TIDMRXB
RNS Number : 2133Z
Rex Bionics PLC
13 March 2017
Rex Bionics Plc
("Rex Bionics" or the "Company")
Funding and strategic review update
13 March 2017: Rex Bionics Plc (AIM: RXB), announces an update
on its funding position, its discussions to secure future funding
and its strategic options, as well as a current trading update.
Funding Update
As set out in the Company's interim results on 5 December
2016:
-- the capital required by the Company appears unlikely to be
readily available from new public market portfolio investors;
-- the Company has been evaluating a number of potential future
strategic options, including seeking alternative sources of funding
strategic partnerships or other transactions; and
-- the Company's cash runway was expected to last into the second quarter of 2017.
The Company has subsequently been exploring (i) a potential
product development agreement with a substantial international
partner (the "Strategic Partner") to develop a next generation REX
device and (ii) options to raise equity funding, totalling a
minimum working capital requirement of GBP4.5m (the "Fundraising"),
to develop a new REX product to a prototype phase and to fund the
Company for a minimum of 12 months. The Company believes that the
proposed new REX product would build on the advantages of the
existing REX device, while significantly reducing costs and
improving both aesthetics and the speed and gait of the device.
Despite intensive efforts over recent weeks on the Fundraising
and discussions with existing and new public market investors,
while the Company had received some indications of funding support,
these have been insufficient to cover the minimum requirement.
The Company estimates that it will likely need external funding
by the end of April 2017 in order to remain as a going concern. As
such, it is in discussions on an alternative strategic option, as
set out below.
Strategic discussions
The Company is in discussions, in partnership with a third party
private investment fund manager (the "Investor"), to set up a new
private development vehicle (the "Operating Company") into which
the Company would contribute essentially all of its operating
business, while the Investor would contribute sufficient funding to
the Operating Company in order to develop the new REX product
prototype with the Strategic Partner (the "Transaction").
As part of the Transaction, the Company would therefore sell its
operating business to the Operating Company in exchange for a
percentage equity interest in that private vehicle. The Investor
would not be investing the development capital directly in the
parent company, Rex Bionics Plc, but as part of the Transaction the
Company is discussing some limited funding to be provided by the
Investor for Rex Bionics Plc's short-term working capital
needs.
The exact structure of the Transaction is still to be determined
but should the Transaction complete, the Company and its
shareholders will have the opportunity to benefit from the future
development of the REX device through the Company's percentage
ownership in the Operating Company, and will have board
representation.
If the Transaction does proceed, one of the matters the Company
intends to consider will be whether, and for how long, it would be
appropriate to maintain the Company's admission to trading on
AIM.
The Board would like to highlight that there can be no guarantee
that the current negotiations will lead to the successful
conclusion of the Transaction, which remains subject to negotiation
and certain conditions precedent, including the approval of the
Company's shareholders in a General Meeting.
The exact terms of the Transaction are still being discussed and
the Company will make a further announcement at the conclusion of
such negotiations.
Should the Transaction not complete and the Company not be able
to secure any other alternative sources of funding, the Company
would cease to be a going concern, in which case Shareholders could
lose their entire equity investment.
Trading Update
The Company announced on 5 December 2016 that the leads it was
exploring gave it confidence that full year sales would show year
on year growth with seven units being sold in FY16.
The Company has broadened its global distribution network and
delivered positive clinical data in the financial year to 28
February 2017, however the level of unit sales in the period are
expected to be below the Company's previous expectations, with
three sales or rentals in the six months to 30 September 2016 and a
further one sale in the subsequent period to date. The Company
currently has a further six REX devices on loan (i.e. trial) with
individuals and institutions that could potentially yield further
orders or sales before the end of the financial year, although
there is no commitment to, or guarantee of these sales
completing.
The Company has, however, continued to focus on cost control in
the period. As a result, the Company expects cost savings to more
than offset the impact of reduced sales in the year such that the
Company expects its operating loss to be in line with management's
expectations.
Peter Worrall, Chief Financial Officer, who in September 2016
announced his retirement from the Board effective 31 March 2017,
has agreed to continue to make his services available to the
Company on a consultancy basis in the short-term.
Inside Information
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of the Company is Peter Worrall.
A copy of this announcement has been posted on the Company's
website at www.rexbionics.com/.
For further information, please contact:
Rex Bionics Plc
Crispin Simon, Chief Executive Officer
+44 (0) 781 086 6386
Peter Worrall, Chief Financial Officer
+44 (0)1428 645416
Stifel Nicolaus Europe Limited (NOMAD and Broker)
Jonathan Senior / Stewart Wallace / Ben Maddison
+44 (0) 20 7710 7600
Consilium Strategic Communications
Mary-Jane Elliott / Chris Welsh
rexbionics@consilium-comms.com
+44 (0) 203 709 5700
About Rex Bionics Plc
Rex Bionics is the pioneer of the "REX" that provides robotic
standing, walking and exercise support for wheelchair users; and
was founded by two British engineers with first-hand experience of
the needs of wheelchair users. REX is used by people who have
suffered a spinal cord injury, stroke or other traumatic brain
injury; and people with multiple sclerosis, muscular dystrophy and
cerebral palsy.
We are working with physiotherapists to develop the concept and
practice of Robot-Assisted Physiotherapy (RAP); and also offer REX
P, for use in the home, enabling customers to walk and stand with
their hands free - providing more work and recreation options.
Wheelchair users are at risk of developing numerous medical
complications from extended periods of sitting. By enabling them to
spend more time standing, walking and exercising, REX may offer
significant health benefits, including improved sleep and
maintenance of joint range, and a reduction in spasm, pain, common
abdominal problems and prescription drug use.
Our commitment to engineering excellence is complemented by a
commitment to clinical science and the RAPPER II clinical trial
results show high levels of practicality, safety and user
enthusiasm.
Our Vision is that every day, around the world, thousands of
people get relief with REX, from the harm - the pain, discomfort
and inconvenience - of neurological accidents and illnesses; and
that many will be cured.
Rex Bionics was admitted to trading on the London Stock
Exchange's AIM in 2014. REX is not registered for At-Home use in
the United States of America.
Enquiries to (info@rexbionics.com)
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDJTMLTMBIBBPR
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