Tissue Regenix Group
plc
('Tissue Regenix', the 'Group', or the
'Company')
Final results for the year
ended 31 December 2023
Annual Report and Notice of
AGM
Tissue Regenix Group plc (AIM: TRX),
the regenerative medical devices company, announces its audited
final results for the year ended 31 December 2023,
with record revenues and a positive adjusted EBITDA* for the full
year, a first for Tissue Regenix.
Financial Highlights
· Top line revenue
growth for the Group of 20%
o This
performance marks the sixth consecutive period of half-on-half,
double digit revenue growth (averaging over 20% for the last three
years)
o BioRinse® revenues increased by 25% to USD20.1m (2022: USD16.0m), driven by
growth in our flagship products and Released Donor
Tissue
o dCELL® revenues increased by 17% to USD6.2m (2022:
USD5.3m) as the commercial reorganisation
implemented in 2022 continued to mature
o The
Group's joint venture, GBM-V, grew modestly by 2% to USD3.2m (2022:
USD3.1m)
· Positive adjusted
EBITDA of USD925k (2022 loss:
USD626k), a first for Tissue
Regenix
o Driven by increased sales revenue and
improved gross margin; aided by management of administrative
expenses
· Gross profit of
USD14.0m (2022: USD11.3m)
o Gross margin increased to 48% (2022: 46%)
· Cash
position at 31 December 2023 of
USD4.7m (2022: USD5.9m)
o Cash
balance increased from H1 2023
Operational Highlights
·
Received approval from the Irish Health Products
Regulatory Authority (IHPRA), allowing the Company
to distribute tissue within the European Union
from its third-party logistics partner in the Republic of
Ireland
·
Announced an agreement with Spineart España SLU to
distribute allograft tissue into Spain
·
Signed BioRinse agreements with five new strategic
partners and six stocking distributors targeting the spinal and
dental markets
·
Added 66 new distributors for dCELL in 2023, 206%
greater than targeted
·
Signed an exclusive distribution
agreement with Kingsung Medical Group, for
the distribution of OrthoPure® XT in China and initiated the
regulatory approval process for China
·
Signed distribution agreements for OrthoPure XT in the United Kingdom and
Australia
·
Sourced 31% more musculoskeletal and dermis donors
and released 38% more donors versus 2022
Jonathan Glenn, Chair of Tissue Regenix,
commented: "2023 was another year of solid progress for
the Group. We have seen record revenues, Tissue Regenix's first
full year positive adjusted EBITDA, improved cash conversion and
many operational highlights including further regulatory approvals,
and new and improved relationships with our many partners. The
diligent focus of our highly motivated team is allowing us to
broaden the Group's capacity, continue to grow the business at an
impressive rate and, importantly, build shareholder value. The
Board of Tissue Regenix is confident and excited about the future
and looks forward to further significant progress in
2024."
*Adjusted EBITDA: profit before interest,
taxes, depreciation, amortisation, and share based payments
Annual Report and Accounts and
Notice of Annual General Meeting (AGM)
As part of the Company's move to
electronic reporting, the Annual Report and Accounts, notice of AGM
and accompanying form of proxy, will be available later this
morning on the Company's website, www.tissueregenix.com,
in accordance with AIM Rule 20. For those who opted to receive hard
copies of the Annual Report, these will be posted today.
The Company's AGM will be held at
DLA Piper, 160 Aldersgate St,
Barbican, London EC1A 4HT on 25 April 2024
at 11.00am. Shareholders are invited to ask
the Board questions about the Annual Report and Accounts or the AGM
by email emailing Walbrook PR at
TissueRegenix@walbrookpr.com.
The results of the votes on the
proposed resolutions will be announced by RNS as soon as
practicable after the conclusion of the AGM.
Investor Briefing
Daniel Lee, Chief Executive Officer,
and David Cocke, Chief Financial Officer, will host a live online
presentation relating to the final results via the Investor Meet
Company platform at 11.00am today. The
presentation is open to all existing and potential
shareholders.
Investors can sign up to Investor
Meet Company for free and register for the presentation here:
https://www.investormeetcompany.com/tissue-regenix-group-plc/register-investor
For more
information:
Tissue Regenix
Group plc
|
www.tissueregenix.com
|
David Cocke, Chief Financial Officer
|
via Walbrook
PR
|
|
|
Cavendish
Capital Markets Limited (Nominated Adviser and
Broker)
|
|
Emily Watts/Geoff Nash/George Dollemore -
Corporate Finance
|
|
Nigel Birks/Harriet Ward - ECM
|
|
|
|
Walbrook PR (Financial PR and IR)
|
Tel: +44
(0)20 7933 8780
|
Alice Woodings/Charlotte Edgar
|
TissueRegenix@walbrookpr.com
|
|
| |
About Tissue Regenix
(www.tissueregenix.com)
Tissue Regenix is a leading medical device
company in regenerative medicine. The Company's patented
decellularisation technology (dCELL®) removes DNA and other
cellular material from animal and human soft tissue, leaving an
acellular tissue scaffold not rejected by the patient's body that
can be used to repair diseased or damaged body structures. Current
applications address many crucial clinical needs in sports
medicine, foot and ankle injuries, and wound care.
In August 2017, Tissue
Regenix acquired CellRight Technologies®. This biotech company
specialises in regenerative medicine and is dedicated to developing
high-quality, innovative tissue scaffolds to enhance healing
opportunities in defects created by trauma and disease. CellRight's
human tissue products may be used in spine, trauma, general
orthopaedic, dental and ophthalmological surgical
procedures.
Chief
Executive Officer's Statement
2023
performance
The Group's performance continued the positive
trajectory set over the past three years, achieving numerous
milestones over the reporting period. We saw record revenues for
the Group, with top-line revenue growth of 20% during FY2023. This
faster than market growth was driven by the continued adoption of
our products through our strategic partners as well as our direct
distribution activities. The combination of sales growth and a
tight focus on overheads translated into positive adjusted EBITDA*
for the year - a first for Tissue Regenix - and contributed to an
increase in our cash balance over the second half of 2023. These
results could not have happened without the hard work and
dedication of all the employees of the Group. We are proud of what
we have achieved so far and believe that a bright future lies ahead
for Tissue Regenix.
*(Earnings before interest, taxes, depreciation
and amortisation and adjusted for share-based payments)
Strategy
Our focus on the 4S strategic elements of
Supply, Sales Revenue,
Sustainability and Scale continues to provide the
foundation of how we operate, execute and drive growth.
The continued investment that we are making and
the focus we are placing on tissue Supply has enabled us to sustain and
grow in line with our business needs as well as manage the
inventories more efficiently and provide tissue to other tissue
processors. Processing capacity, another key element in Supply, has
kept pace with the Group's growth despite resource-related
headwinds, as experienced more broadly across numerous
industries.
Our focus on Sales Revenue and Sustainability has been realised
in revenue growth and a positive adjusted EBITDA for the year. Our
ability to increase our cash balance in the second half of 2023 was
a milestone for the organisation and a further demonstration of
Sustainability.
Obtaining the regulatory approvals for our
third-party logistics partner provides us the opportunity and
flexibility to Scale our allograft business in markets
outside the U.S. ('OUS').
The Group's solid 4S foundation enables us to
continue growth plans for Tissue Regenix and deliver shareholder
value.
Growth
pillars
The 4S strategy enables us to support defined
tactical activities moving forward. In 2023, we implemented clearly
defined growth pillars to provide further direction and help
sustain the growth trajectory for the Group.
The four growth pillars are:
1. Base
Business
We will continue to grow our core businesses
with our existing and new partners/distributors through the
BioRinse and dCELL product lines. This base business includes
existing specialities and geographic markets. We will support this
growth with logical new product enhancements and clinical- or
market-related activities. This growth will also be supported by
our current infrastructure and planned capacity
enhancements.
2. Tissue
Partnerships
Our focus on tissue supply is at the core of
our growth as it drives our capacity. We have built supply volumes
that exceed our internal needs, so we have the opportunity to
provide donor tissue to other tissue processors ('Released Donor
Tissue'). We also have the responsibility of meeting the donor's
desire to have their tissue utilised to help others in a safe and
expeditious manner. Our tissue supply operation adds value by
performing the medical reviews and chart releases required for
tissue suitable for immediate processing by other domestic and OUS
partners. These activities help us to manage our recovery partner
relationships and provide opportunities for tissue that we
currently do not utilise in our processing operations.
3. Market
Expansion
We will continue to broaden the markets for our
products via a two-pronged approach. The need for tissue-based
products in the surgical marketplace is substantial, and we
currently participate in limited segments. We intend to expand into
additional surgical specialities by first generating clinical
experience at institutions where we have an existing base business.
This will serve as the stepping stone for expansion with additional
customers and institutions.
We also plan to expand into markets that have a
need for allograft tissue-based products but currently have limited
availability. Our establishment and receipt of approval to
distribute tissue through a third-party logistics partner provides
the conduit for opportunities into the EU. OrthoPure XT, our
xenograft tissue product, received a CE Mark in 2020, and we
continue to identify opportunities to distribute this product in
markets that recognise the CE Mark.
4. Regulatory
Evolution
The bulk of our revenue comes from allograft
tissue-based products, which are regulated as Section 361 HCTP
(Human, Cell and Tissue Products) in the U.S. The requirements
mandated for Section 361 products place limits on changes to the
allograft tissue; if one works beyond these limits then the product
will need to be regulated as a medical device. Our facility in San
Antonio has been established to meet the requirements of producing
Section 361 products. We intend to evolve and change this facility
to become one that is capable of meeting medical device
requirements. This evolution will give us the opportunity to
innovate with human tissue and broaden opportunities for Tissue
Regenix to distribute tissue into certain international markets
that regulate human tissue allografts as medical
devices.
BioRinse
The BioRinse portfolio was our top performer
over the financial year, reporting sales of USD20,133k (2022:
USD16,049k), driven by the U.S. orthopaedics, wound care and dental
markets. The 25% year-on-year growth was led by confidence in our
Concelltrate, AmnioWorks and other demineralised bone matrix
('DBM') products in addition to our Released Donor Tissue
relationships. Our ability to supply these products in 2022
translated into 2023 through the conviction of our strategic
partners to increase their orders and grow their respective
businesses. Our customers expect a level of service, and we remain
flexible and responsive to our customers' needs.
We continue to grow at above-market rates due
to the superior performance of our products, excellent customer
service and adaptability to customer needs. Our growth rate is
above market for the period, but there is still opportunity for
additional growth. We saw greater than 20% growth from the prior
year within our top five product families.
Our focus on supply ensures an adequate and
continuous supply of donated human tissue. As stewards of the gift
of human tissue donation, we use every effort to ensure that the
tissue is utilised to produce our high-quality products. Our
management of human tissue donation and the processing of the
tissue to meet product demands can result in excess tissue in our
inventories. We have been able to utilise these inventories,
complete the medical review and release process and provide these
value-added tissues to other processors for their own needs. This
ultimately meets our obligation to make sure that the donated human
tissue is used efficiently.
In 2023, after some unanticipated regulatory
delays, we received approval to distribute tissue from our
third-party logistics partner in the Republic of Ireland. This
approval has opened up additional markets within the EU. We also
announced our agreement with SpineArt España to distribute
allograft tissue into Spain. Other markets and agreements are still
in the discussion phase as our plan is to explore opportunities for
focused commercial distribution in the Europe, Middle East and
Africa ('EMEA') markets.
dCELL
In 2023, the commercial reorganisation of the
dCELL business continued to provide growth opportunities for this
division. dCELL is a direct business with a regional sales
management team managing distributors in their respective
territories. This business is highly impacted by Group Purchasing
Organization ('GPO') approvals for our products, which we currently
have with the top five GPOs. As a result, we have placed management
in areas that align with our approvals and will continue to pursue
opportunities to help us achieve coverage over the entire U.S.
market. To increase our coverage footprint, we have targeted areas
where we have already established business. In 2023, our aim was to
add 32 new distributors over the year. Pleasingly, we more than
doubled that goal by adding 66 distributors by 31 December 2023,
and, as a result, revenue growth for this division increased 17%
year on year to USD6,183k (2022: USD5,301k).
The OrthoPure® XT product is the
only non-human biologic tissue graft available for certain ligament
reconstruction procedures. In 2022, we introduced this product into
two new markets and added the UK in 2023. Our efforts to expand
distribution into Australia were impacted by regulatory approval
delays. Additional markets were temporarily put on hold as we
resolved inventory issues in Leeds. Efforts to expand distribution
opportunities will resume this year.
In 2023, clinical use and traction of the
OrthoPure XT device continued to gain momentum in Italy, and we
expect the initial positive Italian experiences of the OrthoPure XT
in broader clinical use to be presented at the European Society of
Sports Traumatology, Knee Surgery and Arthroscopy ('ESSKA') meeting
in 2024. The manuscript on the five-year clinical experience
from the initial regulatory approval study is in final preparation
and planned for submission to a major European publication.
During 2023, we also conducted a retrospective study
reviewing DermaPure® use in addressing Achilles
tendinopathy. A poster has been presented at the 2024 American
College of Foot and Ankle Surgeons meeting, and a manuscript is to
be submitted for publication soon after.
GBM-V
The GBM-V joint venture operates in a GMP (Good
Manufacturing Practice) level facility that has been producing
commercial corneal products since 2016. In 2023, the joint venture
faced supply issues in Germany due to customers requiring the donor
tissue to be sourced from donors who not only were COVID free but
also had no history of COVID infection. While this impacted the
growth of tissue supply, the joint venture realised USD3,177k
(2022: USD3,126k) of revenue, which was marginally up on the prior
year. Demand for corneal tissue continues to outpace supply, and
efforts to minimise COVID concerns, alongside efforts by our tissue
recovery partner to increase supply, will continue in
2024.
New strategic
partners and distributors
During 2023, we achieved commercial milestones
for the Group as we saw record revenue months across all our human
tissue product families - musculoskeletal, dermis and amnion. These
milestones were achieved through the growth of our commercial
partners and securing additional strategic partnerships/distributor
relationships.
For BioRinse, our top customers remained
consistent from the prior year. We saw a 13% increase in the number
of units shipped but a 2% decrease in the number of orders we
processed due to a trend towards larger orders. In 2023, we signed
BioRinse agreements with five new strategic partners and six
stocking distributors who target specialities such as the spine and
dental markets.
For dCELL, the number of distributors added by
the end of the year was 206% greater than targeted. Overall revenue
was up 17% versus the prior year, which represented record annual
revenue for this division. The number of products invoiced for
dCELL products increased by 3% versus the prior year, and the
revenue increase was due in large part to our product mix shifting
to those with higher Average Selling Prices ('ASPs'). Our meshed
DermaPure products helped to drive this revenue increase, and this
sales traction is expected to continue into 2024.
We continued to pursue the commercialisation of
products that utilise our core technology platforms, provide
product line extensions that are faster to market, address a
specific clinical or commercial need and have a customer in place.
In 2023, due to customer requests, we introduced a smaller
DermaPure Mesh product. To address market expectations for our
sports medicine tendon grafts, we implemented new processing
protocols and reagents to improve product safety and implemented a
low-dose sterilisation process.
We added UK distribution of the OrthoPure XT in
2023. Further adoption of this unique product into select European
markets was impacted by mid-year production issues related to a
bioburden spike within the processing line at our Leeds facility.
The temporary halt to production affected inventory availability,
so we paused market expansion during this period as we needed
existing inventory to service current customers. Despite this brief
setback, we look forward to the resumption of discussions with
additional EU distribution partners.
During 2023, we continued to pursue our global
commercialisation plans for our tissue-based products. We have
already described how our third-party logistics partner in the
Republic of Ireland will be central to our human allograft tissue
opportunities in the EMEA region. We signed an agreement with a
Chinese distributor for our OrthoPure XT product and have initiated
the regulatory approval process for China, which required a
regulatory submission, and a human clinical evaluation in China is
planned. The resources needed for this involved process are being
shared with our distribution partner. Another notable example of
the global market demand for our OrthoPure XT product was adding a
distributor in Australia. The CE mark for this product is
recognised in Australia, although additional regulatory approvals
are required there before marketing. The review process in
Australia has been slower than anticipated due to the volume of
submissions within the Therapeutic Goods Administration.
Expanding demand for our existing products with
new and existing partners as well as product line extensions and
product improvements are anticipated to drive our continued organic
growth in 2024 and further utilise our facility and
tissues.
Operations
2023 was another year of growth for the Group
as we continued operations throughout the year at all our locations
without significant impacts from any external
influences.
For our allograft tissue business, the supply
of donor tissue is directly linked to our growth plans. To meet the
need of our commercial partners and our focus on Supply, in 2023,
we sourced 31% more musculoskeletal and dermis donors and released
38% more donors versus the prior year. These shifts reflected the
demand for our processing of musculoskeletal donors and demand from
other tissue processors for our Released Donor Tissue.
In 2022, we implemented a programme to help us
manage the inventory of Released Donor Tissue by making some of it
available to other processing companies. All tissue we receive
needs to go through an internal review and release process to
ensure the safety and quality of the tissue before it is processed.
We continue to expand our relationships with other tissue
processors located domestically or outside the U.S. who wish to
have access to this tissue. This segment of our business has grown
dramatically over the prior year and has become one of the growth
pillars for our organisation. This programme aligns with our
responsibility to honour the gift of tissue donation through
utilisation in a timely manner into products that can help
patients.
The addition of two sterile packaging rooms in
the existing San Antonio facility from our Phase 1 expansion in
2021 brought the total number of clean rooms to seven and provided
additional capacity and flexibility. We continue to identify ways
in which we can be more efficient with the flexibility we now have
with room utilisation and processing scheduling. As a result, we
have been able to respond to orders or unanticipated changes in
almost half the amount of time prior to the Phase 1 expansion.
These rooms effectively provide approximately USD40m of revenue
generation potential and delayed our need for the Phase 2 expansion
and its 8-10 additional clean rooms until 2025, and we do not
anticipate the need for additional equity funding for this further
expansion.
In late 2023, we implemented Sage X3, an
enterprise resource planning ('ERP') system, in our U.S.
operations. This ERP product is used to manage financial aspects of
the business, and we believe that this investment will
significantly increase efficiencies for the Group. The transition
from our legacy system has been smooth, and we continue to refine
the system to meet the needs of all groups within the organisation.
The implementation of Sage X3 was a multi-year effort involving all
segments of the business and two consulting groups and is a strong
strategic investment for the Group that will support our growth
plans.
We believe that the contribution of increased
processing efficiency, increased capacity and state-of-the-art
systems will allow us to enjoy improved gross margins over
time.
The pandemic
is behind us
In the U.S., the issues of healthcare
institution staff shortages still exist in some geographic areas.
We have seen elective procedure volumes improve. Supply chain
issues have been improved, but costs across all aspects of our
operations have increased since the pandemic. We will absorb most
of these increases through efficiencies in our operation. We began
the year with issues related to labour shortages, but by year end
we saw some normalisation with respect to candidates applying for
open positions at our U.S. business.
Organisational
changes
We will continue to invest in resources that
will grow our organisation across all divisions. Additions and
adjustments to our commercial team in BioRinse and dCELL will seek
to bring additional commercial opportunities to our organisation
and spread Tissue Regenix's footprint in the U.S. and
OUS.
Outlook
Sales Revenue and Sustainability will continue
to be the priorities of the 4S's in 2024. We will continue to build
on this base to provide a more solid foundation for the future. Our
four growth pillars are the tactical areas of focus that will be
built on this foundation.
The BioRinse products will continue to be the
dominant revenue contributor in 2024. Growth will come from
existing and new partners as well as new products. Our dCELL
business is also expected to show further growth as we expand into
new domestic territories where we historically have not had much
presence. We will also use our current footholds to expand into
other surgical specialities, such as oncology and colorectal
surgery, as clinicians become familiar with our practise areas. The
inventory of Released Donor Tissue will be distributed to other
processors who have a need for tissue that is ready to be
processed. Our GBM-V joint venture will continue to identify
opportunities to increase their tissue supply and address any
issues that have impacted their growth.
Our geographic outreach with our human tissue
dCELL and BioRinse portfolios is only just beginning as we have our
registered logistics partner, which provides the opportunity to
move into numerous EU markets. We will also seek registrations and
distribution partners in other OUS markets for our human allograft.
Interim supply challenges are behind us, and OrthoPure XT will be
introduced into additional EU and other markets in 2024.
Our evolution into a medical device
manufacturer will provide us the flexibility to be more innovative
with our products versus 361 HCTP products. A medical device
registration is rare for a tissue processor of our size but
positions us well to consider not only novel products but also
entry into markets that regulate allograft tissue as a medical
device.
In 2024, we will begin some of the preliminary
planning activities to build our Phase 2 capacity expansion. In
addition to our organic growth plans, we will continue to examine
acquisition opportunities that would allow us to scale the business
for additional longer-term growth.
In 2021, the Board of Tissue Regenix set in place our
4S strategy. It has been a highly successful strategy for the Group
and continues to provide structure and clear direction for
everything that we do. Three years later, we are in a strong
position, with market-leading products that are distributed
globally, production facilities that allow us to fulfil our current
growth ambitions, a balance sheet to support these growth
opportunities and a team of people that are motivated, talented and
driven with a very clear idea of where we are taking the business.
I am proud to be a part of the Tissue Regenix Group and excited for
its future prospects in 2024 and beyond.
Daniel
Lee
Chief
Executive Officer
18 March 2024
Financial
Review
Statement of
Comprehensive Income
Revenue
During the year ended 31 December 2023, revenue
increased by 20% to USD29,493k (2022: USD24,476k).
The Group experienced growth across all three
key business segments for the year, as more fully described
below:
· The
BioRinse segment increased top-line sales by 25% to USD20,133k
(2022: USD16,049k), driven by growth in Released Donor Tissue and
continued growth across the allograft segments, led by the
AmnioWorks and Concelltrate 100 product families.
·
Revenue from the dCELL division increased by 17% to USD6,183k
(2022: USD5,301k) as the commercial reorganisation implemented in
2022 continued to mature.
· The
Group's joint venture, GBM-V, based in Rostock, Germany, grew
modestly by 2% to USD3,177k (2022: USD3,126k).
Cost of sales
and gross profit
Gross profit for the year was USD14,040k (2022:
USD11,258k). Gross margin percentage increased to 48% (2022:
46%).
Included in costs of sales is cost of product -
USD13,750k (2022: USD12,013k) - and third-party commissions -
USD1,703k (2022: USD1,205k).
Administrative
expenses
During 2023, administrative expenses increased
by USD1,166k, or 9%, to USD14,434k (2022: USD13,268k), driven
primarily by additional staffing costs.
Adjusted
EBITDA
During 2023, the Group reported adjusted EBITDA of
USD925k (2022 loss: USD626k). This shift into positive adjusted
EBITDA was driven by increased sales revenue and gross margin
percentage and aided by management of administrative expenses to
achieve operating leverage. In 2023, EBITDA was USD583k (2022 loss:
USD875k) and is adjusted for share based payments of USD342k (2022:
USD249k).
Finance
income/charges
Finance income of USD26k (2022: USD8k)
primarily represented interest earned on cash deposits. Finance
charges for the year were reported at USD1,301k (2022: USD826k) and
related primarily to interest charges and associated costs in
respect of the MidCap Financial Trust ('MidCap') loan arrangement.
Included in finance charges for 2023 is USD248k relating to a
financing fee associated with the former MidCap loan
termination.
Loss for the
year
The loss for the year was USD1,657k (2022:
loss: USD2,596k), resulting in a basic loss per share of 2.43 cents
(2022: loss per share: 3.83 cents). The reduction in the loss for
the year was driven by the increases in sales revenue and gross
margin percentage.
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 2023, a refund of
USD352k was receivable (2022: USD401k). The year-on-year reduction
was a result of the collection of aged research and development
credits during 2023.
Income tax payable in the U.S. amounted to
USD310k (2022: USD nil). Gross tax losses carried forward in the UK
were USD60,361k (2022: USD58,900k). 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
As at December 2023, the Group had net assets
of USD29,355k (2022: USD30,401k), of which cash in hand totalled
USD4,650k (2022: USD5,949k).
Inventory levels decreased 5% against the 20%
sales revenue increase at USD10,358k (2022: USD10,882k) as the
BioRinse and dCELL segments managed stock levels closely to
increase inventory turnover while also keeping adequate stock
levels to meet customer demand. The Released Donor Tissue offering
of the BioRinse segment turns over more rapidly than processed
grafts.
Intangible assets increased slightly to
USD15,135k (2022: USD15,061k) in the year. A further USD450k of
development costs, relating primarily to clinical research, were
capitalised in the year (2022: USD709k). The balance of movements
in this account relate to amortisation and exchange
adjustments.
The Directors carried out the annual impairment
review, as required by IAS 36, to determine whether there was any
requirement for an impairment provision in respect of goodwill as
at 31 December 2023.
The results of the test indicated that the
recoverable amount of the Group's non-current assets was at least
equal to the carrying amount of those assets and, therefore, no
provision for impairment was required as at 31 December 2023 (2022:
USD nil).
Working capital increased slightly in the year
to USD9,9,705k (2022: USD9,442k), driven by a decrease in payables
made possible by improved debtor collections and lower inventory
investment. As mentioned above, the Released Donor Tissue offering
of the BioRinse segment turns over more rapidly, which speeds up
the sales cycle, allowing for faster cash generation. The Statement
of Financial Position includes income tax receivable of USD352k
(2022: USD401k) in respect of UK research and development tax
credits.
Loans and
borrowings and lease
liability
Borrowings include the USD5,985k debt facility
through MidCap and the USD3,410k lease liability related to the
Group's leasehold in San Antonio (2022: USD6,258k and USD3,350k,
respectively). The MidCap debt facility includes USD2,000k in
respect of the term loan and USD4,148k in respect of the revolving
credit facility, net of USD163k of capitalised debt issue costs. In
January 2023, the Group elected to increase its current revolving
credit facility from USD5,000k to USD10,000k and extend the
maturity until 2028. Repayment of the term loan in equal
instalments commenced in February 2024.
Dividend
No dividend has been proposed for the year to
31 December 2023 (2022: nil).
Accounting
policies
The Group's consolidated financial information
has been prepared in accordance with UK-adopted International
Accounting Standards ('UK-adopted IAS').
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
2025 (the 'Cash Flow Projections'). Funding requirements are
reviewed on a regular basis by the Group's Chief Executive Officer
and Chief Financial Officer and are reported to the Board at each
Board meeting, as well as on an ad hoc basis if requested. Until
sufficient cash is generated from its operations, the Group remains
reliant on cash reserves of USD4,650k at 31 December 2023 and the
ongoing support of MidCap (borrowings of USD5,985k at 31 December
2023) and other lending institutions to meet its working capital
requirements, capital investment programme and other financial
commitments. Repayment on the MidCap borrowings commenced in
February 2024.
In compiling the Cash Flow Projections, the
Board has considered a downside scenario regarding the effect of
reduced and delayed revenues due to slower market uptake of the
Group's product offerings. The Cash Flow Projections prepared by
the Board, including the downside scenario, indicate that the Group
will still have cash reserves at the end of the forecast period.
The Group's Cash Flow Projections assume that the MidCap revolving
credit facility is available throughout the forecast period and
that the term loan repayment begins in 2024. The availability of
these facilities is dependent upon compliance with a rolling
12-month revenue covenant that is measured on a monthly basis. The
Cash Flow Projections, including the downside scenario, 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 the preparation of the financial statements of the Group
and have reviewed the Cash Flow Projections, including the downside
scenario. On the basis of their assessment, they have concluded
that the going concern basis remains appropriate for use in the
financial statements.
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
18 March 2024
Consolidated
Statement of Income
For the year ended 31 December 2023
|
2023
USD'000
|
2022
USD'000
|
Revenue
|
29,493
|
24,476
|
Cost of sales
|
(15,453)
|
(13,218)
|
Gross
profit
|
14,040
|
11,258
|
Administrative expenses
|
(14,434)
|
(13,268)
|
Operating
loss
|
(394)
|
(2,010)
|
Finance income
|
26
|
8
|
Finance charges
|
(1,301)
|
(826)
|
Loss on
ordinary activities before taxation
|
(1,669)
|
(2,828)
|
Taxation
|
12
|
232
|
Loss for the
year
|
(1,657)
|
(2,596)
|
|
|
|
Loss for the
year attributable to:
|
|
|
Owners of the parent company
|
(1,713)
|
(2,695)
|
Non-controlling interest
|
56
|
99
|
|
(1,657)
|
(2,596)
|
|
|
|
Loss per
Ordinary Share
|
|
|
Basic and diluted, cents per share
|
(2.43)
|
(3.83)*
|
The loss for the year arises from the
Group's continuing operations.
*Restated to reflect the share
consolidation that became effective on 28 April 2023.
Consolidated
Statement of Comprehensive Income
For the year ended 31 December 2023
|
|
2023
USD'000
|
2022
USD'000
|
Loss for the
year
|
|
(1,657)
|
(2,596)
|
Other
comprehensive income
|
|
|
|
Items that
may be subsequently reclassified to profit or
loss:
|
|
|
|
Foreign currency translation
differences
|
|
195
|
(653)
|
Total
comprehensive loss for the year
|
|
(1,462)
|
(3,249)
|
|
|
|
|
Total
comprehensive loss for the year attributable to:
|
|
|
|
Owners of the parent company
|
|
(1,518)
|
(3,348)
|
Non-controlling interest
|
|
56
|
99
|
|
|
(1,462)
|
(3,249)
|
Consolidated
Statement of Financial Position
As at 31 December
2023
|
2023
USD'000
|
2022
USD'000
|
Assets
|
|
|
Non-current
assets
|
|
|
Property, plant and equipment
|
5,748
|
5,740
|
Right-of-use assets
|
3,270
|
3,203
|
Intangible assets
|
15,135
|
15,061
|
|
24,153
|
24,004
|
Current
assets
|
|
|
Inventory
|
10,358
|
10,882
|
Trade and other receivables
|
3,730
|
4,803
|
Corporation tax receivable
|
352
|
401
|
Cash and cash equivalents
|
4,650
|
5,949
|
|
19,090
|
22,035
|
Total
assets
|
43,243
|
46,039
|
Liabilities
|
|
|
Non-current
liabilities
|
|
|
Loans and borrowings
|
(5,527)
|
(5,258)
|
Deferred tax
|
(400)
|
(520)
|
Lease liability
|
(3,226)
|
(3,216)
|
|
(9,153)
|
(8,994)
|
Current
liabilities
|
|
|
Trade and other payables
|
(3,783)
|
(5,510)
|
Taxation payable
|
(310)
|
-
|
Loans and borrowings
|
(458)
|
(1,000)
|
Lease liability
|
(184)
|
(134)
|
|
(4,735)
|
(6,644)
|
Total
liabilities
|
(13,888)
|
(15,638)
|
Net
assets
|
29,355
|
30,401
|
Equity
|
|
|
Share capital
|
15,950
|
15,950
|
Share premium
|
134,253
|
134,179
|
Merger reserve
|
16,441
|
16,441
|
Reverse acquisition reserve
|
(10,798)
|
(10,798)
|
Reserve for own shares
|
(1,257)
|
(1,257)
|
Share-based payment reserve
|
1,088
|
824
|
Cumulative translation reserve
|
(1,763)
|
(1,958)
|
Retained deficit
|
(123,764)
|
(122,129)
|
Equity attributable to owners of the parent
company
|
30,150
|
31,252
|
Non-controlling interest
|
(795)
|
(851)
|
Total
equity
|
29,355
|
30,401
|
Consolidated
Statement of Changes in Equity
For the year
ended 31 December 2023
|
Share capital
USD'000
|
Share premium
USD'000
|
Merger reserve
USD'000
|
Reserve
acquisition
reserve USD'000
|
Reserve for own shares
USD'000
|
Share-
based payment
reserve
USD'000
|
Share-
based payment
reserve
USD'000
|
Retained
deficit USD'000
|
Total USD'000
|
Non-controlling
interest USD'000
|
Total equity
USD'000
|
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
|
Transactions with owners in their capacity as
owners:
Exercise of share options
|
3
|
6
|
-
|
-
|
-
|
-
|
-
|
-
|
9
|
-
|
9
|
Transfer to retained deficit in
respect of lapsed, expired and exercised options
|
-
|
-
|
-
|
-
|
-
|
(998)
|
-
|
998
|
-
|
-
|
-
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
249
|
-
|
-
|
249
|
-
|
249
|
Total transactions with
owners in their capacity as
owners
|
3
|
6
|
-
|
-
|
-
|
(749)
|
-
|
998
|
258
|
-
|
258
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,695)
|
(2,695)
|
99
|
(2,596)
|
Other comprehensive income:
Currency translation differences
|
-
|
-
|
-
|
-
|
-
|
-
|
(653)
|
-
|
(653)
|
-
|
(653)
|
Total other comprehensive income for
the year
|
-
|
-
|
-
|
-
|
-
|
-
|
(653)
|
-
|
(653)
|
-
|
(653)
|
Total comprehensive income for the
year
|
-
|
-
|
-
|
-
|
-
|
-
|
(653)
|
(2,695)
|
(3,348)
|
99
|
(3,249)
|
At 31 December 2022
|
15,950
|
134,179
|
16,441
|
(10,798)
|
(1,257)
|
824
|
(1,958)
|
(122,129)
|
31,252
|
(851)
|
30,401
|
Transactions with owners in their capacity as
owners:
Exercise of share options
|
-
|
74
|
-
|
-
|
-
|
-
|
-
|
-
|
74
|
-
|
74
|
Transfer to retained deficit in
respect of exercised and expired options
|
-
|
-
|
-
|
-
|
-
|
(78)
|
-
|
78
|
-
|
-
|
-
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
342
|
-
|
-
|
342
|
-
|
342
|
Total transactions with owners in their capacity as
owners
|
-
|
74
|
-
|
-
|
-
|
264
|
-
|
78
|
416
|
-
|
416
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,713)
|
(1,713)
|
56
|
(1,657)
|
Other comprehensive income: Currency translation differences
|
-
|
-
|
-
|
-
|
-
|
-
|
195
|
-
|
195
|
-
|
195
|
Total other comprehensive income for
the year
|
-
|
-
|
-
|
-
|
-
|
-
|
195
|
-
|
195
|
-
|
195
|
Total comprehensive income for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
195
|
(1,713)
|
(1,518)
|
56
|
(1,462)
|
At
31 December 2023
|
15,950
|
134,253
|
16,441
|
(10,798)
|
(1,257)
|
1,088
|
(1,763)
|
(123,764)
|
30,150
|
(795)
|
29,355
|
Consolidated
Statement of Cash Flows
For the year ended 31 December 2023
|
|
2023
USD'000
|
2022
USD'000
|
Operating
activities
|
|
|
|
Loss on ordinary activities before
taxation
|
|
(1,669)
|
(2,828)
|
Adjustments for:
|
|
|
|
Finance income
|
|
(26)
|
(8)
|
Finance charges
|
|
1,301
|
826
|
Depreciation of property, plant and
equipment
|
|
395
|
353
|
Depreciation of right-of-use assets
|
|
132
|
164
|
Amortisation of intangible assets
|
|
450
|
618
|
Share-based payments
|
|
342
|
249
|
Unrealised foreign exchange
loss/(gain)
|
|
84
|
(239)
|
Operating cash inflow/(outflow) before
movements in working capital
|
|
1,009
|
(865)
|
Decrease/(increase) in inventory
|
|
524
|
(1,163)
|
Decrease/(increase) in trade and other
receivables
|
|
1,073
|
(702)
|
(Decrease)/increase in trade and other
payables
|
|
(1,836)
|
1,249
|
Net cash generated from/(used in)
operations
|
|
770
|
(1,481)
|
Research and development tax credits
received
|
|
270
|
187
|
Net cash generated from/(used in) operating
activities
|
|
1,040
|
(1,294)
|
|
|
|
|
Investing
activities
|
|
|
|
Interest received
|
|
26
|
8
|
Purchase of property, plant and
equipment
|
|
(413)
|
(381)
|
Capitalised development expenditure
|
|
(450)
|
(709)
|
Net cash used in investing
activities
|
|
(837)
|
(1,082)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from exercise of share
options
|
|
74
|
9
|
(Repayment of)/proceeds from loans and
borrowings
|
|
(238)
|
1,708
|
Interest paid on loans and
borrowings
|
|
(567)
|
(450)
|
Fees paid on loans and borrowings
|
|
(355)
|
-
|
Lease liability payments
|
|
(140)
|
(66)
|
Lease interest payments
|
|
(284)
|
(291)
|
Other interest payments
|
|
(2)
|
-
|
Net cash (used in)/generated from financing
activities
|
|
(1,512)
|
910
|
|
|
|
|
Net decrease
in cash and cash equivalents
|
|
(1,309)
|
(1,466)
|
Cash and cash
equivalents at beginning of year
|
|
5,949
|
7,709
|
Effect of movements in exchange rates on cash
held
|
|
10
|
(294)
|
Cash and cash
equivalents at end of year
|
|
4,650
|
5,949
|
Notes to the
Consolidated Financial Statements
For the year ended 31 December 2023
1. Material accounting
policies
Basis of preparation
The financial information set out herein does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006.
The financial information for the year ended 31
December 2023 has been extracted from the Company's audited
financial statements which were approved by the Board of Directors
on 18 March 2024 and which, if adopted, will be delivered to the
Registrar of Companies
for England and Wales.
The financial information for the year ended 31
December 2022 has been extracted from the Company's audited
financial statements which were approved by the Board of Directors
on 20 March 2023.
Statutory accounts for the years ended 31
December 2023 and 31 December 2022 have been reported on by the
auditor. Their reports for both years (i) were unqualified; (ii)
did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their audit
report and (iii) did not contain a statement under section 498(2)
or 498(3) of the Companies Act 2006.
The information in this preliminary statement
has been extracted from the audited financial statements for the
year ended 31 December 2023 and as such, does not contain all the
information required to be disclosed in the financial statements
prepared in accordance with UK adopted International
Accounting Standards ('IAS').
The Company is a public limited company
incorporated and domiciled in England and whose shares
are quoted on AIM, a market operated by The London Stock
Exchange.
The address of the registered office is Unit
3, Phoenix Court, Lotherton Way, Garforth LS25
2GY.
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 2025 (the 'Cash Flow Projections'). Funding
requirements are reviewed on a regular basis by the Group's Chief
Executive Officer and Chief Financial Officer and are reported to
the Board at each Board meeting, as well as on an ad hoc basis if
requested. Until sufficient cash is generated from its operations,
the Group remains reliant on cash reserves of USD4.7 million at 31
December 2023 and the ongoing support of MidCap (borrowings of
USD6.0 million at 31 December 2023) and other lending institutions
to meet its working capital requirements, capital investment
programme and other financial commitments. Repayment of the MidCap
borrowings commenced in February 2024.
In compiling the Cash Flow
Projections, the Board has considered a downside scenario regarding
the effect of reduced and delayed revenues due to slower market
uptake of the Group's product offerings. The Cash Flow Projections
prepared by the Board, including the downside scenario, indicate
that the Group will still have cash reserves at the end of the
forecast period. The Group's Cash Flow Projections assume that the
MidCap revolving credit facility is available throughout the
forecast period and that the term loan repayment begins in 2024.
The availability of these facilities is dependent upon compliance
with a rolling 12-month revenue covenant that is measured on a
monthly basis. The Cash Flow Projections, including the downside
scenario, 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 the preparation of the financial statements
of the Group and have reviewed the Cash Flow Projections, including
the downside scenario. On the basis of their assessment, they have
concluded that the going concern basis remains appropriate for use
in this financial information.
2. Critical
accounting judgements and key sources of estimation
uncertainty
In the application of the Group's accounting
policies, the Directors are required to make judgements, estimates
and assumptions about the carrying amounts of the assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on
historical experience and other factors that are considered to be
relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision
and future periods if the revision affects both the current and
future periods.
The following are the critical judgements and
estimations that the Directors have made in the process of applying
the Group's accounting policies and that have the most significant
effect on the amounts recognised in the financial
statements.
Recoverability of non-current assets
The Directors are required by IAS 36
Impairment of assets to
carry out an annual impairment review in respect of goodwill to
determine whether there was any requirement for an impairment
provision in respect of the Group's goodwill at 31 December
2023.
The carrying amount of non-current
assets at 31 December 2023 was USD24.2 million (2022: USD24.0
million).
Critical
judgements
The Group's non-current assets
include intangible assets and goodwill arising on the acquisition
of CellRight Technologies LLC, plus certain property, plant and
machinery and right-of-use assets. It is the Directors judgement
that the recoverable amount of these assets cannot be determined
individually and that this is the smallest identifiable group of
assets whose output has an active market and which generate largely
independent cash flows from other assets or group of assets. It is,
therefore, the Directors judgement that these assets should be
considered to be a single cash generating unit ('CGU'). Only the
assets included in the CGU are subject to impairment
review.
Estimations
The aggregate carrying value of the
CGU was assessed for impairment based on value in use, which
requires the Directors to estimate the future cash flows expected
to arise from the CGU using a suitable discount rate in order to
calculate present value. The future cash flows expected to arise
were calculated using a discount rate of 18.3% (2022: 18.3%) based
on the weighted average cost of capital.
The impairment test indicated that
the recoverable amount was at least equal to the carrying amount of
the assets and, therefore, no provision for impairment was required
at 31 December 2023 (2022: nil).
The key inputs to the cash flow
forecast are revenues, gross margin and overheads, future
anticipated capital expenditure and movements in working capital.
The key estimation relates to sales growth, which is inherently
difficult to forecast in a rapidly growing market, and it is
possible that any or all of these key assumptions may change, which
may then impact the estimated recoverable amount of the CGU and
require a material adjustment to the carrying value of the assets
in future periods.
Leases
Critical
judgements
Determining the term of a lease that
includes an option to purchase requires the Directors to use their
judgement in determining whether the option is reasonably certain
to be exercised. The Directors' assessment will impact both the
determination of the lease term and the useful economic life of the
asset.
In determining the term of a lease,
the Directors consider all facts and circumstances that create an
economic incentive to exercise an option to purchase a leased
asset. Periods after the date of the option to purchase are not
included in the lease term if the option to purchase is reasonably
certain to be exercised.
In making their assessment, the
Directors considered the potential cash outflow arising as a result
of financing the option to purchase against the potential cost of
ongoing lease payments, the potential market value of the property,
which an independent appraisal indicated would be in excess of the
fixed option exercise price, and the commercial advantages of
taking ownership and control of the property.
The Directors concluded that the
option to purchase is reasonably certain to be exercised,
therefore, the lease term has been determined on this basis, and
the USD3 million cash outflow on exercise of the option has been
included in the lease liability.
Estimations
Right-of-use assets are depreciated
over the shorter of the useful life of the asset and the lease
term, unless the title to the asset transfers at the end of the
lease term, in which case it is depreciated over the useful life.
As a result of the Directors assessment that the Group will
exercise the option to purchase, the assets are being depreciated
over an estimated useful life of 39 years.
3. Segmental
information
The following table provides disclosure of the
Group's revenue by geographical market based on the location of the
customer:
|
|
|
|
2023
USD'000
|
2022
USD'000
|
US
|
|
|
25,327
|
20,711
|
|
Rest of World
|
|
|
4,166
|
3,765
|
|
|
|
|
29,493
|
24,476
|
|
Analysis of revenue by customer
During the year ended 31 December
2023, the Group had one customer who individually exceeded 10% of
revenue. This customer generated 13% of revenue (2022: one customer
who generated 13% of revenue).
Operating segments
In accordance with IFRS 8, the Group
has derived the information for its operating segments using the
information used by the chief operating decision-maker, who has
been identified as the Board of Directors.
The Board of Directors has
determined that the Group has three operating segments for internal
management, reporting and decision-making purposes,
namely dCELL, BioRinse and
GBM-V.
Central overheads, which primarily
relate to operations of the Group function, are not allocated to an
operating segment.
Revenue from all operating segments
derives from the sale of biological medical devices.
|
|
|
dCELL
2023
USD'000
|
BioRinse
2023
USD'000
|
GBM-V
2023
USD'000
|
Central
2023
USD'000
|
Total
2023
USD'000
|
Statement of Income
|
|
|
|
|
|
|
Revenue
|
|
6,183
|
20,133
|
3,177
|
-
|
29,493
|
Gross profit
|
|
2,839
|
10,141
|
1,060
|
-
|
14,040
|
Depreciation
|
|
(4)
|
(423)
|
(16)
|
(84)
|
(527)
|
Amortisation
|
|
-
|
(450)
|
-
|
-
|
(450)
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
|
340
|
1,838
|
220
|
(2,792)
|
(394)
|
Net finance
income/(charges)
|
|
4
|
(1,296)
|
-
|
17
|
(1,275)
|
Profit/(loss) before
taxation
|
|
344
|
542
|
220
|
(2,775)
|
(1,669)
|
Taxation
|
|
202
|
(190)
|
-
|
-
|
12
|
Profit/(loss) for the
year
|
|
546
|
352
|
220
|
(2,775)
|
(1,657)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dCELL
2022
USD'000
|
BioRinse
2022
USD'000
|
GBM-V
2022
USD'000
|
Central
2022
USD'000
|
Total
2022
USD'000
|
Statement of Income
|
|
|
|
|
|
|
Revenue
|
|
5,301
|
16,049
|
3,126
|
-
|
24,476
|
Gross profit
|
|
1,829
|
8,258
|
1,171
|
-
|
11,258
|
Depreciation
|
|
(10)
|
(394)
|
-
|
(113)
|
(517)
|
Amortisation
|
|
-
|
(618)
|
-
|
-
|
(618)
|
|
|
|
|
|
|
|
Operating (loss)/ profit
|
|
(994)
|
678
|
409
|
(2,103)
|
(2,010)
|
Net finance charges
|
|
-
|
(818)
|
-
|
-
|
(818)
|
(Loss)/profit before
taxation
|
|
(994)
|
(140)
|
409
|
(2,103)
|
(2,828)
|
Taxation
|
|
112
|
120
|
-
|
-
|
232
|
(Loss)/profit for the
year
|
|
(882)
|
(20)
|
409
|
(2,103)
|
(2,596)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
dCELL
2023
USD'000
|
BioRinse
2023
USD'000
|
GBM-V
2023
USD'000
|
Central
2023
USD'000
|
Total
2023
USD'000
|
Statement of Financial Position
|
|
|
|
|
|
|
Non-current assets
|
|
1,946
|
21,987
|
6
|
214
|
24,153
|
Current assets
|
|
5,030
|
12,649
|
807
|
604
|
19,090
|
Total assets
|
|
6,976
|
34,636
|
813
|
818
|
43,243
|
Non-current liabilities
|
|
-
|
(9,123)
|
-
|
(30)
|
(9,153)
|
Current liabilities
|
|
(693)
|
(3,345)
|
(200)
|
(497)
|
(4,735)
|
Total liabilities
|
|
(693)
|
(12,468)
|
(200)
|
(527)
|
(13,888)
|
Net assets
|
|
6,283
|
22,168
|
613
|
291
|
29,355
|
|
|
|
|
|
|
|
Capital expenditure
|
|
165
|
167
|
9
|
54
|
395
|
Additions to intangible
assets
|
|
334
|
116
|
-
|
-
|
450
|
|
|
|
|
|
|
|
|
|
|
|
dCELL
2022
USD'000
|
BioRinse
2022
USD'000
|
GBM-V
2022
USD'000
|
Central
2022
USD'000
|
Total
2022
USD'000
|
Statement of Financial Position
|
|
|
|
|
|
|
Non-current assets
|
|
1,376
|
22,382
|
13
|
233
|
24,004
|
Current assets
|
|
3,571
|
14,998
|
806
|
2,660
|
22,035
|
Total assets
|
|
4,947
|
37,380
|
819
|
2,893
|
46,039
|
Non-current liabilities
|
|
-
|
(8,921)
|
-
|
(73)
|
(8,994)
|
Current liabilities
|
|
(736)
|
(5,171)
|
(255)
|
(482)
|
(6,644)
|
Total liabilities
|
|
(736)
|
(14,092)
|
(255)
|
(555)
|
(15,638)
|
Net assets
|
|
4,211
|
23,288
|
564
|
2,338
|
30,401
|
|
|
|
|
|
|
|
Capital expenditure
|
|
124
|
230
|
9
|
36
|
399
|
Additions to intangible
assets
|
|
549
|
160
|
-
|
-
|
709
|
|
|
|
|
|
|
|
| |
4.
Taxation
|
|
|
|
2023
USD'000
|
2022
USD'000
|
Current tax:
|
|
|
|
|
|
UK R&D tax credit
|
|
|
(202)
|
(112)
|
|
Foreign taxation
|
|
|
310
|
-
|
|
|
|
|
108
|
(112)
|
|
|
|
|
|
|
|
Deferred tax:
|
|
|
|
|
|
Origination and reversal of
temporary differences
|
|
|
(120)
|
(120)
|
|
Tax credit for the year
|
|
|
(12)
|
(232)
|
|
The credit for the year can be
reconciled to the loss per the Consolidated Statement of Income as
follows:
|
|
|
|
2023
USD'000
|
2022
USD'000
|
|
Loss on ordinary activities before
tax
|
|
|
(1,669)
|
(2,828)
|
|
Loss multiplied by the standard rate
of corporation tax for UK companies of 23.52% (2022:
19%)
|
|
|
(393)
|
(537)
|
|
Effects of:
|
|
|
|
|
|
Research and development tax credits
received
|
|
|
-
|
(80)
|
|
Surrender of tax losses for R&D
tax credit refund
|
|
|
233
|
104
|
|
Deduction for R&D
expenditure
|
|
|
(115)
|
(59)
|
|
Remeasurement of deferred tax for
changes in tax rates
|
|
|
(22)
|
-
|
|
Adjustments in respect of prior
period current and deferred tax
|
|
|
122
|
(154)
|
|
Movement in deferred tax not
recognised on unutilised tax losses
|
|
|
175
|
(366)
|
|
Expenses not deductible for tax
purposes
|
|
|
108
|
980
|
|
Origination and reversal of timing
differences
|
|
|
(120)
|
(120)
|
|
Tax credit on loss for the
year
|
|
|
(12)
|
(232)
|
|
The enacted UK corporation tax rate
of 25% forms the basis for the UK element of the deferred tax
calculation following the UK budget in 2021, when the Chancellor
announced an increase to the main rate of corporation tax in the UK
to 25% from April 2023.
Unrelieved tax losses carried forward, as
detailed below, have not been recognised as a deferred tax asset as
there is currently insufficient evidence that the asset will be
recoverable in the foreseeable future. The losses are related to UK
operations and must be utilised in relation to the same
operations.
|
|
|
|
2023
USD'000
|
2022
USD'000
|
|
Tax
losses
|
|
|
|
|
|
Losses available to carry
forward
|
|
|
60,361
|
58,900
|
|
Unrecognised deferred tax asset at
25% (2022: 25%)
|
|
|
15,090
|
14,725
|
|
5. Loss per Ordinary Share
Basic loss per Ordinary Share is calculated by
dividing the net loss for the year attributable to owners of the
parent company by the weighted average number of Ordinary Shares in
issue during the year, excluding own shares held jointly by the
Tissue Regenix Employee Share Trust and certain
employees.
Diluted loss per Ordinary Share is calculated
by dividing the net loss for the year attributable to owners of the
parent company by the weighted average number of Ordinary Shares in
issue during the year adjusted for the dilutive effect of potential
Ordinary Shares arising from the Company's share options and
jointly owned shares.
The calculation of the basic and diluted loss
per Ordinary Share is based on the following data:
|
|
|
|
2023
USD'000
|
2022
USD'000
|
|
Losses
|
|
|
|
|
Losses for the purpose of basic and
diluted loss per Ordinary Share being net loss for the year
attributable to owners of the parent company
|
|
|
(1,713)
|
(2,695)
|
|
|
|
|
|
|
|
|
|
|
Number
|
Number
|
|
Number of shares
|
|
|
|
|
|
Weighted average number of Ordinary
Shares for the purpose of basic and diluted loss per Ordinary
Share
|
|
|
70,426,760
|
70,345,218
|
|
|
|
|
|
|
|
Basic and diluted, cents per
share
|
|
|
(2.43)
|
(3.83)
|
|
The Company has options issued over
2,585,537 (2022: 2,009,293) Ordinary Shares and warrants issued
over 30,968 (2022: 30,968) Ordinary Shares, and there are 161,128
(2022: 161,128) jointly owned shares that are potentially
dilutive.
Due to the losses incurred from
continuing operations in the years reported, there is no dilutive
effect from the existing share options and jointly owned
shares.
The information shown above has been
restated to reflect the share consolidation, that became effective
on 28 April 2023, in all periods presented.
6. Lease liabilities
|
|
|
2023
USD'000
|
2022
USD'000
|
Current lease liabilities
|
|
|
184
|
134
|
Non-current lease
liabilities
|
|
|
3,226
|
3,216
|
At 31 December
|
|
|
3,410
|
3,350
|
Maturity
analysis of leases
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 2023 and the
contractual maturity date.
|
|
|
2023
USD'000
|
2022
USD'000
|
Less than 6 months
|
|
|
236
|
203
|
6 months to 1 year
|
|
|
236
|
203
|
1 year to 2 years
|
|
|
3,147
|
412
|
2 years to 5 years
|
|
|
138
|
3,107
|
|
|
|
3,757
|
3,925
|
The movement in lease liabilities during the
year was:
|
|
|
2023
USD'000
|
2022
USD'000
|
At 1 January
|
|
|
3,350
|
3,482
|
Cash flows - financing activities -
lease repayments
|
|
|
(140)
|
(66)
|
Non-cash movements - additions to
right-of-use-assets
|
|
|
195
|
-
|
Non-cash movements - net effect of
foreign exchange
|
|
|
5
|
(66)
|
At 31 December
|
|
|
3,410
|
3,350
|
Effect of
leases on financial performance
|
|
|
2023
USD'000
|
2022
USD'000
|
Depreciation of right-of-use
assets
|
|
|
132
|
164
|
Interest expense
|
|
|
284
|
291
|
|
|
|
416
|
455
|
The Group leases properties used for its
operations in the UK and the US.
· UK
land and buildings: Five-year fixed lease, which included a break
clause in 2023 not exercised.
· US
land and buildings: Ten-year fixed lease, which includes an option
to purchase within the first five years, being up to November
2024.
· US
property, plant and equipment: Five-year fixed leases.
The Group's average effective borrowing rate
for leases at 31 December 2023 was 9% (2022: 9%).