Rex Bionics : Funding and strategic review update

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 £4.5m (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 threesales or rentals in the six months to 30 September 2016 and a further onesale in the subsequent period to date. The Company currently has a further sixREX 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)