The regenerative medical device specialist said it will use the funds to support employee payroll, healthcare, utilities and rent payments within the US over the next two months, criteria which means the loan will not require repayment in the future.
Tissue Regenix also issued an update on trading to March 31, reporting that revenues for its first quarter have increased 18% year-on-year and that it had a cash balance of £1.7mln, enough to fund it until at least the end of the second week of May.
However, following receipt of the US government loan, the company said it now expects its cash runway to extend into at least the second week of July.
The firm also said it was “encouraged by discussions with potential investors”, although it said there is no guarantee that near-term funding will be made available.
Tissue Regenix added that to date it had experienced “no disruption” to its supply chain as a result of the coronavirus pandemic and that it has sufficient inventory of all required equipment and donor materials meaning there has been no disruption to processing at its facility in San Antonio, Texas.
However, the firm has had to halt production at its facility in the UK at Leeds with its technical staff furloughed until UK government advice is amended.
As a result, Tissue Regenix said while sales have not been materially impacted to date, it was “currently not in a position to provide clarity on the outlook for 2020 or beyond”.
"The [coronavirus] pandemic is a difficult and uncertain time for a number of businesses. However, we are encouraged by our ability to implement initiatives to address government advice and ensure the health and well-being of our employees and stakeholders, whilst continuing to process our product portfolio at our facility in San Antonio”, Tissue Regenix interim chief executive Gareth Jones said in the statement.
“Securing additional funds through the US Government-backed loan offers a level of financial security during these uncertain times, and provides an extended cash runway, allowing for the continuation of ongoing discussions with potential investors", he added.
Tissue Regenix shares jumped 7.1% higher to 0.75p in early deals on Wednesday.