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TRX RNS 04.06.2019 - Secures Credit Facilities of up to $20m:
"Tissue Regenix Group (AIM:TRX) ("Tissue Regenix", or the "Company" and together with its subsidiaries, the "Group"), the regenerative medical devices company, announces that it has and certain of its subsidiaries have unconditionally entered into agreements with MidCap Financial Trust ("MidCap Financial") to access a revolving credit facility and a term loan credit facility (the "Facilities") of up to $20 million. Funding of $10.5 million is initially available to the Group, of which it plans to draw down an initial $7.5 million immediately.
Use of Proceeds
The initial net proceeds of the Facilities and any further funding drawn down in due course, will be used to invest in additional capital expenditure to sustain future business growth, generate further clinical and health economic real world data to support brand differentiation within dCELL and BioRinse, and for general corporate and working capital purposes."
++++
So the need in June 2019 when they had considerably more working capital than they have now, was $20 Million.
I would agree with Iglu that 10m is more likely the sum needed to repay Midcap, complete the refit at San Antonio and provide the funds to take us through to break even which cannot be too far away. It would be a shame to be taken over when so close to becoming profitable in our own right. So much potential with their world leading products.
I believe 10m is more the figure needed..but that’s my opinion. In the rns it states they are encouraged by talks with potential investors, could that be for a total takeover? I think Maybe trx have taken this as far as they can, now it needs a merger with a big company. Maybe this is the reason for appointing Jonathan due to his experience in cooperate mergers in the past. The investors could also be other large healthcare companies. Guess we will find out soon
Bad day but not detered.
We have a brilliant company, delivering and selling unique products .
In the darkest moment the greatest unforeseen things can happen.
The new Non Executive Chair, Jonathan Glenn has a very good track record and has stepped forward from being a Non Executive Director. He definitely knows his way around finance and having only just taken over he needs time to establish some dialogue with potential lenders or fresh investors.
To settle the finance issue once and for all we probably need £20m to £30m. Which in the current climate is a big ask. Anything less probably means visiting this issue again in 12 to 18 months time.
I'm going to stick with my belief that they can sort this out and hold on to my shares.
If it means selling the business so be it but its ot to be worth at least £30m in that scenario.
Chester.
I don't know if the Link holding is still open but perhaps that lump of shares could be bought by a white knight investor as part of a buy in it certainly would solve several issues what are your views?
Let's be honest if finance comes this is going to absolutely fly, understandably it's not a dead cert.
The following is keeping me holding:
" The Board is encouraged by a number of ongoing discussions with potential investors which the Board is working to conclude in the near future."
I feel as the SP is continuing to drop this RNS is there to warn but also cause a bigger bounce when/if finance is secured.
Tissue Regenix Group PLC - medical devices firm - Has enough cash to support working capital requirements until end of second week of May 2020, but is still looking to secure necessary funding. San Antonio facility remains operational with no hit to processing. Demand for BioRinse portfolio continues to exceed capacity, and company experiences no material reduction in net revenue.
Above reading is generally ok, the finance is the stumbling block. let’s see what they can do about that in coming weeks ahead. It sounds like they are exploring different options in today’s RNS and are encouraged. Talks must be advanced by now. Let’s see what happens. Truth is know-body here knows
" The Board is encouraged by a number of ongoing discussions with potential investors which the Board is working to conclude in the near future."
If you take that sentence out on its own, it sounds very promising, because at least the discussions havent broken down, and it also mentions investors (plural) which may or may not refer to a "consortium" of investors with experience in the field, who would now put in the cash and take equity at rock bottom prices ( and no doubt warrants to go with it)
I do wonder about the loan aspect, in the sense that this company has potentially, a strong future, and equity would I am sure be more beneficial to an investor than a pure loan with a set yield.
All the added part about shareholder risk and all that, is , for all intense and purposes just necessary wording which they are required to add.
All just possibilities of course
What is interesting is that there has never been any mention of putting themselves up for sale which would have at least given an idea of the interest out there and any potential for investment post with. There would surely be interested parties who would be waiting in the wings and up until now have left the company to fight for themselves until the point where they had no alternative but to put themselves up for sale.
They have stuck with the notion that funds would be raised and put the shareholders on the line for that belief.
They would surely have discussed the situation with the key shareholders with regards to both options, you would have thought
But right now, they are clearly facing the situation of going into administration and putting the company in the hands of the creditors who would either have to find someone to run the company which would still mean them putting in more money, or having the administrators sell the assets to recoup anything for those creditors, which may or may not be less than if they had put the company up for sale.
You can only speculate on what may or may not happen, but, you can only hope the result is a new investor taking a stake in the company to raise funds and the existing shareholders taking a considerable dilution unless they buy to keep up % ownership.
Even if the private investors end up with a dilution, it would be better to own a smaller % of a stronger company than a larger % of a very much weakened one
I think unfortunately we are going to go through a period where a lot of good companies fail. This is a good company. Some big mistakes have been made with the management of their cash. The growth is mapped out for all to see. When sentiment comes back to markets, i still think a lot of industries will take some time to recover, but this business model can continue relatively on track. There will always still be capital out there but it will be a case of what fits the bill. Bio and pharma will be a relatively safe haven. If we were at a much earlier stage of revenues or pre revenues i would give it very little chance. This company will succeed IMO, as noted in the RNS it just depends on the capital structure after the funding. With this type of situation i would have expected if an equity issue was coming, it would have been done without this notice. They always have to give the worse case scenario.
It is concerning that they have updated the market with such a precise time stamp on cash running out to the week. But for the reasons above, i would put the chances of a favourable outcome higher than what i normally would with this type of notice. We know with sufficient working capital the company is worth 10x what it is today, as it was trading there before the notice of breaking covenants. We know that p&l breakeven is within sight.
To be clear I don’t have a position but whenever I see this it usually means pis get jak. In the current situation I think we all need to preserve whatever we can
It’s the key point
the Board will be required to take action to protect the interests of creditors and which, if necessary, is likely to result in a material reduction in any resulting value attributable to shareholders.