Tissue Regenix Group Regulatory News (TRX)

Tissue Regenix Group plc

Preliminary results for year ended 31 January 2016

Leeds, 23 May 2016 - Tissue Regenix Group (AIM:TRX) ("Tissue Regenix" or "The Group") the regenerative medical devices company, today announces its unaudited preliminary results for the year ended 31 January 2016.

Operational Highlights

 During the year, the Group:

· Entered a key joint venture agreement establishing new entity GBM-V

- Granted the first licence to the dCELL® heart valves

- Granted the first licence to DermaPure® in continental Europe

· Secured reimbursement for c.65% of Medicare beneficiaries for the use of DermaPure®, increased to 74% post year end

· Surpassed $1m sales in the US for DermaPure®

- Growing clinical support for the use of DermaPure® in peer reviewed clinical posters

· Completed enrolment for the OrthoPure™ XM clinical trial

· Commenced enrolment for the OrthoPure™ XT clinical trial

· Relocated UK operations to a new ISO 13485 certified manufacturing facility, allowing in-house production of xenograft products for Europe and the rest of the world.

· Appointed a new Non- Executive Director, Jonathan Glenn, reflecting the increased commercial focus of the Group.

Financial Highlights

· Significant revenue growth to £0.8m (2015: £0.1m)

· £19.0m, net of expenses, raised via equity placing

· Strong year-end cash balance of £19.9m (2015: £10.3m)

· Loss after tax for year of £9.5m (2015: £7.6m) as expected, reflecting the progression of EU clinical trials, and growing commercial infrastructure in the US.

Antony Odell, Tissue Regenix's Chief Executive Officer, commented:

"During the year to 31 January 2016 Tissue Regenix made significant progress both in the commercialisation and regulatory pathways across all of our key focus areas.

The performance of DermaPure® in its first commercialised year exceeded our expectations and gives us confidence as we move forward with a number of line extensions in different clinical applications. This progress was also mirrored in our porcine orthopaedic products OrthoPure™ XM & OrthoPure™ XT both of which entered regulatory clinical trials for CE marks.

The establishment of our joint venture in Germany, GBM-V, is an important milestone in our progress as a maturing commercial company, and allows us to bring our dCELL® human tissue applications to a wider European market. Also, allowing us to grant for the first time the dCELL® heart valve licence and to begin commercialising DermaPure® outside the US.

Our momentum has accelerated since year end, with further Medicare coverage for DermaPure®, and 510(k) market clearance from the FDA for medical device SurgiPure™ XD, the first approval for a dCELL® application under this regulatory body.

With Tissue Regenix celebrating its 10th anniversary this year I feel that the Group is now beginning to truly show the enormous potential of our dCELL® technology platform. Changing patient treatment, recovery and quality of life, across multiple clinical areas, and with the scope for future applications within the development pipeline. I look to the coming year with confidence that we will continue to deliver in line with our expectations."

Enquiries

About Tissue Regenix

Tissue Regenix is a leading medical devices company in the field of regenerative medicine. The company's patented decellularisation ('dCELL®') technology removes DNA and other cellular material from animal and human tissue leaving an acellular tissue scaffold which is not rejected by the patient's body and can then be used to repair diseased or worn out body parts. The potential applications of this process are diverse and address many diverse critical clinical needs of which vascular disease, heart valve replacement and knee repair are only the first.

Tissue Regenix was formed in 2006 when it was spun-out from the University of Leeds. The company commercialises academic research conducted by our partners around the World.

In November 2012 Tissue Regenix Group plc set up a subsidiary company in the United States- 'Tissue Regenix Wound Care Inc.', as part of its commercialisation strategy for its dCELL® technology platform.

Chairman's statement

"Tissue Regenix has delivered another promising year of continued progress, both in terms of commercialisation, and development from its pipeline of innovative regenerative solutions."

John Samuel

Chairman

Overview

The twelve months to 31 January 2016 represented another progressive year for Tissue Regenix in its development as a maturing and commercially focussed company, vindicating the belief demonstrated when it was established ten years ago.

Surpassing the $1m sales mark with DermaPure® validates the commercial viability of our technology and our approach to a hybrid distribution model; utilising third party distributors and strengthening our own salesforce is reaping benefits, a model in which we invested after the fundraise in February 2015.

FDA market clearance for medical device SurgiPure™ XD, the first for the Group, further strengthens our commercial position within the US and marks a significant step in the acceptance of our dCELL® technology.

We entered our first Joint Venture Agreement forming a partnership with the GTM-V tissue bank in Rostock, Germany, allowing us to grant for the first time, a dCELL® human heart valve licence.

Throughout the year we undertook a staged move to a new facility in Leeds and we anticipate that the consolidation of our managerial and manufacturing functions will bring further improvement to our corporate efficiency.

The Regenerative Advantage

Regenerative solutions continue to lead the way in revolutionising medical treatments. With an ageing population suffering multiple ailments and injuries, with increasing participation in active sports, and with current treatment modalities having significant disadvantages in terms of side effects, treatment cost and intercurrent morbidity, the potential benefits of the regenerative approach are becoming increasingly clear. In a market that is expected to reach a value of $11.5bn by 2022, Tissue Regenix is actively involved in three clinical areas at present, with considerable potential for further expansion.

Wound Care

We have taken significant steps in the commercialisation of our flagship product DermaPure® in the US, and given the potential size of the wound care market worldwide, we are confident that this success can be replicated in other markets. We are also well on the way to establishing additional applications for wound care, and expect to launch SurgiPure™ XD into the US market in H216 after receiving FDA market clearance in March.

Orthopaedics

Our Orthopaedic clinical trials are currently ongoing, for both the OrthoPure™ XM and XT (porcine products), and we anticipate that we will have CE mark approval by early 2017. We have also strengthened our senior management team by appointing a VP of Orthopedics for North America, who will be key to guiding our entry into this market over the coming years with both our porcine products and human tissue applications.

Cardiac

Our relationship with Professor Francisco da Costa and research partner Pontifical Catholic University of Paraná, Curitiba, Brazil, has been ongoing for the last ten years and we are proud to now be in a position to present the ten year clinical follow-up data at prestigious conferences around the world. We hope to be able to bring dCELL® heart valves to European patients in the near future through our Joint Venture. We anticipate that this will be the first of an expanding network of agreements with international partners who share our ethical and commercial values.

Human Resources

We continue to invest in the development and retention of our staff and have strengthened our senior management with the appointment of a VP for Orthopedics in the US. Alongside this we have expanded our senior sales team for DermaPure® and developed our production and manufacturing teams within the UK.

Finance

With the Group now generating revenue the decision has been made to move our year end date to 31 December, to a more conventional commercial company reporting timeframe. We have also implemented, for the first time, segmental reporting for each of our operational divisions, in order to provide even greater transparency of the business as each of the operating divisions grow.

The Board

In January we announced the appointment of Jonathan Glenn, CEO of Consort Medical plc, as a Non-Executive Director. With the expected rapid commercialisation of products over the coming years, the addition of Jonathan strengthens our commercial, and specifically, medical device industry expertise, to help guide Tissue Regenix through the next stages of its business plan.

Outlook

An exciting and busy year lies ahead for Tissue Regenix and we are confident that we will continue to see notable progress across all three operating divisions in the coming months. dCELL® technology applications are well advanced in terms of clinical development and regulatory processes, and we anticipate that within the coming year we will be in a position to bring them to the European market, and begin our entry pathway in the US with our orthopaedic portfolio.

John Samuel

Chairman

23 May 2016

CEO STATEMENT

"During the year to 31 January 2016 Tissue Regenix made significant progress in both the commercial and development businesses of the Group. We continue to carefully monitor our commitments to ensure that we can deliver in line with expectations, and bring our products to the market in the safest and most time efficient manner over the coming year."

Antony Odellchief executive officer

Our Highlights

In the year since our last report, Tissue Regenix has taken great strides in realising its true potential, gaining commercial traction with our wound care products, surpassing $1m revenue with DermaPure® in its first full year of commercialisation, and receiving our first 510k whilst also undertaking the groundwork to allow for a successful launch of our orthopaedic products during 2017.

We have entered our first Joint Venture Agreement, highlighting the corporate maturity of the Group as we embark on a new business model, enabling us to roll out our dCELL® human tissue products in Europe.

The move to our new manufacturing facilities' consolidating our UK operations' was completed on time and on budget, ensuring that we are in a position to meet our production demands in the coming years, as well as ensuring that we can meet the requirements of the FDA for products such as SurgiPure™ XD.

Finance

During the year we invested in our sales and distribution infrastructure for DermaPure® in the US, and our porcine orthopaedic applications within the EU. Following the £19m fundraise undertaken in February 2015, we maintain a strong financial position.

Strategy

As a company operating in a rapidly developing industry sector, we have remained committed to our core strategic focuses of wound care, orthopaedics and cardiac, with a specific geographic focus on the EU and the US, and a dual tissue strategy utilising both human and animal (xeno) tissues.

However, we also pride ourselves in having the flexibility and commercial confidence to pursue new opportunities as they arise, as was demonstrated in January 2016 when we entered our first Joint Venture Agreement with GTM-V in Rostock, Germany, establishing tissue bank GBM-V. This new business model will allow us to deploy our human tissue products throughout Germany, and the wider EU.

Regulatory Pathways

We have an experienced in-house regulatory and quality team which is successfully leading our regulatory applications and entry into global markets. In March 2016 we received our first 510(k) market clearance from the FDA for SurgiPure™ XD, a decellurised porcine dermis for soft tissue defects. This represents an important step since it is the FDA's first in-depth review of a dCELL® process, as part of the approval which encourages us in planning for future regulatory submissions in the US.

We have also undertaken a two part submission for CE marking, which should reduce the time needed for final approval of the OrthoPure™ products, by ensuring that once the required clinical data has been collected we are in a position to submit the final application for approval.

Our entry into the German market will be managed by our partners from GTM-V who have extensive experience of the German regulatory system, one of the toughest within Europe, thus setting a high benchmark for the dCELL® products to meet, which allows us to feel confident that further EU approvals will be more readily secured.

Key performance indicators

Key Group performance indicators are set out below:

· Monthly review of product development timelines and costs

· Monthly review of revenue progress and forecasts

· Monitoring of cash balance and associated working capital requirements

· Monthly review of actual results against budget

Licensing and IP

Through GBM-V, our JV company, we granted for the first time a licence to CardioPure™, the dCELL® human heart valve. We expect to be in a position to roll out the first dCELL® human heart valves in 2017, subject to approval from the necessary German authorities. GBM- V has also been granted a licence to DermaPure®, the first commercial licence for this product outside of the US.

We continue to maintain our relationship with the NHSBT who were granted an exclusive royalty-free licence for the use of DermaPure® within the UK, and our research partner Pontifical Catholic University of Paraná, who we continue to work with closely in developing our cardiac applications.

Outside of the already granted licences we also have a portfolio of products and line extensions that we are currently developing, and will, if relevant, review licensing to a suitable partner, as well as holding the IP to the dCELL® products that will be manufactured in-house by Tissue Regenix. We continue to protect our intellectual property by securing a number of global patents, and ensuring we take the necessary precautionary steps and action needed to secure these.

Operations

In April 2015 we commenced the move to our new manufacturing facility outside of Leeds. Having undergone renovations to bring it in line with our needs from both a regulatory and manufacturing standpoint, we achieved ISO13485 certification for the whole of our UK operations, which supports the future manufacture of products for Europe and the rest of the world from this facility. We have now consolidated our entire UK operation to this one site, which has the capacity to meet our expanding manufacturing needs in the coming years, for both our orthopaedic and wound care porcine products. We believe that this strategic decision will create further synergies in the manufacturing and development arms, enhancing the corporate cohesion and global reach of the Company.

We have expanded the number of top level managers within the US to facilitate the growth of our wound care division, making senior appointments to both our sales and marketing teams, thus driving further market penetration and brand awareness. In March 2016 we also made our first appointment to Tissue Regenix Orthopedic, Inc. filling the post of VP Orthopedics for North America to lead our entry into this marketplace over the coming years.

Current Trading and Outlook

We expect this progress to continue in the next year as we bring to market SurgiPure™ XD, progress with CE mark application for OrthoPure™, and begin our entry into the US market with our human tissue orthopaedic applications.

DermaPure® now has an established foothold within the US, and we hope to receive the remaining approvals and become available to 100% of medicare beneficiaries in the coming months. Alongside this we will continue to penetrate the private payer market and establish further revenue-generating opportunities.

Our Joint Venture Agreement in Germany allows us to pursue new business opportunities and begin our entry into the European market with our human tissue applications, and additionally allows us to enter the cardiac field, something which we feel will underline the unique efficacy of our dCELL® technology.

Conclusion

Tissue Regenix this year celebrates its tenth anniversary, having fulfilled the promise of its early research and development roots.

With accelerating sales, increasing market visibility in the US, new partners, creating new opportunities, and potential licensing and commercial breakthroughs in Europe, the Company continues to expand and develop as originally envisaged, and we remain optimistic that it will reach its fullest potential across our key focus areas.

At the same time, as a British company, strategically allied with British educational establishments, it remains a source of pride that was granted a revenue-free license for human tissue applications (only) of dCELL® to the NHS in partnership with the National Blood Transfusion Service (NHSBT) who developed DermaPure®, which Tissue Regenix is now commercialising globally outside of the UK.

We are still at an early stage in exploring the potential clinical applications of the dCELL® platform which is showing its true potential to provide solutions in a wide variety of medical arenas.

With the support of our strong blue chip investor base I am confident that the benefits to clinicians and patients will continue to expand over the coming years.

Antony Odell

Chief Executive Officer

23 May 2016

cfo statement

"Tissue Regenix Group plc ended FY16 in line with our expectations. Taking our first product through it's first full year we generated revenue of £816k, and maintained a strong cash balance at the end of the period of £19,907k."

Ian Jefferson

Chief Financial Officer

For the year ended 31 January 2016 Tissue Regenix Group plc delivered revenue of £816k (2015: £100k) and generated an operating loss of £10,242k (2015: £8,369k). With finance income of £213k (2015: £168k) and a research and development tax credit of £527k (2015: £620k) the loss after tax was £9,502k (2015: £7,581k) of which £9,410k (2015: £7,581k) was attributable to the equity holders of the parent Company. Cash balances at the end of the period were £19,907k (2015: £10,257k). The results were in line with our expectations.

Segmental Analysis

A split of the Group's results by operational division, as extracted from the operating segment analysis (see note 3), is shown below along with a further breakdown of administrative costs:

* Central costs include plc, the Board, operations, finance and facilities.

† Sales and marketing for Wound Care includes the entire costs for our US entity. Included within these costs is £303k (2015: £21k) commission on sales.

The Group is organised into Cardiac, Wound Care and Orthopaedics divisions for internal management, reporting and decision-making, based on the nature of the products of the Group's businesses. Central overheads, which primarily relate to operations of the Group function, are generally not allocated to the business units.

Wound Care

Group revenue for the year was generated almost entirely from the Wound Care division with revenue of £808k (2015: £72k).Launched in the second half of the prior year, FY16 represents the first full year of sales for DermaPure®. Delivering £808k ($1.2m) of revenue from our first product launched in the USA, demonstrates the successful transition from development to commercialisation, a significant achievement. Moving forward we anticipate continued acceleration of DermaPure® revenue. The exact timing of distributor appointments and contract approvals is highly variable, therefore our revenue expectation for the next 12 months is between $2.5-$4.5m. However, as described overleaf our next accounting period will be shortened to 31 December 2016, a period of 11 months. The expected reported revenue in the current period will therefore be proportionally smaller. As announced earlier in the year, SurgiPure™ XD has been granted 510k approval in the USA and it is anticipated that the product will be launched in H2 CY16. We therefore do not expect a material impact on revenue from this product in the current period.

Gross margin for the year for the Wound Care division was 81% (2015: 56%). The margin in both years was impacted by the provision of free of charge evaluation units to potential new customers. This was naturally higher in the initial months after product launch and therefore affected 2015 more significantly than 2016. As recurring business has been established the number of evaluation units has reduced as a proportion of total units shipped resulting in an increase in the margin achieved. The underlying margin on product sales, excluding the evaluation units, was 86% (2015: 82%), the variance in the underlying margin being the result of product size mix.

Development costs at £1,108k (2015: £1,029k) resulted from the associated expense of the on going randomised clinical trial of DermaPure®, to collect clinical evidence for use supporting the sales and marketing functions, and the 510k process costs for SurgiPure™ XD. We expect these costs to be slightly lower in the current period as the DermaPure® trial is coming to an end and SurgiPure™ XD is in the final qualification stages before product launch. Sales and marketing expenditure of £3,672k (2015: £1,766k) represents the costs of our US entity. The increase during the year resulted from the planned recruitment of additional direct sales heads, marketing costs to support the roll out of DermaPure® and commission costs on sales. The commission costs were £303k (2015: £21k), which as a percentage of sales was therefore 37.5% (2015: 29.2%). The commission percentages paid vary between salaried reps, external distributors and commission- only reps. The overall percentage paid will therefore vary depending on the sales mix but is anticipated to move towards 35%. For the current period the total sales and marketing costs will increase due to a combination of commission ramping in line with revenue growth, the full year effect of hires in FY16 and several new appointments being made to support the distribution side of our hybrid sales model.

With the working capital and start-up costs of the US operation the Group has a net outflow of US dollars. The recent strength of the US dollar rate means that this outflow is proportionally more expensive when translated into sterling, the Group's functional currency. However, this situation will reverse when the US operation becomes profitable and cash generative.

Orthopaedics

Significant progress was made during the period with both OrthoPure™ XM and OrthoPure™ XT. The development costs incurred of £2,279k (2015: £2,032k) consisted primarily of the pre-clinical and clinical trial costs of both these products as they moved into the human trial phase. We would anticipate these costs increasing in the current period as the implanted patient numbers grow and we move towards CE marking. Product launch for orthopaedic products is expected in the first half of CY17.

Cardiac

There are no material results for year for this division. However, a significant step forward was made with the creation of a Joint Venture tissue bank in Germany in January 2016, an important first step in the process of commercialising our human heart valve technology in Europe. Details on the Joint Venture are included in the Strategic Review on pages 20-21.

Central

Operation costs are mainly incurred centrally and are in general not allocated to individual operating divisions. Costs have been kept under control and remained flat over the period at £3,232k (2015: £3,290).

Finance Income

Finance income increased to £213k (2015: £168k) and represents interest earned on cash deposits. The increased interest reflects the additional cash held on deposit subsequent to the equity fund-raisein February 2015.

The Group follows a risk-averse policy of treasury management. Cash deposits are held across a number of counterparties and are held only with institutions of prime financial standing. The Group's primary objective is to minimise exposure to potential capital losses whilst at the same time securing prevailing market rates.

Taxation

The Group continues to submit enhanced research and development tax claims and elects to exchange tax losses for a cash refund. The expected refund for the year to 31 January 2016 is £492k (2015: £620k). Tax losses carried forward by the Group at the end of January 2016 were £23,772k (2015: £16,121k). The Group therefore does not expect to pay corporation tax for a number of years. Once profitable, the Group also expects to fall within the Patent Box regime and benefit from the reduced corporation tax rate within it.

Cash Balances

As at 31 January 2016 the Group had cash resources of £19,907k (2015: £10,257k) and was debt free. The increase in cash balances resulted from an equity placing in February 2015 which raised £18,947k after expenses. Adjusting for the fund-raise the outflow of cash from other activities was £9,297k (2015: £8,226k). The bulk of this outflow, £9,116k (2015: £8,038k), related to the "cash" operating loss (operating loss excluding non-cash items).

Accounting Reference Date Change

Historically, the Group had a 31 July year end, consistent with its origins as a University spin-out. On reversal onto AIM in 2010 the Group adopted the accounting reference date of 31 January in line with the vehicle into which it reversed. However, now that the Group is entering its commercial phase the Board has decided to change the accounting reference date to 31 December, primarily to bring it in line with a more conventional commercial company reporting timeframe and to provide ease of reference for investors, customers, managers and employees.

The effect of the change to the accounting reference date is to shorten the next accounting period to 31 December 2016, a period of 11 months. The Group will therefore have the following reporting dates:

· Unaudited results for the 6 months to 31 July 2016

· Audited results for the 11 months to 31 December 2016 

The Group will subsequently publish its half-yearly reports to 30 June and annual report and accounts to 31 December in accordance with the AIM Rules for Companies.

Ian Jefferson

Chief Financial Officer

23 May 2016

Consolidated Statement of Comprehensive Income

for the year ended 31 January 2016

The loss for the year arises from the Group's continuing the operations.

The accompanying notes form an integral part of the financial statements.

Consolidated Statement of Changes in Equity

for the year ended 31 January 2016

Consolidated Statement of Financial Position

as at 31 January 2016

Approved by the Board of Directors and authorised for issue on 23 May 2016.

Company number: 5969271

John SamuelChairman

Ian JeffersonChief Financial Officer

Consolidated Statement of Cash Flows

for the year ended 31 January 2016

The Company's annual report and accounts for the year ended 31 January 2016 have been published today and will be posted to shareholders shortly. The annual report and accounts are also available in electronic form for download on the Company's website, www.tissueregenix.com.

Notes to the Financial Statements

for the year ended 31 January 2016

1. BASIS OF PREPARATION

The financial statements of Tissue Regenix Group plc are audited consolidated financial statements for the year to 31 January 2016. These include audited comparatives for the year to 31 January 2015.

The Financial Statements set out in this announcement do not constitute statutory accounts for the year ended 31 January 2016. The report of the auditors on the statutory accounts for the year ended 31 January 2016 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The Financial Statements for the year ended 31 January 2016 included in this announcement were authorised for issue in accordance with a resolution of the Board of Directors on 23 May 2016.

The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.

The Group financial statements consolidate the financial statements of Tissue Regenix Group plc and the entities it controls, its subsidiaries.

Subsidiaries are entities controlled by the Group. The Group controls an entity when it 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 that are currently exercisable. The acquisition date is the date on which control is transferred to the acquirer. The financial statements 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. Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated.

Going Concern

As at 31 January 2016, the Group had £19.9m of cash and cash equivalents available to it. The Directors have considered their obligation, in relation to the assessment of the going concern of the Group and each statutory entity within it, and have reviewed the current budget cash forecasts and assumptions as well as the main risk factors facing the Group.

After due enquiry, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

2. Significant accounting policies

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union as they apply to the financial statements of the Group for the year ended 31 January 2016 and applied in accordance with the Companies Act 2006.

The accounting policies adopted are consistent with those followed in the preparation of the audited financial statements of Tissue Regenix Group Plc for the year ended 31 January 2016 and are disclosed in those statements.

3. SEGMENTAL REPORTING

The following table provides disclosure of the Group's revenue by geographical market based on location of the customer:

Analysis of revenue by customer

During the year ending 31 January 2016 the Group had two customers who individually exceeded 10% of revenue. These customers generated 12% and 11% of revenue respectively. During the year ending 31 January 2015 the Group had three customers who individually exceeded 10% of revenue. These customers generated 28%, 25% and 18% of revenue respectively.

Operating segments

The Group is organised into Cardiac, Wound Care and Orthopaedics divisions for internal management, reporting and decision-making, based on the nature of the products of the Group's businesses. Managers have been appointed within these divisions, who report to the Board. These are the reportable operating segments in accordance with IFRS 8 "Operating Segments". The Directors recognise that the operations of the Group are dynamic and therefore this position will be monitored as the Group develops.

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. The Group has identified the Board of Directors as the Chief Operating Decision Maker as it is responsible for the allocation of resources to the operating segments and assessing their performance.

Central overheads, which primarily relate to operations of the Group function, are not allocated to the business units.

Administrative costs are broken down as follows:

* Central costs include plc, the Board, operations, finance and facilities.

† Sales and marketing for Wound Care includes the entire costs for our US entity. Included within these costs is £303k (2015: £21k) commission on sales.

Other segment information

The Group's non-current assets are predominantly held by UK entities and consequently no geographical statement of financial position disclosures are required.

4. TAXATION

Tax on loss on ordinary activities

The charge for the year can be reconciled to the loss before tax per the statement of comprehensive income as follows:

Factors affecting the current tax charges

Deferred tax

* The Company has not recognised a deferred tax asset relating to these losses as their recoverability is uncertain.

5. LOSS PER SHARE (BASIC AND DILUTED)

Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent 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 Company has issued employee options over 24,543,853 ordinary shares and there are 16,940,386 jointly owned shares which are potentially dilutive. There is, however, no dilutive effect of these issued options as there is a loss for each of the years concerned.

6. SHARE CAPITAL

As permitted by the provisions of the Companies Act 2006, the Company does not have an upper limit to its authorised share capital.

7. MOVEMENT IN RETAINED EARNINGS AND RESERVE FOR OWN SHARES

8. Annual report and accounts

The Company's annual report and accounts for the year ended 31 January 2016 have been published today and will be posted to shareholders shortly. The annual report and accounts are also available in electronic form for download on the Company's website, www.tissueregenix.com.