Member Info for B2HS2L

Minimal spread but also minimal volume I fear.
Its time for a rumour to boost volume, so lets start with the one share sold code (09:08), - it means TR1's due this afternoon..

From 14.11.2019 RNS:

TRX calculated previously that they were about to breach loan covenants.

The RNS contained the agreed changes to the MidCap loan arrangement.

Drawdown of the first tranche of the loan had occurred in June, and the TRX cash balance as at 31 October 2019 was $9.3M.

On 14th Nov, TRX agreed an immediate repayment of $5.5 million of the outstanding Term Loan.

Subsequent to this repayment, TRX stated they had enough cash to see them to the end of Q1 2020.

I believe the statement in the 14.11.19 RNS that has investors concerned about funding, - or lack of it is:

"however the drawdown of these tranches is now subject to MidCap's discretion and satisfactory recapitalisation of the Company at that time."

I now think that as part of the new agreement, MidCap required TRX to spend their own money before any drawdown under the new loan agreement, and that is all that is meant by "drawdown at MidCap's discretion, and satisfactory recapitalisation".
Satisfactory recapitalisation meaning that MidCap wanted to see TRX cash balance fall before next drawdown, - thus achieving MidCap's required recapitalisation of the Company.

If this is the case, TRX are due to drawdown the next loan tranche near the end of Q1, and there is no finance issues beyond that.

ie I think a poor choice of sentence construction has caused concern for investors unnecessarily.

Hope you will share your thoughts on this.

Stu -
"Is it fair to assume that any financial remuneration to these 'partners' for their part in our mentoring/advice would manifest in a clear listing on our financial accounts"?

If you look at the position of ARMS medical, - it is clear that DermaPure is a very large part of the offering ARMS has to surgeons via the GPO system.

I am sure ARMS / 2Swell are busy assisting TRX to maximise output, because the problem of insufficient tissue to satisfy demand is adversely affecting the ARMS bottom line just as much as TRX, so they are all in the same boat, indeed they all have the same motivation to safeguard TRX and TRX finances.

There is also the following.

Robert Greer is founder of ARMS and a partner in 2Swell, and from Robert's Linked In page concerning his 2Swell employment:

"At 2Swell we are committed to helping entrepreneurs reach their next level of success.
In partnership with our clients, we work inside their company to increase the ROI of their existing resources, while identifying and driving new opportunities of growth."

So it would seem Robert Greer and Michel Koopman are busy inside TRX, together with whichever ARMS / 2Swell partner's expertise is available, working on developing the shortest route to profitability for TRX.

Last year there was a trading announcement on 4th February.
If you look at the RNS it only provides an unaudited trading update for the year ended 31 December 2018, so we will have to wait until year end to see evidence of company expenditure.

Despite drawdown of tranches of the loan now being available only with Mid Cap's discretion, I believe Gareth Jones must be relatively happy with company finances because ARMS, 2Swell and MidCap are all adversely affected if anything arises that is detrimental to TRX's finances.

They are probably all bricking it with the sp so low.

Lets hope our investment moves on soon to a more secure financial footing.

This is the Gynaecological Mesh procedure that ARMS medical see Dermapure replacing, for women who need surgery, and also those who already have serious after effects of mesh surgery.

A common surgical implant has generated the largest multi-district litigation since asbestos.
60 Minutes reports on one of the device's manufacturers, Boston Scientific, now facing 48,000 lawsuits

*.cbsnews.com/news/boston-scientific-gynecological-mesh-the-medical-device-that-has-100000-women-suing-2019-04-17/

I have been pondering the reason why the last TRX CFO, Mike Barker, lasted only a couple of months in post.
His departure on 18.11.2019 was announced 4 days after an RNS was issued, entitled "Updated loan facility agreement with MidCap".

The RNS states "Group Financial Controller, Kirsten Lund, has been appointed Group Finance Director and will resume these responsibilities with immediate effect allowing for an orderly handover. Kirsten Lund is not being appointed to the Board of the Company at the current time".

I felt that the position of Chief Financial Officer was being somehow dumbed down, it felt like TRX were saying we don't really need a board appointed CFO any more.

Below is the path of some interesting research on TRX partner ARMS medical and its CEO Michel Koopman.

++++
https://www. is the prefix to be used whenever * is encountered below.
This stops website addresses being removed as part of uploading my post to this bulletin board.
++++

*armsmedical.com/what-we-do

Suggest you look 1/2 way down this page at -
Michel Koopman CEO

...Today, in addition to his leadership role at ARMS Medical, he advises entrepreneurial companies on go-to-market and growth strategies as the founder of 2Swell.

There are many links of interest at the bottom of this web page to do with ARMS medical and Tissue Regenix.

Now move to

*2swell.com/leadershipteam

Michel Koopman - Chief Executive Officer & Founder of 2Swell, and CEO at ARMS Medical

*2swell.com/managementconsulting/

Growth Services

Corporate Services

Finance Services
In partnership with Amesto Global, we are assisting companies with corporate finance needs, including funding, credit requirements, mergers, acquisitions, joint ventures and more, whether in the USA, Europe and the rest of the world.

Michel Koopman is on Linked In, where a more complete background is available.

Now move to

*amesto.global/corporate-finance-services/

Now move to

*.amesto.global/growth-services/

I think that TRX may be being 'mentored' through the change from developer of medical processes various toward the practical and financial challenges of becoming a profitable producer in as short a time as possible, via 2Swell and ARMS medical. I am not saying TRX should have an FCO on the board, but it seems the board might not be in need of one, if services provided by Michel Coopman and his contacts are available. Your feedback would be welcomed.

For all you people with a weary eye on the sp, and why we are losing so much hair over the situation Tissue Regenix finds itself in, I am doing some research on previous presentations, and found this:
Tissue Regenix CEO Antony Odell Presents at Biotech Capital Conference 28.02.2017
youtube.com/watch?v=B1f9rgSjhTM
(Prefix with https://www.)

This presentation and subsequent questions provides a good grounding in TRX's core products.

It made me feel better about my investment.

Thanks for the response Chester.
I see Daniel Lee is TRX US President of Operations, and has previously been employed in San Antonio by two other Orthobiologic companies. If he is as well connected in San Antonio as I suspect, then he might know where there might be surplus processing capacity, and perhaps put it to work for TRX.
The other possibility is that he will be able to pick up trained operatives to help solve some of the recruit training issues.
Lets hope he doesn't get head hunted any time soon.

Chester, - I'm not sure what Gareth Jones is talking about with respect to new products, and why he mentions them when he cannot process enough of the present offerings.
Can you or some other lth throw some light on what was meant, or are you confused as well?

From one of my 22.12.2019 posts, directly relevant to the present conversation:

TRX managers had to renegotiate the loan, resulting in $5.5 Mil returned to lender and access to tranches within MidCap's control.

14/11 RNS extract: "however the drawdown of these tranches is now subject to MidCap's discretion and satisfactory recapitalisation of the Company at that time."

Satisfactory recapitalisation. - So to me that is MidCap needing to be satisfied with the mix of loan and equity before drawdown occurs.
Also FWIW, I feel that MidCap are not happy with this ratio at present, as a drawdown of funds since 14 Nov RNS has not occured.
MidCap may be waiting to see what the situation is like in March when funds are necessary.

Since the last interview with Gareth Jones, I feel that there may be new product announcements via outsourced contractors, because there is no spare manufacturing capacity in Texas, but WTFDIK. - Just my 2 cents.

parkez: prefix the following with www.

investopedia.com/terms/r/recapitalization.asp

I found it helpful.

FWIW Stu, I think MM's have their orders to allow the off-loading of Woodford shares at or around 1p, to keep sales up into January.
With Woodfords investors being told that money could be distributed either Jan or Feb (can't remember which), there is a timetable for shares to be sold.

Previously sp was in decline because many could see Woodford needing to shead an awful lot of shares.

Then TRX managers had to renegotiate the loan, resulting in $5.5 Mil returned to lender and access to tranches within MidCap's control.

14/11 RNS extract: "however the drawdown of these tranches is now subject to MidCap's discretion and satisfactory recapitalisation of the Company at that time."

Satisfactory recapitalisation. - So to me that is MidCap needing to be satisfied with the mix of loan and equity before drawdown occurs.
Also FWIW, I feel that MidCap are not happy with this ratio at present, as a drawdown of funds since 14 Nov RNS has not occured.
MidCap may be waiting to see what the situation is like in March when funds are necessary.

TRX may be attractive to a bidder whilst sp is so low, and to counteract this the company might need a loan to load up with debt, so the picture becomes less attractive. - But that is purely my speculation about how the board would react to any hostile bid.

Since the last interview with Gareth Jones, I feel that there may be new product announcements via outsourced contractors, because there is no spare manufacturing capacity in Texas, but WTFDIK. - Just my 2 cents.

For me it was a buy, not a sell.

If sp breaks out of 0.95 - 1.05 band, then I think the big buy Friday will have been because somebody knew the selling was nearing the end.
But lets see what the sp is noon monday.

Otherwise any spikes will be sold into.

The 15 Million buyer is :

1 Building a takeover stake, more purchases monday a.m. but to be listed after market closes.

2 Sure that there are few shares left to be discarded by Woodford, and consequently sp will shortly move north.

3 Sure that a new less restrictive loan has been agreed.

4 Sure that a new product or products are shortly to be launched. (Gareth Jones mentioned outsourcing and new products in the latest video).

5 Sure that a takeover is pending.

6 Sure that a merger with a blue chip party is imminent.

Anybody have another likely scenario?

Interested to know whether there is a consensus on one or more of the above possibilities.

My choice is option 2.

Merry Christmas to the great and good..
and especially to the patient..

Why the need for an interview now.
The company is or has recently been in the limelight for retail investors, and there is no new news included?

So I assume it is for reassurance that fundamentals are unchanged after the 14.11 RNS,
Gareth Jones reassuring that if there is anything to say it will appear in an RNS as always.

Company seems quite happy with MidCap being very supportive on a day to day basis, allowing discussions with brokers to structure the company for future operations.

Gareth looks remarably calm for a man who's companies share price has dropped so hard and fast to 1P due to circumstances beyond his control.
Disappointed he could not give a much deeper in depth update. Steady as she goes.

I think I would be looking to loosen the future drawdowns being 'subject to MidCap's discretion', by finding another lender, but if Gareth Jones is happy, so must we all be.

My buys have historicaly been higher than yours Chris, and I'm thinking the sp moving down just now is a result of this interview containing no further news, but we'll get there, we just need to be patient and buy on the dips.

Nomlungu, from 14.11 RNS: - 'The Company estimates that, following the Repayment, it currently has sufficient working capital until at least the end of March 2020'.

Having re-read the quote you provided, I see it includes the words working capital.

From https://www.investopedia.com/terms/w/workingcapital.asp

What Is Working Capital?
Working capital, also known as net working capital (NWC), is the difference between a company’s current assets, such as cash, accounts receivable (customers’ unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable. Net operating working capital is a measure of a company's liquidity and refers to the difference between operating current assets and operating current liabilities. In many cases these calculations are the same and are derived from company cash plus accounts receivable plus inventories, less accounts payable and less accrued expenses.

There is nothing within the above which mentions investing in fixed assets like clean rooms.

From: https://www.cleanroomtechnology.com/news/article_page/Tissue_Regenix_plans_tissue_engineering_expansion_in_Texas/157299 (dated 19.08.2019)

"Phase one of the expansion will commence immediately with part of the new building being converted into office, distribution and warehouse space, allowing for additional cleanrooms to be built in the original facility, which are expected to be operational by the end of H1 2020."

So either the 14 Nov RNS has not mentioned that funds beyond working capital are available and being utilised for plant investment, or MidCap are not making available loans agreed with TRX, because no RNS stating that loan draw down has occured.

It seems to me that expansion plans are not likely to mature until 2020 H2 now.

Sorry Woodstock, I'm thinking they would not want to compound financial pressures by buying properties right now, or have I missed something?

This is the article I referred to in my 12:57 post. The timescales were true as at date of publication, apologies if these references have been quoted before :

https://www.cleanroomtechnology.com/news/article_page/Tissue_Regenix_plans_tissue_engineering_expansion_in_Texas/157299
Article published 19.08.2019:
"Phase one of the expansion will commence immediately with part of the new building being converted into office, distribution and warehouse space, allowing for additional cleanrooms to be built in the original facility, which are expected to be operational by the end of H1 2020".

"Over time, it is planned for further processing and packaging cleanrooms to be built in the new facility, therefore, increasing the company’s ability to process more tissue and produce products".

Gareth Jones, Interim CEO of Tissue Regenix Group, said: “I am delighted that we have secured this additional facility to support our ambitious growth plans. The group has undertaken a number of operational initiatives in order to increase production capabilities and meet the growing market demand for our products. Having commenced a second shift at the beginning of the year in our current facility in San Antonio, the phased build-out of this new facility will allow us to meet the growing requirements of our customers well into the future.”

Also:
https://www.expressnews.com/business/health-care/article/Tissue-Regenix-to-expand-San-Antonio-area-medical-14504344.php
As of 09.10.2019, 41 persons were employed at San Antonio.

I would like to see Ken James clarify what substances have been used as a placebo in the P-K study, & phases 2 and 3, explaining the reasons for any changes.
If the placebo provided in phase 3 was dosed with GTN somehow, similar results would have occurred.
Hearing the company state that placebo was checked for presence of GTN as part of Quality Assurance would now be appropriate.

Thanks guys for your views.

I have limited time at present, but will have more tonight, so will make this do for now.

Chester, I have seen but will have to re-find articles about the refurbishment of the Texas facility.
From those articles timescales might be deduced, however there is no mention of expenditure on capital equipment, so I don't know the timing of investment in plant equipment.

MidCap know that there is a problem with finances scheduled for March, but must also know that TRX cannot fulfil their orders at present, so basically everything TRX manufactures between now and March is already sold.
That being so, they know what income to expect when time for paying an invoice is taken into account. The only unknown is if TRX fail to keep up with current productivity levels because of labour unrest or equipment failure or some other issue.

"MidCap want to make sure their investment money is going to be safe before they jump aboard the Tissue Regenix train. "

As I see it, MidCap could be constricting the rate of plant development because they control drawdown, so in effect MidCap is already on board the train, and they are already controlling the rate at which TRX can invest in Texas, and possibly this is one of the reasons the FD resigned.
They might do this because they want TRX to spend the cash available without a drawdown in the way MidCap wants, not the way TRX wants.
Once TRX has no funds in March, Drawdown might be conditional upon what it is to be spent on.

I hope I'm wrong about this, but it's the way it feels to me.
Hoping to post tonight.

Thanks all.

From the 14 Nov RNS;
"Access to Tranche Two and the final tranche of $2.5 million ("Tranche Three") of the Term Loan remain in place, however the drawdown of these tranches is now subject to MidCap's discretion and satisfactory recapitalisation of the Company at that time."

My problem is with the finances of TRX at present.
They repaid Midcap $5.5Mil, and now Midcap has discretion of drawdown, so not surprised the FD resigned.
Just how quickly can TRX now implement their plans for the new plant in Texas, - is it as quickly as TRX intended, or much faster / slower?
When tranches are allowed to be drawn down by MidCap, we should expect an RNS to advise, - yet no RNS.
So are Midcap waiting for sales invoices to be paid before further plant investment resumes?

Happy to hear your side of this coin.