Arthro Kinetics Secures Funding for its Long Term Survival

TUESDAY, 16th December 2008 - Arthro Kinetics plc (AIM: AKI) ('Arthro Kinetics' or the 'Company'), the orthopedics company dedicated to regenerating joint mobility announces that it expects to raise at least €500,000 in a fundraise having agreed heads of terms for new investment with a commitment of €500,000 at a price of €0.03 (£0.026p) per share from a combination of its Japanese joint venture partner, Polaris Rx Corporation ('Polaris'), and funds controlled by Heidelberg Innovation. The new investment, together with the group's existing cash balance which remains in line with previous announcements, is expected to provide sufficient capital to support the operations of the group beyond the end of 2010.

The Company is currently reviewing the most efficient group structure to support the ongoing business and anticipates that the new investment will be directly into the group's primary operating subsidiary Arthro Kinetics Biotechnology GmbH ('AKI GmbH') in Austria. This investment would account for approximately 16% of AKI GmbH with the remaining 84% being retained by the Company. However, in due course the Company's intention is for the current group structure to be reduced to its simplest operating form with a single trading company based in Austria. 

Jason Loveridge, CEO of Arthro Kinetics comments;

 'This is clearly a very important achievement for Arthro Kinetics, which, in the current difficult market conditions underlines the potential of the Company. This additional finance will enable us to successfully complete our restructuring program in early 2009 and secure the continuing availability of our autologous chondrocyte implant - CaReS® - in existing markets, the continuing success of our joint ventures in Japan & China and the development of our new cell free implants'.

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