of regenerative
medicine and tissue engineering. The Company is principally a holding company incorporated and domiciled in
--the UK and is listed on the London Stock Exchange’s Alternative Investment Market (AIM). The subsidiary
undertakings of the Group are listed in note C10 of the Company’s financial statements.
Business model
A description of the Group’s business model is included on page 2. Explanations of activities and how it seeks to
add value are included in the Chairman’s statement on page 3 to 4 and the Chief Executive Officer’s statement on
pages 5 to 8.
Business review and results
A review of the Group’s performance and future prospects is included in the Chairman’s statement on pages 3
to 4 and Chief Executive Officer’s statement on pages 5 to 8. A review of the Group’s financial performance is
within the Financial overview on pages 9 to 11. The loss for the 12 months attributable to equity holders of the
parent was ($4,792k) (2020: $12,466k). The Directors do not recommend the payment of a dividend (2020: nil).
Share capital and funding
Full details of the Group and Company’s share capital movements during the year are given in note 22 to the
financial statements.
Directors and their interests
The following Directors held office in the year:
Jonathan Glenn
Shervanthi Homer-Vanniasinkam
Daniel Lee
Trevor Phillips-Appointed 5 January 2021
Brian Phillips-Appointed 5 January 2021
David Cocke-Appointed 21 January 2021
Directors’ interests in the shares of the Group, including family interests, are included in the remuneration report
on beginning on 25.
Directors’ indemnity insurance
The Group has maintained insurance throughout the year for its Directors and officers against the consequences
of actions brought against them in relation to their duties for the Group.
28 Tissue Regenix Group plc
Directors’ Report
continued
Corporate governance
The corporate governance report is set out beginning on page 21.
Substantial shareholders
As at 31 December 2021, shareholders holding more than 3% of the share capital of Tissue Regenix Group plc
were:
Name of shareholder
Lombard Odier
Harwood Capital (London)
Mr Richard Griffiths (UK)
IP Group (London)
Premier Miton Investments (London)
Number
of shares
% of
voting rights
944,244,619
778,500,000
764,250,000
660,837,567
523,553,784
13.43
11.32
10.87
9.40
7.45
Employment policies
The Group is committed to keeping employees as fully informed as possible regarding the Group’s performance
and prospects and seeks their views, wherever possible, on matters which affect them as employees.
Statement as to disclosure of information to the Auditor
The Directors who were in office on the date of approval of these financial statements have confirmed, that as far
as they are aware, there is no relevant audit information of which the Auditor is unaware. Each of the Directors
has confirmed that they have taken all the steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that it has been communicated to the Auditor.
Financial instruments
Further details of financial risk management objectives and policies are set out in note 17 of the financial
statements.
Auditor
RSM UK Audit LLP have indicated willingness to continue in office, in accordance with the recommendation of
the Audit Committee and section 489 of the Companies Act 2006. A resolution to reappoint RSM as the Company’s
Auditor will be proposed at the forthcoming Annual General Meeting.
Strategic report
The Group has chosen in accordance with Companies Act 206 s414C (11) to set out in the Group’s strategic report
information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008, Sch 7 to be contained in the Directors’ report in relation to research and development, and future
developments.
The Directors' Report was approved by the Board on 14 March 2022.
On behalf of the Board
Daniel Lee
Chief Executive Officer
Annual Report and Accounts 2021 29
Directors’ Responsibilities Statement
The directors are responsible for preparing the Strategic Report, the Directors’ Report, and the financial statements
in accordance with applicable law and regulations.
Company law requires the directors to prepare group and company financial statements for each financial year.
The directors have elected under company law and are required by the AIM Rules of the London Stock Exchange
to prepare group financial statements in accordance with UK-adopted International Accounting Standards and
have elected under company law to prepare the company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
The group financial statements are required by law and UK-adopted International Accounting Standards to present
fairly the financial position and performance of the group. The Companies Act 2006 provides in relation to such
financial statements that references in the relevant part of that Act to financial statements giving a true and fair
view are references to their achieving a fair presentation.
Under company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group
for that period.
In preparing each of the group and company financial statements, the directors are required to:
a.
select suitable accounting policies and then apply them consistently;
b. make judgements and accounting estimates that are reasonable and prudent;
c.
d.
e.
for the group financial statements, state whether they have been prepared in accordance with UK-adopted
International Accounting Standards;
for the company financial statements state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the company financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
group and the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the group’s and the company’s transactions and disclose with reasonable accuracy at any time the financial
position of the group and the company and enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the group and
the company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Tissue Regenix Group plc website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
30 Tissue Regenix Group plc
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
Opinion
We have audited the financial statements of Tissue Regenix Group plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 31 December 2021 which comprise the Consolidated Statement of Income, the
Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial
Position, the Consolidated and Company Statements of Changes in Equity, the Consolidated Statement of Cash
Flows and notes to the financial statements, including significant accounting policies. The financial reporting
framework that has been applied in the preparation of the group financial statements is applicable law and
UK-adopted International Accounting Standards. The financial reporting framework that has been applied in the
preparation of the parent company financial statements is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 101 “Reduced Disclosure Framework” (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
l
l
l
l
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 December 2021 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted International
Accounting Standards;
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group and the parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Summary of our audit approach
Key audit matters
Group
l Goodwill impairment
Parent Company
l Impairment of intercompany receivables
Materiality
Group
l Overall materiality: US$345,000 (2020: £290,000)
l Performance materiality: US$258,000 (2020: £217,000)
Parent Company
l Overall materiality: £222,000 (2020: £222,000)
l Performance materiality: £166,000 (2020: £166,000)
Scope
Our audit procedures covered 100% of revenue, 99% of total assets and 93% of
loss before taxation.
Annual Report and Accounts 2021 31
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
continued
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the group and parent company financial statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had
the greatest effect on the overall audit strategy, the allocation of resources in the audit and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the group and parent
company financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Goodwill impairment
Key audit matter description
The non-current assets of the CellRight Technologies LLC (“CellRight”) cash
generating unit (CGU) includes goodwill of US$11.6m (after a cumulative
impairment charge of US$7.9m) and this CGU is subject to annual impairment
testing. The CellRight CGU is a legal entity in its own right and forms part of the
BioRinse operating segment. Management have disclosed details relating to their
impairment test in notes 4 and 14.
Impairment testing requires management to compare the carrying amount of
the CGU’s attributable assets and liabilities with the higher of fair value less costs
of disposal and value in use (the “Recoverable Amount”). Where the carrying
amount is higher than Recoverable Amount then an impairment charge arises.
Impairment testing involves a significant degree of judgement because
management’s determination of value in use is based on a number of
assumptions, including an assessment of future performance in a high growth
sector, and the selection of an appropriate discount rate.
Significant impairment charges have arisen in previous periods and the Group
overall continues to be loss making. Any recorded impairment charge would
most likely have a material impact on the financial statements and we therefore
considered this matter to be one of the matters of most significance in the
current year audit.
How the matter was addressed
in the audit
Management provided us with an impairment model for the CellRight CGU. We
performed audit work on this model, which included:
l Checking the calculations contained within the model, including reperforming
the comparison of the Recoverable Amount with the carrying amount and
agreeing the carrying amount to the accounting records.
l Using a specialist to check the appropriateness of the method and the
mathematical calculation of value in use within the model and to obtain an
independent estimate of an appropriate discount rate.
l Challenging management to support key assumptions within the model,
particularly forecast revenue growth.
l Reviewing the disclosures made in the financial statements to ensure that
they were in accordance with the applicable financial reporting framework.
32 Tissue Regenix Group plc
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
continued
Impairment of intercompany receivables
Key audit matter description
At the 31 December 2021, the carrying value of amounts due from group
undertakings amounted to £15.7m after recording an ECL provision of £63.9m
(see notes C2 and C6). A reversal of £0.3m of the existing provision arose in the
current year.
The parent company has loans due from subsidiary undertakings that are
currently loss making. The loans are repayable on demand and the subsidiary
undertakings do not have sufficient liquid assets to make repayment should the
parent company call in the loans.
One of the most significant matters in the current year audit of the parent
company is that management are required to calculate an expected credit loss
(“ECL”) provision in accordance with IFRS9 Financial Instruments.
The calculation of ECLs involves a significant degree of judgement and
estimation as management have to make assumptions about future cash
generation and consider multiple scenarios through which the balances may be
recovered.
Given the magnitude of the loan balances we considered this matter to be one
of the matters of most significance in the current year audit.
How the matter was addressed
in the audit
We obtained management’s calculation of the ECL and the underlying
calculations prepared to support the carrying value of the balance and performed
work as follows:
l Assessed the reasonableness of the scenarios considered by management
and the probabilities assigned to each.
l Ensured that the cash flow forecasts used were consistent with the latest
Board approved forecasts.
l Recalculated the computation of the ECL
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature,
timing and extent of our audit procedures. When evaluating whether the effects of misstatements, both individually
and on the financial statements as a whole, could reasonably influence the economic decisions of the users we
take into account the qualitative nature and the size of the misstatements. Based on our professional judgement,
we determined materiality as follows:
Overall materiality
US$345,000 (2020: £290,000)
£222,000 (2020: £222,000)
Group
Parent company
Basis for determining overall
materiality
1.75% of total revenue
0.5% of net assets. The percentage
applied to the benchmark has been
the purpose of
restricted
calculating
appropriate
an
component materiality.
for
Annual Report and Accounts 2021 33
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
continued
Rationale
applied
for benchmark
Group
Parent company
Revenue selected given shareholder
focus on revenue growth. The group
is still in relatively early phase of
development and revenue growth is
critical to reducing operating losses.
Net assets selected as the parent
company
is purely a holding
company and no income statement
is presented.
Performance materiality
US$258,000 (2020: £217,000)
£166,000 (2020: £166,000)
Basis for determining
performance materiality
Reporting of misstatements
to the Audit Committee
75% of overall materiality
75% of overall materiality
in excess of
Misstatements
US$17,000 and misstatements
below that threshold that, in our
view, warranted
reporting on
qualitative grounds.
Misstatements in excess of £11,000
and misstatements below
that
threshold that, in our view, warranted
reporting on qualitative grounds.
Materiality levels in respect of the disclosure requirements for the group and parent company in relation to
directors’ emoluments including share-based payment transactions were set at a reduced level of US$25,000.
This reduced level has been set on the basis these transactions and balances have specific disclosure
requirements under UK Company Law and would be of specific interest to shareholders.
An overview of the scope of our audit
The group consists of 11 components, located in the United Kingdom, USA and Germany.
The coverage achieved by our audit procedures was:
Number of
components
Full scope audit 4
Specific audit procedures 5
Revenue Total assets Loss before tax
88% 94% 53%
12% 5% 40%
Total 9
100% 99% 93%
Analytical procedures at group level were performed for the remaining 2 components.
Of the above, specific audit procedures for 1 component were undertaken by component auditors.
Specific audit procedures were undertaken on 1 component as it contained significant revenue and in respect of
the remaining 3 components included above on the basis of incurring significant expenditure.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment
of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included
reviewing and evaluating management’s latest forecasts and plans, considering the appropriateness and sensitivity
of the key assumptions, and reviewing the key terms of debt facilities. These forecasts are prepared in respect of
the period to 31 December 2023. The Group has significant cash reserves at 31 December 2021 of US$7.7m
following the fundraising in June 2020 and even in downside scenarios which take account of slower than forecast
sales growth, management’s forecasts indicate significant cash at the end of the forecast period.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s or the parent company’s
ability to continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue.
34 Tissue Regenix Group plc
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
continued
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
l
l
the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
l
l
l
l
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 30, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Annual Report and Accounts 2021 35
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
continued
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain
sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on
the determination of material amounts and disclosures in the financial statements, to perform audit procedures
to help identify instances of non-compliance with other laws and regulations that may have a material effect on
the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and
regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the
financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud through designing and implementing appropriate responses and to respond
appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to
ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and
for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group
audit engagement team:
l
l
l
obtained an understanding of the nature of the industry and sector, including the legal and regulatory
frameworks that the group and parent company operate in and how the group and parent company are
complying with the legal and regulatory frameworks;
inquired of management, and those charged with governance, about their own identification and assessment
of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including
assessment of how and where the financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
Legislation / Regulation
Additional audit procedures performed by the Group audit engagement team
included:
UK-adopted IAS, FRS101
and Companies Act 2006
Review of the financial statement disclosures and testing to supporting
documentation;
Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance regulations
Inspection of advice received from external tax advisors;
Input from a tax specialist was obtained regarding the calculation of Research
and Development tax credit claims made in the UK during the year.
FDA Medical Device
Regulations in the USA
Inquiry of management and those charged with governance as to whether the
Group is in compliance with these laws and regulations and whether any
correspondence existed with the Regulatory Authorities.
36 Tissue Regenix Group plc
Independent Auditor’s Report to the Members of Tissue
Regenix Group PLC
continued
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Revenue recognition
Management override of
controls
Testing a sample of revenue transactions either side of the balance sheet date
to determine whether the transaction has been appropriately recognized in the
correct financial reporting period;
Testing a sample of revenue transactions and tracing through to appropriate
inventory movements and cash receipt to ensure that the revenue transaction
exists;
Testing of a sample of transactions completed under the Group’s Bill and Hold
arrangements with its customers to ensure that they have been recognized in
accordance with the Group’s accounting policy, substantiating the transactions
to underlying inventory movements and cash receipts and ensuring that they
have been recorded in the appropriate financial period.
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are
indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual
or outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
ANDREW ALLCHIN FCA (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Central Square Fifth Floor
29 Wellington Street
Leeds
LS1 4DL
Date
Annual Report and Accounts 2021 37
Consolidated Statement of Income
For the year ended 31 December 2021
Revenue
Cost of sales
Gross profit
Administrative expenses before exceptional items
Exceptional items
Total administrative expenses
Grant Income
Operating loss
Finance income
Finance charges
Loss on ordinary activities before taxation
Taxation
Loss for the year
Loss for the year attributable to:
Equity holders of the parent company
Non-controlling interest
Loss per ordinary share attributable to equity holders of
the parent company
Basic and diluted, cents per share
The loss for the year arises from the Group’s continuing operations.
Notes
5
6
8
9
6
10
25
11
2021
USD
'000
19,746
(11,270)
8,476
(12,574)
(355)
(12,929)
–
(4,453)
3
(692)
(5,142)
157
(4,985)
(4,792)
(193)
(4,985)
2020
USD
'000
16,473
(8,903)
7,570
(12,925)
(8,324)
(21,249)
1,098
(12,581)
3
(571)
(13,149)
684
(12,465)
(12,466)
1
(12,465)
(0.07)
(0.28)
38 Tissue Regenix Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Loss for the year
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Foreign currency translation differences
Total comprehensive loss for the year
Total comprehensive loss for the year attributable to:
Equity holders of the parent company
Non-controlling interest
2021
USD
'000
2020
USD
'000
(4,985)
(12,465)
(4)
(4,989)
(4,796)
(193)
(4,989)
970
(11,495)
(11,496)
1
(11,495)
25
Annual Report and Accounts 2021 39
Consolidated Statement of Financial Position
As at 31 December 2021
Assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Current assets
Inventory
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Liabilities
Non-current liabilities
Loans and borrowings
Deferred tax
Lease liability
Current liabilities
Trade and other payables
Lease liability
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Reverse acquisition reserve
Reserve for own shares
Share-based payment reserve
Cumulative translation reserve
Retained deficit
Equity attributable to equity holders of the parent company
Non-controlling interest
Total equity
Notes
12
13
14
15
16
17
19
20
21
18
21
22
23
23
23
23
23
23
23
24
2021
USD
'000
5,708
3,388
15,064
24,160
9,719
4,101
534
7,709
22,063
46,223
(4,465)
(640)
(3,364)
(8,469)
(4,244)
(118)
(4,362)
(12,831)
33,392
15,947
134,173
16,441
(10,798)
(1,257)
1,573
(1,305)
(120,432)
34,342
(950)
33,392
2020
USD
'000
4,417
3,337
15,299
23,053
9,604
3,589
1,120
12,968
27,281
50,334
(3,788)
(760)
(3,084)
(7,632)
(4,084)
(347)
(4,431)
(12,063)
38,271
15,947
134,173
16,441
(10,798)
(1,257)
1,463
(1,301)
(115,640)
39,028
(757)
38,271
The consolidated financial statements were approved by the Board of Directors and authorised for issue on
14 March 2022 and were signed on its behalf by:
Daniel Lee
Chief Executive Officer
Company number: 05969271
40 Tissue Regenix Group plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Attributable to equity holders of parent
e
v
r
e
s
e
r
n
o
i
t
i
s
i
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0
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0
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e
t
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g
n
i
l
l
o
r
t
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’
0
0
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t
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0
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0
0
0
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p
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r
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0
0
0
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’
0
0
0
D
S
U
At 31 December 2019 8,478 124,118 16,441 (10,798) (1,257) 1,500 (2,271) (103,174) 33,037 (758) 32,279
Transactions with owners in
their capacity as owners:
Issue of equity shares 7,467 11,200 – – – – – – 18,667 – 18,667
Expenses of issue of equity
shares – (1,145) – – – – – – (1,145) – (1,145)
Exercise of share options 2 – – – – – – – 2 – 2
Share-based payments – – – – – (37) – – (37) – (37)
Total transactions with owners
in their capacity as owners 7,469 10,055 – – (37) – – 17,487 – 17,487
Loss for the year – – – – – – (12,466) (12,466) 1 (12,465)
Other comprehensive income:
Currency translation differences – – – – – – 970 – 970 – 970
Total other comprehensive
income for the year – – – – – – 970 – 970 – 970
Total comprehensive income
for the year – – – – – – 970 (12,466) (11,496) 1 (11,495)
At 31 December 2020 15,947 134,173 16,441 (10,798) (1,257) 1,463 (1,301) (115,640) 39,028 (757) 38,271
Transactions with owners in
their capacity as owners:
Share-based payments – – – – – 110 – – 110 – 110
Total transactions with owners
in their capacity as owners – – – – – 110 – – 110 – 110
Loss for the year – – – – – – – (4,792) (4,792) (193) (4,985)
Other comprehensive income:
Currency translation differences – – – – – – (4) – (4) – (4)
Total other comprehensive
income for the year – – – – – – (4) – (4) – (4)
Total comprehensive income
for the year – – – – – – (4) (4,792) (4,796) (193) (4,989)
At 31 December 2021 15,947 134,173 16,441 (10,798) (1,257) 1,573 (1,305) (120,432) 34,342 (950) 33,392
Annual Report and Accounts 2021 41
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Operating activities
Loss before taxation
Adjustments for:
Finance income
Finance charges
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Impairment of intangible assets
Share-based payments
Amortisation of debt cost
Unrealised foreign exchange loss
Operating outflow before working capital movements
Increase in inventory
Increase in trade and other receivables
Increase in trade and other payables
Cash used in operations
Research & development tax credits received
Net cash used in operating activities
Investing activities
Interest received
Purchase of property, plant and equipment
Capitalised development expenditure
Net cash used in investing activities
Financing activities
Proceeds from issue of shares
Expenses of issue of shares
Proceeds from exercise of share options
Proceeds from new borrowings
Interest paid on loans and borrowings
Lease liability payments
Lease interest payments
Net cash (used in)/generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of movement in exchange rates on cash held
Cash and cash equivalents at end of year
42 Tissue Regenix Group plc
2021
USD
'000
2020
USD
'000
(5,142)
(13,149)
(3)
692
258
103
730
–
110
75
55
(3,122)
(115)
(512)
159
(3,590)
615
(2,975)
3
(1,550)
(497)
(2,044)
–
–
–
602
(391)
(102)
(301)
(192)
(5,211)
12,968
(48)
7,709
(3)
571
245
78
730
7,871
(37)
75
834
(2,785)
(4,115)
(259)
223
(6,936)
881
(6,055)
3
(1,573)
(293)
(1,863)
18,667
(1,146)
2
715
(317)
–
(237)
17,684
9,766
3,121
81
12,968
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
1) Corporate information
Tissue Regenix Group plc (the “Company” and, together with its subsidiaries, the “Group”) is domiciled and
incorporated in the United Kingdom under the Companies Act 2006 and is limited by shares. 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 to develop, manufacture and commercialise
biological medical devices.
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 IFRS 16 – Covid-19 related rent concessions beyond 30 June 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFS 4 and IFRS 16 – Interest rate benchmark reform phase 2
New and revised IFRS Standards in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following new and revised
IFRS Standards that have been issued but are not yet effective:
They are as follows:
Amendments to IAS1 – Classification of liabilities as current or non-current
Amendments to IFRS 3 – Reference to the conceptual framework
Amendments to IFRS 17 – Insurance contracts
Amendments to IFRS 17 – Initial application of IFRS 17 and IFRS 9 – comparative information
Amendments to IAS 8 – Definition of accounting estimates
Amendments to IAS 12 – Deferred tax related to assets and liabilities arising from a single transaction
Amendments to IAS 16 – Property, plant and equipment – proceeds before intended use
Amendments to IAS 37 – Onerous contracts – cost of fulfilling a contract
Amendments to IAS 1 and IFRS practice statement 2 – Disclosure of accounting policies
Annual improvements to IFRS standards 2018-2020
The Directors do not expect that the adoption of these standards or interpretations in future periods will have a
material impact on the financial statements of the Company or the Group.
3) Significant accounting policies
Basis of preparation
These financial statements have been prepared and approved by the directors in accordance with UK- adopted
International Accounting Standards (IAS).
Annual Report and Accounts 2021 43
Notes to the Consolidated Financial Statements
continued
The financial statements have been prepared on the historical basis, other than certain financial assets and
liabilities which are stated at their fair value. Historical cost is generally based on the fair value of the considerations
given in exchange for assets.
As described below, the Directors continue to adopt the going concern basis in preparing the consolidated financial
statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods
presented in these financial statements.
Judgements made by the Directors in the application of these accounting policies that have significant impact on
the financial statements and estimates with a significant risk of material adjustment in the next year, are discussed
in note 4.
Restatement
With effect from 1 January 2021, the Group’s presentation currency changed from pounds sterling (“£”) to United
States dollar (“USD”) as the Directors considered the USD to be more representative of the sector in which the
Group primarily operates. The functional currency of the Group is pound sterling (“£”).
In accordance with International Accounting Standards, this change has been applied retrospectively and
comparatives for the year ended 31 December 2020 were translated, for all statement of financial position items
except equity, using USD:£ exchange spot rate at that date, being USD 1.358, for the income statement using the
average USD:£ exchange rate during the year, being USD 1.284, and for the opening balances as at 1 January
2020, except equity, using the USD spot rate on that date, being USD 1.3116. Share capital, share premium and
other reserves were translated at the historic rates prevailing at the dates of transactions.
Historical differences arising from the retranslation to USD up to 1 January 2020 have been taken directly to the
foreign currency translation reserve.
The Directors have not presented a third statement of financial position and associated notes to reflect the change
in presentation currency as they do not believe this additional disclosure is material. The rate used to confirm the
net assets has been included above and the Statement of Changes in Equity represents the equity elements of
the statement of financial position on a converted basis. Notes 12, 13, and 14 disclose the impact on the non-
current assets.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
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 2023 (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. The Cash Flow
Projections show that the Group will continue to consume cash over the forecast period. Until sufficient cash is
generated from its operations, the Group remains reliant on cash reserves of USD 7.7 million at 31 December
2021 and the ongoing support of MidCap Financial Trust (“MidCap”) (borrowings of USD 4.5 million at 31 December
2021) to meet its working capital requirements, capital investment programme and other financial commitments.
The COVID-19 pandemic continued to affect most healthcare businesses in 2021, as the emergence of the Delta
and Omicron variants extended the timeline for a return to normal healthcare procedure volumes. Given the
uncertainty around the level and duration of disruption from COVID-19, it is difficult to determine how long the
current situation may last, and the time taken to catch-up any postponed surgical procedures thereafter.
However, the Board, in compiling the Cash Flow Projections, has considered a downside scenario regarding the
effect of reduced and delayed revenues due to COVID-19 and has undertaken market soundings regarding the
likely timeframe for the recommencement of procedures. It has concluded that there will not be a significant long-
lasting impact on the ability of the business to carry out its commercial activities. The Cash Flow Projections
prepared by the board, including the downside scenario, indicate that the Group will still have cash reserves at the
44 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
end of the forecast period. The Group’s Cash Flow Projections also assume that the MidCap facilities are available
throughout the forecast period as repayment is not due to start until July 2023. The availability of these facilities
is dependent upon compliance with a rolling twelve-month revenue covenant which is measured on a monthly
basis. The Cash Flow Projections indicate compliance with this covenant throughout the forecast period.
In summary, the Directors have considered their obligations in relation to the assessment of the going concern
basis for preparation of the financial statements of the Group and have reviewed the Cash Flow Projections. 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. Unrealised gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
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.
Revenue
Revenue is measured as the fair value of the consideration received or receivable in the normal course of business,
net of discounts, VAT and other sales related taxes and is recognised to the extent that it is probable that the
economic benefits associated with the transaction will flow into the Company, which usually coincides with the
despatch of goods
Bill and hold sales
The Group has bill-and-hold arrangements with customers, and this revenue is recognised when the company
considers that performance obligations have been met and they meet the following criteria:
Annual Report and Accounts 2021 45
Notes to the Consolidated Financial Statements
continued
l 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)
l The product must be identified separately as belonging to the customer (that is, it cannot be used to satisfy
other orders)
l
l
The product must be ready for physical transfer to the customer
The Group cannot have the ability to use the product, or to direct it to another customer
Grant Income
Grant income is recognised as earned based on contractual conditions and is presented as Grant income on the
face of the Consolidated Statement of Income.
Foreign Currencies
The individual financial statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purposes of the consolidated financial
statements, the results and the financial position of each Group entity are expressed in United States dollar, 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 as a separate component of Shareholders’ equity 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 operations which have a functional currency other than United States dollar, 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 (i.e. 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 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.
46 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
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:
l
It is technically feasible to complete the product and the management is satisfied that appropriate regulatory
hurdles have been, or will be achieved
l Management intends to complete the product and use or sell it
l
l
l
l
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, 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 cost. The costs of internally generated developments are recognised as
intangible assets and are subsequently measured in the same way as externally acquired intangible assets.
However, until completion of the development project, the assets are subject to impairment testing only.
Exceptional Items
Items which are significant by virtue of their size or nature and/or which are considered non-recurring are classified
as an exceptional operating item. Such items are included within the appropriate consolidated income statement
category but are highlighted separately. Exceptional operating items are excluded from the profit measures used
by the Directors to monitor underlying performance.
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.
Appropriate provisions for estimated irrecoverable amounts are recognised in the income statement when there
is objective evidence that the assets are impaired.
Property, Plant, 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.
Annual Report and Accounts 2021 47
Notes to the Consolidated Financial Statements
continued
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 at 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 on a
straight-line basis over the lease term (39 years).
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 & IT 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 intangible
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). For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash generating units).
Discounted cash flow valuation techniques are generally applied for assessing recoverable amounts using Board
approved five-year forward- looking cash flow projections and terminal value estimates, together with discount
rates appropriate to the risk of the related cash generating units.
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.
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 the Company’s estimate of shares that will
eventually vest. Historically, the fair value of the options granted have been measured using the Binomial model,
however, the fair value of the options issued in the current year have been measured using the Monte Carlo model.
The performance conditions of previous grants were generally market based whereas current grants are now
issued with multiple performance conditions and therefore the Monte Carlo model is considered to be a more
appropriate model.
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 comprehensive 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.
48 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
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, taking into account the terms and conditions
upon which the jointly owned shares were purchased.
Financial Assets and Liabilities
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 the company considered 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 to 3 months overdue
0% of aged receivables
to 4 months overdue
25% of aged receivables
to 5 months overdue
50% of aged receivables
Over 5 months
100% of aged receivables overdue
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 six months.
Share capital
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 they are incremental
costs directly attributable to the equity transaction that would otherwise have been avoided.
Leases
On commencement of a contract which 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 (term is 12 months or less with no option to purchase the lease asset) or a ‘low-value’ lease
(where the underlying asset is USD 5,000 or less when new).
Annual Report and Accounts 2021 49
Notes to the Consolidated Financial Statements
continued
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 profit and loss
account 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.
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
performance of the operating segments and making strategic decisions, has been identified as the Board of
Directors.
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 value 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 on-going basis. Revisions to accounting estimates
are recognized 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
Determining whether an asset is impaired requires an assessment of whether there are any indicators of
impairment. If there is any indication of potential impairment, an impairment test is required based on the
recoverable amount of the asset.
50 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
At 31 December 2021, the Directors determined that there were indicators of impairment in respect of the Group’s
non-current assets and that there was a requirement to perform an impairment test. The assets were assessed for
impairment based on value in use which requires the Group to estimate the future cash flows expected to arise from
the cash-generating unit using a suitable discount rate in order to calculate present value. The future cash flows
expected to arise was calculated using a discount rate of 14.6% 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
no provision for impairment was required (2020: USD 7.9 million impairment of Goodwill). See note 14.
The carrying amount of non-current assets at the 31 December 2021 was USD 24.2 million (2020: USD 23.1 million)
and the Directors did not consider that it was appropriate to make a provision for impairment in respect of these
assets.
5) Segmental reporting
The following table provides disclosure of the Group’s revenue by geographical market based on location of the
customer:
USA
Rest of world
2021
USD
‘000
16,883
2,863
19,746
2020
USD
‘000
13,733
2,740
16,473
Analysis of revenue by customer
During the year ending 31 December 2021, the Group had one customer who individually exceeded 10% of revenue.
This customer generated 14% of revenue (2020: one customer who generated 13% of revenue).
Operating segments
At 31 December 2020, the Group was organised into 3 operating divisions for internal management, reporting and
decision-making purposes. These divisions were, BioSurgery, Orthopaedics & Dental, and GBM-V & Cardiac and
were the operating segments reported in accordance with IFRS 8 “Operating Segments”.
The Directors have now determined that it would be more appropriate to the Group’s operations to disclose its
divisions as, dCELL (formerly BioSurgery and now including Cardiac and the UK side of the Ortho & Dental
segment), BioRinse (formerly the US side of the Ortho & Dental segment), and GBM-V.
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.
Central overheads, which primarily relate to operations of the Group function, are not allocated to the business
unit.
Segmental information about these divisions is presented below. We have not restated the prior year with the
changes as the information was not readily available and the value added was considered to be minimal.
Annual Report and Accounts 2021 51
Notes to the Consolidated Financial Statements
continued
Income Statement
Revenue
Gross Profit
Exceptional items
Depreciation
Amortisation
Operating loss
Net Finance charges
Loss before taxation
Taxation
Loss for the year
Income Statement
Revenue
Cost of sales
Gross Profit
Administrative expenses
Exceptional items:
Impairment of intangible assets
Restructuring costs
Grant Income
Operating loss
Net Finance charges
Loss before taxation
Taxation
Loss for the year
dCELL
2021
USD
‘000
4,246
1,720
(183)
(18)
–
(1,236)
1
(1,235)
37
(1,198)
Biosurgery
2020
USD
‘000
4,247
(2,374)
1,873
(3,415)
–
–
417
(1,125)
–
(1,125)
(28)
(1,153)
BioRinse
2021
USD
‘000
12,711
5,852
(120)
(305)
(730)
(1,118)
(682)
(1,800)
120
(1,680)
Ortho &
dental
2020
USD
‘000
9,562
(4,942)
4,620
(6,390)
(7,871)
(18)
629
(9,030)
(568)
(9,598)
546
(9,052)
GBM-V
2021
USD
‘000
2,789
904
–
(3)
–
(154)
–
(154)
–
(154)
GBM-V &
Cardiac
2020
USD
‘000
2,664
(1,587)
1,077
(1,418)
–
(129)
–
(470)
–
(470)
166
(304)
Revenue from all operating segments derives from the sale of biologic medical devices.
dCELL
2021
USD
‘000
808
3,326
4,134
–
(428)
(428)
3,706
2
–
BioRinse
2021
USD
‘000
23,005
11,310
34,315
(8,056)
(3,421)
(11,477)
22,838
1,594
497
GBM-V
2021
USD
‘000
5
706
711
–
(249)
(249)
462
–
–
Statement of Financial Position
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net assets
Capital expenditure
Additions to intangible assets
52 Tissue Regenix Group plc
Central
2021
USD
‘000
–
–
(52)
(35)
–
(1,945)
(8)
(1,953)
–
(1,953)
Central
2020
USD
‘000
–
–
–
(1,702)
–
(306)
52
(1,956)
–
(1,956)
–
(1,956)
Central
2021
USD
‘000
342
6,721
7,063
(121)
(556)
(677)
6,386
105
–
Total
2021
USD
‘000
19,746
8,476
(355)
(361)
(730)
(4,453)
(689)
(5,142)
157
(4,985)
Total
2020
USD
‘000
16,473
(8,903)
7,570
(12,925)
(7,871)
(453)
1,098
(12,581)
(568)
(13,149)
684
(12,465)
Total
2021
USD
‘000
24,160
22,063
46,223
(8,177)
(4,654)
(12,831)
33,392
1,704
497
Notes to the Consolidated Financial Statements
continued
Statement of Financial Position
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net assets
Capital expenditure
Additions to intangible assets
Biosurgery
2020
USD
‘000
Ortho & dental
2020
USD
‘000
–
2,807
2,807
–
(390)
(390)
2,417
–
–
22,322
10,613
32,935
(7,415)
(3,073)
(10,488)
22,447
4,692
293
GBM-V
2020
USD
‘000
5
1,079
1,084
–
(236)
(236)
848
–
–
Central
2020
USD
‘000
272
12,782
13,054
(217)
(732)
(949)
12,105
Total
2020
USD
‘000
22,599
27,281
49,880
(7,632)
(4,431)
(12,063)
37,817
278
–
4,970
293
6) Loss on ordinary activities before taxation
Loss before taxations for the year is stated after charging/(crediting):
Depreciation of plant and equipment
Depreciation of right-of-use asset
Amortisation of intangible asset
Amortisation of debt cost
Rentals subject to “short lease” exemption
Expensed inventory
Staff costs
Foreign exchange (gains)/losses
Exceptional items*:
Restructuring costs
Business interruption
Impairment of intangible assets
Auditor remuneration:
– fees payable to Company’s Auditor for the audit of the parent
Company and consolidated financial statements
– auditing the financial statements of subsidiaries pursuant to
legislation
Other services:
– fees in relation to cyber attack
Total auditor’s remuneration
2021
USD
‘000
258
103
730
75
208
7,804
7,153
(4)
235
120
–
27
103
–
130
2020
USD
‘000
245
78
730
75
149
7,691
7,271
68
453
–
7,871
26
90
139
255
* Exceptional items include restructuring costs of USD $52k related to a redundancy in the Central segment, and USD $183k was charged
to the DCell® division as a result of a restructuring of that division. The February 2021 winter storm event in Texas resulted in a charge of
USD $120k to the BioRinse® division relating to non-productive time and spoilage.
Annual Report and Accounts 2021 53
Notes to the Consolidated Financial Statements
continued
Grant Income
USA
Rest of world
2021
USD
‘000
–
–
–
2020
USD
‘000
1,047
51
1,098
During the year ended 31 December 2020, the Group’s US subsidiaries received two US Government PPP loans.
The Loans had a two-year term and carried a 1% annual interest rate deferred for 6 months. Under the terms of
the loan agreement, the Loan would not require repayment if the funds were used to support employee payroll,
healthcare, utilities and rent payments within the US, during the six months following inception. The Group met
these conditions and presented the loans as grant income in the consolidated statement of income. No further
such loans have been received during the year ended 31 December 2021.
7) Staff costs
The average monthly number of employees (including Directors) was:
Directors
Laboratory and administration staff
Their aggregate remuneration comprised:
Wages and salaries
Share-based payments (see note 24)
Social security, pension & healthcare costs
Directors’ remuneration included above comprised:
Emoluments for qualifying services
2021
No.
6
73
79
2021
USD
‘000
5,867
110
1,176
7,153
1,058
2020
No.
5
73
78
2020
USD
‘000
6,056
(77)
1,292
7,271
913
Social security, pension and healthcare costs include pension contributions of USD 41K (2020: USD 126K). No
funding was received from the UK government furlough scheme during the year (2020: USD 5K).
Directors’ emoluments disclosed above include USD 503K paid to the highest paid Director (2020: USD 629K).
The share-based payment charge for Directors was USD 79K (2020: USD nil).
8) Finance income
Bank interest receivable
54 Tissue Regenix Group plc
2021
USD
‘000
3
2020
USD
‘000
3
Notes to the Consolidated Financial Statements
continued
9) Finance Charges
Interest on bank loans
Interest on lease liabilities
10) Taxation
Tax on loss on ordinary activities
Current tax:
UK R&D tax credit
Deferred tax:
Origination and reversal of temporary timing differences
Tax credit on loss on ordinary activities
The credit for the year can be reconciled to the loss per the income statement as follows:
2021
USD
‘000
(391)
(301)
(692)
2021
USD
‘000
(37)
(37)
(120)
(157)
Loss on ordinary activities before tax
Tax at the standard rate of corporation tax 19% (2020: 19%)
Effects of:
Research and development tax credits received
Surrender of research and development relief for repayable tax
credit including enhancement
Unutilised tax losses
Tax credit for the period
2021
USD
‘000
(5,142)
(977)
(124)
74
870
(157)
2020
USD
‘000
(317)
(254)
(571)
2020
USD
‘000
(564)
(564)
(120)
(684)
2020
USD
‘000
(13,149)
(2,499)
(403)
555
1,663
(684)
Unrelieved tax losses carried forward 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 must be utilised in
relation to the same operations.
Tax losses
Losses available to carry forward against future trading profits
Unrecognised deferred tax asset – at 25% (2020: 19%)
2021
USD
‘000
73,643
18,411
2020
USD
‘000
69,399
13,186
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.
Annual Report and Accounts 2021 55
Notes to the Consolidated Financial Statements
continued
11) Loss per ordinary share
Basic loss per ordinary share is calculated by dividing the net loss attributable to equity holders 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.
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during
the year to assume conversion of all dilutive potential ordinary shares.
The calculation of the basic and diluted loss per ordinary share is based on the following data:
2021
USD
‘000
2020
USD
‘000
Total loss attributable to the equity holders of the parent
(4,792)
(12,466)
Weighted average number of ordinary shares in issue during the year
7,033,077,499
4,447,666,932
Loss per ordinary share
Basic and diluted, cents per share
(0.07)
(0.28)
No.
No.
The Company has options issued over 106,832,872 (2020: 50,803,039) ordinary shares and there are 16,112,800
(2020: 16,112,800) jointly owned shares which are potentially dilutive. See note 23.
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.
12) Property, plant and equipment
Land &
buildings
USD
‘000
Laboratory
equipment
USD
‘000
Fixtures &
fittings
USD
‘000
Computer
equipment
USD
‘000
Cost
At 31 December 2019
Additions
Exchange adjustment
At 31 December 2020
Additions
Exchange adjustment
At 31 December 2021
Depreciation
At 31 December 2019
Charge for the period
Exchange adjustment
At 31 December 2020
Charge for the period
Exchange adjustment
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
At 31 December 2019
56 Tissue Regenix Group plc
2,533
1,439
45
4,017
1,085
(84)
5,018
161
63
3
227
65
(46)
246
4,772
3,790
23,722
2,628
112
49
2,789
308
(30)
3,067
2,015
153
79
2,247
152
(84)
2,315
752
542
613
1,006
–
19
1,025
39
(10)
1,054
956
16
29
1,001
17
(29)
989
65
24
50
795
20
25
840
118
(19)
939
740
13
26
779
24
17
820
119
61
55
Total
USD
‘000
6,962
1,571
138
8,671
1,550
(143)
10,078
3,872
245
137
4,254
258
(142)
4,370
5,708
4,417
3,090
Notes to the Consolidated Financial Statements
continued
13) Right-of-use assets
Cost
At 31 December 2019
Additions
Exchange adjustment
At 31 December 2020
Additions
At 31 December 2021
Depreciation
At 31 December 2019
Charge for the period
At 31 December 2020
Charge for the period
At 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
Land and Buildings
USD
‘000
–
3,416
(1)
3,415
154
3,569
–
78
78
103
181
3,388
3,337
14) Intangible assets
Development
costs
USD ‘000
Goodwill
USD ‘000
Customer
relationships
USD ‘000
Trademarks
USD ‘000
Process
Tech
USD ‘000
Supplier
agreements
TOTAL
USD ‘000 USD ‘000
Cost
At 31 December 2019
Additions*
Exchange Adjustment
1,275
19,458
3,000
799
1,500
600
26,632
293
45
–
–
–
–
–
–
–
–
–
–
293
45
At 31 December 2020
1,613
19,458
3,000
799
1,500
600
26,970
Additions*
Exchange adjustment
497
(11)
–
–
–
–
–
–
–
–
–
–
497
(11)
At 31 December 2021
2,099
19,458
3,000
799
1,500
600
27,456
Amortisation
At 31 December 2019
Charge for the period
Exchange adjustment
Impairment
At 31 December 2020
Charge for the period
Exchange adjustment
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
At 31 December 2019
1,275
–
45
–
1,320
–
(9)
1,311
788
293
–
–
–
–
7,871
7,871
–
–
7,871
11,587
11,587
19,458
719
300
–
–
1,019
300
–
1,319
1,681
1,981
2,281
383
160
–
–
543
160
–
703
96
256
416
360
150
–
–
510
150
–
660
840
990
1,140
288
120
–
–
408
120
–
528
72
192
312
3,025
730
45
7,871
11,671
730
(9)
12,392
15,064
15,299
23,607
* Additions in both years arose from internal development.
Annual Report and Accounts 2021 57
Notes to the Consolidated Financial Statements
continued
Goodwill, customer relationships, trademarks, process technology and supplier agreements relate to the
acquisition of CellRight Technologies LLC in 2017 and are subject to annual impairment testing as described
below. The remaining amortisation periods for these assets are: Customer relationships: 5.8 years, Trademarks:
0.8 years, Process Tech: 5.8 years, Supplier agreements: 0.8 years.
Impairment of non-current assets
Annual impairment test on CellRight Technologies LLC (“CellRight”)
The Group considers the assets arising on the acquisition of CellRight Technologies LLC to be a single cash
generating unit (“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, generally 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
14.6% (2020: 14.6%) which reflects current market assessments of the time value of money. 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% (2020: 2%). Due to the uncertainty created by the Covid-19 pandemic the Directors have taken a cautious
approach to the forecasts used in the calculation of value in use and in particular the assumption disclosed below
in respect of future revenue growth.
The key inputs to the cash flow forecasts are:
l
l
l
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 base
on the anticipated growth of the business);
future anticipated capital expenditure (adjusted based on expected future growth); and
l movements in working capital.
The key assumption within the cash flow forecasts relates to sales growth which is inherently difficult to forecast
in light of the continued pandemic. Across the five-year forecast period the compound annual growth rate (“CAGR”)
is 24.7% (2020: 18%) reflecting the uncertainty still present in the group’s markets at 31 December 2021.
At 31 December 2021, the impairment test prepared by the Directors indicates a recoverable amount based on
value in use of USD 62 million (2020: USD 30 million) compared to a CGU carrying amount of USD 31 million (2020:
USD 38 million). The Directors therefore do not consider that an impairment charge is appropriate for the year
ended 31 December 2021 (2020: USD 7.9 million). 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 16% across the five-year period.
The Directors consider the impairment charged at 31 December 2020 was due to the uncertainty created by the
Covid-19 pandemic.
58 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
15) Inventory
Raw materials and consumables
Work in progress
Finished goods including goods for resale
Total
2021
USD
‘000
2,681
5,628
1,410
9,719
2020
USD
‘000
2,704
4,783
2,117
9,604
Inventory of finished goods including goods for resale is presented net of a provision of USD 307k (2020:
USD 368k).
16) Trade and other receivables
Trade debtors
Other receivables
Prepayments and accrued income
2021
USD
‘000
2,946
118
1,037
4,101
2020
USD
‘000
2,424
129
1,036
3,589
The Directors consider that the carrying amount of trade and other receivables approximates to their fair values.
Trade receivables
Less: Allowance for expected credit losses
Allowance for expected credit losses
USD
‘000
3,024
(78)
2,946
USD
‘000
2,467
(43)
2,424
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
not overdue
0 to 3 months overdue
3 to 4 months overdue
4 to 5 months overdue
over 5 months overdue
Expected
credit loss
rate
0%
0%
25%
50%
100%
Carrying
amount
2021
USD
‘000
Allowance for
expected credit
losses 2021
USD
‘000
Allowance for
Carrying expected credit
losses 2020
USD
‘000
amount 2020
USD
‘000
2,745
127
69
45
38
3,024
–
–
17
23
38
78
1,324
1,114
19
27
(17)
2,467
–
–
13
18
12
43
Annual Report and Accounts 2021 59
Notes to the Consolidated Financial Statements
continued
The average Credit terms with customers is 40 days (2020: 40 days). Trade receivables are analysed by the
currencies of settlement below:
US Dollars
Euros
Sterling
Trade debtors
Movements in the impairment allowance for trade receivables are as follows:
Opening provision for impairment of trade receivables
Increase during the year
Receivables written off during the year as uncollectable
Unused amounts reversed
At 31 December 2021
17) Financial instruments
2021
USD
‘000
2,687
188
71
2,946
2021
USD
‘000
43
135
3
(103)
78
2020
USD
‘000
2,123
287
14
2,424
2020
USD
‘000
128
37
–
(122)
43
Financial risk management objectives
Management provides services to the business, co-ordinates access to domestic and international financial
markets and monitors and manages the financial risks relating to the operations of the Group. These risks include
cash flow interest risk, credit risk, liquidity risk, capital 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 minimize costs and liquidity risk.
The capital structure of the Group consists of cash and cash equivalents, interest bearing loans and borrowings,
and equity attributable to equity holders of the parent, comprising 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
Financial assets measured at amortised cost
Cash and cash equivalents
Trade receivables
Other receivables
60 Tissue Regenix Group plc
2021
USD
‘000
7,709
2,946
80
10,735
2020
USD
‘000
12,968
2,424
114
15,506
Notes to the Consolidated Financial Statements
continued
Financial liabilities measured at amortised cost
Trade payables
Accruals
Borrowings
Lease liabilities
2021
USD
‘000
2,574
1,619
4,465
3,482
2020
USD
‘000
1,324
2,570
3,788
3,431
12,140
11,113
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 on-going 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 Groups interest bearing loans incur interest charges at a fixed rate above LIBOR and therefore, the Group is
not exposed to significant interest rate fluctuations.
Accordingly, no sensitivity analysis has been presented.
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 to recognized 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 debtors is mitigated by a robust procedure including credit reviews on all customers
and establishing a credit allowance that reflect 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 because the counterparties are financial
institutions with high and good credit ratings assigned by international credit rating agencies. The majority of
funds are held by institutions with an A rating or higher.
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 continuously monitoring forecast and actual cash flow.
With the exception of borrowings and leases, outlined in notes 18 and 20 respectively, the Group’s financial
liabilities mature within less than six months.
At 31 December 2021, the Group was compliant with all the terms relating to the MidCap facilities. Since the year
end, the Group has been able to increase the funds available to it under the terms of the facility from USD 3 million
to USD 5 million.
Annual Report and Accounts 2021 61
Notes to the Consolidated Financial Statements
continued
The maturity of borrowings was as follows:
Less than 6 months
6 months to 1 year
1 year to 2 years
2 years to 5 years
2021
USD
‘000
–
–
1,000
3,465
4,465
2020
USD
‘000
–
–
–
3,788
3,788
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, with the result that exposure to
exchange rate fluctuations arise. However, there is currently limited currency risk within the Group at the current
time as all its financial assets and the majority of its liabilities are denominated in the functional currency of the
relevant entity. The Group does not hold cash balances in currencies other than the functional currency of the
relevant entity and therefore there is little exposure to fluctuations in exchange rates which would impact the
income statement of the Group.
The carrying amounts of the Group’s foreign currency denominated monetary liabilities at the reporting date are
immaterial and as a result the Group has not undertaken foreign currency sensitivity analysis.
The Group does not normally hedge against the effects of movements in exchange rates.
18) Trade and other payables
Current:
Trade payables
Taxes and social security
Accruals
2021
USD
‘000
2,574
51
1,619
4,244
2020
USD
‘000
1,324
190
2,570
4,084
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 on-going 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.
62 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
19) Loans and borrowings
At 31 December 2021
Term loan
Revolving credit
Gross borrowings
Less: capitalised debt issue costs
Borrowings
At 31 December 2020
Term loan
Revolving credit
Gross borrowings
Less: capitalised debt issue costs
Borrowings
Interest rate %
Maturity
Current USD
Non-current
‘000
USD’000
LIBOR RATE +6.75%
LIBOR RATE +4.5%
Jun 2024
Jun 2024
–
–
–
–
2,000
2,649
4,649
(184)
4,465
Interest rate %
Maturity
Current USD
Non-current
‘000
USD’000
LIBOR RATE +6.75%
LIBOR RATE +4.5%
Jun 2024
Jun 2024
–
–
–
–
2,000
2,047
4,047
(259)
3,788
In June 2019, the Group signed a revised bank facility with MidCap Financial Trust (“MidCap”) in the US.
Under the terms of the agreement, repayment of the term loan will commence in July 2023 by the payment of
12 monthly instalments. The revolving credit is repayable in full by June 2024 and, at 31 December 2021, had a
maximum drawdown facility of USD 3 million. Since the year end, the Group has been able to increase the funds
available to it under the terms of the facility from USD 3 million to USD 5 million.
In respect of the term loan, MidCap holds security over the Group’s freehold property in San Antonio and certain
IP. The carrying amount of these assets at 31 December 2021 is USD 4.8 million (2020: USD 3.8 million) and nil
(2020: nil) respectively.
The revolving credit facility is subject to revenue covenants.
Debt issue costs of USD 377k were capitalised against the loan and is being amortised over the life of the term
loan.
Please refer to note 17 for maturity analysis.
The movement in total borrowings during the year was as follows:
Non-cash
changes
Non-cash foreign Non-cash
changes exchange changes
2020 Cashflows Additions movement other 2021
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Borrowings 3,788 602 75 – – 4,465
Lease Liabilities 3,431 (102) 154 (1) – 3,482
Total Liabilities
from Financing Activities 7,219 500 229 (1) – 7,947
Annual Report and Accounts 2021 63
Notes to the Consolidated Financial Statements
continued
Non-cash
changes
foreign Non-cash
Non-cash exchange changes
2019 Cashflows additions movement other 2020
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Borrowings 2,998 715 75 – – 3,788
Lease Liabilities – – 3,413 – 18 3,431
Total Liabilities
from Financing Activities 2,998 715 3,488 – 18 7,219
20) Deferred tax liabilities
As at December 2019
Release to the income statement
As at December 2020
Release to the income statement
As at December 2021
USD
‘000
880
(120)
760
(120)
640
The deferred tax liability relates to intangible assets recognised on the acquisition of CellRight Technologies LLC.
See note 14
21) Lease liabilities
Current Lease liabilities
Non–current liabilities
2021
USD
‘000
118
3,364
3,482
2020
USD
‘000
347
3,084
3,431
Maturity analysis of lease liabilities
The maturity of the gross contractual undiscounted cashflows due on the Group’s lease liabilities is set out below
based on the period between 31 December 2021 and the contractual maturity date.
Land and buildings
Less than 6 months
6 months to 1 year
1 year to 2 years
2 years to 5 years
5 or more years
2021
USD
‘000
202
208
420
3,518
–
4,348
2020
USD
‘000
181
181
390
4,002
–
4,754
Disclosure of additions to and carrying amounts of right-of-use assets by class has been provided in note 13.
64 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
Effect of leases on financial performance
Depreciation on right-of-use assets
Interest expense
Total effect of leases on financial performance
2021
USD
‘000
103
301
404
2020
USD
‘000
78
254
332
The Group leases properties used for its operations in the United Kingdom (“UK”) and United States (“US”).
UK Property: 5-year fixed lease which includes a break clause in 2023.
US property: 5-year fixed which includes an option to purchase up to 2025.
The Group average effective borrowing rate for leases at 31 December 2021 was 9% (2020: 9%).
22) Share capital
Allotted, issued and fully paid
Ordinary shares of 0.1 pence
Deferred shares of 0.4 pence
2021
USD
‘000
9,164
6,783
15,947
Movements on share capital during the period were as follows:
At 31 December 2019
Sub-division of shares
Issued on exercise of share options
Issue of shares
At 31 December 2020 and 2021
Ordinary shares
Number
1,171,971,322
1,479,965
5,859,626,212
7,033,077,499
USD
Deferred shares
‘000
8,478
(6,783)
2
7,467
9,164
Number
–
1,171,971,322
–
–
1,171,971,322
2020
USD
‘000
9,164
6,783
15,947
USD
‘000
–
6,783
–
–
6,783
As permitted by the provisions of the Companies Act 2006, the Company does not have an upper limit to its
authorised share capital.
On 9 June 2020, a special resolution was passed at the general meeting for the subdivision of 1,171,971,322
ordinary shares of 0.5 pence each into 1,171,971,322 ordinary shares of 0.1 pence each and 1,171,971,322 deferred
shares of 0.4 pence.
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 AIM, do not give the holders any right to receive notice of, or to attend or
vote at any general meetings, 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 9 June 2020, the Company issued 5,859,626,212 ordinary shares of 0.1 pence each raising gross proceeds of
USD 18.7 million (£14.6 million).
Annual Report and Accounts 2021 65
Notes to the Consolidated Financial Statements
continued
23) 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 and the fair value of the assets transferred
differ.
Reverse acquisition
Retained earnings of a reverse acquisition.
Own shares held
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, whilst its reporting currency is USD, resulting in
exchange differences on translation of the parent undertakings equity.
Retained deficit
All current and prior period retained losses.
24) Share-based payments
Share options and shares held in employee benefit trust (“EBT”)
The Company operates a share option plan, under which certain employees have been granted options to
subscribe for ordinary shares. All options are equity settled. The options have an exercise price of between 0.1p
to 22.5p and a vesting period between one and three years. If the options remain unexercised after a period of
10 years from the date of grant, the options expire. The Group has no legal or constructive obligation to repurchase
or settle the options in cash.
The Group also operates a jointly-owned EBT share scheme for senior management under which the trustee of
the Group sponsored EBT has acquired shares in the Group 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 fair value benefit is measured using the Binomial model,
taking into account the terms and conditions upon which the jointly owned shares were purchased.
66 Tissue Regenix Group plc
Notes to the Consolidated Financial Statements
continued
The number and weighted average exercise prices of share options and EBT shares are as follows:
At 31 December 2019
Exercised in the period
Lapsed during year
Issued in the year
EMI
Unapproved
EBT
SAYE
options
5,267,716
options
4,758,732
shares
16,112,800
options
6,430,483
LTIP
options
–
–
(4,047,279)
–
(1,479,965)
(1,435,293)
–
–
–
(6,430,483)
–
– 47,739,128
At 31 December 2020
1,220,437
1,843,474
16,112,800
47,739,128
Weighted
average
exercise
price per
Total share (£)
32,569,731 0.0596
(1,479,965) 0.0008
(11,913,055) 0.0615
47,739,128 0.0028
66,915,839 0.0180
–
–
–
–
Lapsed during year
Issued in the year
(464,902)
–
(1,346,603)
–
– (24,275,360)
–
–
– 82,116,698
(26,086,865) 0.0081
82,166,698 0.0010
At 31 December 2021
755,535
496,871
16,112,800 23,463,768 82,116,698 122,945,672 0.0091
Excluding the EBT shares, there were 573,381 share options outstanding at 31 December 2021 (2020: 573,381)
which were eligible to be exercised. The remaining options were not eligible to be exercised as these are subject
to employment period and market based vesting conditions, some of which had not been met at 31 December
2021.
The range of exercise prices applicable to share options is between 0.1p and 22.5p with the majority of the
remaining shares at the lower price. The options eligible to be exercised are at a price of 12p per share.
There were 16,112,800 of the jointly held EBT shares which were eligible to vest as at 31 December 2021.
Share options and employee interests in jointly owned EBT shares which are not exercised within 10 years from
the date of grant will expire. The weighted average remaining contractual life of options outstanding at the end of
the financial year was 6.7 years (2020: 5.2 years).
The fair value of the options issued in the current year have been measured using the Monte Carlo model. The
performance conditions of previous grants were generally market based whereas current grants are now issued
with multiple performance conditions and therefore the Monte Carlo model is considered to be a more appropriate
model.
The significant inputs into the model for the IFRS2 valuation were as follows:
Dividend yield
Exercise price (£)
Expected volatility (%)
Risk free interest rate (%)
Expected vesting life of EBT shares and options (years)
Weighted average fair value (£)
Weighted average share price (£)
Expected volatility is based on historic share prices as published on the LSE website.
The fair value of the options granted during the year was USD 447k.
Options
Granted
2021
–
0.001
80
0.11
3
0.0040
0.0055
Annual Report and Accounts 2021 67
Notes to the Consolidated Financial Statements
continued
Share based payments continued
The Company recognised a total expense of USD 110k (2020: credit USD 36k) in respect of employment related
securities.
Other Share Options
In 2019, Warrants were issued to MidCap as part of the Group’s new borrowing facilities. Options over 3,096,798
shares were granted at an exercise price of 5.74p. These options are equity-settled and still remain exercisable.
The weighted average contractual life is 7.5 years. (2020: 8.5). The binomial model was used to value the share-
based payment charge and the assumptions adopted are consistent with those used in the calculation of 2019
employee share-based payments above except the vesting period of nil.
25) Non-controlling interest
As at 1 January
Attributable loss for the year
As at 31 December
2021
USD
‘000
(757)
(193)
(950)
2020
USD
‘000
(758)
1
(757)
The non-controlling interest has 50% (2020: 50%) equity holding. GBM-V GmbH contributed revenue of USD 2,789k
(2020: USD 2,666k) and a loss before tax of USD 154k after elimination of intercompany trading (2020: Profit
USD 277k) for the year. Further financial information relating to GBM-V GmbH can be found in note 5.
26) Related party transactions
Amounts due from subsidiaries
Balances and transactions between the Company and its subsidiaries which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
Transactions with key management personnel
The remuneration of the Board of Directors of the Group is set out below in aggregate for each of the categories
specified in IAS 24 Related party disclosures.
Short-term employment benefits
2021
$000
1,058
2020
$000
1,247
For more information on the salary and fees, bonus, and benefits included above see Director’s Remuneration Report.
27) Ultimate controlling party
The Directors believe that there is no ultimate controlling party.
68 Tissue Regenix Group plc
Company Statement of Changes in Equity
For the year ended 31 December 2021
At 31 December 2019
Transactions with owners in
their capacity as owners:
Issue of shares
Costs of issue of new equity
Share options exercised
Share-based payment credit
Total transactions with owners
in their capacity as owners
Loss for the year
At 31 December 2020
Transactions with owners in
their capacity as owners:
Share-based payments
Total transactions with owners
in their capacity as owners
Loss for the year
Share-
based
Share
Merger
payment
Retained
premium
£’000
86,399
reserve
£’000
10,884
reserve
£’000
910
deficit
£’000
(63,466)
Total
£’000
40,586
8,790
(899)
–
–
7,891
–
–
–
–
–
–
–
–
–
–
(3)
(3)
–
–
–
–
–
–
14,650
(899)
1
(3)
13,749
(15,048)
(15,048)
94,290
10,884
907
(78,514)
39,287
–
–
–
–
–
–
80
80
–
–
80
–
(244)
80
(244)
Share
capital
£’000
5,859
5,860
–
1
–
5,861
–
11,720
–
–
–
At 31 December 2021
11,720
94,290
10,884
987
(78,758)
39,123
Annual Report and Accounts 2021 69
Company Statement of Financial Position
As at 31 December 2021
Assets
Non-current assets
Investments
Intercompany loans
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium
Merger reserve
Share-based payment reserve
Retained deficit
Notes
2021
£000
2020
£000
C4
C6
C5
C7
C8
C9
C9
C9
C9
18,836
15,722
34,558
117
4,679
4,796
39,354
(231)
(231)
39,123
11,720
94,290
10,884
987
(78,758)
39,123
18,813
11,754
30,567
35
9,039
9,074
39,641
(354)
(354)
39,287
11,720
94,290
10,884
907
(78,514)
39,287
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
parent company’s statement of income or statement of comprehensive income.
The parent company’s loss for the year ended 31 December 2021 was £244k (2020: loss £15,048k).
The Company financial statements were approved by the Board of Directors and authorised for issue on 14 March
2022 and were signed on its behalf by
Daniel Lee
Chief Executive Officer
Company number: 05969271
70 Tissue Regenix Group plc
Notes to the Company Financial Statements
For the year ended 31 December 2021
C1. Principal accounting policies
Tissue Regenix Group plc (the “Company”) is a company limited by shares, domiciled and incorporated in the
United Kingdom under the Companies Act 2006.
The address of the registered office is Unit 3, Phoenix Court, Lotherton Way, Garforth LS25 2GY. The Company’s
shares are admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange.
The presentation currency of these financial statement is pound sterling “£”, which is the currency in which the
Company raises funds. The functional currency is pound sterling.
These financial statements were prepared in accordance with Financial Reporting Standard 101: Reduced
Disclosure Framework (“FRS 101”). The Company has adopted FRS 101 for the first time. Therefore, the
requirements of paragraphs 6-33 of IFRS 1 apply (except for the requirements of paragraphs 6 and 21 to present
an opening statement of financial position at the date of transition). There were no material adjustments arising
from the adoption of FRS 101, and therefore no reconciliations of equity at 1 January 2021 or 31 December 2020,
or of profit for the year ended 31 December 2021, have been presented.
In preparing these financial statements, the Company applies the recognition and measurement requirements of
UK adopted International accounting standards, amended where necessary to comply with the Companies Act
2006.
Under section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own
profit and loss account.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the
following disclosures:
l
l
l
l
l
Cash flow statement and related notes;
Disclosure in respect of transactions with wholly-owned subsidiaries;
Disclosure in respect of capital management;
The effects of new but not yet effective IFRSs; and
Disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the
exemptions under FRS 101 available in respect of the following disclosures:
l
l
IFRS 2 Share-based payments in respect of group settled share-based payments;
Certain disclosures required by IFRS 13 Fair value measurement and the disclosures required by IFRS 7
Financial instrument disclosures.
The principal accounting policies adopted are the same as those set out in the Group’s consolidated financial
statements and have, unless otherwise stated, been applied consistently to all years presented in these financial
statements.
The financial statements have been prepared on the historical basis. Historical cost is generally based on the fair
value of the consideration given in exchange for assets.
Judgements made by the Directors in the application of these accounting policies that have significant effect on
the financial statement and estimates with a significant risk of material adjustment in the next year are discussed
in C2.
Investments
Fixed asset investments, including investments in subsidiaries, are stated at cost and reviewed for impairment if
there are any indications that the carrying value may not be recoverable.
Annual Report and Accounts 2021 71
Notes to the Company Financial Statements
continued
C2. Critical accounting estimates and judgements
In the application of the Company’s accounting policies, the Directors are required to make judgements, estimates
and assumptions about the carrying value 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 on-going basis. Revisions to accounting estimates
are recognized 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 Company’s accounting policies and that have the most significant effect on the amounts recognised in the
financial statements.
Recoverability of investments and loans to subsidiary undertakings
The Company has investments and outstanding loans from its subsidiaries. However, there is a risk that the that
the carrying amount of the Company’s investments and loans will exceed the recoverable amount.
At 31 December 2021, the Company had outstanding loans due from its subsidiaries of £79.6 million (2020:
£75.9 million).
In accordance with IFRS 9 Financial Instruments, as the subsidiary undertakings cannot repay the loans at the
reporting date, the Company has made an assessment of expected credit losses. Having considered multiple
scenarios on the manner, timing, quantum and probability of recovery on the receivables, a cumulative lifetime
expected credit loss (ECL) of £63,871,000 has been recognised at 31 December 2021 (2020: £64,132,000) resulting
in a reversal credit of £261,000.
The calculation of the allowance for lifetime expected credit losses requires a significant degree of estimation
and judgement, in particular in determining the probability weighted likely outcome for each scenario considered.
The Directors’ assessment of ECL included repayment through future cash flows over time (which are inherently
difficult to forecast for the Company at its current stage of development) and also the amount that could be
realised through an immediate sale of the subsidiary undertakings. The Directors’ assessment of repayment
through future cash flows included scenarios where the loan was not recovered in full. The Directors allocated a
probability weighting of 90% to scenarios where recovery would be repayment over time, and 10% to the scenario
where immediate sale of the subsidiary undertaking was contemplated.
Given the quantum of the provision recorded at 31 December 2021, the outcome is materially sensitive to the key
assumptions inherent in the calculation. The carrying value of amounts owned by subsidiary undertakings at 31
December 2021 is disclosed in note C6 to the financial statements.
C3. Staff costs
The average monthly number of persons (including Directors)
employed by the Company during the period was:
Directors Administration staff
The aggregate remuneration, including Directors, comprised: Wages and salaries
Social security, pension & healthcare costs
2021
no.
6
2
8
£000
467
68
535
2020
no.
5
2
7
£000
631
141
772
Social security, pension and healthcare costs include pension contributions £13,000 (2020: £33,000).
72 Tissue Regenix Group plc
Notes to the Company Financial Statements
continued
C4. Investment in subsidiary companies
Cost at 1 January
Push down of Share-based payment charges
Carrying value at 31 December
2021
£000
18,813
23
18,836
2020
£000
18,594
219
18,813
At 31 December 2021, the Company held the following investments in subsidiaries:
Share of issued capital
and voting rights
Undertaking
Sector
Tissue Regenix Limited
TRX Wound Care Limited
TRX Orthopaedics Limited
TRX Cardiac Limited
TRX Vascular Limited
Tissue Regenix Wound Care Inc*
TRX Orthopedics Inc^
Tissue Regenix Holdings Limited
Tissue Regenix Holdings Inc**
CellRight Technologies LLC†
GBM-V GmbH
Regenerative medicine
Regenerative medicine
Regenerative medicine
Regenerative medicine
Dormant
Regenerative medicine
Regenerative medicine
Holding company
Holding company
Regenerative medicine
Regenerative medicine
* Held through TRX Wound Care Limited
^ Held through TRX Orthopaedics Limited
** Held through Tissue Regenix Holdings Limited
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
† Held through Tissue Regenix Holdings Inc. All others are held through Tissue Regenix Limited.
Registered Addresses:
Tissue Regenix Limited, TRX Wound Care Limited, TRX Orthopaedics Limited, TRX Cardiac Limited,
TRX Vascular Limited, Tissue Regenix Holdings Limited: Unit 3, Phoenix Court, Lotherton Way, Garforth, Leeds
LS25 2GY.
Tissue Regenix Wound Care Inc, TRX Orthopedics Inc, CellRight Technologies LLC, Tissue Regenix Holding Inc:
1808 Universal City Boulevard, Universal City Texas, 78148.
GBM-v Gmbh: Schillingallee 68, 18057, Rostock, Germany.
C5. Trade and other receivables
Prepayments & accrued income
Other debtors
2021
£000
108
9
117
2020
£000
31
4
35
Annual Report and Accounts 2021 73
Notes to the Company Financial Statements
continued
C6. Intercompany loans
Intercompany loans
Less: Expected credit losses
Comprising:
Non-current assets
2021
£000
79,593
(63,871)
15,722
15,722
2020
£000
75,866
(64,132)
11,754
11,754
The Company has entered into a number of unsecured related party transactions with its subsidiary undertakings.
Intercompany loans include £0.8 million gross (2020: £0.8 million) before a provision of £0.7 million (2020:
£0.7 million) due from the Group’s EBT. No interest was receivable on loans to subsidiary undertakings and the
loans are repayable on demand except for a £13.2 million (2020: £13.2 million) unsecured loan to
Tissue Regenix Limited that is charged at 4% above the Bank of England base rate and which is repayable in 2024.
Intercompany loans are classified as non-current as the timing of repayment is uncertain and unlikely to be within
one year.
C7. Trade and other payables
Taxes & social security
Accruals
C8. Share Capital
Allotted, issued and fully paid
Ordinary shares of 0.1 pence
Deferred shares of 0.4 pence
2021
£000
23
208
231
2021
£000
7,033
4,687
11,720
Movements on share capital during the period were as follows:
At 31 December 2019
Sub-division of shares
Issued on exercise of share options
Issue of shares
At 31 December 2020 and 2021
Ordinary shares
Number
1,171,971,322
1,479,965
5,859,626,212
7,033,077,499
£000
5,859
(4,687)
1
5,860
Deferred shares
Number
–
1,171,971,322
–
–
7,033
1,171,971,322
2020
£000
110
244
354
2020
£000
7,033
4,687
11,720
2020
£000
–
4,687
–
5,860
4,687
As permitted by the provisions of the Companies Act 2006, the Company does not have an upper limit to its
authorised share capital.
On 9 June 2020, a special resolution was passed at the general meeting for the subdivision of 1,171,971,322
ordinary shares of 0.5 pence each into 1,171,971,322 ordinary shares of 0.1 pence each and 1,171,971,322 deferred
shares of 0.4 pence.
74 Tissue Regenix Group plc
Notes to the Company Financial Statements
continued
The Deferred shares are not listed on AIM, do not give the holders any right to receive notice of, or to attend or
vote at any general meetings, 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
£1million per share).
On 9 June 2020, the Company issued 5,859,626,212 ordinary shares of 0.1 pence each raising gross proceeds of
£14.6 million.
C9. 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 and the fair value of the assets transferred
differ.
Share-based payment reserve
Accumulated charges/(credits) made under IFRS 2 in respect of share-based payments.
Retained deficit
All current and prior period losses.
C10. Related party transactions
Subsidiary undertakings
The Company has taken advantage of the exemption under FRS 101 in regard to the disclosure of transactions
and balances with wholly-owned group companies.
Annual Report and Accounts 2021 75
Other
Notice of Annual General Meeting
Notice is given that the 2022 Annual General Meeting of Tissue Regenix Group plc (“Company”) will be held at
DLA Piper, 160 Aldersgate St, Barbican, London EC1A 4HT on 26th April 2022 at 13.00 for the following purposes:
To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
1.
To receive the Company’s annual accounts, strategic report and directors’ and auditors’ reports for the year
ended 31 December 2021
2.
3.
4.
5.
6.
7.
8.
9.
To reappoint Jonathan Glenn who retires by rotation, as a director of the Company
To reappoint Daniel Lee who retires by rotation, as a director of the Company
To reappoint David Cocke who retires by rotation, as a director of the Company
To reappoint Brian Phillips who retires by rotation, as a director of the Company
To reappoint Shervanthi Homer-Vanniasinkam who retires by rotation, as a director of the Company
To reappoint Trevor Phillips who retires by rotation, as a director of the Company
To reappoint RSM UK Audit LLP as auditors of the Company
To authorise the directors to determine the remuneration of the auditors
10. That, pursuant to section 551 of the Companies Act 2006 (“Act”), the directors be generally and
unconditionally authorised to allot Relevant Securities:
10.1 up to an aggregate nominal amount of £2,344,359; and
10.2 comprising equity securities (as defined in section 560(1) of the Act) up to a further aggregate nominal
amount of £2,344,359 in connection with an offer by way of a rights issue:
10.2.1 to holders of ordinary shares in the capital of the Company in proportion (as nearly as
practicable) to the respective numbers of ordinary shares held by them; and
10.2.2 to holders of other equity securities in the capital of the Company, as required by the rights
of those securities or, subject to such rights, as the directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the directors may deem necessary
or expedient in relation to treasury shares, fractional entitlements, record dates or any legal or
practical problems under the laws of any territory or the requirements of any regulatory body
or stock exchange, provided that these authorities shall expire at the conclusion of the next
annual general meeting of the Company after the passing of this resolution or on 26 July 2023
(whichever is the earlier), save that, in each case, the Company may make an offer or
agreement before the authority expires which would or might require Relevant Securities to
be allotted after the authority expires and the directors may allot Relevant Securities pursuant
to any such offer or agreement as if the authority had not expired.
In this resolution, “Relevant Securities” means shares in the Company or rights to subscribe for
or to convert any security into shares in the Company; a reference to the allotment of Relevant
Securities includes the grant of such a right; and a reference to the nominal amount of a Relevant
Security which is a right to subscribe for or to convert any security into shares in the Company
is to the nominal amount of the shares which may be allotted pursuant to that right.
These authorities are in substitution for all existing authorities under section 551 of the Act
(which, to the extent unused at the date of this resolution, are revoked with immediate effect).
To consider and, if thought fit, to pass the following resolutions as special resolutions:
11. That, subject to the passing of resolution 10 and pursuant to section 570 of the Act, the directors be and are
generally empowered to allot equity securities (within the meaning of section 560 of the Act) for cash
pursuant to the authority granted by resolution 10 as if section 561(1) of the Act did not apply to any such
allotment, provided that this power shall be limited to the allotment of equity securities:
76 Tissue Regenix Group plc
Other
continued
11.1 in connection with an offer of equity securities (whether by way of a rights issue, open offer or
otherwise, but, in the case of an allotment pursuant to the authority granted by paragraph 10.2 of
resolution 10, such power shall be limited to the allotment of equity securities in connection with an
offer by way of a rights issue):
11.1.1 to holders of ordinary shares in the capital of the Company in proportion (as nearly as
practicable) to the respective numbers of ordinary shares held by them; and
11.1.2 to holders of other equity securities in the capital of the Company, as required by the rights
of those securities or, subject to such rights, as the directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the directors may deem necessary
or expedient in relation to treasury shares, fractional entitlements, record dates or any legal
or practical problems under the laws of any territory or the requirements of any regulatory
body or stock exchange; and
11.2 otherwise than pursuant to paragraph 11.1 of this resolution up to an aggregate nominal amount of
£703,307,
and this power shall expire at the conclusion of the next annual general meeting of the Company after
the passing of this resolution or on 26 July 2023 (whichever is the earlier), save that the Company
may make an offer or agreement before this power expires which would or might require equity
securities to be allotted for cash after this power expires and the directors may allot equity securities
for cash pursuant to any such offer or agreement as if this power had not expired.
This power is in substitution for all existing powers under section 570 of the Act (which, to the extent
unused at the date of this resolution, are revoked with immediate effect).
12. That, pursuant to section 701 of the Act, the Company be and is generally and unconditionally authorised to
make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 0.1p each in
the capital of the Company (“Shares”), provided that:
12.1 the maximum aggregate number of Shares which may be purchased is 703,307,749;
12.2 the minimum price (excluding expenses) which may be paid for a Share is 0.1p;
13.
the maximum price (excluding expenses) which may be paid for a Share is an amount equal to 105 per cent
of the average of the middle market quotations for a Share as derived from the Daily Official List of the London
Stock Exchange plc for the five business days immediately preceding the day on which the purchase is made;
and (unless previously revoked, varied or renewed) this authority shall expire at the conclusion of the next
annual general meeting of the Company after the passing of this resolution or on 26 July 2023 (whichever
is the earlier), save that the Company may enter into a contract to purchase Shares before this authority
expires under which such purchase will or may be completed or executed wholly or partly after this authority
expires and may make a purchase of Shares pursuant to any such contract as if this authority had not
expired.
Unit 3, Phoenix Court
Lotherton Way
Garforth
Leeds
England
LS25 2GY
Registered in England and Wales No. 05969271
By order of the board
Kirsten Lund
Secretary
14 March 2022
Registered office
Annual Report and Accounts 2021 77
Other
continued
Notes
Entitlement to attend and vote
14. The right to vote at the meeting is determined by reference to the register of members. Only those
shareholders registered in the register of members of the Company as at the close of business on
Sunday 24 April (or, if the meeting is adjourned, close of business on the date which is two working days
before the date of the adjourned meeting) shall be entitled to attend and vote at the meeting in respect of
the number of shares registered in their name at that time. Changes to entries in the register of members
after that time shall be disregarded in determining the rights of any person to attend or vote (and the number
of votes they may cast) at the meeting.
Proxies
15. A shareholder is entitled to appoint another person as his or her proxy to exercise all or any of his or her
rights to attend and to speak and vote at the meeting. A proxy need not be a shareholder of the Company.
A shareholder may appoint more than one proxy in relation to the meeting, provided that each proxy is
appointed to exercise the rights attached to a different share or shares held by that shareholder. Failure to
specify the number of shares each proxy appointment relates to or specifying a number which when taken
together with the numbers of shares set out in the other proxy appointments is in excess of the number of
shares held by the shareholder may result in the proxy appointment being invalid.
A proxy may only be appointed in accordance with the procedures set out in notes 3 and 4 below and the
notes to the proxy form.
The appointment of a proxy will not preclude a shareholder from attending and voting in person at the
meeting.
You can vote either:
l
l
l
by logging on to www.signalshares.com and following the instructions;
You may request a hard copy form of proxy directly from the registrars, Link Group (previously called
Capita), on Tel: 0371 664 0300. Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines
are open between 09:00 - 17:30, Monday to Friday excluding public holidays in England and Wales);
in the case of CREST members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below.
In order for a proxy appointment to be valid a form of proxy must be completed. In each case the form of
proxy must be received by PXS 1, Link Group, Central Square, 29 Wellington Street, Leeds, LS1 4DL, no later
than 13.00 p.m. on Sunday 24 April (or, if the meeting is adjourned, no later than 48 hours before the time of
any adjourned meeting).
16. CREST members who wish to appoint a proxy or proxies for the meeting (or any adjournment of it) through
the CREST electronic proxy appointment service may do so by using the procedures described in the CREST
Manual. CREST personal members or other CREST sponsored members, and those CREST members who
have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear
UK & Ireland Limited’s specifications and must contain the information required for such instructions, as
described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a
proxy or is an amendment to the instruction given to a previously appointed proxy, must, in order to be valid,
be transmitted so as to be received by Link Asset Services (ID RA10) no later than 13.00 p.m. on
Sunday 24 April (or, if the meeting is adjourned, no later than 48 hours before the time of any adjourned
meeting). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp
78 Tissue Regenix Group plc
Other
continued
applied to the message by the CREST Applications Host) from which Link Asset Services is able to retrieve
the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of
instructions to proxies appointed through CREST should be communicated to the appointee through
other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member or sponsored member or has appointed a voting service provider(s), to procure
that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST
system and timings.
The Company may treat a CREST Proxy Instruction as invalid in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
Corporate representatives
17. A shareholder which is a corporation may authorise one or more persons to act as its representative(s) at
the meeting. Each such representative may exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual shareholder, provided that (where there is more than one
representative and the vote is otherwise than on a show of hands) they do not do so in relation to the same
shares.
Documents available for inspection
18. Subject to the restrictions imposed as a result of the spread of COVID-19 in the UK, the following documents
will be available for inspection during normal business hours at the registered office of the Company from
the date of this notice until the time of the meeting. They will also be available for inspection at the place of
the meeting from at least 15 minutes before the meeting until it ends:
18.1 Copies of the service contracts of the executive directors.
18.2 Copies of the letters of appointment of the non - executive directors.
Biographical details of directors
19. Biographical details of all those directors who are offering themselves for reappointment at the meeting are
set out on pages 20 and 20 of the enclosed annual report and accounts.
Share capital
20. As at 14 March (the last practicable business day prior to the date of this notice), the Company’s issued
share capital comprised 7,033,077,499 ordinary shares of 0.1 pence each and 1,171,971,322 deferred shares
of 0.4 pence each. Each ordinary share carries the right to vote at a general meeting of the Company. The
deferred shares carry no voting rights. Therefore, the total number of voting rights as at the date of this
document is 7,033,077,499.
Annual Report and Accounts 2021 79
Company and Adviser Information
Non-Executive Chairman
Chief Executive Officer
Chief Financial Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
REGISTRAR
Link Group
PXS 1
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
LEGAL ADVISERS
DLA Piper UK LLP
Princes Exchange
Princes Square
Leeds
LS1 4BY
DIRECTORS
Jonathan Glenn
Daniel Lee
David Cocke
Shervanthi Homer-Vanniasinkam
Trevor Phillips
Brian Phillips
COMPANY SECRETARY
Kirsten Lund
COMPANY WEBSITE
www.tissueregenix.com
COMPANY NUMBER
05969271 (England & Wales)
REGISTERED OFFICE
Unit 3
Phoenix Court
Lotherton Way
Garforth
LS25 2GY
AUDITOR
RSM UK Audit LLP
Central Square
29 Wellington Street
Leeds
LS1 4DL
NOMINATED ADVISER
AND BROKER
Stifel Nicolaus Europe Ltd
150 Cheapside
London
EC2V 6ET
Squire Patton Boggs UK LLP
6 Wellington Place
Leeds
LS1 4AP
80 Tissue Regenix Group plc
Tissue Regenix Group plc
Unit 3
Phoenix Court
Lotherton Way
Garforth LS25 2GY
www.tissueregenix.com