Some of our products, which we acquire from third parties, are highly technical and are required to meet exacting specifications, and any quality control problems that we experience with respect to the products supplied by third-party vendors could adversely and materially affect our reputation, our attempts to complete our clinical trials or commercialization of our products and adversely and materially affect our business, operating results and prospects. We may also need to obtain FDA or other regulatory authorisations for the use of an alternative component or for certain changes to our products or manufacturing process. We may also have difficulty obtaining similar components from other suppliers that are acceptable to the FDA or foreign regulatory authorities and the failure of our suppliers to comply with strictly enforced regulatory requirements could expose us to regulatory action including, warning letters, product recalls, termination of distribution, product seizures, or civil penalties. Completing that development and obtaining such authorisations could require significant time and expense and we may not obtain such authorisations on a timely basis, or at all. The availability of critical components and products from other third parties could also reduce our control over pricing, quality and timely delivery. These events could either disrupt our ability to manufacture and sell certain of our products into one or more markets or completely prevent us from doing so, and could increase our costs. Any such event could have a material adverse effect on our results of operations, cash flow and business. Furthermore, since some of these suppliers are located outside of the United States, we are subject to foreign export laws and United States import and customs regulations, which complicate and could delay shipments of components to us. In 2021, we experienced significant disruption to our international supply chain which caused some disruption to operations. There can be no assurance that these disruptions will not continue or intensify in the future which may create significant challenges in fulfilling customer orders that we may not be able to overcome.

Although ~~Trinity Biotech does~~we do not ~~expect~~plan to be dependent upon any one source for these critical components or raw materials, alternative sources of ~~antibodies~~such raw materials or components with the characteristics and quality desired by ~~Trinity Biotech~~us may not be available. Such unavailability could affect the quality of our products and our ability to meet orders for specific products.

~~The Covid-19 outbreak could significantly disrupt our operations and adversely affect our results of operations.~~

In December 2019, Covid-19 began to impact the population of Wuhan, China, a disease caused by a novel and highly contagious form of coronavirus. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been reported globally. The severity of the outbreak resulted in travel restrictions, quarantine and social distancing measures imposed by governments in virtually all of the countries in which we market our products. The Covid-19 outbreak made it difficult to carry out our marketing activities to promote our products to potential customers and gave rise to sudden significant changes in regional and global economic conditions that could interfere with purchases of products or services. We currently are unable to predict the duration and severity of the spread of the Covid-19, and responses thereto, and the impact on our business, results of operations, financial condition, cash flows and liquidity, as these depend on rapidly evolving developments, which are highly uncertain. Many factors are beyond our control, such as the continued spread or recurrence of contagion, the implementation of effective preventative and containment measures, the development of effective medical solutions, financial and other market reactions to the foregoing, and reactions and responses of communities and societies. However, we know the Covid-19 outbreak will result in lower revenues in 2020 and potentially beyond.

Any similar future outbreak of a contagious disease, other adverse public health developments around the world, or the measures taken by the governments around the world in response to a future outbreak of a contagious disease may restrict economic activities in affected regions, resulting in reduced business volume, temporary closure of our facilities and offices or otherwise disrupt our business operations and adversely affect our results of operations.

~~Global economic conditions may have a material adverse impact on our results.~~

We currently generate significant operating cash flows, which combined with access to the credit markets provides us with discretionary funding capacity for research and development and other strategic activities. Uncertainty in global economic conditions may continue for the foreseeable future and intensify. This uncertainty poses a risk to the overall economy that could impact demand for our products, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors, including financial institutions. Volatile economic conditions have adversely affected and could continue to adversely affect our financial performance and condition or those of our customers and suppliers. These circumstances could adversely affect our access to liquidity needed to conduct or expand our business or conduct future acquisitions or make other discretionary investments. Many of our customers rely on public funding provided by federal, state and local governments, and this funding has been and may continue to be reduced or deferred as a result of economic conditions.

If global economic conditions deteriorate significantly, our business could be negatively impacted, including such areas as reduced demand for our products from a slow-down in the general economy, supplier or customer disruptions resulting from tighter credit markets and/or temporary interruptions in our ability to conduct day-to-day transactions through our financial intermediaries involving the payment to or collection of funds from our customers, vendors and suppliers. These circumstances may adversely impact our customers and suppliers, which, in turn, could adversely affect their ability to purchase our products or supply us with necessary equipment, raw materials or components. Even with the improvement of economic conditions, it may take time for our customers and suppliers to establish new budgets and return to normal purchasing and shipping patterns. We cannot predict the reoccurrence of any economic slowdown or the strength or sustainability of the economic recovery.

~~We face risks relating to our international sales and business operations, including regulatory risks, which could impact our current business operations and growth strategy.~~

Our international sales and operations are subject to various United States and foreign laws and regulations relating to export controls (including, without limitation, the U.S. Commerce Department’s Export Administration Regulations), economic sanctions (including, without limitation, various sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control), and anti-corruption (including, without limitation, the United States Foreign Corrupt Practice Act). Failure to comply with such applicable laws and regulations could subject us to civil or criminal penalties, government investigations, debarment from export privileges, and reputational harm, which could have a material adverse effect on our business.

~~The U.K.’s withdrawal from membership of the E.U. could adversely affect us.~~

The United Kingdom (“U.K.”) exited the E.U. on January 31, 2020. There is now a transition period until the end of 2020 while the U.K. and E.U. negotiate additional arrangements. The existing rules on trade, travel, and business for the U.K. and E.U. continue to apply during the transition period. Our business in the U.K., the E.U. and world-wide could be affected by the impact of U.K.’s withdrawal from membership of the E.U. The U.K.’s exit from the E.U. could cause volatility in global financial markets, including in global currency exchange rates, resulting in a slow-down in economic activity in the U.K., Europe or globally, negatively impact new trade agreements between the U.K and other countries, and result in significant regulatory changes and uncertainty. One or more of these events could make it more difficult or costly to sell our products, particularly in the U.K. and Europe, and negatively affect our revenues and results of operations. The U.K.’s exit may also influence other countries and result in additional countries deciding to leave the E.U. This in turn could result in additional changes and uncertainty, any or all of which could negatively impact our business.

~~Our sales and operations are subject to the risks of fluctuations in currency exchange rates.~~

A substantial portion of our operations is based in Ireland and Europe is one of our main sales territories. As a result, changes in the exchange rate between the U.S. Dollar and the Euro can have significant effects on our results of operations. In addition, in markets where we invoice in U.S. Dollars but where the local currency has weakened, we have been required to reduce our pricing in order to preserve our competiveness. The Group has an exposure to the Canadian Dollar through its two Canadian entities (Nova Century Scientific and Phoenix Biotech) and to the Brazilian Real through its Brazilian entity. The Group also has revenues and costs denominated in British Sterling. The discontinued operation in Sweden, Fiomi Diagnostics, also gives us a Swedish Krona exposure.

In the future, we may enter into hedging instruments to manage our currency exchange rate risk. However, our attempts to hedge against these risks may not be successful. If we are unable to successfully hedge against unfavourable foreign currency exchange rate movements, our consolidated financial results may be adversely impacted.

~~The conversion of our outstanding employee share options would dilute the ownership interest of existing shareholders.~~

The total share options exercisable at December 31, 2019, as described in Item 18, Note 20 to the consolidated financial statements, are convertible into American Depository Shares (ADSs), 1 ADS representing 4 “A” Ordinary Shares. The exercise of the share options exercisable will likely occur only when the conversion price is below the trading price of our ADSs and will dilute the ownership interests of existing shareholders. For instance, should the options of the 6,622,667 “A” Ordinary Shares (1,655,667ADSs) exercisable at December 31, 2019 be exercised, Trinity Biotech would have to issue 6,622,667 additional “A” Ordinary Shares (1,655,667 ADSs). On the basis of 96,162,410~~“A” Ordinary Shares outstanding at December 31, 2019, this would effectively dilute the ownership interest of the existing shareholders by approximately 7%.~~

~~It could be difficult for US holders of ADSs to enforce any securities laws claims against Trinity Biotech, its officers or directors in Irish Courts.~~

At present, no treaty exists between the United States and Ireland for the reciprocal enforcement of foreign judgments. The laws of Ireland do however, as a general rule, provide that the judgments of the courts of the United States have in Ireland the same validity as if rendered by Irish Courts. Certain important requirements must be satisfied before the Irish Courts will recognise the United States judgment. The originating court must have been a court of competent jurisdiction, the judgment may not be recognised if it is based on public policy, was obtained by fraud or its recognition would be contrary to Irish public policy. Any judgment obtained in contravention of the rules of natural justice will not be enforced in Ireland.

Our inability to manufacture products in accordance with applicable specifications, performance standards or quality requirements could adversely affect our business.

The materials and processes used to manufacture our products must meet detailed specifications, performance standards and quality requirements to ensure our products will perform in accordance with their label claims, our customers’ expectations and applicable regulatory requirements.

As a result, our products and the materials used in their manufacture or assembly undergo regular inspections and quality testing. Factors such as defective materials or processes, mechanical failures, human errors, environmental conditions, changes in materials or production methods by our vendors, and other events or conditions could cause our products or the materials used to produce or assemble our products to fail inspections and quality testing or otherwise not perform in accordance with our label claims or the expectations of our customers.

Any failure or delay in our ability to meet the applicable specifications, performance standards, quality requirements or customer expectations could adversely affect our ability to manufacture and sell our products or comply with regulatory requirements. These events could, in turn, adversely affect our revenues and results of operations.

Our revenues are highly dependent on a network of distributors worldwide.

We currently distribute our product portfolio through distributors in approximately 100 countries worldwide. Our continuing economic success and financial security is dependent on our ability to secure effective channels of distribution on favourable trading terms with suitable distributors.

The loss or termination of our relationship with these key distributors could significantly disrupt our existing business unless suitable alternatives were quickly found or lost sales to one distributor are absorbed by another distributor. Finding a suitable alternative to a lost or terminated distributor may pose challenges in our industry’s competitive environment, and another suitable distributor may not be found on satisfactory terms, if at all. For instance, some distributors already have exclusive arrangements with our competitors, and others do not have the same level of penetration into our target markets as our existing distributors. If total revenue from these or any of our other significant distributors were to decrease in any material amount in the future or we are not successful in timely transitioning business to new distributors, our business, operating results and financial condition could be materially and adversely affected.

Our success depends on our ability to service and support our products directly or in collaboration with our strategic partners.

To the extent that we or our strategic partners fail to maintain a high-quality level of service and support for diagnostic products, there is a risk that the perceived quality of our products will be diminished in the marketplace. Likewise, we may fail to provide the level, quantity or quality of service expected by the marketplace. These risks have increased as a result of the public health restrictions put in place due to Covid-19. This could result in slower adoption rates and lower than anticipated utilisation of our products which could have a material adverse effect on our business, financial condition and results of operations.

Our ability to protect our information systems and electronic transmissions of sensitive data from data corruption, cyber-based attacks, security breaches or privacy violations is critical to the success of our business.

We are highly dependent on information technology networks and systems, including the Internet, to securely process, transmit and store electronic information, including personal information of our customers. Security breaches of this infrastructure, including physical or electronic break-ins, computer viruses, malware attacks by hackers and similar breaches, can cause all or portions of our websites to be unavailable, create system disruptions, shutdowns, erasure of critical data and software or unauthorised disclosure of confidential information. We invest in security technology to protect our data against risks of data security breaches and cyber-attacks and we have implemented solutions, processes, and procedures to help mitigate these risks, such as encryption, virus protection, security firewalls and comprehensive information security and privacy policies. However, despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. We have been the victim of cyber-attacks but these have had no material impact on our operations. The age of our information technology systems, as well as the level of our protection and business continuity or disaster recovery capability, varies from site to site, and there can be no guarantee that any such plans, to the extent they are in place, will be effective. In addition, a security breach or privacy violation that leads to disclosure of personal information, including but not limited to employee or consumer information (including personally identifiable information or protected health information) could harm our reputation, compel us to comply with disparate state breach notification laws and otherwise subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue. If we are unable to prevent further security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, we may be subject to legal claims or proceedings, or we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive consumer data, which could have a material adverse impact on our business, financial condition and results of operations. While we currently expend resources to protect against cyber-attacks and security breaches, hackers and other cyber criminals are using increasingly sophisticated and constantly evolving techniques, and we may need to expend additional resources to continue to protect against potential security breaches or to address problems caused by such attacks or any breach of our safeguards. In addition, a data security breach could distract management or other key personnel from performing their primary operational duties.

In addition, the interpretation and application of consumer and data protection laws in the United States, Europe and elsewhere are often uncertain, contradictory and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, this could result in government-imposed fines or orders requiring that we change our data practices, which could have an adverse effect on our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

Our sales and operations are subject to the risks of fluctuations in currency exchange rates.

A substantial portion of our operations are based in Ireland and Europe is one of our main sales territories. As a result, changes in the exchange rate between the U.S. Dollar and the Euro can have significant effects on our results of operations. In addition, in markets where we invoice in U.S. Dollars but where the local currency has weakened, we have been required to reduce our pricing in order to preserve our competitiveness. We have an exposure to the Canadian Dollar through our two Canadian subsidiaries and to the Brazilian Real through our Brazilian subsidiary. We also have revenues and costs denominated in British Sterling.

The invasion of Ukraine by Russia and the resulting sanctions imposed on Russia may lead to greater volatility in currency exchange rates globally. In the future, we may enter into hedging instruments to manage our currency exchange rate risk. However, our attempts to hedge against these risks may not be successful. If we are unable to successfully hedge against unfavourable foreign currency exchange rate movements, our consolidated financial results may be adversely impacted.

The large amount of intangible assets and goodwill recorded on our balance sheet may lead to significant impairment charges in the future.

We regularly review our long-lived assets, including identifiable intangible assets and goodwill, for impairment. Goodwill and acquired indefinite life intangible assets are subject to impairment review on a periodic basis and whenever potential impairment indicators are present. Other long-lived assets are reviewed when there is an indication that an impairment may have occurred. The amount of goodwill and identifiable intangible assets on our consolidated balance sheet as of December 31, 2021 was US$36 million (2020: US$34 million) (2019: US$44 million). In 2021, we recorded total impairment charges of intangible assets of US$4 million (2020: US$15 million) (2019: US$17 million) as a result of our periodic impairment review. We may record further significant impairment charges in the future if there are changes in market conditions, a significant reduction in share price or other changes in the future outlook. In addition, we may from time to time sell assets that we determine are not critical to our strategy or execution. Future events or decisions may lead to asset impairments and/or related charges. Certain impairments may result from a change in our strategic goals, business direction or other factors relating to the overall business environment. Any significant impairment charges could have a material adverse effect on our results of operations.

Tax matters, including disagreements with taxing authorities, the changes in corporate tax rates and imposition of new taxes could impact our results of operations and financial condition.

We are subject to regular reviews, examinations, and audits by tax authorities in a number of jurisdictions across the world with respect to our taxes. Although we believe our tax estimates are reasonable, if a taxing authority disagrees with the positions we have taken, we could face additional tax liability, including interest and penalties. There can be no assurance that payment of such additional amounts upon final adjudication of any disputes will not have a material impact on our results of operations and financial position.

A significant portion of our business is located in the U.S. and is subject to income and other taxes in the U.S. and our operations, plans and results are affected by tax and other initiatives. Changes to the US tax code could have a significant impact on our profitability. For example, in December, 2017, the U.S. Government enacted comprehensive tax legislation known as the Tax Cuts and Jobs Act. This legislation made broad and complex changes to the U.S. tax code, including but not limited to reducing the corporate tax rate from 35% to 21%, requiring a one-time mandatory deemed repatriation of certain deferred foreign earnings tax on and accelerating first year expensing of certain capital expenditures. The legislation also introduced new tax laws affecting our taxable income, which included a new provision designed to tax global intangible low taxed income, limited deductibility of certain executive compensation, created a base erosion anti-abuse tax and modified many deductions and credits. Changes to the tax code could also affect our valuation of deferred tax assets and liabilities. Any such change in valuation would have a material impact on our income tax expense and deferred tax balances.

Future acquisitions may be less successful than expected, not generate the expected benefits, disrupt our ongoing business, distract our management, increase our expenses and adversely affect our business, and therefore, growth may be limited.

We have has historically grown organically and through the acquisition of, and investment in, other companies, product lines and technologies. We may enter into strategic acquisitions or investments as a way to expand our business. These activities, and their impact on our business, are subject to many risks, including the following:

Suitable acquisitions or investments may not be found or consummated on terms or schedules that are satisfactory to us or consistent with our objectives;

The benefits expected to be derived from an acquisition may not materialize and could be affected by numerous factors, such as regulatory developments, insurance reimbursement, general economic conditions and increased competition;

We may be unable to successfully integrate an acquired company’s personnel, assets, management systems, products and/or technology into our business;

Worse than expected performance of an acquired business may result in the impairment of intangible assets;

Acquisitions may require substantial expense and management time and could disrupt our business;

We may not be able to accurately forecast the performance or ultimate impact of an acquired business;

An acquisition and subsequent integration activities may require greater capital and other resources than originally anticipated at the time of acquisition;

An acquisition may result in the incurrence of unexpected expenses, the dilution of our earnings or our existing stockholders’ percentage ownership, or potential losses from undiscovered liabilities not covered by an indemnification from the seller(s) of the acquired business;

An acquisition may result in the loss of our or the acquired company’s key personnel, customers, distributors or suppliers;

An acquisition of a foreign business may involve additional risks, including, but not limited to, foreign currency exposure, liability or restrictions under foreign laws or regulations, and our inability to successfully assimilate differences in foreign business practices or overcome language or cultural barriers; and

Our ability to integrate future acquisitions may be adversely affected by inexperience in dealing with new technologies.

The occurrence of one or more of the above or other factors may prevent us from achieving all or a significant part of the benefits expected from an acquisition or investment. This may adversely affect our financial condition, results of operations and ability to grow our business or otherwise achieve our financial and strategic objectives.

The United Kingdom’s withdrawal from the European Union could potentially impact our supply chains and the market for our products in the United Kingdom.

The United Kingdom (“UK”) formally left the European Union in January 2020 and entered a transition period, to December 31, 2020, during which time the UK remained bound to the rules and regulations of the EU. A Trade and Cooperation Agreement was ratified by the European Union in April 2021 and sets out the future trading relationship between the UK and the European Union covering areas such as trade in goods and services. Uncertainties, however, remain over the challenges which could be posed by the operation of the trading agreement with delays in the import and export of goods being experienced at UK ports as customs check and regulatory procedures are carried out. Such checks could impact the performance of supply chains extending timelines and delaying supplier and customer commitments, while imposing additional taxes and duties dependent on rules of origin. The uncertainty might continue to create volatility for the Pound Sterling.

Increasing scrutiny and changing expectations from investors, lenders, customers and other market participants with respect to our Environmental, Social and Governance, or ESG, policies may impose additional costs on us or expose us to additional risks.

Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investors, lenders and other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to ESG may hinder our access to capital, as investors and lenders may reconsider their capital investment allocation as a result of their assessment of our ESG practices. If we do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and the business, financial condition and the price of our company’s ADS’s could be materially and adversely affected.

Risks Related to Government Regulations

Clinical trials necessary to support future premarket submissions will be expensive and will require enrolment of suitable patients who may be difficult to identify and recruit. Delays or failures in our clinical trials will prevent us from commercializing any modified or new products and will adversely affect our business, operating results and prospects.

Initiating and completing clinical trials necessary to support approval of future products under development, is time consuming and expensive and the outcome uncertain. Moreover, the results of early clinical trials are not necessarily predictive of future results, and any product we advance into clinical trials may not have favorable results in later clinical trials.

Conducting successful clinical studies will require the enrolment of patients who may be difficult to identify and recruit. Patient enrolment in clinical trials and completion of patient participation and follow-up depends on many factors, including the size of the patient population, the nature of the trial protocol, and the availability of appropriate clinical trial investigators. Patients may not participate in our clinical trials if they choose to participate in contemporaneous clinical trials of competitive products. Continuing public health measures against Covid-19 may increase the difficulty of conducting clinical trials.

Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required and we may not adequately develop such protocols to support clearance and approval. Further, the FDA and/or other regulatory authorities may require us to submit data on a greater number of patients than we originally anticipated and/or for a longer follow-up period or change the data collection requirements or data analysis applicable to our clinical trials. Any challenges to patient enrolment may cause an increase in costs and delays in the approval and attempted commercialization of our products or result in the failure of the clinical trial. In addition, despite considerable time and expense invested in our clinical trials, FDA and/or other regulatory authorities may not consider our data adequate to demonstrate safety and efficacy. Such increased costs and delays or failures could adversely affect our business, operating results and prospects.

Our facilities and our clinical investigational sites operate under procedures that govern the conduct and management of FDA-regulated clinical studies under 21 CFR Parts 50, 56 and 812, and Good Clinical Practices. Although the majority of our in-vitro diagnostic (“IVD”) clinical studies meet the definition of exempted investigations under 21 Part 812 and are exempt from the Investigational Device Exemption (“IDE”) regulations in 21 CFR Part 812, we are still required to meet the requirements of 21 CFR Parts 50 and 56 for informed consent and Institutional Review Board (“IRB”) approval. FDA may conduct Bioresearch Monitoring (“BiMo”) inspections of us and/or our clinical sites to assess compliance with FDA regulations, our procedures, and the clinical protocol. If the FDA were to find that we or our clinical investigators are not operating in compliance with applicable regulations, we could be subject to the above FDA enforcement action as well as refusal to accept all or part of our data in support of a 510(k) or PMA and/or we may need to conduct additional studies.

In relation to World Health Organisation (WHO) qualification, our IVD clinical studies are required to meet all the requirements of the TSS-1: Human Immunodeficiency Virus (HIV) rapid diagnostic tests for professional use. If we are not operating in compliance with this regulation we could be subject to WHO enforcement action. In addition, our IVD clinical studies are required to meet the requirements of:

WMA Declaration of Helsinki – Ethical Principles for Medical Research Involving Human Subjects (2008);

ICH Harmonised Guidelines - Integrated Addendum to ICH E6 (R2) Guideline for Good Clinical Practice (Nov 2016);

ISO 20916:2019 In vitro diagnostic medical devices — Clinical performance studies using specimens from human subjects — Good study practice;

ISO 14155:2011: Clinical investigation of medical devices for human subjects – Good clinical practice.

If the third parties on whom we rely to conduct our pre-clinical studies and clinical trials and to assist in pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory approval or commercialize our products.

We may not have the ability to independently conduct our pre-clinical studies and clinical trials for our products and we may rely on third parties, such as contract research organizations, medical institutions, clinical investigators and contract laboratories to conduct such trials. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if these third parties need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our pre-clinical or clinical protocols or regulatory requirements or for other reasons, our pre-clinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize, our products on a timely basis, if at all, and our business, operating results and prospects may be adversely affected. Furthermore, our third-party clinical trial investigators may be delayed in conducting our clinical trials for reasons outside of their control.

The results of our clinical trials may not support our product candidate claims.

Even if our clinical trials are completed as planned, we cannot be certain that their results will support our product candidate claims or that the FDA or other regulatory authorities will agree with our conclusions regarding them. The clinical trial process may fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others. Any delay or termination of our clinical trials will delay the filing of our product submissions and, ultimately, our ability to commercialize our product candidates and generate revenues.

We may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved or “off-label” uses.

Our promotional materials must comply with FDA and other applicable laws and regulations. We believe that the specific uses for which our products are marketed fall within the scope of the indications for use that have been cleared or approved by the FDA or other relevant regulatory authorities. However, the FDA and/or the other relevant regulatory authorities could disagree and require us to stop promoting our products for those specific uses until we obtain clearance or approval for them. In addition, if the FDA or other relevant regulatory authorities determines that our promotional materials constitute promotion of an unapproved use, it could demand that we modify our promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine and criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement. In that event, our reputation could be damaged and adoption of the products would be impaired.

If the FDA were to modify its policy of enforcement discretion with respect to our laboratory developed tests, we could incur substantial costs and delays associated with trying to obtain premarket clearance or other approvals.

Although the FDA has statutory authority to assure that medical devices are safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable regulations with respect to laboratory developed tests (“LDTs”), although reagents, instruments, software or components provided by third parties and used to perform LDTs may be subject to FDA regulation. The FDA defines the term “laboratory developed test” as an IVD test that is intended for clinical use and designed, manufactured and used within a single laboratory. Until 2014, the FDA exercised enforcement discretion such that it did not enforce provisions of the Food, Drug, and Cosmetic Act, or FDA Act, with respect to LDTs. In July 2014, due to the increased proliferation of LDTs for complex diagnostic testing and concerns with several high-risk LDTs related to lack of evidentiary support for claims and erroneous results, the FDA issued guidance that, when finalized, would adopt a risk-based framework that would increase FDA oversight of LDTs. As part of this developing framework, FDA issued draft guidance in October 2014, informing Congress and manufacturers of LDTs of its intent to collect information from laboratories regarding their current LDTs and newly developed LDTs through a notification process. The FDA will use this information to classify LDTs and to prioritize enforcement of premarket review requirements for categories of LDTs based on risk, using a public process. Specifically, the FDA plans to use advisory panels to provide recommendations to the agency on LDT risks, classification and prioritization of enforcement of applicable regulatory requirements on certain categories of LDTs, as appropriate.

We cannot provide any assurance that FDA regulation, including premarket review, will not be required in the future for any of our LDTs, whether through additional guidance or regulations issued by the FDA, new enforcement policies adopted by the FDA or new legislation enacted by Congress. It is possible that legislation will be enacted into law, regulations could be promulgated or guidance could be issued by the FDA which may result in increased regulatory burdens for us to continue to offer our current LDTs or to develop and introduce new LDTs. We cannot predict the timing or content of future legislation enacted, regulations promulgated or guidance issued regarding LDTs, or how it will affect our business.

If FDA premarket review, including clearance or approval, is required for our current or future LDTs (either alone or together with sample collection devices), products or services we may develop, or if we decide to voluntarily pursue FDA clearance or approval, we may be forced to stop selling our LDTs while we work to obtain such FDA clearance or approval. Our business would be negatively affected until such review was completed and clearance to market or approval was obtained. The regulatory process may involve, among other things, successfully completing additional clinical studies and submitting premarket notification or filing a premarket approval application with the FDA. If premarket review is required by the FDA or if we decide to voluntarily pursue FDA premarket review of our LDTs, there can be no assurance that any tests, products or services we may develop in the future will be cleared or approved on a timely basis, if at all, nor can there be assurance that labelling claims will be consistent with our current claims or adequate to support continued adoption of for our LDTs. If our LDTs are allowed to remain on the market but there is uncertainty in the marketplace about our tests, if we are required by the FDA to label them investigational and we cannot offer the LDTs for diagnostic purposes, or if labelling claims, the FDA allows us to make are limited, orders may decline and adversely affect our results of operations, cash flow and business.

Ongoing compliance with FDA regulations would increase the cost of conducting our business, and subject us to heightened regulation by the FDA and penalties for failure to comply with these requirements.

If we fail to maintain regulatory approvals and clearances, or are unable to obtain, or experience significant delays in obtaining, regulatory clearances or approvals for our future products or product enhancements, our ability to commercially distribute and market these products could suffer.

Our medical device products and operations are subject to rigorous government regulation in the United States by the FDA, and numerous other federal, state and foreign governmental authorities, as well as and by comparable regulatory authorities in other jurisdictions such as the HPRA in Ireland. In particular, we are subject to strict governmental controls on the development, manufacture, labelling, storage, testing, advertising, promotion, marketing, distribution and import and export of our products. In addition, we or our distributors are often required to register with and/or obtain clearances or approvals from foreign governments or regulatory bodies before we can import and sell our products in foreign countries. The clearance and approval process for our products, while variable across countries, is generally lengthy, time consuming, detailed and expensive.

The process of obtaining and maintaining regulatory clearances or approvals to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all. In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”), or is the subject of an approved premarket approval application (“PMA”) unless the device is specifically exempt from those requirements. The FDA will clear marketing of a lower risk medical device through the 510(k) process if the manufacturer demonstrates that the new product is substantially equivalent to other 510(k)-cleared products. High risk devices deemed to pose the greatest risk, such as life-sustaining, life-supporting, or implantable devices, or devices not deemed substantially equivalent to a previously cleared device, require the approval of a PMA.

The PMA process is more costly, lengthy and uncertain than the 510(k) clearance process. A PMA application must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labelling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use. The 510(k) clearance process usually takes from three to 12 months, but it can take longer. The process of obtaining PMA approval is much more costly and uncertain than the 510(k) clearance process. It generally takes from one to three years, or even longer, from the time the PMA application is submitted to the FDA, until an approval is obtained. There is no assurance that we will be able to obtain FDA clearance or approval for any of our new products on a timely basis, or at all.

In the United States, many of our currently commercialized products have received pre-market clearance under Section 510(k) of the FDCA. If the FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we had expected, our product introductions or modifications could be delayed or cancelled, which could cause our sales to decline. In addition, the FDA may determine that future products will require the more costly, lengthy and uncertain PMA process. Although we currently market only one device pursuant to an approved PMA, the FDA may demand that we obtain a PMA prior to marketing certain of our future products.

The FDA can delay, limit or deny clearance or approval of a device for many reasons, including:

our inability to demonstrate to the FDA’s satisfaction that our products are safe and effective for their intended users;

insufficient data from our pre-clinical studies and clinical trials to support clearance or approval, where required; and

the failure of the manufacturing process or facilities we use to meet applicable requirements.

In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently cleared products on a timely basis. For example, in response to industry and healthcare provider concerns regarding the predictability, consistency and rigor of the 510(k) regulatory pathway, the FDA initiated an evaluation of the program, and in January 2011, announced several proposed actions intended to reform the review process governing the clearance of medical devices. FDA’s review of its 510(k) clearance process could result in additional changes to regulatory requirements or guidance documents which could increase the costs of compliance, or restrict our ability to maintain current clearances. In addition, as part of the Food and Drug Administration Safety and Innovation Act (“FDASIA”), Congress reauthorised the Medical Device User Fee Amendments with various FDA performance goal commitments and enacted several “Medical Device Regulatory Improvements” and miscellaneous reforms which are further intended to clarify and improve medical device regulation both pre- and post-clearance and approval. Furthermore, regulatory authorities, including the FDA, may not agree with our interpretation of its policies and regulations which may lead to enforced modifications, restrictions, discontinuation, etc. of some of our products, even if they were previously approved.

Our continued success is dependent on our ability to develop and market new or updated products, some of which are currently awaiting clearance or approval from the applicable regulatory authorities. There is no certainty that such clearance or approval will be granted or, even once granted, will not be revoked during the continuing review and monitoring process. Further, regulatory authorities, including the FDA, may not approve or clear our future products for the indications that are necessary or desirable for successful commercialization. A regulatory authority may impose requirements as a condition to granting a marketing authorisation, may include significant restrictions or limitations as part of a marketing authorisation it grants and may delay or refuse to authorise a product for marketing, even though a product has been authorised for marketing without restrictions or limitations in another country or by another agency. Failure to receive clearance or approval for our new products, or commercially undesirable limitations on our clearances or approvals, would have an adverse effect on our ability to expand our business. Modifications made to our products may invalidate previously granted regulatory approvals which may lead to revised regulatory clearances, enforced modifications, restrictions, discontinuation, etc. of some of our products.

Additionally, changes in the FDA’s review of certain clinical diagnostic products referred to as laboratory developed tests, which are tests developed by a single laboratory for use only in that laboratory, could affect some of our customers who use our Life Science instruments for laboratory developed tests. In the past, the FDA has chosen to not enforce applicable regulations and has not reviewed such tests for approval. However, the FDA has issued draft guidance that it may begin enforcing its medical device requirements, including premarket submission requirements, to such tests. Any delay in, or failure to receive or maintain, clearance or approval for our products could prevent us from generating revenue from these products and adversely affect our business operations and financial results.

Failure to comply with FDA or other regulatory requirements may require us to suspend production of our products or institute a recall which could result in higher costs and a loss of revenues.

Even after we obtain clearance or approval for our medical devices, we are still subject to ongoing and extensive post market regulatory requirements. Regulation by the FDA and other federal, state and foreign regulatory agencies, such as the HPRA in E.U., impacts many aspects of our operations, and the operations of our suppliers and distributors, including manufacturing, labelling, packaging, adverse event reporting, storage, advertising, promotion, marketing, record keeping, import and export. For example, the manufacture of medical devices must comply with the FDA’s Quality System Regulation (“QSR”), which covers the methods and documentation of the design, testing, production, control, quality assurance, labelling, packaging, sterilization, storage and shipping of our products. Our manufacturing facilities and those of our suppliers and distributors are, or can be, subject to periodic regulatory inspections by the FDA to assess compliance with the QSR and other regulations, and by other comparable foreign regulatory authorities with respect to similar requirements in other jurisdictions. The FDA and foreign regulatory agencies may require post-marketing testing and surveillance to monitor the performance of approved products or place conditions on any product clearances or approvals that could restrict the commercial applications of those products. The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions:

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

unanticipated expenditures to address or defend such actions;

customer notifications for repair, replacement and refunds;

recall, detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;

operating restrictions;

withdrawing 510(k) clearances on PMA approvals that have already been granted;

refusal to grant export approval for our products; or

criminal prosecution.

Other regulatory authorities have similar sanctions in their respective jurisdictions.

If any of these actions were to occur, they may harm our reputation and cause our product sales and profitability to suffer and may prevent us from generating revenue. Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with all applicable regulatory requirements which could result in our failure to produce our products on a timely basis and in the required quantities, if at all.

For example, in August 2020, our subsidiary received a Warning Letter from FDA following an inspection of our subsidiary’s Kansas City, Missouri manufacturing facility that took place in January and February 2020. We have taken voluntary remediation actions to correct the observations noted in the Warning Letter.

Even if regulatory clearance or approval of a product is granted, such clearance or approval may be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully commercialize the product and generate revenue from the product. If the FDA determines that our promotional materials, labelling, training or other marketing or educational activities constitute promotion of an unapproved use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement actions. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our training or other promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

In addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products, and we must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to our products. Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QSR, may result in changes to labelling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.

In the ordinary course of business, we must frequently make subjective judgments with respect to compliance with applicable laws and regulations. If regulators subsequently disagree with the manner in which we have sought to comply with these regulations, we could be subjected to substantial civil and criminal penalties, as well as product recall, seizure or injunction with respect to the sale of our products. The assessment of any civil and criminal penalties against us could severely impair our reputation within the industry and any limitation on our ability to manufacture and market our products could have a material adverse effect on our business.

In addition to the FDA and other regulations described above, laws and regulations in some countries may restrict our ability to sell products in those countries. While we intend to comply with any applicable restrictions, there is no guarantee we will be successful in these efforts.

We must also comply with numerous laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, disposal of hazardous substances and labour or employment practices. Compliance with these laws or any new or changed laws regulating our business could result in substantial costs. Because of the number and extent of the laws and regulations affecting our industry, and the number of governmental agencies whose actions could affect our operations, it is impossible to reliably predict the full nature and impact of these requirements. To the extent the costs and procedures associated with complying with these laws and requirements are substantial or it is determined that we do not comply, our business and results of operations could be adversely affected.

Modifications to our products, may require new 510(k) clearances or pre-market approvals, or may require us to cease marketing or recall the modified products until clearances or approvals are obtained.

Any modification to a 510(k)-cleared device in the United States that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, design or manufacture, requires a new 510(k) clearance or, possibly, approval of a PMA. The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer’s decision. The FDA may not agree with our decisions regarding whether new clearances or approvals are necessary. If the FDA disagrees with our determination and requires us to submit new 510(k) notifications or PMAs for modifications to previously cleared products for which we conclude that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties. Further, our products could be subject to recall if the FDA determines, for any reason, that our products are not safe or effective. Any recall or FDA requirement that we seek additional approvals or clearances could result in significant delays, fines, increased costs associated with modification of a product, loss of revenue and potential operating restrictions imposed by the FDA.

For example, we obtained 510(k) clearance for our Primus Variant System for the separation and quantification of normal and abnormal haemoglobin species as an aid in the diagnosis of haemoglobinopathies. The sample type used by this system was blood tubes. We subsequently introduced two systems based on the original Primus Variant System and they were named as ultra² GeneSys Variant System and ultra² Resolution Variant System. The primary focus of the GeneSys Variant System was on newborn screening using Dried Blood Spots as the sample type, while the Resolution was intended for confirmatory testing on the adult population using blood tubes as the sample type. We determined that these modifications to the indications for use to both systems were within our existing clearance and did not require the submission of a new 510(k) notification. The FDA stated that the use of Dried Blood Spots with the ultra² GeneSys Variant System was not part of the original submission and represented a new modified Intended Use. The FDA informed us that it disagreed with our decision not to seek new 510(k) clearances for these modifications, and we filed new 510(k) notifications to obtain clearance for these indications. The FDA rejected our filing on the basis that the predicate device chosen did not meet their requirements. Additionally, the FDA asked us to withdraw the ultra² GeneSys Variant System from the market. A recall was conducted and has since been closed.

Additionally, in August 2020, we received a Warning Letter from the FDA. In the Warning Letter, FDA stated that we had made additional changes to the ultra² Resolution Variant System not covered within our existing 510(k). Accordingly, we conducted a voluntary recall of the ultra² Resolution Variant System. We have developed the Premier Resolution as a successor instrument to the ultra² Resolution Variant System and this has already been launched in various jurisdictions outside the United States. We expect to submit a 510(k) application for this successor instrument in 2022 which, if approved, will allow us to market this instrument in the United States.

Furthermore, the FDA’s ongoing review of the 510(k) program may make it more difficult for us to make modifications to any products for which we obtain clearance, either by imposing more strict requirements on when a manufacturer must submit a new 510(k) notification for a modification to a previously cleared product, or by applying more onerous review criteria to such submissions. For example, in accordance with FDASIA, the FDA was obligated to prepare a report for Congress on the FDA’s approach for determining when a new 510(k) clearance will be required for modifications or changes to a previously cleared device. The FDA issued this report and indicated that manufacturers should continue to adhere to the FDA’s 1997 Guidance on this topic when making a determination as to whether or not a new 510(k) clearance is required for a change or modification to a device. However, the practical impact of the FDA’s continuing scrutiny of the 510(k) program remains unclear.

We are subject to export controls and economic sanctions laws, and our customers and distributors are subject to import controls that could subject us to liability if we are not in full compliance with applicable laws.

Certain of our products are subject to U.S. export controls and sanctions regulations and we would be permitted to export such solutions to certain destinations outside the U.S. only by first obtaining an export license from the U.S. government, or by utilizing an existing export license exception/General License, or after clearing U.S. government agency review. Obtaining the necessary export license or accomplishing a U.S. government review for a particular export may be time-consuming and may result in the delay or loss of sales opportunities.

Although we take precautions to prevent our products from being provided in violation of U.S. export control and economic sanctions laws, our products may have been in the past, and could in the future be, provided inadvertently in violation of such laws. If we were to fail to comply with U.S. export law requirements, U.S. customs regulations, U.S. economic sanctions or other applicable U.S. laws, we could be subject to substantial civil and criminal penalties, including fines, incarceration for responsible employees and managers and the possible loss of export or import privileges. U.S. export controls, sanctions and regulations apply to our distributors as well as to us. Any failure by our distributors to comply with such laws, regulations or sanctions could have negative consequences, including reputational harm, government investigations and penalties.

Changes or new versions of our products or changes in export and import regulations may create delays in the introduction of our products into international markets, prevent our distributors from deploying our products globally or, in some cases, prevent the export or import of our products to certain countries, governments or persons altogether. In addition, any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential international customers. Any decreased use of our principal products or limitation on our ability to export or sell such products would likely adversely affect our business, financial condition and operating results.

We are subject to anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.

We are subject to anti-corruption and anti-bribery and similar laws, such as the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the Foreign Corrupt Practices Act, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act 2010 and other anti-corruption, anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly and prohibit companies and their employees and agents from promising, authorizing, making, offering, soliciting, or accepting, directly or indirectly, improper payments or other improper benefits to or from any person whether in the public or private sector. As we increase our international sales and business, our risks under these laws may increase. Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, adverse media coverage and other consequences. Any investigations, actions or sanctions could adversely affect our business, results of operations and financial condition.

Changes in healthcare regulation could affect our revenues, costs and financial condition.

In the United States in recent years, there have been numerous initiatives at the federal and state level for comprehensive reforms affecting the payment for, the availability of and reimbursement for healthcare services. These initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including providing comprehensive healthcare coverage to the public under government-funded programs, to minor modifications to existing programs. One example is the Patient Protection and Affordable Care Act, the Federal healthcare reform law enacted in 2010 (the “Affordable Care Act”). Similar reforms may occur internationally.

Third party payors, such as Medicare and Medicaid in the United States, have reduced their reimbursements for certain medical products and services. Our business is impacted by the level of reimbursement available for clinical tests from third party payors. In the United States payment for many diagnostic tests furnished to Medicare fee-for-service beneficiaries is made based on the Medicare Clinical Laboratory Fee Schedule (CLFS), a fee schedule established and adjusted from time to time by the Centers for Medicare and Medicaid Services (CMS). Some commercial payors are guided by the CLFS in establishing their reimbursement rates. Laboratories and clinicians may decide not to order or perform certain clinical diagnostic tests if third party payments are inadequate, and we cannot predict whether third party payors will offer adequate reimbursement for tests utilizing our products to make them commercially attractive. Legislation, such as the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act and the Middle Class Tax Relief and Job Creation Act of 2012, has reduced the payments for clinical laboratory services paid under the CLFS. In addition, the Protecting Access to Medicare Act of 2014 (PAMA) has made significant changes to the way Medicare will pay for clinical laboratory services, which has further reduced reimbursement rates.

Legislative and regulatory bodies are likely to continue to pursue healthcare reform initiatives in many forms and may continue to reduce funding in an effort to lower overall federal healthcare spending. The U.S. government recently enacted legislation that eliminated what is known as the “individual mandate” under the Affordable Care Act and may enact other changes in the future. The ultimate content and timing of any of these types of changes in other healthcare reform legislation and the resulting impact on us are impossible to predict. If significant reforms are made to the healthcare system in the U.S., or in other jurisdictions, those reforms may increase our costs or otherwise have an adverse effect on our financial condition and results of operations.

Our laboratory business could be harmed from the loss or suspension of a licence or imposition of a fine or penalties under, or future changes in, the law or regulations of the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), or those of other state or local agencies.

Our laboratory operated by our subsidiary Immco Diagnostics Inc. is subject to CLIA, which is administered by CMS and extends federal oversight to virtually all clinical laboratories by requiring that they be certified by the federal government or by a federally-approved accreditation agency. CLIA is designed to ensure the quality and reliability of clinical laboratories by, among other things, mandating specific standards in the areas of personnel qualifications, administration, and participation in proficiency testing, patient test management, quality control, quality assurance and inspections. Laboratories must undergo on-site surveys at least every two years, which may be conducted by the Federal CLIA program or by a private CMS approved accrediting agency such as the College of American Pathologists, among others. The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties.

We are also subject to regulation of laboratory operations under state clinical laboratory laws of New York and of certain other states from where we accept specimens. State clinical laboratory laws may require that laboratories and/or laboratory personnel meet certain qualifications, specify certain quality controls or require maintenance of certain records. For example, California requires that we maintain a licence to conduct testing in California, and California law establishes standards for our day-to-day laboratory operations, including the training and skill required of laboratory personnel and quality control.

In some respects, notably with respect to qualifications of testing personnel, California’s clinical laboratory laws impose more rigorous standards than does CLIA. Certain other states, including Florida, Maryland, New York and Pennsylvania, require that we hold licences to test specimens from patients residing in those states, and additional states may require similar licences in the future. Potential sanctions for violation of these statutes and regulations include significant fines and the suspension or loss of various licences, certificates and authorisations, which could adversely affect our business and results of operations.

We are also subject to various federal and state laws targeting fraud and abuse in the healthcare industry.

If we fail to comply with federal and state health care laws, including fraud and abuse, false claims, physician payment transparency and privacy and security laws, we could face substantial penalties and our business, operations and financial condition could be adversely affected. We are subject to anti-kickback laws, self-referral laws, false claims laws, and laws constraining the sales, marketing and other promotional activities of manufacturers of medical devices by limiting the kinds of financial arrangements we may enter into with physicians, hospitals, laboratories and other potential purchasers of our products. The laws that may affect our ability to operate include, but are not limited to:

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the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and wilfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;

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the Physician Self-Referral Law, also known as the “Stark Law”, which provides for strict liability for referrals by physicians to entities with which they or their immediate family members have a financial arrangement for certain designated health services, including clinical laboratory services provided by our CLIA-certified laboratory owned and operated by our subsidiary Immco Diagnostics Inc., that are reimbursable by federal healthcare programs, unless an exception applies. Penalties for violating the Stark Law include denial of payment, civil monetary penalties of up to fifteen thousand dollars per claim submitted, and exclusion from federal health care programs, as well as a penalty of up to one-hundred thousand dollars for attempts to circumvent the law;

federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal third-party payers that are false or fraudulent. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals, commonly known as “whistleblowers”, may share in any amounts paid by the entity to the government in fines or settlement. When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. Often, to avoid the threat of treble damages and penalties under the False Claims Act, which in 2020 were $11,665 to $23,331 per false claim, companies will resolve allegations in a settlement without admitting liability to avoid the potential treble damages. Any such settlement could materially affect our business, financial operations, and reputation;

the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

federal criminal laws that prohibit executing a scheme to defraud any federal healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information;

the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the CMS, information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and requires applicable manufacturers to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners. Manufacturers are required to submit reports to CMS by the 90th day of each calendar year. We cannot assure you that we have and will successfully report all transfers of value by us, and any failure to comply could result in significant fines and penalties. Failure to submit the required information may result in civil monetary penalties up to an aggregate of $150,000 per year (and up to an aggregate of $1 million per year for “knowing failures”) for all payments, transfers of value or ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws or regulations;

federal and state laws governing the certification and licensing of clinical laboratories, including operational, personnel and quality requirements designed to ensure that testing services are accurate and timely, and federal and state laws governing the health and safety of clinical laboratory employees;

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the U.S. Foreign Corrupt Practices Act, or the FCPA, which prohibits corporations and individuals from paying, offering to pay or authorising the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity; the UK Bribery Act, which prohibits both domestic and international bribery, as well as bribery across both public and private sectors; and bribery provisions contained in the German Criminal Code, which makes the corruption and corruptibility of physicians in private practice and other healthcare professionals a criminal offense; and

analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any payor, including commercial insurers; state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbours available under such laws, it is possible that some of our business activities, including our relationships with physicians and other healthcare providers, some of whom may recommend, purchase and/or order our tests, our sales and marketing efforts and certain arrangements with customers, including those where we provide our instrumentation for free in exchange for minimum purchase requirements of our reagents, and our billing and claims processing practices, could be subject to challenge under one or more of such laws. By way of example, some of our consulting arrangements with physicians do not meet all of the criteria of the personal services safe harbour under the federal Anti-Kickback Statute. Accordingly, they do not qualify for safe harbour protection from government prosecution. A business arrangement that does not substantially comply with a safe harbour, however, is not necessarily illegal under the Anti-Kickback Statute, but may be subject to additional scrutiny by the government. We are also exposed to the risk that our employees, independent contractors, principal investigators, consultants, vendors and distributors may engage in fraudulent or other illegal activity. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

To enforce compliance with the federal laws, the U.S. Department of Justice (“DOJ”), has recently increased its scrutiny of interactions between health care companies and health care providers, which has led to a number of investigations, prosecutions, convictions and settlements in the health care industry. Dealing with investigations can be time and resource consuming and can divert management’s attention from the business. In addition, settlements with the DOJ or other law enforcement agencies have forced healthcare providers to agree to additional compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

Many of the existing requirements are new and have not been definitively interpreted by state authorities or courts, and available guidance is limited. In addition, changes in or evolving interpretations of these laws, regulations, or administrative or judicial interpretations, may require us to change our business practices or subject our business practices to legal challenges, which could have a material adverse effect on our business, financial condition and results of operations.

We have not yet developed a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements to which we are or may become subject. Although the development and implementation of such compliance programs can mitigate the risk of investigation, prosecution, and penalties assessed for violations of these laws, or any other laws that may apply to us, the risks cannot be entirely eliminated.

If our operations are found to be in violation of any of the laws described above or any other laws and regulations that apply to us, we could receive adverse publicity, face enforcement action and be subject to penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and our results of operations.

Compliance with regulations governing public company corporate governance and reporting is complex and expensive.

Many laws and regulations impose obligations on public companies, which have increased the scope, complexity and cost of corporate governance, reporting and disclosure practices. Our implementation of certain aspects of these laws and regulations has required and will continue to require substantial management time and oversight and may require us to incur significant additional accounting and legal costs. We continually evaluate and monitor developments with respect to new and proposed rules and cannot predict or estimate the ultimate amount of additional costs we may incur or the timing of such costs. These laws and regulations are also subject to varying interpretations, in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Although we are committed to maintaining high standards of corporate governance and public disclosure, if we fail to comply with any of these requirements, legal proceedings may be initiated against us, which may adversely affect our business.

~~Failure~~Risks Related to ~~achieve our financial and strategic objectives could have a material adverse impact on our business prospects.~~Our Intellectual Property

As a result of any number of risk factors identified herein, no assurance can be given that we will be successful in implementing our financial and strategic objectives. In addition, the funds for research, clinical development and other projects have in the past come primarily from our business operations. If our business slows and we have less money available to fund research and development and clinical programs, we will have to decide at that time which programs to cut, and by how much. Similarly, if adequate financial, personnel, equipment or other resources are not available, we may be required to delay or scale back our business. Our operations will be adversely affected if our total revenue and gross profits do not correspondingly increase or if our technology, product, clinical and market development efforts are unsuccessful or delayed.

~~Furthermore, our failure to successfully introduce new or enhanced products and develop new markets could have a material adverse effect on our business and prospects.~~

~~We may require future additional capital.~~

~~Our future liquidity and ability to meet our future capital requirements will depend on numerous factors, including, but not limited to, the following:~~

~~The costs and timing of expansion of sales and marketing activities;~~

~~The timing and success of the commercial launch of new products;~~

~~The extent to which we gain or expand market acceptance for existing, new or enhanced products;~~

~~The costs and timing of the expansion of our manufacturing capacity;~~

~~The success of our research and product development efforts;~~

~~The time, cost and degree of success of conducting clinical trials and obtaining regulatory approvals;~~

~~The magnitude of capital expenditures;~~

~~Changes in existing and potential relationships with distributors and other business partners;~~

~~The costs involved in obtaining and enforcing patents, proprietary rights and necessary licenses;~~

~~The costs and liability associated with patent infringement or other types of litigation;~~

~~Competing technological and market developments; and~~

~~The scope and timing of strategic acquisitions.~~

If additional financing is needed, we may seek to raise funds through the sale of equity or other securities or through bank borrowings. There can be no assurance that financing through the sale of securities, bank borrowings or otherwise will be available to us on satisfactory terms, or at all.

Investor confidence and share value may be adversely impacted if we and/or our independent registered public accounting firm conclude that our internal control over financial reporting is not effective.

We expect that our internal controls will continue to evolve as our business activities change. Although we seek to diligently and vigorously review our internal control over financial reporting in an effort to ensure compliance with the Section 404 requirements, any control system, regardless of how well designed, operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. In addition, the overall quality of our internal controls may be affected by the internal control over financial reporting implemented by any business we acquire and our ability to assess and successfully integrate the internal controls of any such business.

We could conclude that our internal control over financial reporting is not effective. These events could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements and effectiveness of our internal controls, which ultimately could negatively impact the market price of our common stock.

~~The large amount of intangible assets and goodwill recorded on our balance sheet may lead to significant impairment charges in the future.~~

We regularly review our long-lived assets, including identifiable intangible assets and goodwill, for impairment. Goodwill and acquired indefinite life intangible assets are subject to impairment review on an annual basis and whenever potential impairment indicators are present. Other long-lived assets are reviewed when there is an indication that an impairment may have occurred. The amount of goodwill and identifiable intangible assets on our consolidated balance sheet is US$44 million (2018: US$53 million). In 2019, we recorded total impairment charges of US$24 million (2018: US$27 million). We may record further significant impairment charges in the future if there are changes in market conditions, a significant reduction in share price or other changes in the future outlook. In addition, we may from time to time sell assets that we determine are not critical to our strategy or execution. Future events or decisions may lead to asset impairments and/or related charges. Certain non-cash impairments may result from a change in our strategic goals, business direction or other factors relating to the overall business environment. Any significant impairment charges could have a material adverse effect on our results of operations.

~~Our success depends on our ability to service and support our products directly or in collaboration with our strategic partners.~~

To the extent that we or our strategic partners fail to maintain a high quality level of service and support for diagnostic products, there is a risk that the perceived quality of our products will be diminished in the marketplace. Likewise, we may fail to provide the level, quantity or quality of service expected by the marketplace. This could result in slower adoption rates and lower than anticipated utilisation of our products which could have a material adverse effect on our business, financial condition and results of operations.

~~Consolidation of our customers or the formation of group purchasing organisations could result in increased pricing pressure that could adversely affect our operating results.~~

The health care industry has undergone significant consolidation resulting in increased purchasing leverage for customers and consequently increased pricing pressures on our business. Additionally, some of our customers have become affiliated with group purchasing organisations. Group purchasing organisations typically offer members price discounts on laboratory supplies and equipment if they purchase a bundled group of one supplier’s products, which results in a reduction in the number of manufacturers selected to supply products to the group purchasing organization and increases the group purchasing organization’s ability to influence its members’ buying decisions. Further consolidation among customers or their continued affiliation with group purchasing organizations may result in significant pricing pressures and correspondingly reduce the gross margins of our business or may cause our customers to reduce their purchases of our products, thereby adversely affecting our business, prospects, operating results or financial condition.

We may be unable to protect or obtain proprietary rights that we utilise or intend to utilise.

In developing and manufacturing our products, we employ a variety of proprietary and patented technologies. In addition, we have ~~licensed,~~licenced, and expect to continue to ~~license,~~licence, various complementary technologies and methods from academic institutions and public and private companies. We cannot provide any assurance that the technologies that we own or ~~license~~licence provide protection from competitive threats or from challenges to our intellectual property. In addition, we cannot provide any assurances that we will be successful in obtaining ~~licenses~~licences or proprietary or patented technologies in the future, or that ~~licenses~~licences granted to us by third parties will not be granted to other third parties who could potentially compete with us.

Filing, prosecuting and defending patents covering our current and future products throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States. These products may compete with our products in jurisdictions where we do not have any issued or ~~licensed~~licenced patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

The scope of the patent protection we obtain may not be sufficiently broad to compete effectively in our markets; our patent applications could be rejected or the existing patents could be challenged; and trade secrets and confidential know-how could be obtained by competitors.

Trinity Biotech currently owns ~~6 U.S.~~a number of active patents, some with protection across multiple countries. These patents have remaining patent lives varying from 16 year to 1413 years.

We may fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The patent applications that we own, or ~~in-license~~in-licence, may fail to result in issued patents with claims that cover our current products or any future products in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application.

We can provide no assurance that third parties will not challenge the validity, enforceability or scope of the patents Trinity Biotech may apply for, or obtain, which may result in such patents being narrowed, invalidated, or held unenforceable. Any successful opposition to these patents or any other patents owned by or ~~licensed~~licenced to us could deprive us of rights necessary for the successful commercialization of any products covered by those patents.

Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product under patent protection could be reduced. We can provide no assurance that our patents will continue to be commercially valuable.

Trade secrets and confidential know-how are important to our scientific and commercial success. Although we seek to protect our proprietary information through confidentiality agreements and other contracts, we can provide no assurance that others will not independently develop the same or similar information or gain access to our proprietary information.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the United States Patent and Trademark Organization (“USPTO”) and other foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalise and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering our current or future products, our competitors might be able to enter the market, which would have an adverse effect on our business.

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

Depending on actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have ~~licensed~~licenced or that we might obtain in the future.

Similar changes could happen to patent laws outside of USA which would have the same consequences.

For example, the United States has enacted and implemented wide-ranging patent reform legislation, which could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defence of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The United States Patent Office ~~recently~~ developed ~~new~~ regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defence of our issued patents, all of which could have an adverse effect on our business and financial condition.

Additionally, the U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

Product infringement claims by other companies could result in costly disputes and could limit our ability to sell our products.

Litigation over intellectual property rights is prevalent in the diagnostic industry, including patent infringement lawsuits, interferences, derivation and administrative law proceedings, inter party review, and post-grant review before the USPTO, as well as oppositions and similar processes in foreign jurisdictions.

As the market for diagnostics continues to grow and the number of participants in the market increases, we may increasingly be subject to patent infringement claims. It is possible that a third-party may claim infringement against us. For example, because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our products may infringe. Defence of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of managerial and financial resources from our business. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialise one or more of our products. The pendency of any litigation may cause our distributors and customers to reduce or terminate purchases of our products. If found to infringe, we may have to pay substantial damages, including treble damages and attorneys’ fees for ~~wilful~~willful infringement, obtain one or more ~~licenses~~licences from third parties, pay royalties or redesign our affected products, which may be impossible or require substantial time and monetary expenditure. Any substantial loss resulting from such a claim could cause our revenues to decrease and have a material adverse ~~affect~~effect on our profitability, and the damage to our reputation in the industry could have a material adverse ~~affect~~effect on our business.

If we need to obtain a ~~license~~licence as a result of litigation, we cannot predict whether any such ~~license~~licence would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need to obtain ~~licenses~~licences from third parties to advance our research or allow commercialisation of our products. We may fail to obtain any of these ~~licenses~~licences at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialise one or more of our products, which could harm our business significantly.

We may be involved in lawsuits to enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful.

Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorised use, we may be required to file legal claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defence proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. The initiation of a claim against a third party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte re-examinations, inter partes review, or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable.

We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. For the patents and patent applications that we have ~~licensed,~~licenced, we may have limited or no right to participate in the defence of any ~~licensed~~licenced patents against challenge by a third party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any future patent protection on our current or future products. Such a loss of patent protection could harm our business.

We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a ~~license~~licence on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our ~~ordinary shares.~~

ADSs.

~~Our ability~~

Risks Related to ~~protect our information systems and electronic transmissions of sensitive data from data corruption, cyber-based attacks, security breaches or privacy violations is critical to the success~~Ownership of our ~~business.~~ADSs

We are a foreign private issuer under the rules and regulations of the SEC and are therefore exempt from a number of rules under the Exchange Act and are permitted to file less information with the SEC than a domestic U.S. reporting company, which reduces the level and amount of disclosure that you receive.

WeAs a foreign private issuer under the Exchange Act, we are ~~highly dependent on information technology networks and systems,~~exempt from certain rules under the Exchange Act, including the ~~Internet,~~proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations. Moreover, we are not required to ~~securely process, transmit~~file periodic reports and ~~store electronic information, including personal information~~financial statements with the SEC as frequently or as promptly as domestic U.S. companies with securities registered under the Exchange Act; and are not required to comply with Regulation FD, which imposes certain restrictions on the selective disclosure of material information. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our ~~customers. Security breaches~~ADSs. Accordingly, you receive less information about our company than you would receive about a domestic U.S. company and are afforded less protection under the U.S. federal securities laws than you would be afforded in holding securities of ~~this infrastructure, including physical~~a domestic U.S. company.

As a foreign private issuer whose ADSs are listed on the NASDAQ Global Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements of the NASDAQ Stock Market Rules. Among other things, as a foreign private issuer we may also follow home country practice with regard to, the composition of the board of directors, director nomination procedure, compensation of officers and quorum at shareholders’ meetings. In addition, we may follow our home country law, instead of the NASDAQ Stock Market Rules, which require that we obtain shareholder approval for certain dilutive events, such as for the establishment or ~~electronic break-ins, computer viruses, malware attacks~~amendment of certain equity based compensation plans, an issuance that will result in a change of control of the company, certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions of the stock or assets of another company. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ’s corporate governance rules. In addition, as foreign private issuer, we are not required to file quarterly reviewed financial statements. A foreign private issuer that elects to follow a home country practice instead of such requirements must submit to NASDAQ in advance a written statement from an independent counsel in such issuer’s home country certifying that the issuer’s practices are not prohibited by ~~hackers and similar breaches, can cause all~~the home country’s laws.

We may be classified as a passive foreign investment company, or ~~portions~~PFIC, which would subject our U.S. investors to adverse tax rules.

U.S. holders of our ~~websites to be unavailable, create system disruptions, shutdowns, erasure~~ADSs may face income tax risks. Based on the composition of ~~critical data and software~~our income, assets (including the value of our goodwill, going-concern value or unauthorised disclosure of confidential information. We invest in security technology to protect our data against risks of data security breaches and cyber-attacks and we have implemented solutions, processes, and procedures to help mitigate these risks, such as encryption, virus protection, security firewalls and comprehensive information security and privacy policies. However, despite our security measures, our information technology and infrastructureany other unbooked intangibles, which may be ~~vulnerable~~determined based on the price of the ordinary shares), and operations, we believe we will not be classified as a “passive foreign investment company”, or PFIC, for the 2020 taxable year. However, because PFIC status is based on our income, assets and activities for the entire taxable year, it is not possible to ~~attacks by hackers~~determine whether we will be characterized as a PFIC for our current taxable year or ~~breached due to employee error, malfeasance or other disruptions. The age~~future taxable years until after the close of the applicable taxable year. Moreover, we must determine our PFIC status annually based on tests that are factual in nature, and our status in the current year and future years will depend on our income, assets and activities in each of those years and, as a result, cannot be predicted with certainty as of the date hereof. Furthermore, fluctuations in the market price of our ~~information technology systems,~~ordinary shares may cause our classification as ~~well as~~a PFIC for the ~~level~~current or future taxable years to change because the aggregate value of our ~~protection~~assets for purposes of the asset test, including the value of our goodwill and ~~business continuity~~unbooked intangibles, generally will be determined by reference to the market price of our shares from time to time (which may be volatile). The IRS or ~~disaster recovery capability, varies from site to site,~~a court may disagree with our determinations, including the manner in which we determine the value of our assets and the percentage of our assets that are passive assets under the PFIC rules. Therefore, there can be no ~~guarantee~~assurance that we will not be a PFIC for the current taxable year or for any future taxable year. Our treatment as a PFIC could result in a reduction in the after-tax return to U.S. Holders (as defined below under Item 10E. “Additional Information – Taxation”) of our ADSs and would likely cause a reduction in the value of such ~~plans, to the extent they are in place,~~shares. A foreign corporation will be ~~effective. In addition,~~treated as a ~~security breach~~PFIC for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income,” or ~~privacy violation~~(2) at least 50% of the average value of the corporation’s gross assets produce, or are held for the production of, such “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property and rents and royalties other than rents and royalties that ~~leads to disclosure~~are received from unrelated parties in connection with the active conduct of ~~consumer information (including personally identifiable information~~a trade or protected health information) could harm our reputation, compel us to comply with disparate state breach notification laws and otherwise subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue.business. If we are ~~unable~~treated as a PFIC, U.S. Holders of ADSs would be subject to ~~prevent further security breaches~~a special adverse U.S. federal income tax regime with respect to the income derived by us, the distributions they receive from us, and the gain, if any, they derive from the sale or ~~privacy violations~~other disposition of their ADSs. U.S. Holders should carefully read Item 10E. “Additional Information – Taxation” for a more complete discussion of the U.S. federal income tax risks related to owning and disposing of ADSs.

The market price of our ADSs has been, and may continue to be, highly volatile, and such volatility could cause the market price of our ADSs to decrease and could cause you to lose some or ~~implement satisfactory remedial measures,~~all of your investment in our ~~operations could~~ADSs.

The stock market in general and the market prices of the ADSs on Nasdaq, in particular, are or will be ~~disrupted, we~~subject to fluctuation, and changes in these prices may be unrelated to our operating performance. During the first quarter of 2022, the market price of our ADSs fluctuated from a high of $1.44 per ADS to a low of $0.92 per ADS, and the price of our ADSs continues to fluctuate. We anticipate that the market prices of our securities will continue to be subject to wide fluctuations. The market price of our securities may be subject to ~~legal claims or proceedings,~~a number of factors, including:

	●	announcements of new products by us or others;

	●	announcements by us of significant acquisitions, strategic partnerships, in-licensing, joint ventures or capital commitments;

	●	the developments of the businesses and projects of our various subsidiaries;

	●	expiration or terminations of licences, research contracts or other collaboration agreements;

	●	public concern as to the safety of the products we sell;

	●	the volatility of market prices for shares of companies with whom we compete;

	●	developments concerning intellectual property rights or regulatory approvals;

	●	variations in our and our competitors’ results of operations;

	●	changes in revenues, gross profits and earnings announced by us;

	●	changes in estimates or recommendations by securities analysts, if the ADSs are covered by analysts;

	●	fluctuations in the share price of our publicly traded subsidiaries;

	●	changes in government regulations or patent decisions; and

	●	general market conditions and other factors, including factors unrelated to our operating performance.

These factors may materially and adversely affect the market price of our securities and result in substantial losses by our investors.

We expect we will need additional capital in the future. If additional capital is not available, we may not be able to continue to operate our business pursuant to our business plan or we may ~~suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive consumer data,~~have to discontinue our operations entirely.

We expect we will require additional capital in the future. If we continue to incur losses, we will need significant additional financing, which could have a material adverse impact on our business, financial condition and results of operations. While we currently expend resources to protect against cyber-attacks and security breaches, hackers and other cyber criminals are using increasingly sophisticated and constantly evolving techniques, and we may ~~need~~seek through a combination of private and public equity offerings, debt financings, and asset sales, etc. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of any such offerings may include liquidation or other preferences that may adversely affect the then existing shareholders rights. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to ~~expend~~take specific actions such as incurring debt or making capital expenditures. If we raise additional ~~resources~~funds through collaboration, strategic alliance or licensing arrangements with third parties, we may have to ~~continue~~relinquish valuable rights to ~~protect against potential~~our technologies, future revenue streams or product candidates, or grant licences on terms that are not favorable to us.

Future sales of our ADSs could reduce the market price of the ADSs.

Substantial sales of our ADSs may cause the market price of our ADSs to decline. Sales by us or our security ~~breaches~~holders of substantial amounts of our ADSs, or ~~to address problems caused by such attacks~~the perception that these sales may occur in the future, could cause a reduction in the market price of our ADSs.

The issuance of any additional ADSs, or any ~~breach of~~securities that are exercisable for or convertible into our ~~safeguards. In addition, a data security breach could distract management or other key personnel from performing their primary operational duties.~~

In addition, the interpretation and application of consumer and data protection laws in the United States, Europe and elsewhere are often uncertain, contradictory and in flux. It is possible that these lawsADSs, may be interpreted and applied in a manner that is inconsistent with our data practices. If so, this could result in government-imposed fines or orders requiring that we change our data practices, which could have an adverse effect on the market price of our ~~business. Complying with these various laws could cause us to incur substantial costs or require us to change~~ADSs and will have a dilutive effect on our ~~business practices in a manner adverse to our business.~~existing holders of ADSs.

~~Reductions in government funding~~The conversion of our outstanding share options and ~~research budgets could adversely affect our business and financial results.~~warrants would dilute the ownership interest of existing shareholders.

The total share options exercisable at December 31, 2021, as described in Item 18, Note 21 to the consolidated financial statements, are convertible into American Depository Shares (ADSs), 1 ADS representing 4 “A” Ordinary Shares. The exercise of the outstanding share options will likely occur only when the conversion price is below the trading price of our ADSs and will dilute the ownership interests of existing shareholders. For instance, if all of the vested options outstanding at April 15, 2022 were exercised, the Company would have to issue 13,121,338 additional “A” Ordinary Shares (3,280,335 ADSs). Similarly, at April 15, 2022, if all of the outstanding warrants to purchase “A” Ordinary Shares were exercised, the Company would have to issue 10,000,000 “A” Ordinary Shares (2,500,000 ADSs). On the basis of 107,670,894“A” Ordinary Shares outstanding at April 15, 2022, the exercise of both the share options and the warrants would effectively dilute the ownership interest of the existing shareholders by approximately 18%.

It could be difficult for US holders of ADSs to enforce any securities laws claims against Trinity Biotech, its officers or directors in Irish Courts.

We ~~sell~~have no plans to pay dividends on our ~~products into~~ADSs, and you may not receive funds without selling the ~~public health market, which consists~~ADSs.

We do not expect to pay any cash dividends on our ADSs for the foreseeable future. We currently intend to retain any additional future earnings to finance our operations and growth and, therefore, we have no plans to pay cash dividends at this time. Any future determination to pay cash dividends will be at the discretion of ~~state, county~~our board of directors and will be dependent on our earnings, financial condition, operating results, capital requirements, any contractual restrictions, and other ~~governmental public health agencies, community-based organisations, service organisations and similar entities. Many~~factors that our board of ~~these customers depend~~directors deems relevant. Accordingly, you may have to sell some or all of the ADSs in order to generate cash from your investment. You may not receive a ~~significant degree~~gain on ~~grants or funding provided by governmental agencies to run their operations including programs that use our products. In international markets, we often~~your investment when you sell ~~our products to parties funded by such agencies. The level of available government grants or funding is unpredictable~~the ADSs and may be affected by various factors including future economic conditions, legislative and regulatory developments, political changes, civil unrest and changing priorities for research and development activities. Any reduction or delay in government funding could cause our customers to delay, reduce or forego purchaseslose the entire amount of ~~our products.~~your investment.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct the voting of your Class A ordinary shares underlying the ADSs.

22Holders of ADSs do not have the same rights as our registered shareholders. As a holder of the ADSs, you will not have any direct right to attend general meetings of our shareholders or to cast any votes at such meetings. You will only be able to exercise the voting rights which attach to the Class A ordinary shares underlying the ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Under the deposit agreement with the depositary, you may vote only by giving voting instructions to the depositary, as the registered holder of the Class A ordinary shares underlying the ADSs. If we ask for your instructions, then upon receipt of your voting instructions, the depositary will try to vote the underlying Class A ordinary shares in accordance with these instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise any right to vote with respect to the underlying Class A ordinary shares unless you withdraw the shares underlying your ADSs and become the registered holder of such shares prior to the record date for the general meeting. When a general meeting is convened, you may not receive sufficient advance notice of the meeting to enable you to withdraw the shares underlying the ADSs and become the registered holder of such shares prior to the record date for such general meeting to allow you to attend the general meeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting. Where any matter is to be put to a vote at a general meeting, upon our instruction, the depositary will notify you of the upcoming vote and deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure you can direct the depositary to vote the Class A ordinary shares underlying your ADSs in accordance with your instructions. In addition, the depositary and its agents are not responsible for failing to carry out your voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to direct how the shares underlying the ADSs are voted and you may have no legal remedy if the shares underlying the ADSs are not voted as you instructed.

Our securities could be delisted from Nasdaq if we do not comply with Nasdaq’s listing standards.

Our ADSs are listed on the NASDAQ Capital Market under the symbol “TRIB.” To continue to be listed on the NASDAQ Capital Market, we need to satisfy a number of conditions, including to maintain a minimum bid price of $1.00 per ADS and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. As of the date of this Annual Report on Form 20-F, we were in compliance with the Nasdaq continued listing requirements. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), if we fail to remain in compliance with the minimum bid price requirement we will be given 180 days to regain compliance. In the event that we do not regain compliance within this 180-day period, we may be eligible to seek an additional compliance period of 180 calendar days if we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and provide written notice to Nasdaq of our intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide notice to us that our ADSs will be subject to delisting.

If our ADSs become subject to delisting, they would be subject to rules that impose additional sales practice requirements on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our ADSs. This would adversely affect the ability of investors to trade our ADSs and would adversely affect the value of our ADSs. Delisting could also impair our ability to raise capital.

~~Risks Related to Government Regulation~~Item 4. Information on the Company

~~Changes in healthcare regulation could affect our revenues, costs and financial condition.~~

A.	History and Development of the Company

We were incorporated as a public limited company (“plc”) registered in Ireland in 1992 and commenced operations in 1992. In October 1992 we completed an initial public offering of our securities in the ~~United States in recent years, there~~US and our ADS have ~~been numerous initiatives at~~traded on the federal and state level for comprehensive reforms affecting the payment for, the availability of and reimbursement for healthcare services. These initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including providing comprehensive healthcare coverage to the public under government-funded programs, to minor modifications to existing programs. One example is the Patient Protection and Affordable Care Act, the Federal healthcare reform law enacted in 2010 (the “Affordable Care Act”). Similar reforms may occur internationally.

The ultimate content and timing of any of these types of changes in other healthcare reform legislation and the resulting impact on us are impossible to predict. If significant reforms are made to the healthcare system in the U.S., or in other jurisdictions, those reforms may increase our costs or otherwise have an adverse effect on our financial condition and results of operations.

~~Tax matters, including disagreements with taxing authorities, the changes in corporate tax rates and imposition of new taxes could impact our results of operations and financial condition.~~

~~A significant portion~~principal offices of our ~~business is~~company are located ~~in the U.S.~~at IDA Business Park, Bray, Co. Wicklow, Ireland. The Group has expanded its product base through internal development and is subject to income and other taxes in the U.S. and our operations, plans and results are affected by tax and other initiatives. In December, 2017, the U.S. Government enacted comprehensive tax legislation known as the Tax Cuts and Jobs Act. This legislation made broad and complex changes to the U.S. tax code, including but not limited to reducing the corporate tax rate from 35% to 21%, requiring a one-time mandatory deemed repatriation of certain deferred foreign earnings tax on and accelerating first year expensing of certain capital expenditures. The legislation also introduced new tax laws affecting our taxable income, which includes, but is not limited to, a new provision designed to tax global intangible low taxed income, limitations on the deductibility of certain executive compensation, creating a base erosion anti-abuse tax and modifying or repealing many deductions and credits. The ultimate impacts of the Tax Act may differ from the Company’s estimates due to changes in the interpretations and assumptions made, as well as any forthcoming regulatory guidance. The changes to the tax code could also affect our valuation of deferred tax assets and liabilities. Any such change in valuation would have a material impact on our income tax expense and deferred tax balances.

acquisitions.

Our ~~laboratory business could~~website address is https://www.trinitybiotech.com/ .. The information contained on, or that can be ~~harmed~~accessed from, our website does not form part of this Annual Report. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as we, that file electronically, with the loss or suspension of a license or imposition of a fine or penalties under, or future changes in, the law or regulations of the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), or those of other state or local agencies.SEC at www.sec.gov.

B. Business Overview

We are also subject to regulation of laboratory operations under state clinical laboratory laws of New York and of certain other states from where we accept specimens. State clinical laboratory laws may require that laboratories and/or laboratory personnel meet certain qualifications, specify certain quality controls or require maintenance of certain records. For example, California requires that we maintain a license to conduct testing in California, and California law establishes standards for our day-to-day laboratory operations, including the training and skill required of laboratory personnel and quality control.

Overview

In some respects, notably with respect to qualifications of testing personnel, California’s clinical laboratory laws impose more rigorous standards than does CLIA. Certain other states, including Florida, Maryland, New YorkWe and ~~Pennsylvania, require that we hold licenses to test specimens from patients residing in those states,~~our subsidiaries (the “Group”) develop, acquire, manufacture and additional states may require similar licenses in the future. Potential sanctions for violation of these statutes and regulations include significant fines and the suspension or loss of various licenses, certificates and authorisations, which could adversely affect our business and results of operations.

~~Item 4~~

~~Information on the Company~~

~~Trinity Biotech develops, acquires, manufactures and markets~~market medical diagnostic products for the clinical laboratory and point-of-care segments of the diagnostic market. These products are used to detect autoimmune, infectious and sexually transmitted diseases, diabetes and disorders of the liver and intestine. ~~Trinity Biotech~~We are also is a significant provider of raw materials to the life sciences and research industries globally.

~~Trinity Biotech markets its~~We market our portfolio of ~~almost 850~~several hundred products to customers in approximately 100 countries around the world through ~~its~~our own sales force and a network of international distributors and strategic partners.

Trinity Biotech was incorporated as a public limited company (“plc”) registered in Ireland in 1992. The Company commenced operations in 1992 and, in October 1992, completed an initial public offering of its securities in the US. The principalOrganisational Structure

While our executive offices ~~of the Group~~ are located at ~~IDA Business Park,~~ Bray, ~~Co Wicklow, Ireland. The Group has expanded its product base through internal~~Ireland, our research and development, manufacturing and ~~acquisitions.~~marketing activities are principally conducted at the following:

Trinity Biotech Manufacturing Limited, based in Bray, Ireland;

Clark Laboratories Inc, based in Jamestown, New York;

Primus Corporation, based in Kansas City;

Biopool US Inc (trading as Trinity Biotech USA), based in Jamestown, New York;

Immco Diagnostics Inc, based in Amherst and Buffalo, New York;

Nova Century Scientific Inc, based in Burlington, Canada; and

Trinity Biotech Brazil based in Sao Paulo, Brazil.

The ~~following represents~~Group’s distributor of raw materials for the ~~most recent acquisition made by Trinity Biotech:~~life sciences industry, Benen Trading Ltd (trading as Fitzgerald Industries), is based in Bray, Ireland and Acton, Massachusetts.

~~Acquisition of Immco Diagnostics Inc~~

~~In 2013, the Group acquired 100% of the common stock of Immco Diagnostics Inc (“Immco”) for US$32.88m.~~

Immco, which is headquartered in Buffalo, New York, specialises in the development, manufacture and sale of autoimmune test kits on a worldwide basis. This product line is complemented by specialised reference laboratory services in diagnostic immunology, pathology and immunogenetics, marketed to U.S. based hospitals and reference laboratories.

Principal Markets

The primary market for Trinity Biotech’s diagnostic products is the Americas (which consists principally of North America and South America). During fiscal year 2019, 58% (US$52.2 million) (2018: US$57.6 million or 59%) (2017: 60% or US$59.5 million) of the Group’s total revenues were derived from products sold in the Americas. Sales in the non-Americas (principally European, Asian and African countries) represented 42% (US$38.2 million) of total sales for fiscal year 2019 (2018: 41% or US$39.5 million) (2017: 40% or US$39.6 million)

~~For a more comprehensive segment analysis please refer to Item 5, “Results of Operations” and Item 18, Note 2 to the consolidated financial statements.~~

~~Principal Products~~

The brand names of the principal products of Trinity Biotech are listed below, organised first by point of use and second by ~~application. The trademarks and registered marks noted below are owned by Trinity Biotech.~~application..

Point-Of-Care

Clinical Laboratory

Infectious Diseases

Haemoglobin

Autoimmune

Clinical Chemistry

Blood Bank Screening

~~UniGold™~~UniGold

MarDx

Premier

ImmuBlot

Captia

Recombigen

FlexTrans

~~MarDx~~^®

Ultra

~~Premier™~~

~~ImmuBlot™~~

~~EZ™~~

~~Captia™~~

~~Recombigen~~^®

~~MarBlot~~^®

~~Ultra™~~

~~ImmuGlo™~~ImmuGlo

~~ImmuLisa™~~ImmuLisa

~~OTOblot™~~OTOblot

~~Trinity Biotech~~We also ~~sells~~sell raw materials to the life sciences industry and research institutes globally through ~~its~~our wholly owned subsidiary, Benen Trading Ltd., trading as Fitzgerald Industries.

~~Trinity Biotech sells its~~We sell our products through ~~its~~our direct sales organisations in the United States, Brazil and to an extent in the United Kingdom, France and Germany and then through ~~its~~our network of principal distributors and non-governmental bodies into approximately 100 countries globally.

Point-of-Care (“POC”)

Point-of-care refers to diagnostic tests which are carried out in the presence of the patient.

Uni-Gold™ HIV

We believe that Trinity Biotech makes a very significant contribution to the global effort to meet the challenge of human immuno-deficiency virus, or HIV, with its principal product, Uni-Gold™ HIV. In Africa, Uni-Gold™ HIV has been used for many years in voluntary counselling and testing ~~centres~~centers in the sub-Saharan region where it is a cornerstone to early detection and treatment intervention.

The Future of Point-Of Care at Trinity Biotech

In Africa, HIV testing typically involves using a point-of-care rapid test for screening followed by a different rapid test as the confirmatory test. Our Uni-Gold™ HIV product is ~~the dominant~~a leading confirmatory HIV test in the African ~~market and has been the gold standard for over 15 years. It is the confirmatory test of choice in the vast majority of significant African countries.~~market.

Point-Of-Care is key to the growth of Trinity Biotech. Central to this growth will be a new HIV screening test, TrinScreen HIV, which ~~we are~~received World Health Organisation approval in ~~the process of developing.~~February 2022 . Trinity Biotech has not previously competed in the larger screening market, which is estimated to be valued at approximately US$150 million p.a. The screening market is addressed by few companies. TrinScreen ~~will~~should not jeopardise our existing confirmatory business as it employs a different HIV antigen to the existing Uni-Gold™ HIV test. In other words, countries will be able to use both the TrinScreen HIV test and the Uni-Gold™ HIV test as part of their testing ~~algorithm .~~algorithm. Our strategy is to leverage the existing brand equity of Trinity Biotech in African markets to take market share in the screening market. This initiative will be supported by increased sales and marketing resources in the African market. Market opportunities for the TrinScreen HIV product also exist in other territories, in particular in emerging countries.

~~The company~~We are developing a rapid Covid-19 antigen test with which we intend to leverage our existing infectious disease rapid test design to expedite the development and validation timeframe and also ~~sells the only FDA approved~~generate scale efficiencies in manufacture and ~~CLIA waived syphilis point-of-care test in the USA.~~

The Trinity Biotech Uni-Gold™ S. pneumonia, Uni-Gold™ Legionella, Uni-Gold™ C. difficile and Uni-Gold™ Syphilis are all Conformité Européenne (“CE”) marked and we will concentrate selling these products on international markets outside of the USA.

distribution.

These point-of-care products will be sold through Trinity Biotech’s sales and marketing organisation to a variety of customers including public health authorities, non-governmental organisations, clinical and reference laboratories directly in the United Kingdom, France and Germany and through independent distributors and strategic partners in other countries.

Clinical Laboratory

Trinity Biotech supplies the clinical laboratory segment of the in-vitro diagnostic market with a range of diagnostic tests and instrumentation which detect:

Infectious diseases;

Glycated haemoglobin (for diabetes monitoring and diagnosis) and haemoglobin variants for the detection of haemoglobinopathies (haemoglobin abnormalities);

Autoimmune diseases

Trinity Biotech also supplies this market with other products through its clinical chemistry business.

Infectious Diseases

Trinity Biotech manufactures kits for the detection of specialty and esoteric biomarkers of infectious ~~diseases.~~diseases and other associated laboratory products. The products are used in processing patient samples whose results aid physicians in the diagnosis and clinical assessment of a broad range of infectious diseases. The key clinical laboratory disease areas that Trinity Biotech serves include:

~~Lyme disease,~~

Sexually transmitted diseases, including Syphilis and ~~Herpes.~~

Herpes;

Markers for Epstein Barr, ~~measles, mumps, toxoplasmosis, cytomegalovirus, rubella, varicella~~Measles, Mumps, Toxoplasmosis, Cytomegalovirus, Rubella, Varicella and other viral ~~pathogens.~~

pathogens;

25Lyme disease; and

SARS-CoV-2.

Trinity Biotech develops, manufactures and distributes products predominantly in enzyme-linked immunosorbent assay (“ELISA”) ~~and cytotoxicity assay formats.~~format. As a complement to its product range, the company also offers third party automated processors to its customers.

~~The vast majority~~Many of the products in our Infectious Diseases product line ~~of Trinity Biotech is~~are FDA cleared for sale in the United States and CE marked in Europe. Products are sold in approximately 100 countries in total, with the focus on the Americas, Europe and Asia. The infectious disease products are sold through the sales and marketing organisation of Trinity Biotech to a variety of customers including public health authorities, clinical and reference laboratories directly in the U.S. and U.K. and through independent distributors and strategic partners in other countries.

Diabetes and Haemoglobinopathies

Trinity Biotech manufactures products for in-vitro diagnostic ~~testing for~~measurement of haemoglobin A1c (“HbA1c”) used in the monitoring and diagnosis of diabetes, as well identifying those who are at a high risk of developing diabetes (pre-diabetic). The Premier Hb9210 uses patented boronate affinity technology to ~~test for~~measure HbA1c which is a ~~measure~~marker of a patient’s average blood sugar control over the last 100 to 120 days. It is a highly accurate biomarker available for the diagnosis of diabetes and is a strong indicator of a diabetic’s glycemic control. HbA1c is also used to identify those at risk of becoming diabetic; often referred to as impaired glucose tolerance. Additionally, HbA1c is used in the assessment of diabetes complications.

Trinity Biotech manufactures its own ~~A1c~~HbA1c instrument, the Premier Hb9210, which was launched in Europe and obtained FDA approval in late 2011. In Europe, Trinity Biotech distributes Premier Hb9210 through its partner Menarini Diagnostics. In the USA and Brazil, Trinity Biotech sells the Premier Hb9210 through its own direct sales organisations. In the rest of the world, Trinity sells the Premier Hb9210 through a network of distributors. The Premier’s unique features, cost structure and core technology enables it to compete in most economies and settings.

Trinity Biotech also sells products for haemoglobin variants, ~~primarily~~ through the ~~Ultra~~² ~~instrument. This is used for~~Premier Resolution (CE cleared - meaning it can be sold in the ~~detection of haemoglobinapothies, which~~EU). The Premier Resolution detects and identifies haemoglobinapothies. These are genetic defects that result in abnormal structure of the haemoglobin molecule. Haemoglobinapathies include sickle-cell diseases, alpha and beta thalassemia which are amongst the most common genetic disorders in the world.

Trinity Biotech has launched the Premier Resolution, its next generation Haemoglobinapothy Analyzer in Europe and the Middle East after undergoing rigorous and successful field trials. ~~In 2020,~~The Company expects to submit the Premier Resolution ~~will be submitted~~ to the FDA for ~~approval.~~approval in 2022. The submission has been significantly delayed due to the Covid-19 pandemic. The Premier Resolution uses an internally ~~developed~~designed column as well as state of the art hardware and software innovations in order to provide unparalleled variant detection. It is a best in class analyser that will enable Trinity to expand upon its leading position as a key supplier to this highly specialised segment.software.

The point-of-care segment of the HbA1c market is addressed by the Tri-stat system. The Tri-stat offers rapid, precise analysis in a simple and highly cost effective manner. Using boronate affinity technology and a two phase optical system, ~~The~~the instrument can process three samples simultaneously with the three results available in just 10 minutes. In 2018, a new, second generation Tri-stat analyser was launched in international markets outside of the USA. In 2020 an enhanced version of the Tri-stat analyser was launched which includes a dual detector for improved performance.

Autoimmune Diseases

Autoimmune diseases are diseases that involve an abnormal immune response in which the immune system attacks the body’s own cells and tissues.

In 2013, Trinity Biotech acquired Immco Diagnostics (“Immco”), an autoimmunity company known for novel assay development and high impact contributions to autoimmune disease diagnostic research.

Immco develops, manufactures and sells products in the following formats for diagnosis of autoimmune diseases:

Immunofluorescence Assay (“IFA”),

;

Enzyme-linked immunosorbent (“ELISA”),

;

Western Blot (“WB”); and

Line immunoassay (“LIA”).

The Immco products are a seamless fit for the instrument platforms that Trinity Biotech markets for its infectious diseases ~~products.~~portfolio. Additionally, Trinity sells a complete line of IFA processors. ~~The majority~~Many of Immco’s products are FDA cleared for sale in the U.S. and CE marked in Europe.

The Immco product line addresses the high growth, lower throughput, specialty autoimmune segment, where competition is limited. The principal autoimmune conditions in this segment are ~~rheumatoid arthritis, vasculitis, lupus, celiac~~Rheumatoid Arthritis, Vasculitis, Lupus, Celiac and Crohn’s ~~disease, ulcerative colitis, neuropathy,~~Disease, Ulcerative Colitis, Neuropathy, Hashimoto’s ~~disease~~Disease and Grave’s ~~disease.~~

Disease.

In addition, Immco ~~is the only company able to market~~markets a panel of proprietary early markers for ~~Sjogrens~~Sjögrens disease often referred to as “dry eye disorder”.

The Immco products are sold through Trinity Biotech’s sales and marketing organisation to clinical and reference laboratories directly in the USA and via distributors in other countries. ~~Menarini Diagnostics, a European market leader in autoimmune testing, distributes Immco products in the key European markets.~~

The diagnostic product line is complemented by Immco’s New York ~~state licensed~~State Department of Health licenced reference laboratory offering specialised services in diagnostic immunology, pathology and immunogenetics, and is marketed to U.S.-based reference laboratories and hospitals.

Clinical Chemistry

The speciality clinical chemistry business of Trinity Biotech includes reagent products such as ACE, bile acids, ~~lactate,~~ oxalate and glucose-6-phosphate dehydrogenase (“G6PDH”) that are clearly differentiated in the marketplace. These products are suitable for both manual and automated testing and have proven performance in the diagnosis of many disease states from liver and kidney disease to G6PDH deficiency which is an indicator of haemolytic anaemia.

Blood Bank Screening

Trinity Biotech manufactures enzyme-linked immunosorbent assays (“ELISA”), for the detection of Syphilis and Malaria. These products are sold through distributors and are manufactured under original equipment manufacturer agreements for other major third party diagnostic companies. The business is not currently operating in the United States.

Sales and Marketing

Trinity Biotech sells its products through its own direct sales force in the United States. Our sales team in the United States is responsible for marketing and selling the Trinity Biotech range of Point-Of-Care, Infectious Diseases, Haemoglobins, Autoimmune and Clinical Chemistry products. Meanwhile the direct sales force in Brazil sells the company’s haemogloblins product range.

Through its international sales and marketing organisation, which is located in Ireland, Trinity Biotech sells:

Its Clinical Chemistry product range directly to hospitals and laboratories in Germany and France;

Infectious Diseases and Clinical Chemistry product ranges directly to hospitals and laboratories in the UK; and

All product lines through independent distributors and strategic partners in a further approximately 100 countries.

Competition

The diagnostic industry is very competitive. There are many companies, both public and private, engaged in the sale of medical diagnostic products and diagnostics-related research and development, including a number of well-known pharmaceutical and chemical companies. Competition is based primarily on product reliability, customer service and price. This is a technology driven market with an emphasis on automation and emerging biomarkers. Trinity actively works on increasing automation for the clinical laboratory. Trinity seeks to bring novel biomarkers to market by licensing agreements with universities and innovative companies.

The Group’s competition includes several large companies such as, but not limited to: Abbott Diagnostics, Arkray, Bio-Rad, Diasorin Inc., Johnson & Johnson, ~~OraSure Technologies Inc.,~~ Roche Diagnostics, Siemens (from the combined acquisitions of Bayer, Dade-Behring and DPC), Thermo Fisher, Copan, Becton Dickenson and Tosoh.

Research and Development

Research & Development (“R&D”) carried out by third parties

Certain R&D activities of the Group have been outsourced to third parties. These activities are carried out in the normal course of business with these companies. During 2021, a number of third party consultants and contractors were engaged to assist with development projects, working principally on the Autoimmune Smart Reader project and the Covid antigen projects. The total amount paid to these R&D consultants and contractors in 2021 was US$807,000 (2020: US$658,000).

Research and Products under Development

Trinity Biotech has research and development groups focusing separately on haemoglobin, infectious diseases and autoimmune products. During 2021, these groups were located in Ireland and the USA and largely mirror the production capability at each production site. In addition to in-house activities, Trinity Biotech sub-contracts some research and development from time to time to independent researchers based in the USA and Europe.

Principal Development Projects

The following table sets forth for each of Trinity Biotech’s main development projects, the costs incurred during each period presented and the cumulative costs (before amortization and impairment) incurred as at 31 December 2021:

	2021		2020		Total project costs to December 31, 2021¹
Product Name	US$’000		US$’000		US$’000
Premier Instrument for Haemoglobin A1c testing		2,538		1,359		35,924
HIV screening rapid test		1,488		2,278		12,240
Covid tests		1,320		467		1,787
Autoimmune Smart Reader		550		666		3,287
Mid-tier haemoglobins instrument		303		243		609
Tri-stat Point-of-Care instrument		245		203		9,477
Uni-Gold antigen improvement		-		556		2,918
Syphilis point-of-care test		-		618		1,942

¹ Cumulative costs to December 31, 2021 are shown before deduction of amortization and impairment losses.

²Syphilis point-of-care test – there was no capital expenditure on this development project in 2021 as other projects were prioritized. It is expected this project will resume within the next twelve months.

The costs in the foregoing table mainly comprise the cost of internal resources, such as the payroll costs for the development teams and attributable overheads. The remainder mainly comprises materials, consumables, regulatory trial and third party consultants’ costs.

There are inherent risks and uncertainties associated with completing development projects on schedule. In the experience of Trinity Biotech, the main risks to the achievement of a project’s planned completion date occur primarily during the product’s verification and validation phase. During these phases the product must attain successful results from in-house product testing and from third party clinical trials. Obtaining regulatory approval on a timely basis is another variable in achieving a project’s planned completion date.

Some aspects of the development of a new product are outside of the control of Trinity Biotech. Notwithstanding the uncertainty surrounding these external factors, Trinity Biotech believes the planned completion dates of these projects are realistic and achievable. As the manufacturing lead time for these new products is relatively short, it is anticipated that material cash inflows will commence shortly after each of the project’s planned completion date.

The following is a description of the principal projects which are currently being undertaken by the research and development groups within Trinity Biotech:

Haemoglobin Development Group

Premier Hb9210 Instrument for Haemoglobin A1c Testing

This project entails the development of a new HPLC instrument for testingHbA1c. Development was initiated in late 2007, and was launched outside of the United States in 2011 and in the United States in early 2012.

As part of our continuous improvement a new monitor, keyboard and frit housing have been customised and validated. These improvements maintain the competitiveness of the instruments.

Premier Resolution Instrument for Haemoglobin Variant Testing

We have developed the Premier Resolution instrument which is utilised for haemoglobin variant testing and is currently being rolled out in certain international markets outside of the USA. We intend to submit it to the FDA for clearance in 2022. Meanwhile, Premier Resolution continues to be enhanced with unique features such as lot specific gradients, an optimised internally designed column with extended column life, and a rapidly expanding on-board variant library.

Tri-stat 2.0

Tri-stat 2.0 represents a new HbA1c device that offers rapid, precise analysis in a simple and highly cost effective manner. Using boronate affinity technology and a two phase optical system, three samples can be analysed simultaneously. This instrument though often characterised as point-of-care is targeted at very low volume laboratories and governmental outreach programs. The ability to perform three samples simultaneously enables the instrument to address these segments. Taking advantage of the latest technology the instrument features a colour touchscreen, multiple language capability, modern connectivity, increased storage capacity as well as replaceable diodes for state-of-the-art performance. Whilst the product has been launched in international markets, the company continues to make enhancements to further improve its operational efficiency and accuracy. In 2020 an enhanced version of the Tri-stat analyser was launched which includes a dual detector for improved performance.

Low to Medium throughput Haemoglobin instrument for A1c Testing

We are developing a low to medium throughput Haemoglobin A1c instrument with a view to targeting the market segment for testing volumes which lie between the Tri-stat 2.0 and Premier Hb9210. We are targeting a launch date in 2022.

Point-of-Care Development Group

We are developing a rapid Covid-19 antigen test, which we expect to have CE marked for professional use only in the second quarter of 2022.

A syphilis point-of-care rapid test is also being developed using our existing lateral flow format. In 2021, other projects were prioritized, but it is expected this project will resume within the next twelve months.

Autoimmunity Development Group

IFA Smart Reader Project

We are developing two devices which will enable cell based Immunofluorescence Assays (IFA) to be read in a more automated manner. The first device, ScopeSmart will be an automated IFA reader capable of performing image capture, pattern recognition and analysis on IFA slides. This will then be followed by SlideSmart which will fully automate this entire testing process by integrating the sample preparation.

Patents and Licences

Patents

Many of Trinity Biotech’s tests are not protected by specific patents, due to the significant cost of putting patents in place for Trinity Biotech’s wide range of products. However, Trinity Biotech believes that substantially all of its tests are protected by proprietary know-how, manufacturing techniques and trade secrets.

From time-to-time, certain companies have asserted exclusive patent, copyright and other intellectual property rights to technologies that are important to the industry in which Trinity Biotech operates. In the event that any of such claims relate to its planned products, Trinity Biotech intends to evaluate such claims and, if appropriate, seek a licence to use the protected technology. There can be no assurance that Trinity Biotech would, firstly, be able to obtain licences to use such technology or, secondly, obtain such licences on satisfactory commercial terms. If Trinity Biotech or its suppliers are unable to obtain or maintain a licence to any such protected technology that might be used in Trinity Biotech’s products, Trinity Biotech could be prohibited from marketing such products. It could also incur substantial costs to redesign its products or to defend any legal action taken against it. If Trinity Biotech’s products should be found to infringe protected technology, Trinity Biotech could also be required to pay damages to the infringed party.

Licences

Trinity Biotech has entered into a number of ~~key~~ licensing arrangements including the following:

Immco entered into a ~~license~~licence agreement on January 19, 2012, and subsequently an amended ~~license~~licence agreement on June 14, 2018. The ~~license~~licence pertains to any product or service relating to identifying indicators of Sjogren’s disease. The agreement is effective through January 21, 2036 and is worldwide in scope. Royalties are payable based on agreement in place.

In 2013, Trinity Biotech entered into a licence agreement with a leading market participant, giving the Group a non-exclusive, worldwide licence access to a significant HIV-2 patent portfolio for the purpose of making, using and selling a HIV test kit, subject to certain limitations.

In 2012, Trinity Biotech entered into a licence agreement with the CDC in Atlanta, Georgia, United States for the rights to use Cardiolipin and other immunoassays and mechanisms in developing and producing a Syphilis rapid test.

In 2006, Trinity Biotech entered into a new licence agreement with Inverness Medical Innovations (“IMI”) to IMI’s updated broad portfolio of lateral flow patents, which expanded the field of use to include over the counter (“OTC”) for HIV products, thus ensuring Trinity Biotech’s freedom to operate in the lateral flow market with its UniGold™ technology. As a platform technology, the lateral flow licences obtained from Inverness Medical Innovations also apply to Point-of-Care tests developed at our Carlsbad facility.

In 2005, Trinity Biotech obtained a licence from the University of Texas for the use of certain Lyme disease antigens, thus enabling the inclusion of these antigens in the Group’s Lyme diagnostic products.

On December 19, 1999 Trinity Biotech obtained a non-exclusive commercial licence from the National Institute of Health (“NIH”) in the United States for NIH patents relating to the general method of producing HIV-1 in cell culture and methods of serological detection of antibodies to HIV-1.

Each of the ~~key~~ licensing arrangements disclosed under this subheading terminates on the date expiration or adjudication of invalidity or unenforceability of the last of the particular ~~licensed~~licenced patents covered by the respective agreement. Each licensor has the right to terminate the arrangement in the event of non-performance by Trinity Biotech. The key licensing arrangements, with the exception of the agreement entered into in 2013 which provides for the payment of a lump sum licence fee, require the Group to pay a royalty to the licence holder which is based on sales of the products which utilise the relevant technology being ~~licensed. The royalty rates vary from 1.6% to 12.5% of sales.~~licenced. The total amount paid by Trinity Biotech under key licensing arrangements in ~~2019~~2021 was US$~~338,000 (2018:~~540,000 (2020: US$~~442,000)~~470,000).

Government Regulation

The research, development, preclinical and clinical testing, as well as the manufacture, labelling, marketing, sales, record-keeping, advertising, distribution, and promotion of Trinity Biotech’s products are subject to extensive and rigorous government regulation in the United States and in other countries in which Trinity Biotech’s products are sought to be marketed.

The process of obtaining authorisation to market our products varies, depending on the product categorisation and the country, from merely notifying the authorities of intent to sell, to lengthy formal approval procedures which often require detailed laboratory and clinical testing and other costly and time-consuming processes. The main regulatory bodies which require extensive clinical testing are the FDA in the United States, the Health ~~Product~~Products Regulatory Authority (as the authority over Trinity Biotech in Europe), the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom and Health Canada.

The process in each country varies considerably depending on the nature of the test, the perceived risk to the user and patient, the facility at which the test is to be used and other factors. As ~~58%~~62% of Trinity Biotech’s ~~2019~~2021 revenues were generated in the Americas (with a large concentration of this in the United States) and as the United States represents a substantial proportion of the worldwide diagnostics market, an overview of FDA regulation has been included below.

Food and Drug Administration

~~All~~Many of our products sold in the United States are medical devices subject to the Federal Food, Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the U.S. Food and Drug Administration (“FDA”). Certain products sold in the United States require FDA clearance to market under Section 510(k) of the FDCA. Other products sold in the United States require premarket approval (“PMA”) to market.

Failure by us or by our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or other regulatory authorities, which may result in sanctions including, but not limited to:

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

unanticipated expenditures to address or defend such actions

customer notifications for repair, replacement, refunds;

recall, detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;

operating restrictions;

withdrawing 510(k) clearances or PMA approvals that have already been granted;

refusal to grant export approval for our products; or

criminal prosecution.

The FDA governs the following activities that we perform or that are performed on our behalf, to ensure that medical products distributed domestically or exported internationally are safe and effective for their intended uses:

product design, development and manufacture;

product safety, testing, ~~labeling~~labelling and storage;

record keeping procedures;

product marketing, sales and distribution; and

post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.

FDA premarket clearance and approval requirements

Access to U.S. Market. Each medical device that Trinity Biotech may wish to commercially distribute in the U.S. will require either pre-market notification (more commonly known as 510(k)) clearance or approval of a pre-market approval (“PMA”) application prior to commercial distribution, unless specifically exempt. Under the FDCA, medical devices are classified into one of three classes -- Class I, Class II or Class III -- depending on the degree of risk associated with each medical device and the extent of control needed to ensure safety and effectiveness. Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s general regulatory controls for medical devices, which include compliance with the applicable portions of the FDA's Quality System Regulation ("QSR"), facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading ~~labeling,~~labelling, advertising, and promotional materials (the “General Controls”). Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

Class II devices are subject to FDA’s general controls, and any other special controls as deemed necessary by FDA to ensure the safety and effectiveness of the device. Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification process. Unless a specific exemption applies, 510(k) premarket notification submissions are subject to user fees.

Devices deemed by the FDA to pose the greatest risk, such as life sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a previously 510(k)-cleared device are categorised as Class III, requiring approval of a PMA.

510(k) Clearance Pathway. When a 510(k) clearance is required, Trinity Biotech must submit a pre-market notification demonstrating that the proposed device is substantially equivalent to a previously cleared 510(k) device, a device that was in commercial distribution before May 28, 1976 for which the U.S. Food and Drug Administration has not yet called for the submission of pre-market approval applications, or is a device that has been reclassified from Class III to either Class II or I. By regulation, the FDA is required to clear or deny a 510(k) premarket notification within 90 days of submission of the application. As a practical matter, clearance may take longer. As a practical matter, the FDA’s 510(k) clearance pathway usually takes from 3 to 12 months, but it can take longer, and clearance is never assured. Although many 510(k) pre-market notifications are cleared without clinical data, in some cases, the U.S. Food and Drug Administration requires significant clinical data to support substantial equivalence.

In reviewing a pre-market notification, the FDA may request additional information, including clinical data, which may significantly prolong the review process.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could even require a PMA approval, if the change raises complex or novel scientific issues or the product has a new intended use. The FDA requires each manufacturer to make this determination initially, but the FDA may review any such decision and may disagree with a manufacturer’s determination.

If the FDA disagrees with a manufacturer’s determination, the FDA may require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or pre-market approval is obtained. We have modified aspects of some of our devices since receiving regulatory clearance. Some of those modifications we believe could not significantly affect the safety or efficacy of the device, and therefore, we believe new 510(k) clearances or pre-market approvals are not required. We have also obtained new 510(k) clearances from the FDA for other modifications to our devices.

In the future, we may make additional modifications to our products after they have received FDA clearance or approval, and in appropriate circumstances, determine that new clearance or approval is unnecessary.

However, the FDA may disagree with our determination and if the FDA requires us to seek 510(k) clearance or pre-market approval for any modifications to a previously cleared product, we may be required to cease marketing or recall the modified device until we obtain the required clearance or approval. Under these circumstances, we may also be subject to significant regulatory fines or other penalties. In addition, the FDA continues to evaluate the 510(k) process and may make substantial changes to industry requirements, including which devices are eligible for 510(k) clearance, the ability to rescind previously granted 510(k)s and additional requirements that may significantly impact the process.

PMA Approval Pathway. A device that does not qualify for 510(k) clearance generally will be placed in class III and required to obtain PMA approval, which requires proof of the safety and effectiveness of the device to the FDA’s satisfaction for its intended use. A PMA application must provide extensive technical, preclinical and clinical trial data and also information about the device and its components regarding, among other things, device design, manufacturing and labelling. In addition, an advisory panel made up of clinicians and/or other appropriate experts from outside the FDA is typically convened to evaluate the application and make recommendations to the FDA as to whether the device should be approved.

Although the FDA is not bound by the advisory panel decision, the panel’s recommendation is important to the FDA’s overall decision making process. The PMA approval pathway is more costly, lengthy and uncertain than the 510(k) clearance process. After a premarket approval application is sufficiently complete, the FDA will accept the application and begin an in-depth review of the submitted information. By statute, the FDA has 180 days to review the “accepted application”, although, generally, review of the application can take between one and three years, but it may take significantly longer. During this review period, the FDA may request additional information or clarification of information already provided. In addition, the FDA will conduct a pre-approval inspection of the manufacturing facility to ensure compliance with Quality System Regulation, which imposes elaborate design development, testing, control, documentation and other quality assurance procedures in the design and manufacturing process. In February 2020, FDA published proposed regulation to update the Quality System Regulation to incorporate the international standard specific for medical device quality management systems (ISO 13485). If finalized, the quality management system requirements for FDA-regulated devices would be harmonized with the ISO 13485 standards.

After approval of a PMA, a new PMA or PMA supplement is required in the event of a modification to the device, its labelling or its manufacturing process. The FDA imposes substantial user fees for the submission and review of PMA applications. The FDA may approve a PMA application with post-approval conditions intended to ensure the safety and effectiveness of the device including, among other things, restrictions on labelling, promotion, sale and distribution and collection of long-term follow-up data from patients in the clinical study that supported approval. Failure to comply with the conditions of approval can result in materially adverse enforcement action, including the loss or withdrawal of the approval. New PMA applications or PMA supplements are required for significant modifications to the manufacturing process, labelling of the product and design of a device that is approved through the PMA process. PMA supplements often require submission of the same type of information as the original PMA application, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA application, and may not require as extensive clinical data or the convening of an advisory panel.

Clinical Studies

Devices that have not received FDA approval or clearance and are used in clinical trials are considered to be and must be labeled as investigational devices. FDA regulates these products under the IDE regulations. (See 21 C.F.R. § 812.)

Per the IDE regulations, clinical studies that involve investigational devices are divided into two categories, based on the type of device. Studies of devices considered by the agency to present a significant risk require prior approval by an Institutional Review Board (“IRB”), informed consent of patients, and FDA approval of an IDE application, which details in part the clinical study protocol, pursuant to 21 C.F.R. § 812. A significant risk device study is defined as a study of a device that presents a potential for serious risk to the health, safety, or welfare of a subject and falls into at least one of the following categories: (1) it is intended as an implant; (2) it is used in supporting or sustaining human life; (3) it is of substantial importance in diagnosing, curing, mitigating or treating a disease, or otherwise prevents impairment of human health; or (4) it otherwise presents a potential for serious risk to the health, safety, or welfare of a subject. See 21 C.F.R. 812.3(m). Studies of ~~non significant~~non-significant risk investigational devices require IRB approval and informed consent; however, the sponsor of the study does not have to obtain FDA approval of an IDE application before beginning the study.

Most clinical studies of IVDs (all of which technically involve investigational use only (“IUO”) devices) are exempted from the IDE regulation, so long as the IUO device and the study meet certain regulatory criteria. Specifically, devices are exempt from IDE requirements if they are intended for IUO and:

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Are non-invasive;

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Do not require an invasive sampling procedure that poses a significant risk;

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Do not introduce energy into a subject by design or intention;

Are not to be used as a diagnostic procedure without confirmation of the diagnosis by another medically established diagnostic product or procedure; and

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Comply with the ~~labeling~~labelling requirements for IUO devices, as outlined in 21 C.F.R. § 812.2(c)(3).

If an IUO device does not meet all the requirements for exemption, studies involving that IUO device would be subject to the IDE regulations. The majority of our products are exempt from the IDE regulation. However, we are required to have IRB approval prior to and during our clinical trials and must obtain informed consent from study participants.

Post-market Regulation

After the FDA permits a device to enter commercial distribution, numerous regulatory requirements apply. These include:

product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;

Quality System Regulation, (“QSR”), which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;

~~labeling~~labelling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;

clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices;

approval of product modifications that affect the safety or effectiveness of one of our approved devices;

medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur;

post-approval restrictions or conditions, including post-approval study commitments;

post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;

the FDA's recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;

regulations pertaining to voluntary recalls; and

notices of corrections or removals.

We have registered our facilities with the FDA as medical device manufacturers. The FDA has broad post-market and regulatory enforcement powers. We are subject to announced and unannounced inspections by the FDA to determine our compliance with the QSR and other regulations and these inspections may include the manufacturing facilities of our suppliers. In 2017, the FDA closed its pilot program for MDSAP (Medical Device Single Audit Program) and began accepting third party inspection reports from approved Auditing Organizations in lieu of conducting its own routine surveillance inspections. MDSAP audits are paid by the manufacturer and conducted annually. The FDA receives and reviews the MDSAP report and may respond to the manufacturer with its own inspection if it deems the facility is not in control. If the FDA finds any failure to comply, the agency can institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions such as fines, injunctions, and civil penalties; recall or seizure of products; the issuance of public notices or warnings; operating restrictions, partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMA approval of new products; withdrawing 510(k) clearance or PMA approvals already granted; and criminal prosecution.

Advertising and promotion of medical devices, in addition to being regulated by the FDA, are also regulated by the Federal Trade Commission and by state regulatory and enforcement authorities. Recently, promotional activities for FDA-regulated products of other companies have been the subject of enforcement action brought under healthcare reimbursement laws and consumer protection statutes. In addition, under the federal Lanham Act and similar state laws, competitors and others can initiate litigation relating to advertising claims. If the FDA determines that our promotional materials or training constitutes promotion of an unapproved use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our promotional or training materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement. In that event, our reputation could be damaged and adoption of the products would be impaired.

Furthermore, our products could be subject to voluntary recall if we or the FDA determine, for any reason, that our products pose a risk of injury or are otherwise defective. Moreover, the FDA can order a mandatory recall if there is a reasonable probability that our device would cause serious adverse health consequences or death.

Unanticipated changes in existing regulatory requirements or adoption of new requirements could have a material adverse effect on the Group. Any failure to comply with applicable QSR or other regulatory requirements could have a material adverse effect on the Group’s revenues, earnings and financial standing.

There can be no assurances that the Group will not be required to incur significant costs to comply with laws and regulations in the future or that laws or regulations will not have a material adverse effect upon the Group’s revenues, earnings and financial standing.

Clinical Laboratory Improvement Amendments of 1988, (“CLIA”)

Purchasers of Trinity Biotech’s clinical diagnostic products and our reference laboratory in the United States may be regulated under The Clinical Laboratory Improvements Amendments of 1988 and related federal and state regulations. CLIA is intended to ensure the quality and reliability of clinical laboratories in the United States by mandating specific standards in the areas of personnel qualifications, administration and participation in proficiency testing, patient test management, quality control, quality assurance and inspections. The regulations promulgated under CLIA established three levels of diagnostic tests (“waived”, “moderately complex” and “highly complex”) and the standards applicable to a clinical laboratory depend on the level of the tests it performs. Laboratories performing high complexity testing are required to meet more stringent requirements than laboratories performing less complex tests. In addition, we and our customers are required to meet certain laboratory licensing requirements for states with regulations beyond CLIA. For more information on state licensing requirements, see the sections entitled “Government Regulation – New York Laboratory Licensing” and “Government Regulation – Other States’ Laboratory Licensing.”

Under CLIA, a laboratory is any facility that performs laboratory testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease, or the impairment of or assessment of health.

CLIA requires that a laboratory hold a certificate applicable to the type of laboratory examinations it performs and that it complies with, among other things, standards covering operations, personnel, facilities administration, quality systems and proficiency testing, which are intended to ensure that clinical laboratory testing services are accurate, reliable and timely. Laboratories must register and list their tests with the ~~Centers for Medicare & Medicaid Services, or~~ CMS, the agency that oversees CLIA.

CLIA compliance and certification is also a prerequisite to be eligible to bill for services provided to governmental payor program beneficiaries and for many private payors. CLIA is user-fee funded. Therefore, all costs of administering the program must be covered by regulated facilities, including certification and survey costs.

To renew ~~our~~the CLIA certificate for our Autoimmune Reference Laboratory, we are subject to survey and inspection every two years to assess compliance with program standards. We also may be subject to additional unannounced inspections. Laboratories performing high complexity testing are required to meet more stringent requirements than laboratories performing less complex tests. CLIA requires full validation including accuracy, precision, specificity, sensitivity and establishment of a reference range for any test used in clinical testing. The regulatory and compliance standards applicable to the testing we perform may change over time and any such changes could have a material effect on our business.

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Federal Oversight of Laboratory Developed Tests and Research Use Only Products

Trinity Biotech supplies clinical laboratories with raw materials, such as reagent products, that may be used by clinical laboratories in clinical laboratory tests, which are regulated under CLIA, as well as by applicable state laws. Although the FDA has statutory authority to assure that medical devices are safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable regulations with respect to laboratory developed tests, or LDTs. The FDA defines the term “laboratory developed test” as an in vitro diagnostic test that is intended for clinical use and designed, manufactured and used within a single laboratory. Until 2014, the FDA exercised enforcement discretion such that it did not enforce provisions of the Food, Drug and Cosmetic Act with respect to LDTs. In July 2014, due to the increased proliferation of LDTs for complex diagnostic testing, and concerns with several high-risk LDTs related to lack of evidentiary support for claims and erroneous results, the FDA issued guidance that, when finalized, would adopt a risk based framework that would increase FDA oversight of LDTs. As part of this developing framework, FDA issued draft guidance in October 2014, informing Congress and manufacturers of LDTs of its intent to collect information from laboratories regarding their current LDTs and newly developed LDTs through a notification process. The FDA will use this information to classify LDTs and to prioritize enforcement of premarket review requirements for categories of LDTs based on risk, using a public process. Specifically, FDA plans to use advisory panels to provide recommendations to the agency on LDT risks, classification and prioritization of enforcement of applicable regulatory requirements on certain categories of LDTs, as appropriate. FDA issued a discussion paper on LDTs in January 2017 discussing possible approaches to oversight of LDTs.

Some products are for research use only (“RUO”), or for IUO. RUO and IUO products are not intended for human clinical use and must be properly labeled in accordance with FDA guidance. Claims for RUOs and IUOs related to safety, effectiveness, or diagnostic utility or that it are intended for human clinical diagnostic or prognostic use are prohibited. In November 2013, the FDA issued guidance titled “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only - Guidance for Industry and Food and Drug Administration Staff.” This guidance sets forth the requirements to utilize such designations, ~~labeling~~labelling requirements and acceptable distribution practices, among other requirements. Mere placement of an RUO or IUO label on an in vitro diagnostic product does not render the device exempt from otherwise applicable clearance, approval or other requirements. The FDA may determine that the device is intended for use in clinical diagnosis based on other evidence, including how the device is marketed.

We cannot predict the potential effect the FDA’s current and forthcoming guidance on LDTs and IUOs/RUOs will have on our reagents or materials that we market to the life sciences industry, and that we may use in the development of assays in our reference laboratory. We cannot be certain that the FDA might not promulgate rules or issue guidance documents that could affect our ability to sell these materials to the market. Should any of the reagents marketed by us to the life sciences industry and used in conducting diagnostic services be affected by future regulatory actions, our business could be adversely affected by those actions.

We cannot provide any assurance that FDA regulation, including premarket review, will not be required in the future for LDTs that rely on our reagents or through our reference laboratory, whether through additional guidance or regulations issued by the FDA, new enforcement policies adopted by the FDA or new legislation enacted by Congress.

Legislative proposals addressing oversight of LDTs were introduced in recent years and we expect that new legislative proposals will be introduced from time to time. It is possible that legislation could be enacted into law or regulations or guidance could be issued by the FDA which may result in new or increased regulatory requirements.

Product Imports/Exports

Products for export from the United States are subject to foreign countries’ import requirements and the exporting requirements of the FDA, as applicable. In particular, international sales of medical devices manufactured in the United States that are not approved or cleared by the FDA for use in the United States, or are banned or deviate from lawful performance standards, are subject to FDA export requirements.

Foreign countries often require, among other things, an FDA certificate for products for export, also called a Certificate for Foreign Government (“CFG”). To obtain this certificate from the FDA, the device manufacturer must apply to the FDA. The FDA certifies that the product has been granted clearance or approval in the United States and that the manufacturing facilities were in compliance with QSR regulations at the time of the last FDA inspection. If the FDA determines that our facilities or procedures do not comply with the QSR regulations, it may refuse to provide such certificates until we resolve the issues to the FDA’s satisfaction. Failure to obtain a CFG could inhibit our ability to export our products to countries that require such certificates.

Export of products subject to 510(k) notification requirements, but not yet cleared to market, are permitted without FDA export approval, if statutory requirements are met. Unapproved products subject to PMA requirements can be exported to any country without prior FDA approval provided, among other things, they are not contrary to the laws of the destination country, they are manufactured in substantial compliance with the QSR, and have been granted valid marketing authorisation in Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa or member countries of the European Union or of the European Economic Area (“EEA”). FDA approval must be obtained for exports of unapproved products subject to PMA requirements if these export conditions are not met.

There can be no assurance that Trinity Biotech will meet statutory requirements and/or receive required export approval on a timely basis, if at all, for the marketing of its products outside the United States.

Foreign Corrupt Practices Act and Other Anti-Corruption Laws

The U.S. Foreign Corrupt Practices Act (“FCPA”), to which we are subject, prohibits corporations and individuals from engaging in bribery and corruption when dealing with foreign government officials and foreign political parties. It is illegal to corruptly offer, pay, promise, or authorize the giving of anything of value to any officer or employee of a foreign government or public international organization, political party, political party official, or political candidate, in an attempt to obtain or retain business or to otherwise improperly influence a person working in an official capacity on behalf of a foreign government or public international organization. Our present and future business has and will continue to be subject to the FCPA and various other laws, rules and/or regulations applicable to us as a result of our international sales. We also are subject to the FCPA’s accounting provisions, which require us to keep accurate books and records and to maintain a system of internal accounting controls sufficient to assure management’s control, authority, and responsibility over the company's assets. The failure to comply with the FCPA and similar laws could result in civil or criminal sanctions or other adverse consequences.

The laws to which we are subject as a result of our international sales also include the U.K. Bribery Act (the “Bribery Act”), which proscribes giving and receiving bribes in the public and private sectors, bribing a foreign public official, and failing to have adequate procedures to prevent employees and other agents from giving bribes. U.S. companies that conduct business in the United Kingdom generally will be subject to the Bribery Act. Penalties under the Bribery Act include potentially unlimited fines for companies and criminal sanctions for corporate officers under certain circumstances.

Healthcare Reform

The Protecting Access to Medicare Act of 2014 (“PAMA”), which was signed into law on April 1, 2014, significantly alters the current payment methodology under the Medicare Clinical Laboratory Fee Schedule, or CLFS. Under PAMA, beginning January 1, 2016, clinical laboratories must report laboratory test contracted payment data for each Medicare-covered clinical diagnostic laboratory test that it furnishes during a time period to be defined by future regulations, which we expect will cover the previous 12 months. The reported data must include the payment rate (reflecting all discounts, rebates, coupons and other price concessions) and the volume of each test that was paid by each contracted private payor (including health insurance issuers, group health plans, Medicare Advantage plans and Medicaid managed care organisations). Beginning in 2017, the Medicare payment rate for each clinical diagnostic lab test will be equal to the weighted median amount for the test from the most recent data collection period.

Other recent laws make changes impacting clinical laboratories, many of which have already gone into effect. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively, the Affordable Care Act (“ACA”), enacted in March 2010, among other things:

includes a reduction in the annual update factor used to adjust payments under the CLFS for inflation. This update factor reflects the consumer price index for all urban consumers, or CPI-U, and the ACA reduces the CPI-U by 1.75% for the years 2011 through 2015. The Affordable Care Act also imposes a multifactor productivity adjustment in addition to the CPI-U, which may further reduce payment rates;

requires certain medical device manufacturers to pay an excise tax in an amount equal to 2.3% of the price for which such manufacturer sells its medical devices that are listed with the FDA; and

requires the coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and clinicians and initiatives to promote quality indicators in payment methodologies.

The Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction (known as sequestration) to several government programs. This included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2024 unless additional Congressional action is taken.

Further, in February 2012, the Middle Class Tax Relief and Job Creation Act of 2012 was passed, which, among other things, reduced by 2% the 2013 Medicare CLFS and rebased payments at the reduced rate for subsequent years. Overall, when adding this 2% reduction to the ACA’s 1.75% reduction to the update factor and the productivity adjustment, the payment rates under the CLFS declined by 2.95% and 0.75% for 2013 and 2014, respectively.

This reduction does not include the additional sequestration adjustment. Lastly, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

State and Federal Privacy and Security Laws

Under the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or collectively, HIPAA, the U.S. Department of Health and Human Services (“HHS”), has issued regulations to protect the privacy and security of individually identifiable health information, also known as protected health information (“PHI”), held, used or disclosed by health care providers, such as our reference laboratory, and other covered entities.

HIPAA also regulates standardisation of data content, codes and formats used in certain electronic health care transactions and standardisation of identifiers for health plans and providers. HIPAA also governs patient access to laboratory test reports. Effective October 6, 2014, individuals (or their personal representatives, as applicable) have the right to access test reports directly from laboratories and to direct that copies of those reports be transmitted to persons or entities designated by the individual. Penalties for violations of HIPAA regulations include civil and criminal penalties.

In addition to federal privacy regulations, there are a number of state laws governing the privacy, confidentiality and security of individually identifiable health information and other personal information that are applicable to our business. Where these state laws are stricter than the requirements imposed by HIPAA or impose different or additional requirements than HIPAA, we may be subject to additional restrictions and liability above and beyond HIPAA’s requirements.

The laws governing privacy and security of health information and other personal information are rapidly changing and new laws governing privacy and security may be adopted in the future as well. We can provide no assurance that we are or will remain in compliance with diverse privacy and security requirements in all of the jurisdictions in which we do business or process personal information, or in which our patients reside, or that we will be able to keep up with the cost of complying with new or additional requirements. Failure to comply with privacy and security requirements could result in damage to our reputation, adversely affect customer or investor confidence in us and reduce the demand for our services from existing and potential customers. In addition, we could face litigation, penalties and regulatory actions including civil or criminal penalties and significant costs for compliance with new or changing requirements, all of which could generate negative publicity and which could have a materially adverse effect on our business.

Federal and State Anti-Kickback Laws

The Federal Anti-Kickback Statute makes it a felony for a person or entity, including a laboratory, to knowingly and ~~willfully~~wilfully offer, pay, solicit or receive any remuneration, directly or indirectly, to induce or in return for either the referral of an individual or the purchase, lease or order, or arranging for the purchase, lease or order, of items, services or other business that is reimbursable under any federal health care program, including Medicare and Medicaid. Courts have stated that an arrangement may violate the Anti-Kickback Statute if any one purpose of the arrangement is to encourage patient referrals or other federal health care program business, regardless of whether there are other legitimate purposes for the arrangement. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. The definition of "remuneration" has been broadly interpreted to include anything of value, including for example, gifts, discounts, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests and providing anything at less than its fair market value. The Anti-Kickback Statute is broad and prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry.

Recognising that the Anti-Kickback Statute may technically prohibit innocuous or beneficial arrangements within the healthcare industry, HHS has issued a series of regulatory safe harbours. Although full compliance with these safe harbours protects health care providers and other parties against prosecution under the federal Anti-Kickback Statute, the failure of a transaction or arrangement to fit within a specific safe harbour does not necessarily mean that the transaction or arrangement is illegal or that prosecution under the federal Anti-Kickback Statute will be pursued. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Penalties for the Federal Anti-Kickback Statute violations are severe and include imprisonment, criminal fines, civil money penalties and exclusion from participation in federal health care programs.

Federal and state law enforcement authorities scrutinise arrangements between health care entities or providers and potential referral sources to ensure that the arrangements are not designed as a mechanism to induce patient care referrals or induce the purchase or prescribing of particular products or services.

The law enforcement authorities, the courts and Congress have also demonstrated a willingness to look behind the formalities of a transaction to determine the underlying purpose of payments between health care providers or entities and actual or potential referral sources.

Many states have also adopted statutes similar to the federal Anti-Kickback Statute, some of which apply to payments in connection with the referral of patients for healthcare items or services reimbursed by any source, not only governmental payor programs. There can be no assurance that our relationships with physicians, hospitals, clinical laboratories and other customers will not be subject to investigation or challenge under such laws.

Physician Self-Referral Prohibitions

In addition to the Anti-Kickback Statute, a federal law directed at physician "self-referral," commonly known as the Stark Law, prohibits, among other things, physicians who personally or through an immediate family member, have a financial relationship, including an investment, ownership or compensation relationship with an entity, including clinical laboratories, from referring Medicare patients to that entity for designated health services, which include clinical laboratory services, unless an exception applies. In addition, the clinical laboratory is prohibited from billing for any tests performed pursuant to a prohibited referral. Recent court cases have extended the Stark law's prohibition to referral of Medicaid patients as well. A person who engages in a scheme to circumvent the Stark Law's referral prohibition may be fined up to US$100,000 for each such arrangement or scheme. In addition, any person who presents or causes to be presented a claim to the Medicare or Medicaid programs in violation of the Stark Law is subject to civil monetary penalties of up to US$15,000 per bill submission, an assessment of up to three times the amount claimed and possible exclusion from participation in federal governmental payor programs. Bills submitted in violation of the Stark Law may not be paid by Medicare or Medicaid and any person collecting any amounts with respect to any such prohibited bill is obligated to refund such amounts. Many states also have anti- "self-referral" and other laws that are not limited to Medicare and Medicaid referrals.

Like the Anti-Kickback Statute, the Stark Law is broad in its application to health care transactions and arrangements. Accordingly, the Stark Law contains many exceptions, which protect certain arrangements and transactions from the Stark Law penalties. The Stark Law is a strict liability statute, however, so intent is irrelevant, i.e., a physician's financial relationship with a laboratory must meet an exception under the Stark Law, or the referrals are prohibited. Thus, unlike the Anti-Kickback Statute's safe harbours, if a laboratory's financial relationship with a referring physician does not meet the requirements of a Stark Law exception, then the physician is prohibited from making Medicare and Medicaid referrals to the laboratory and any such referrals will result in overpayments to the laboratory and subject the laboratory to the Stark Law's penalties. Many states have also adopted statutes similar to the Stark Law, some of which apply to payments in connection with the referral of patients for healthcare items or services reimbursed by any source, not only governmental payor programs.

Civil Monetary Penalties Law

The federal Civil Monetary Penalties Law, among other things, prohibits the offering or giving of remuneration, including the provision of free items and services, to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary's selection of a particular supplier of items or services reimbursable by a federal or state governmental program. Violations could lead to civil money penalties of up to $10,000 for each wrongful act, assessment of three times the amount claimed for each item or service and exclusion from the federal healthcare programs.

Federal Physician Payment Sunshine Act

The U.S. Physician Payment Sunshine Act requires certain manufacturers of drugs, biologics, devise and medical supplies to record any transfers of value to certain U.S. healthcare providers and U.S. teaching hospitals. These payments and transfers of value must be reported annually to CMS Open Payments. Sunshine Act reporting requirements were expanded in 2021 to include any payments and transfers of value to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anaesthetists, and certified nurse-midwives. Failure to comply with Sunshine Act reporting requirements may result in civil monetary penalties of up to $100,000 for each knowing violation.

Other Federal and State Fraud and Abuse Laws

In addition to the requirements discussed above, several other health care fraud and abuse laws apply to our business. For example, provisions of the Social Security Act permit Medicare and Medicaid to exclude an entity that charges the federal health care programs substantially in excess of its usual charges for its services. The terms "usual charge" and "substantially in excess" are ambiguous and subject to varying interpretations.

HIPAA also created federal criminal statutes that prohibit, among other actions, knowingly and willfully executing or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them in order to have committed a violation.

A violation of each of these statutes is a felony and may result in fines, imprisonment or exclusion from governmental payor programs. Many states have similar statutes that may carry significant penalties.

The Federal False Claims Act prohibits a person from knowingly submitting a claim, making a false record or statement in order to secure payment or retaining an overpayment by the federal government. Actions which violate the Anti-Kickback Statute or Stark Law also incur liability under the False Claims Act. In addition to actions initiated by the government itself, the statute’s “qui tam” provisions authorise actions to be brought on behalf of the federal government by a private party having knowledge of the alleged fraud.

Because the complaint is initially filed under seal, the action may be pending for some time before the defendant is even aware of the action. If the government is ultimately successful in obtaining redress in the matter or if the plaintiff succeeds in obtaining redress without the government's involvement, then the plaintiff will receive a percentage of the recovery.

When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties ranging from $5,500 to $11,000 for each separate false claim, exclusion from participation in federal health care programs and criminal penalties. Several states have also adopted comparable state false claims act, some of which apply to all payors.

The ACA, among other things, also imposed new reporting requirements on manufacturers of certain devices, drugs and biologics for certain payments and transfers of value by them and in some cases their distributors to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

New York Laboratory Licensing

Because our reference laboratory located in New York receives specimens from New York State, our clinical reference laboratory is required to be ~~licensed~~licenced under New York laws and regulations, which establish standards for, among other things:

day-to-day operation of a clinical laboratory, including training and skill levels required of laboratory personnel;

physical requirements of a facility;

equipment; and

validation and quality control.

New York law also mandates proficiency testing for laboratories ~~licensed~~licenced under New York state law, regardless of whether such laboratories are located in New York. If a laboratory is out of compliance with New York statutory or regulatory standards, the state regulatory agency may suspend, limit, revoke or annul the laboratory's New York ~~license,~~licence, censure the holder of the ~~license~~licence or assess civil money penalties. Statutory or regulatory noncompliance may result in a laboratory's operator being found guilty of a misdemeanor under New York law. The state regulatory agency also must approve any LDT before the test is offered in New York. Should we be found out of compliance with New York laboratory requirements, we could be subject to such sanctions, which could harm our business. We cannot provide assurance that the state will at all times find us to be in compliance with applicable laws.

Other States' Laboratory Licensing

In addition to New York, other states including California, Florida, Maryland, Pennsylvania and Rhode Island, require licensing of out-of-state laboratories under certain circumstances. From time to time, we may become aware of other states that require out-of-state laboratories to obtain licensure in order to accept specimens from the state and it is possible that other states do have such requirements or will have such requirements in the future.

Regulation outside the United States

Distribution of Trinity Biotech’s products outside of the United States is also subject to foreign regulation. Each country’s regulatory requirements for product approval and distribution are unique and may require the expenditure of substantial time, money, and effort. We are also subject to regulations in foreign countries governing products, human clinical trials and marketing, and may need to obtain approval (or pre-qualification or endorsement) from local regulators in such countries or international public health agencies, such as the World Health Organization, in order to sell products in certain countries. Approval processes vary from country to country, and the length of time required for approval or to obtain other clearances may in some cases be longer than that required for U.S. governmental approvals. We generally pursue approval only in those countries that we believe have a significant market opportunity.

The International Organization for Standardization (“ISO”) is a worldwide federation of national standards bodies from some 130 countries, established in 1947. The mission of the ISO is to promote the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services. ISO 13485 certification indicates that our quality system complies with standards applicable to activities ranging from initial product design and development through production and distribution.

In the European Union (EU), diagnostic products are also categorized into different categories and the regulatory process, which has been governed by the European In Vitro Diagnostic Medical Device Directive, depends upon the category, with certain product categories requiring review and approval by an independent company, known as a Notified Body, before the manufacturer can affix a CE mark to the product to declare conformity to the Directive. Other products only require a self-certification process. In the second quarter of 2017, the EU adopted the new In Vitro Diagnostic Regulation (IVDR) which replaces the existing directive in the EU for in vitro diagnostic products. The IVDR will apply after a five-year transition period and imposes additional premarket and post market regulatory requirements on manufacturers of such products. The EU has recently announced updated transition periods for certain classes of in vitro medical devices.

In the medical devices segment, the research and development process begins with research on a specific technology that is evaluated for feasibility and commercial viability. If the research program passes that hurdle, it moves forward into development. The development process includes evaluation, selection and qualification of a product design, completion of applicable clinical trials to test the product’s safety and efficacy, and validation of the manufacturing process to demonstrate its repeatability and ability to consistently meet pre-determined specifications.

In the EU, medical devices are also categorized into different classes and the regulatory process, which has been governed by the European Medical Device Directive and the Active Implantable Medical Device Directive, varies by class. Each product must bear a CE mark to show compliance with the Directive. In the second quarter of 2017, the EU adopted the new Medical Devices Regulation (MDR) which replaces the existing directives in the EU for medical devices and imposes additional premarket and post market regulatory requirements on manufacturers of such products. While the MDR was previously adopted to apply after a three year transition period, in 2020 the European Parliament postponed the date of application by one year. The MDR is officially effective as of May 26, 2021.

Some products require submission of a design dossier to the appropriate regulatory authority for review and approval prior to CE marking of the device. For other products, the company is required to prepare a technical file which includes testing results and clinical evaluations but can self-certify its ability to apply the CE mark to the product. Outside the U.S. and the EU, the regulatory requirements vary across different countries and regions.

There can be no assurance that new laws or regulations will not have a material adverse effect on Trinity Biotech’s business, financial condition, and results of operation. The time required to obtain needed product approval by particular foreign governments may be longer or shorter than that required for FDA clearance or approval. There can be no assurance that Trinity Biotech will receive on a timely basis, if at all, any foreign government approval necessary for marketing its products.

~~Organisational~~C. Organizational Structure

~~Trinity Biotech plc~~

Please refer to Note 32 to our audited consolidated financial statements (“Group Undertakings”) included elsewhere in this Annual Report for a listing of our significant subsidiaries, including name, country of incorporation, and ~~its subsidiaries (“the Group”) is a manufacturer~~proportion of ~~diagnostic test kits~~ownership interest.

D. Property, Plants and ~~instrumentation for sale~~Equipment

Our headquarters, manufacturing and ~~distribution worldwide.~~

~~Trinity Biotech’s executive~~research and development facilities as well as our sales offices are located atin Bray ~~Ireland while its~~Ireland. We have entered into a number of related party transactions with JRJ Investments (“JRJ”), a partnership currently owned by Mr Ronan O’Caoimh and Dr Walsh, directors of the Company, and directly with Mr O’Caoimh, to provide current and potential future needs for the Group’s manufacturing and research and development ~~manufacturing and marketing activities are principally conducted at the following:~~

~~Trinity Biotech Manufacturing Limited, based~~facilities in Bray, ~~Ireland;~~

~~Clark Laboratories Inc, based~~Ireland. We have entered into an agreement for a 25 year lease with JRJ, for 15,780 square feet of offices at an annual rent of €381,000 (US$432,000), which expires in ~~Jamestown, New York;~~

~~MarDx Diagnostics Inc, based in Carlsbad, California;~~

~~Primus Corporation, based in Kansas City;~~

~~Biopool US Inc (trading as Trinity Biotech USA), based in Jamestown, New York;~~

~~Immco Diagnostics Inc, based in Amherst~~2027 and ~~Buffalo, New York;~~

~~Nova Century Scientific Inc, based in Burlington, Canada; and~~

~~Trinity Biotech Brazil based in Sao Paulo, Brazil.~~

~~The Group’s distributor of raw materials~~have entered into lease agreements with Mr. O’Caoimh for ~~the life sciences industry, Benen Trading Ltd (trading as Fitzgerald Industries), is based~~a 43,860 square foot manufacturing facility in Bray, Ireland and ~~Acton, Massachusetts, USA.~~

~~For a more comprehensive schedule~~an adjacent warehouse of 16,000 square feet. The annual rent for the ~~subsidiary undertakings~~manufacturing facility is €787,605 (US$891,000) and the annual rent for the warehouse is €144,000 (US$163,000). These two leases expire in 2028 and 2026 respectively. Towards the end of 2020, the Group ~~please refer~~occupied some additional space adjoining the warehouse. This is a short-term arrangement, and no payments were made for the additional space during 2020 and 2021. A sum of US$90,000 was accrued for rent payable to Mr O’Caoimh in relation to this additional space. See Item ~~18, Note 33 to the consolidated financial statements.~~7 – Major Shareholders and Related Party Transactions.

~~Property, Plant and Equipment~~

~~Trinity Biotech has seven~~

We have six main manufacturing sites worldwide, five in the ~~Americas.~~Americas (Amherst, Williamsville and Jamestown, NY, Kansas City, MO, ~~Carlsbad, CA~~ and Extrema, Brazil), and one in Bray, Ireland. An additional facility is owned in Burlington, Canada which serves as a distribution centre and also carries out some research and development activities.

The U.S. and Irish facilities are each FDA registered and ISO certified facilities. As part of ~~its~~our ongoing commitment to quality, each Trinity Biotech facility was granted the latest ISO 13485 certification. This certification was granted by internationally recognised notified bodies. This serves as external verification that Trinity Biotech has established an effective quality system in accordance with an internationally recognised standard. By having an established quality system there is a presumption that ~~Trinity Biotech~~we will consistently manufacture products in a controlled manner. To achieve this certification, each Trinity Biotech facility performed an extensive review of the existing quality system and implemented any additional regulatory requirements.

The facilities at Jamestown, NY, Kansas City, MO ~~and Carlsbad, CA~~ and Bray, Ireland also achieved certification to the requirements of the Medical Device Single Audit Programme (MDSAP). The Medical Device Single Audit Program allows an MDSAP recognized Auditing Organization to conduct a single regulatory audit of a medical device manufacturer that satisfies the relevant requirements of the regulatory authorities participating in the program. International regulatory authorities that are participating in the MDSAP include, US Food and Drug Administration, Therapeutic Goods Administration of Australia, Brazil’s Agência Nacional de Vigilância Sanitária, Health Canada, Japan’s Ministry of Health, Labour and Welfare, and the Japanese Pharmaceuticals and Medical Devices Agency The World Health Organization (WHO) Prequalification of In Vitro Diagnostics (IVDs) Programme and the European Union (EU) are Official Observers.

Trinity Biotech has entered into a number of related party transactions with JRJ Investments (“JRJ”), a partnership currently owned by Mr O’Caoimh and Dr Walsh, directors of the Company, and directly with Mr O’Caoimh, to provide current and potential future needs for the Group’s manufacturing and research and development facilities, located in Bray, Ireland. Trinity Biotech has entered into an agreement for a 25 year lease with JRJ, for 15,780 square feet of offices at an annual rent of €381,000 (US$427,000), which expires in 2027. Trinity Biotech has entered into lease agreements with Ronan O’Caoimh for a 43,860 square foot manufacturing facility in Bray, Ireland and an adjacent warehouse of 16,000 square feet. The annual rent for the manufacturing facility is €787,000 (US$883,000) and the annual rent for the warehouse is €144,000 (US$162,000). These two leases expire in 2028 and 2026 respectively. See Item 7 – Major Shareholders and Related Party Transactions.

Trinity Biotech USA operates from a 25,610 square foot FDA ~~and ISO 9001 approved~~registered facility in Jamestown, New York. The facility was purchased ~~by Trinity Biotech USA~~ in 1994. Additional warehousing space is also leased in Jamestown, New York at an annual rental charge of US$183,000.

MarDx operates from two facilities in Carlsbad, California. The first facility comprises 21,436 square feet and the second adjacent facility comprises 14,500 square feet. The last number of years have seen a steady migration of customers away from using Western Blot for diagnosing Lyme in favour of alternative testing platforms. Production volumes at our Carlsbad, California facility (which specialises in Western Blot manufacturing) have declined steadily to the extent that it no longer makes economic sense to continue. Consequently, in the early part of 2020 management decided to close this facility from June 30, 2020. Both facilities operated by Mardx are leased and in 2020, we have given notice to the landlords that we will terminate our leases on June 30, 2020. During the period until closure, final batches of Lyme Western Blot for our remaining customers will be produced, whilst simultaneously transferring non-Lyme product manufacturing to other Group facilities.

Primus Corp. operates from a 39,000 square foot facility in Kansas City, Missouri and an adjacent 13,500 square foot facility mainly used for warehousing. The leases on these properties run until 2022 and 2025 respectively and annual rents are US$~~119,000~~108,000 and US$~~47,000~~44,000 respectively.

Immco Diagnostics Inc. operates from a 20,520 square foot facility in Amherst, New York and a 31,731 square foot facility in Williamsville, New York, subject to leases expiring in 2022 and 2033 respectively. The annual rent for the Amherst facility is US$~~257,000.~~259,000. The Williamsville facility’s annual rent is currently US$~~405,000,~~416,000, rising to US$452,000 by 2029. An additional 5,120 square foot facility is owned by Trinity Biotech in Burlington, Canada.

Additional office and factory space is leased by the Group in Acton, Massachusetts, Sao Paulo, Brazil and Extrema, Brazil at an annual cost of US$~~95,000,~~96,000, US$~~11,000~~8,000 and US$~~33,000~~41,000 respectively.

At present, we have sufficient productive capacity to cover demand for our product range. We continue to review our level of capacity in the context of future revenue forecasts. In the event that these forecasts indicate capacity constraints, we will either obtain new facilities or expand our existing facilities.

In relation to products revenues are directly related to our ability to identify significant revenue-generating products while they are still in development and to bring them to market quickly produced at our facilities – these are as follows:

Bray, Ireland – Point-of-Care/HIV, ~~Immunofluorescence~~Clinical Chemistry and ~~Clinical Chemistry~~Viral Transport Media products are manufactured at this site.

Jamestown, New York – this site specializes in the production of Microtitre Plate EIA products for infectious diseases and auto-immunity. Viral Transport Media products are also manufactured at this facility.

Carlsbad, California – this facility specialises in the development and manufacture of products utilising Western Blot and lateral flow technology. Our suite of Lyme products iswere manufactured at this facility and our new Infectious Diseases Point-of-Care range ~~are~~were manufactured at this site. In 2020, management made the decision to close this facility permanently (see above).

Kansas City, Missouri – this site is responsible for the manufacture of the Group’s haemoglobin and Viral Transport Media range of products. It also carries out all of the Group’s haemoglobin R&D activities.

Buffalo, New York – these two sites are responsible for the manufacture of autoimmune test kits, Viral Transport Media products and the majority of R&D activities for Immco Diagnostics, along with its reference laboratory business.

We are in material compliance with all environmental legislation, regulations and rules applicable in each jurisdiction in which we operate.

Principal Capital Expenditure and Divestitures

Our principal capital expenditure in the last three financial years has been on developing new products internally. The amount capitalized for development projects has been US$6,771,000, US$6,896,000, US$9,569,000 for years ended December 31, 2021, 2020 and 2019 respectively. In 2022, we expect the capital expenditure on development projects will be in the range US$6,500,000 to US$7,500,000.

Item 4A.

Unresolved Staff Comments

Not applicable.

~~Item 5~~

~~Operating and Financial Review and Prospects~~

Item 5.Operating and Financial Review and Prospects

A. Operating Results

Overview

~~Trinity Biotech’s~~

We develop, manufacture and market diagnostic test kits used for the clinical laboratory and Point-of-Care (“POC”) segments of the diagnostic market. These test kits are used to detect infectious diseases, sexually transmitted diseases, blood disorders and autoimmune disorders, as well as monitoring and diagnosing diabetes and haemoglobin variants. The Group markets hundreds of different diagnostic products in approximately 100 countries. In addition, the Group manufactures its own and distributes third party infectious disease diagnostic instrumentation. Through our Fitzgerald subsidiary, we are a provider of raw materials to the life sciences industry.

Our consolidated financial statements include the attributable results of Trinity Biotech plc and all its ~~subsidiary undertakings collectively.~~subsidiaries. This discussion covers the years ended December 31, ~~2019, December 31, 2018~~2021 and December 31, ~~2017,~~2020 and should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 20-F. The financial statements have been prepared in accordance with IFRS both as issued by the International Accounting Standards Board (“IASB”) and as subsequently adopted by the European Union (“EU”) (together “IFRS”). Consolidated financial statements are required by Irish law to comply with IFRS as adopted by the EU which differ in certain respects from IFRS as issued by the IASB. These differences predominantly relate to the timing of adoption of new standards by the EU. However, as none of the differences are relevant in the context of Trinity Biotech, the consolidated financial statements for the periods presented comply with IFRS both as issued by the IASB and as adopted by the EU.

~~Trinity Biotech has availed of the~~We have relied on an exemption under ~~SEC~~the SEC’s rules to prepare consolidated financial statements without a reconciliation to U.S. generally accepted accounting principles (“U.S. GAAP”) as at and for the three year period ended December 31, ~~2019~~2021 as Trinity Biotech is a foreign private issuer and the financial statements have been prepared in accordance with IFRS as issued by the ~~International Accounting Standards Board (“IASB”).~~

~~Overview~~

Trinity Biotech develops, manufactures and markets diagnostic test kits used for the clinical laboratory and Point-of-Care (“POC”) segments of the diagnostic market. These test kits are used to detect infectious diseases, sexually transmitted diseases, blood disorders and autoimmune disorders, as well as monitoring and diagnosing diabetes and haemoglobin variants. The Group markets almost 850 different diagnostic products in approximately 100 countries. In addition, the Group manufactures its own and distributes third party infectious disease diagnostic instrumentation. Trinity Biotech, through its Fitzgerald subsidiary, is a provider of raw materials to the life sciences industry.IASB.

Factors affecting our results

The global diagnostics market is growing due to, among other reasons, the ageing population and the increasing demand for rapid tests in a clinical environment.

Our revenues are directly related to our ability to identify significant revenue-generating products, ~~while they are still in~~carry out the necessary development work and to bring them to market quickly and effectively. Efficient and productive research and development is crucial in this environment as we, like our competitors, search for effective and cost-efficient solutions to diagnostic problems. The growth in new technology will almost certainly have a fundamental effect on the diagnostics industry as a whole and upon our future development.

The comparability of our financial results for the years ended December 31, ~~2019, 2018, 2017, 2016~~2021 and ~~2015 have been~~2020 were impacted by the decision to discontinue operations in Fiomi Diagnostics AB in 2016 following the withdrawal of the Troponin premarket submission to the U.S. Food and Drug Administration (see Item 18, Note 10). The Group also realised impairment losses ~~in 2016, 2017, 2018 and in 2019~~ as a result of ~~annual~~ impairment reviews ~~as at~~during the years ended December 31, ~~2016, December 31, 2017, December 31, 2018~~2020 and ~~December 31, 2019 (see~~2021 (See Item 18, Note ~~13)~~14). ~~There were no acquisitions made in 2019, 2018, 2017, 2016 or 2015.~~

For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As reflected in the accompanying consolidated financial statements, for the years ended December 31, 2021 and 2020, we recorded a profit of US$0.9 million and a loss of US$6.4 million, respectively. In addition, we reported cash outflow of US$1.5 million for the year ended December 31, 2021 and a cash inflow of US$10.9 million for the year ended December 31, 2020. As of December 31, 2021, we had an accumulated deficit in equity attributable to the equity holders of the Company of US$0.3 million.

The directors have considered the Group’s current financial position and cash flow projections, taking into account all known events and developments including the closing of the financing with Perceptive Advisers and the Covid-19 pandemic. The directors believe that the Group will be able to continue its operations for at least the next 12 months from the date of this report and that it is appropriate to continue to prepare the consolidated financial statements on a going concern basis.

At the date of this report the Group’s financial position has substantially improved following the successful re-financing of the Group’s debt in early 2022. This has significantly improved the Group’s capital structure by reducing gross debt by approximately US$19 million and there are no material debt maturities until 2026. Furthermore, the pending investment by MiCo IVD Holdings LLC, a subsidiary of the MiCo Group, will facilitate our exploring lower cost debt funding options, in the short-term, with the aim of further reducing our interest expense through refinancing the balance of the Group’s term loan at substantially lower interest rates. In April 2022, the Company announced a US$45 million strategic investment and partnership with the MiCo Group, a KOSDAQ-listed company. The investment is subject to customary Korean central bank approvals. The investment consists of an equity investment of approximately US$25.2 million and a seven-year, unsecured junior convertible note issued by Trinity Biotech of US$20 million, with a fixed interest rate of 1.5% and an ADS conversion price of US$3.24 per ADS.

Impact of Currency Fluctuation

Trinity Biotech’s revenue and expenses are affected by fluctuations in currency exchange rates especially the exchange rate between the US Dollar and the Euro, the Brazilian Real and Canadian Dollar. Trinity Biotech’s revenues are primarily denominated in US Dollars and its expenses are incurred principally in US Dollars, Euro and Brazilian Real. The weakening of the US Dollar could have an adverse impact on future profitability.

Trinity Biotech holds most of its cash assets in US Dollars. As Trinity Biotech reports in US Dollars, fluctuations in exchange rates do not result in exchange differences on these cash assets. Fluctuations in the exchange rate between the Euro or Brazilian Real and the US Dollar may impact on the Group’s Euro or Real monetary assets and liabilities and on Euro, Swedish Krona or Real expenses and consequently the Group’s earnings.

Impact of Covid-19 Pandemic

Our revenues decreased by 8.8% in 2021 compared to 2020. This was mainly due to lower demand and selling prices for PCR Viral Transport Media (“VTM”) products compared to 2020 when there was exceptional demand due to limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices in 2021.

In 2020, most of our product lines were negatively impacted by the Covid-19 pandemic. Our business relies on people attending hospitals and clinics with ailments that need to be diagnosed through testing. Due to quarantine restrictions and peoples’ fear of catching Covid-19, there was a marked decrease in 2020 in people attending hospitals and clinics. Haemoglobins revenues reduced for both instruments and consumables with the impact being greater on diabetes (A1c) rather than on haemoglobin variant revenues. In autoimmunity, testing volumes were particularly impacted at our reference laboratory in Buffalo, New York but there were also lower product sales in all major markets. HIV revenues in Africa were negatively impacted by logistical and testing constraints arising from COVID-19.

In 2021, there was an easing of quarantine restrictions and vaccination programs gave patients the confidence to visit their doctors again. For this reason, on a product-for-product basis, revenues outside of our Covid-19 product portfolio returned to near pre-pandemic levels in 2021.

Covid-19 products

When the pandemic started, we were was well-positioned to respond with our established expertise in infectious disease products including our existing Viral Transport Media product which could be used to transport testing samples for Covid-19 PCR tests. Since the start of the pandemic to the end of 2021, VTM revenues have been in excess of US$50 million.

Beginning in 2020, we undertook development of three different Covid-19 diagnostic tests. A Covid-19 antibody test using an ELISA platform, a Covid-19 rapid antibody test and a rapid Covid-19 antigen test, with which we intend will leverage our existing rapid infectious disease test design.

Operations and Employee Safety

Many governments have implemented restrictive lockdowns requiring non-essential businesses to shut down operations. Our business is typically deemed “essential” and we continued to operate, manufacture and distribute products to customers throughout most of 2020 with no closures in 2021. We furloughed many of our work forces in the USA, Ireland and Canada in April 2020 but the majority of employees returned the following month.

We have implemented health and safety policies to help safeguard our on-site employees and maintain business continuity. We have also enhanced cleaning procedures, provided additional personal hygiene supplies and protective equipment to employees, limited access to our facilities to visitors, trained employees on social distancing and mask wearing. Where practical, we have facilitated many employees to work remotely. These measures have created additional challenges from our work methods and on our infrastructure and I.T. systems which may have resulted in decreased productivity and some increased operating costs. However, the various responses we have put in place have to date resulted in limited disruption to our normal business operations. To date, we have been able to maintain our operations without significant interruption and have been able to develop and quickly scale manufacturing capacity for new products related to the Covid-19 pandemic.

We have availed of governmental supports. This included the receipt of forgivable loans under the U.S. government’s Paycheck Protection Program (“PPP”). In Ireland, the company also availed of economic support mechanisms in 2020 being provided by the Irish Government mainly in the form of wage subsidies.

Supply Chains

The pandemic has caused delays in deliveries of certain raw materials and components for our products, particularly those related to our Viral Transport Media product. Such delays can result in disruption to our business operations. We are continuously evaluating our supply chain to identify potential gaps and take steps intended to ensure continuity. Our inventory levels continue to fluctuate due to the change in our sales mix and the increased size of customer orders for Covid-19 related products. We successfully increased our production capacity for our viral transport media product, with the workforce mainly comprising of temporary staff.

Outlook

Management continues to monitor the pandemic situation closely and seeks to minimise the negative impacts on the business, while at the same time, optimising the opportunities presented to us as a medical diagnostic company. We sell our products in approximately 100 countries and there can be a large variance globally in the impact of the virus, the virus infection rates and public healthcare measures from country to country. It is therefore difficult to generalise about the recovery of demand for our products given the number of variables.

While the outlook is subject to significant uncertainty, we expect demand for our non-Covid related products to further increase in 2022 compared to 2021 as vaccination rollout allows for more patients to return to their doctors, which is what mainly drives our business. The extent to which demand for our Covid-19 portfolio of products is sustained into 2022 and beyond is highly uncertain and very difficult to predict. The launch of our rapid Covid-19 antigen test during 2022 is expected to drive growth as the market for that type of product is exceptionally large. Generally, demand for the Covid-19 tests depends on new information that may emerge concerning the severity of the coronavirus, the incidence of Covid-19 variants and the vaccination programmes plus competition from competing products.

Year ended December 31, 2021 compared to the year ended December 31, 2020

Revenues

In 2021, revenues decreased by 8.8% from US$102.0 million in 2020 to US$93.0 million. The decrease is mainly due to lower sales of our PCR VTM products. In 2020, demand for VTM products was exceptional while there was limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices in 2021.

Trinity Biotech’s revenues for the year ended December 31, 2021 were US$93.0 million compared to revenues of US$102.0 million for the year ended December 31, 2020, which represents a decrease of US$9.0 million or 8.8%. The following table sets forth selected sales data for each of the periods indicated.

	Year ended December 31,
		2021 US$’000	2020 US$’000	% Change
Revenues
Clinical laboratory goods		74,700	84,280		(11.4	)%
Clinical laboratory services		7,928	8,485		(6.6	)%
Point-of-Care		10,337	9,215		12.2	%
		92,965	101,980		(8.8	)%

Clinical Laboratory Goods

Clinical Laboratory goods revenues decreased by US$9.6 million in 2021, which represents a decrease of 11.4%. The decrease is mainly due to lower sales of our PCR VTM. In 2020, demand for VTM products was exceptional while there was limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices.

There was a significant reduction in demand for new orders of VTM from early 2021 as COVID-19 testing volumes dropped and customers utilised stockpiled product. While the situation relating to COVID-19 products remains very fluid, with the evolving impact of the new variants the Company has seen increased customer interest in VTM products over recent months and has resumed manufacturing VTM products, albeit in lower volumes compared to late 2020. The Company has retained the capability to flex manufacturing volumes should market conditions warrant it.

In 2021, there was a partial return towards more normalised level of Haemoglobins testing. While COVID-19 public health restrictions remained in place in 2021 in many markets, these restrictions were not as severe as in 2020. As a result, diabetic related testing revenues increased by approximately 20% in 2021 and we are continuing to see increasing demand for these instruments and consumables as diabetic testing programmes continue their return to normalisation. Offsetting this increase was lower sales in our haemoglobinopathies products due to the recall of the Ultra II instrument in U.S. in the early part of 2021.

Fitzgerald Industries, our life science raw materials business and our clinical chemistry product line both recorded single digit revenue growth in 2021. Similarly, autoimmune product revenues in 2021 recorded single digit revenue growth compared to 2020, mainly due to a lessening of the impact of the Covid-19 pandemic.

Clinical Laboratory Services

Our New York reference laboratory offers laboratory-testing services for autoimmune disorders, such as Sjogren’s syndrome, hearing loss, celiac disease, lupus, rheumatoid arthritis and systemic sclerosis. Revenues for the laboratory decreased by 6.6% to US$7.9 million. While revenues for our proprietary Sjogren’s syndrome test increased by 46% compared to 2020 these were offset by a reduction in testing for other disorders due to fewer patients visiting their physicians for pandemic reasons and due to the ending of certain testing that was carried out for a high-volume customer.

Point-of-Care

Point-of-Care revenues increased from US$9.2 million in 2020 to US$10.3 million in 2021, an increase of US$1.1 million or 12.0%. This was driven by higher HIV sales in Africa. In 2020, HIV revenues were negatively impacted by logistical and testing constraints arising from COVID-19. Non-HIV point-of-care revenues, which mainly comprise a syphilis test sold in U.S., were broadly unchanged year on year.

Revenues by Geographical Region

The following table sets forth selected sales data, analysed by geographic region, based on location of customer:

	Year ended December 31,
		2021 US$‘000	2020 US$‘000	% Change
Revenues
Americas		57,799	70,408		(17.9	)%
Asia/Africa		25,504	22,567		13.0	%
Europe		9,662	9,005		7.3	%
Total		92,965	101,980		(8.8	)%

In the Americas, revenues decreased US$12.6 million or 17.9% mainly due to decreased sales of our VTM products which were used in the Covid-19 testing programs in U.S. and Canada. To a lesser extent, haemoglobin revenues were impacted by the recall of the Ultra II instrument in U.S. in the early part of 2021, following a FDA warning letter in the prior year.

Asia/Africa revenues increased by 13.0%, or US$2.9 million compared to 2020. The increase is due i) to higher Point-of-Care revenues in Africa where logistical and testing constraints arose in 2020 due to Covid-19 and ii) an increase in haemoglobins revenues as there was a return to more normal diabetes testing schedules in China and our other Asian markets, in contrast to the disruptions that were seen in 2020 due to the pandemic.

In Europe, revenues increased by 7.3% or US$0.7 million, compared to 2020. The increase was due to higher haemoglobin A1c and infectious diseases revenues in the territory, mainly due to more patients attending their doctors for heath checks following the easing of the public healthcare emergency. Similar to Asia/Africa, there was an increase in haemoglobins instrument sales in Europe as customers that had postponed their instrument purchases in 2020 due to uncertainty created by the pandemic, returned to the market.

Cost of sales, gross profit and gross margin

Total cost of sales increased by US$1.5 million from US$53.4 million for the year ended December 31, 2020 to US$54.9 million, for the year ended December 31, 2021, an increase of 2.8%. This resulted in a gross profit for 2021 of US$38.1 million compared to a gross profit for 2020 of US$48.6 million. The gross margin of 41.0% in 2021 compares to a gross margin of 47.6% in 2020. Gross margin remains susceptible to product mix changes, geographic spread, currency fluctuations and product level variation. The reduction in the gross margin in 2021 compared to 2020 is mainly due to comparatively higher sales prices for VTM in 2020 caused by exceptionally high demand with prices and consequently gross margin reducing progressively during 2021. Lower margins were also recorded in our Fitzgerald life sciences supply business in 2021 compared to 2020 as we made a strategic decision to pursue larger volume orders that typically have lower pricing but are expected to add to overall profitability. Additionally, the receipt of government payroll supports in 2020 related to COVID-19 helped to increase the gross margin in 2020 and these supports were not claimed in 2021.

Other operating income

Other operating income increased from US$1.9 million in 2020 to US$4.7 million in 2021. In both years, this income almost entirely comprises income received under the U.S. government’s Cares Act, principally its PPP and its Provider Relief Fund. All PPP loans received in 2020 and in 2021 have now been 100% forgiven by the U.S. government. Four PPP loans received in 2020, but not forgiven until 2021, totalling US$2.9m, were treated as short-term liabilities at December 31, 2020.

Research and development expenses

Research and development (“R&D”) expenditures decreased from US$5.1 million in 2020 to US$4.5 million in 2021. The decrease in costs in 2021 is mainly due to the closure of an R&D centre located in Carlsbad, California in June 2020. For details of the Company’s various R&D projects see “Research and Products under Development” below.

Selling, general and administrative expenses

Selling, general and administrative expenses (excluding impairment charges, closure costs, recognition of contingent asset and tax settlement) decreased from US$26.4 million in 2020 to US$24.7 million in 2021, which represents a decrease of 6.5%. In 2020, selling, general and administrative expenses were unusually low due to certain non-recurring savings, principally the furloughing of employees because of the pandemic and government payroll supports related to COVID-19. Despite neither of these savings occurring in 2021, a reduction in costs was recorded due to a cost saving program which saw headcount reduced by 7%, as well as lower performance-related pay due to lower revenues. Additionally, in 2021 a foreign currency gain was recorded on Euro-denominated lease liabilities while the equivalent foreign currency movement in 2020 was a loss.

The Group recorded a total share-based payments charge of US$1.1 million in 2021 compared to US$0.8 million in 2020. The increase of US$0.3 million in the total share-based payments expense is mainly due to a higher number of options being in their vesting period in 2021 compared to 2020 due to options granted in prior years. Share based payments included in selling, general and administrative expenses was US$1.1 million in 2021 and US$0.8 million in 2020. For further details, refer to Item 18, Note 21 to the consolidated financial statements.

Amortisation decreased from US$1.4 million for the year ended December 31, 2020 to US$0.9 million for the year ended December 31, 2021. The decrease of US$0.5 million is mainly due to the impairment recorded at December 31, 2020 which resulted in a lower carrying value for development projects and other intangible assets such as acquired technology, customer and supplier lists.

Recognition of contingent asset

In 2019, we disclosed a contingent asset of US$1.2 million which had not been recognised. It was in connection with the 2019 tax audit settlement and was payable by Darnick Company. This balance was settled in the year ended December 31, 2020 and was credited within selling, general and administrative expenses - recognition of contingent asset in 2020. The underlying amount was denominated in Euro. Due to a depreciation in the US Dollar between 2019 and 2020, the US Dollar equivalent amount increased from US$1.2 million to US$1.3 million.

Closure costs

In 2020, management decided to close a production facility in Carlsbad, California which specialised in Western Blot manufacturing. The last number of years had seen a steady migration of customers away from using the Western Blot testing format for diagnosing Lyme Disease in favour of alternative testing platforms. Production volumes declined steadily at the plant to the extent that it no longer made economic sense to continue. The plant was closed on June 30, 2020. Production of remaining products was transferred to other locations. The charge for closing the facility in 2020 was US$2.4 million which largely comprised redundancy costs, the write-off of inventory and the cost of exiting lease obligations.

Impairment charges

The Company recognized impairment charges of US$6.9 million in 2021. In 2020, the impairment charges were US$17.8 million. In accordance with the provisions of accounting standards under IFRS, a company is required to carry out impairment reviews in order to determine the appropriate carrying value of its net assets. A number of factors impacted this calculation including cash flow projections and net asset values across each of the Group’s cash generating units, the Company’s share price at the date on which the impairment test is performed (in 2021, two tests were performed, one at June 30 and one at December 31) and the cost of capital. The impairment loss of US$5.0 million for Immco Diagnostics Inc. mainly comprised a write down of intangible assets. Trinity Biotech Do Brasil incurred an impairment loss of almost US$1.0 million (mainly comprising property, plant and equipment assets) in 2021 as this CGU continues to be impacted by the weakness of the Brazilian Real. Trinity Biotech Manufacturing Limited recorded an impairment loss of US$0.8 million relating to one development project intangible asset. Biopool US Inc. incurred an impairment loss of US$0.1 million in 2021, with a downward trend in non-Covid-19 related infectious disease revenues in U.S. being a major factor. For further details, see Item 18, Notes 13, 14 and 18.

Operating profit

The operating profit for continuing operations was US$6.6 million for the year, which compares to an operating profit of US$0.1 million for 2020.

Net financing expenses

Net financing expense was US$5.9 million for the year-end December 31, 2021 compared to US$6.7 million in 2020.

Financial income increased by US$1.2 million from US$0.04 million for the year-end December 31, 2020 to US$1.2 million in 2021. There was a decrease of US$33,000 in bank deposit interest mainly due to lower interest rates and an increase of US$1.2 million in the income arising from the revaluation of embedded derivatives at fair value.

Financial expenses increased by US$0.3 million to US$7.1 million during 2021 due to loan origination costs of US$1.7 million incurred in 2021 relating to the new term loan from Perceptive Advisors which was drawn down in 2022. Offsetting this an expense of US$1.2 million which arose in 2020 from revaluation of embedded derivatives at fair value. The equivalent revaluation in 2021 is a gain which is recorded in financial income.

Income tax credit

The Group recorded a tax credit on continuing operations of US$0.2 million for the year ended December 31, 2021 compared to a tax credit of US$0.6 million for the year ended December 31, 2020. The 2021 tax credit consists of US$0.2 million of current tax credit and US$0.04 million of a deferred tax charge. In 2020, the tax credit comprised US$0.4 million of current tax credit and US$0.2 million of a deferred tax credit. For further details on the Group’s tax charge please refer to Item 18, Note 9 and Note 15 to the consolidated financial statements.

Profit from continuing operations

The profit for the year from continuing operations was US$0.9 million, compared to a loss of US$6.0 million in 2020.

Loss from discontinued operations

The Cardiac Point-of-Care operation was discontinued during the year ended December 31, 2016. Expenses, gains and losses relating to the discontinuation of the Cardiac point-of-care tests operation have been eliminated from profit or loss from the Group’s continuing operations and are shown as a single line item in the Statement of Operations. The loss on discontinued operations is US$0.05 million in year ended December 31, 2021, which is mainly due to administrative expenses. The loss on discontinued operations is US$0.4 million in year ended December 31, 2020, which is mainly due to the unwinding of closure provisions and a change of estimate in relation to a tax receivable balance. For further details, see Item 18, Note 10.

Year Ended December 31, 2020 Compared with Year Ended December 31, 2019

Revenues

Revenues by Product Line

Trinity Biotech’s revenues for the year ended December 31, 2020 were US$102.0 million compared to revenues of US$90.4 million for the year ended December 31, 2019, which represents an increase of US$11.6 million or 12.8%. The following table sets forth selected sales data for each of the periods indicated.

	Year ended December 31,
		2020 US$’000	$	2019 US$’000	% Change
Revenues
Clinical laboratory goods		84,280		68,127		23.7	%
Clinical laboratory services		8,485		10,915		(22.3	)%
Point-of-Care		9,215		11,393		(19.1	)%
		101,980		90,435		12.8	%

Clinical Laboratory Goods

Clinical Laboratory goods revenues increased by US$16.2 million in 2020, which represents an increase of 23.7%. The increase is mainly due to strong sales within our Covid-19 related portfolio of products, with our VTM products being the most significant contributor to revenue within that portfolio. Due mainly to the impact of Covid-19, revenues for Haemoglobins and Autoimmune products recorded decreases in 2020 compared to 2019. In our Haemoglobins business, revenues were affected by the deferral of Diabetes instrument purchases as healthcare resources were stretched by the pandemic. Autoimmune revenues were affected by fewer patients attending their doctors for consultations. Infectious Diseases revenues increased significantly due to the aforementioned Viral Transport Media sales, but this was partly offset by lower Lyme sales attributable to the continued migration away from Western Blot to other testing formats.

Clinical Laboratory Services

Our New York reference laboratory offers laboratory-testing services for autoimmune disorders, such as Sjogren’s syndrome, hearing loss, celiac disease, lupus, rheumatoid arthritis and systemic sclerosis. Revenues for the laboratory decreased by 22.3% to US$8.5 million due to lower testing volumes mainly on account of the pandemic.

Point-of-Care

Point-of-Care revenues decreased from US$11.4 million in 2019 to US$9.2 million in 2020, which is a decrease of US$2.2 million (-19.1%). This was driven by lower HIV sales in both the U.S. and Rest of World. The decline in the U.S. was attributable to the decision to exit this market in 2019, which had been in decline for a number of years, whilst Rest of World sales were lower due to logistical and testing constraints arising from Covid-19 in the second and third quarters, with normal trading patterns only being restored in the fourth quarter of 2020.

Revenues by Geographical Region

The following table sets forth selected sales data, analysed by geographic region, based on location of customer:

	Year ended December 31,
		2020 US$‘000	2019 US$‘000	% Change
Revenues
Americas		70,408	52,183		34.9	%
Asia/Africa		22,567	27,686		(18.5	)%
Europe		9,005	10,566		(14.8	)%
Total		101,980	90,435		12.8	%

In the Americas, revenues increased US$18.2 million or 34.9% mainly due to increased sales of our Viral Transport Media product which was used in the Covid-19 testing programs in USA and Canada. This increase was partly offset by (i) the decision to exit the HIV point-of-care testing market in USA during 2019, (ii) the continued migration of Lyme confirmatory testing away from Western Blot to alternative testing platforms and (iii) lower haemoglobins revenues due to the negative impact of Covid-19 in USA and Brazil and also due to a marked weakness in the Brazilian currency.

Asia/Africa revenues decreased by 18.5%, or US$5.1 million compared to 2019. The decrease is due i) to lower Point-of-Care revenues in Africa where logistical and testing constraints arose due to Covid-19 particularly in the second and third quarters and ii) a decrease in haemoglobins revenues as patients’ scheduled diabetes tests in China and our other Asian markets were cancelled or postponed due to government quarantine enforcement in response to the pandemic. Our haemoglobins customers also deferred their instrument purchases as healthcare resources were stretched by the pandemic.

In Europe, revenues decreased by 14.8% or US$1.6 million, compared to 2019. The decrease was due to lower haemoglobin A1c and infectious diseases revenues in the territory, mainly due to the reduction in patients attending their doctors for heath checks on account of the public healthcare emergency. Similar to Asia/Africa, there was a drop in haemoglobins instrument sales in Europe as customers postponed their instrument purchases due to uncertainty created by the pandemic.

Cost of sales, gross profit and gross margin

Total cost of sales increased by US$1.1 million from US$52.3 million for the year ended December 31, 2019 to US$53.4 million, for the year ended December 31, 2020, an increase of 2.1%. This resulted in a gross profit of US$48.6 million for 2020 compared to a gross profit of US$38.1 million for 2019. The gross margin of 47.6% in 2020 compares to a gross margin of 42.2% in 2019. This increase was largely due to the impact of strong sales within our Covid-19 related portfolio of products, fewer instrument placements (which are lower than average margin), lower depreciation and a range of cost saving measures implemented during the year.

Other operating income

Other operating income increased from US$0.09 million in 2019 to US$1.9 million in 2020. In 2020, other operating income mainly relates to funding received under the U.S. government’s Cares Act, principally its PPP. Two out of six PPP loans received by the Company were forgiven during the year. The four loans which remained unforgiven at year end, totaling US$2,905,000, are treated as short term liabilities at December 31, 2020. In 2019, other operating income mainly comprised the provision of canteen services to third parties in Ireland. Due to Covid-19 restrictions, these services were suspended in the second quarter of 2020.

Research and development expenses

R&D expenditure recorded in the Statement of Operations decreased from US$5.3 million in 2019 to US$5.1 million in 2020. The decrease in 2020 is due to cost saving measures implemented during the year including the furloughing of employees. For details of the Company’s various R&D projects see “Research and Products under Development” below.

Selling, General & Administrative expenses

Total selling, general and administrative expenses decreased by US$1.3 million from US$27.7 million for the year ended December 31, 2019 to US$26.4 million for the year ended December 31, 2020.

Selling, general and administrative expenses excluding share-based payments and amortisation decreased from US$24.6 million for the year ended December 31, 2019 to US$24.2 million for the year ended December 31, 2020, which represents a decrease of 1.4%. The decrease of US$0.4 million is mainly attributable to:

A range of cost saving measures implemented in response to the Covid-19 pandemic including the furloughing of employees in the second quarter of 2020, the receipt of government payroll subsidies, significantly reduced travel costs and the cancellation of trade shows and other marketing activities.

Partially offsetting these savings were increased foreign currency losses mainly due to the re-translation of Euro-denominated lease liabilities for right-of-use assets and increased performance-related pay due to higher revenues and profits.

The share-based payments expense represents the fair value of share options granted to directors, employees and contractors, which is charged to the statement of operations over the vesting period of the underlying options. The Group has used a trinomial valuation model for the purposes of valuing these share options with the key inputs to the model being the expected volatility over the life of the options, the expected life of the option, the option price, the dividend yield and the risk-free rate. The Group recorded a total share-based payments charge of US$0.79 million (2019: US$0.76 million). The increase of US$0.03 million in the total share-based payments expense is mainly due to a higher number of options being in their vesting period in 2020 compared to 2019 due to options granted in 2020. The total charge is shown in the following expense headings in the statement of operations: US$0.01 million (2019: US$0.02 million) was charged against cost of sales and US$0.8 million (2019: US$0.7 million) was charged against selling, general & administrative expenses.

Amortisation decreased from US$2.4 million for the year ended December 31, 2019 to US$1.4 million for the year ended December 31, 2020. The decrease of US$1.0 million is due to the impairment recorded at December 31, 2019 which resulted in a lower carrying value for development projects and other intangible assets such as acquired technology, customer and supplier lists.

Selling, general and administrative expenses – recognition of contingent asset

In our financial statements for the year ended December 31, 2019, we disclosed a contingent asset of USD$1.2 million which had not been recognised. It was in connection with the 2019 tax audit settlement and was payable by Darnick Company. This balance was settled in the year ended December 31, 2020 and has been credited to the Statement of Operations within Selling, General and Administrative Expenses - recognition of contingent asset. The underlying amount was denominated in Euro. Due to a depreciation in the US Dollar since 2019, the US Dollar equivalent amount increased from US$1.2 million to US$1.3 million.

Selling, general and administrative expenses – tax audit settlement

In the year end December 31, 2019, a tax audit settlement of US$6.4 million arising in one of the jurisdictions in which the company operates was reached. The settlement consisted of US$3.9 million in relation to a patent dividend scheme, which had operated via Rayville Limited from 1995 to 2010, US$1.2 million in relation to payments for CEO Services made to Darnick Company (a company controlled by the family of Ronan O’Caoimh), and US$0.08 million in relation to R&D tax credits. Penalties were US$0.3 million. Interest charges were US$1.0 million and this is shown as a financial expense. The total settlement excluding interest of US$1.0 million was US$5.4 million and this was partially offset by an existing provision of US$0.4 million, resulting in an expense of US$5.0 million. There was no tax audit settlement charge recorded in the year end December 31, 2020.

Selling, general and administrative expenses – closure costs

In 2020, management decided to close a production facility in Carlsbad, California facility which specialised in Western Blot manufacturing. The last number of years had seen a steady migration of customers away from using the Western Blot testing format for diagnosing Lyme in favour of alternative testing platforms. Production volumes declined steadily at the plant to the extent that it no longer made economic sense to continue. The plant was closed on June 30, 2020. Production of remaining products was transferred to other locations in the Group. The charge for closing the facility was US$2.4 million which largely comprised redundancy costs, the write-off of inventory and the cost of exiting lease obligations.

Selling, general and administrative expenses - impairment charges

Impairment charges of US$17.8 million for the year ended December 31, 2020 are included in selling, general and administrative expenses. In 2019, the impairment charges were US$24.3 million. In accordance with the provisions of accounting standards under IFRS, a company is required to carry out annual impairment reviews in order to determine the appropriate carrying value of its net assets. A number of factors impacted this calculation including cash flow projections and net asset values across each of the Company’s cash generating units, the Company’s share price at December 31, 2020 and the cost of capital. Primus Corporation, which recorded an impairment loss of US$16.7 million in 2020, has been particularly impacted by the pandemic and changes to its product offering. Trinity Biotech Do Brasil also incurred a significant impairment loss in 2020 as this CGU continues to be impacted by the weakness of the Brazilian Real.

Net Financing Expense

Net financing expense was US$6.7 million for the year-end December 31, 2020 compared to US$5.9 million in 2019. Financial income decreased by US$0.7 million from US$0.7 million for the year-end December 31, 2019 to US$0.04 million in 2020. There was a decrease of US$0.4 million in bank deposit interest due to the lower cash deposits and lower interest rates and a decrease of US$0.2 million in the income arising from the revaluation of embedded derivatives at fair value.

Financial expenses increased by US$0.2 million to US$6.8 million during 2020 mainly due to an expense of US$1.2 million arising from revaluation of embedded derivatives at fair value, partly offset by non-recurring interest of US$1.0 million arising on a tax audit settlement in 2019.

Taxation

The Group recorded a tax credit on continuing operations of US$0.6 million for the year ended December 31, 2020 compared to a tax credit of US$1.0 million for the year ended December 31, 2019. The 2020 tax credit comprises US$0.5 million of current tax credit and US$0.2 million of a deferred tax credit. For further details on the Group’s tax charge please refer to Item 18, Note 9 and Note 15 to the consolidated financial statements.

Loss for the year from continuing operations

The loss for the year ended December 31, 2020 amounted to US$6.0 million, compared to a loss of US$29.0 million in 2019.

Discontinued operations

The loss on discontinued operations was US$0.4 million in year ended December 31, 2020, which is mainly due to the unwinding of closure provisions and a change of estimate in relation to a tax receivable balance. The profit on discontinued operations was US$0.1 million in year ended December 31, 2019, which was mainly due to the release of Fiomi Diagnostic’s accumulated foreign currency translation reserve.

B.	Liquidity and Capital Resources

In 2021, the Group financed its operations mainly from internal sources in the form of existing cash resources and cash generated from operations. The only new external financing received in 2021 came from government-backed Covid-19 loans received by our U.S. subsidiaries.

The Group’s capital structure is a mixture of debt and equity. The Group maintains a relationship with a number of lending banks. In 2021, the outstanding debt consisted of exchangeable notes, finance leases and government-backed Covid-19 loans.

Exchangeable Notes

The Group originally issued US$115.0 million of 30-year exchangeable senior notes in 2015. The notes are senior unsecured obligations and accrue interest at an annual rate of 4%, payable semi-annually in arrears. In August 2018, the Group purchased US$15.1 million of the exchangeable notes. The nominal amount of the debt since this purchase has been US$99.9 million. The notes are convertible into ordinary shares of the parent entity at the applicable exchange rate, at any time prior to the close of business on the second business day immediately preceding the maturity date, at the option of the holder, or repayable on April 1, 2045. The conversion rate is 47.112 ADSs per $1,000 principal amount of notes, equivalent to an exchange price of approximately $21.88 per ADS. The notes include a number of non-financial covenants, all of which were complied with at December 31, 2021.

In December 2021, Trinity Biotech entered into agreements with five holders of the exchangeable notes for the repurchase of approximately 99.7% of the outstanding notes. The agreements were conditioned on certain lending conditions being met and required shareholder approval, which was obtained in January 2022. In January 2022, the Company paid approximately US$86.7 million to the five note holders, using funds from a new term loan from Perceptive Advisors and the Company’s own cash resources. It also issued a total of 5.3 million ADSs to the five note holders as partial consideration for the exchange of the notes.

Term loan with Perceptive Advisors

In December 2021, the Company and its subsidiaries entered into a US$81.3 million senior secured term loan credit facility (the “Term Loan”) with Perceptive Advisors (“Perceptive”), an investment manager with an expertise in healthcare. The Term Loan was drawn down in January 2022, when the necessary shareholder approvals were obtained.

The 48-month term loan will mature in January 2026 and accrues interest at an annual rate equal to 11.25% plus the greater of (a) one-month LIBOR and (b) one percent per annum, and interest is payable monthly in arrears in cash. The term loan does not require any amortization, and the entire unpaid balance will be payable upon maturity. The term loan can be repaid, in part or in full, at a premium before the end of the four-year term.

In connection with the Term Loan the Company agreed to issue warrants to Perceptive for 2.5 million of the Company’s ADSs. The per ADS exercise price of the Warrants is US$1.30. The warrants are exercisable, in whole or part, until the seventh anniversary of the date of drawdown of the funding under the Term Loan.

The re-financing of the exchangeable notes in early 2022 improved the Group’s capital structure by reducing gross debt by approximately US$19 million with the Group having no material debt maturities until 2026. In addition, the fact that the term loan can be repaid, in part or in full, before the end of the four-year term should allow the Group increased optionality regarding its future capital structure.

Government-backed Covid-19 loans

To mitigate the financial impact of the Covid-19 outbreak, the Company has availed of governmental supports. In 2020, the Company received US$4.5 million of Paycheck Protection Program (“PPP”) loans and in 2021, a further US$1.8 million of PPP loans were received. All of the loans received under the program have been forgiven by the U.S. government before December 31, 2021 and therefore no liability for these loans exists at December 31, 2021.

In 2020, the Company received an interest-free loan of CAD$0.04 million (US$0.03 million) under the Canada Emergency Business Account (“CEBA”). The CEBA loans were provided by the Canadian Government to mitigate the financial impact of the Covid-19 outbreak. This interest-free loan is repayable by December 31, 2022.

Leases

The Group entered into sale and leaseback arrangements in 2018 with Allied Irish Bank and Wells Fargo. At December 31, 2021, the amount owed under sale and leaseback arrangements was US$0.2 million. The Group also has lease liabilities relating to right-of-use assets with lease maturities between 1 and 12 years.

Cash and cash equivalents

At December 31, 2021, the cash and cash equivalents balance was US$25.9 million. In the future, the amount of cash generated from operations will depend on a number of factors which include the following:

The ability of the Group to continue to generate revenue growth from its existing product lines and from new products following the successful completion of its development projects;

The ability of the Group to mitigate the negative impacts of the Covid-19 pandemic and maximize the opportunities to sell our Covid-19 related portfolio of products;

The extent to which capital expenditure is incurred on additional property plant and equipment;

The level of investment required to undertake both new and existing development projects; and

• Successful working capital management in the context of a growing business.

Liquidity

In April 2022, the Company announced a US$45.0 million strategic investment and partnership with the MiCo Group, a KOSDAQ-listed company. The investment is subject to customary Korean central bank approvals. The investment consists of an equity investment of approximately US$25.2 million (11.2 million ADSs at a price of US$2.25 per ADS) and a seven-year, unsecured junior convertible note issued by Trinity Biotech of US$20 million, with a fixed interest rate of 1.5% and an ADS conversion price of US$3.24 per ADS. The convertible note mandatorily converts into ADS if the volume weighted average price of the Company’s ADSs is at or above US$3.24 for any five consecutive NASDAQ trading days.

It is intended that the Company will use these funds primarily to repay a portion of the Group’s US$81.25 million term loan. The Company also expects that this investment will facilitate it exploring lower cost debt funding options, in the short-term, with the aim of further reducing the company’s interest expense through refinancing the balance of the Company’s term loan at substantially lower interest rates.

Cash Flows

As at December 31, 2021, our consolidated cash and cash equivalents were US$25.9 million. Our cash and cash equivalents consist primarily of cash in bank accounts and short-term deposits.

The following table presents the major components of net cash flows used in and provided by operating, investing and financing activities.

	Year ended December 31,
		2021 US$‘000		2020 US$‘000
Net cash inflow from operating activities		13,238		23,755
Net cash outflow from investing activities		(8,691	)	(10,198	)
Net cash outflow from financing activities		(6,019	)	(2,716	)
Net (decrease)/increase in cash and cash equivalents and short-term investments		(1,472	)	10,841

Operating Activities

Net cash generated from operating activities for the year ended December 31, 2021 amounted to US$13.2 million (2020: US$23.8 million), a decrease of US$10.5 million. The decrease in net cash generated from operating activities of US$10.5 million is attributable to an increase in working capital outflows of US$4.8 million and a decrease in operating cash flows before changes in working capital of US$8.2 million partially offset by a decrease in interest and taxes paid of US$2.5 million. The decrease in operating cash flows before changes in working capital is primarily driven by a lower operating profit before impairment losses during the current financial year compared with an operating loss before impairment losses during the prior year. The working capital outflow increase, when compared to the prior year, is due to an increase outflow in trade and other payables of US$12.5 million partially offset by an increase in cash inflows for trade and other receivables of US$8.7 million and increase in cash outflows for inventories of US$1.0 million.

Investing Activities

Net cash outflows from investing activities for the year ended December 31, 2021 amounted to US$8.7 million (2020: US$10.2 million) which were principally made up as follows:

Payments to acquire intangible assets of US$6.9 million (2020: US$7.0 million), which principally related to development expenditure capitalised as part of the Group’s on-going product development activities; and

Acquisition of property, plant and equipment of US$1.8 million (2020: US$3.2 million) incurred as part of the Group’s investment programme for its manufacturing and distributing activities, and placement of instruments.

Financing Activities

Net cash outflows from financing activities for the year ended December 31, 2021 amounted to US$6.0 million (2020: outflows of US$2.7 million). This outflow is due to the payment of lease liabilities (US$3.0 million) and an interest payment on the exchangeable notes (US$4.0 million), refinancing costs (US$0.8m) partially offset by the receipt of loans in 2021 under the U.S. government’s PPP (US$1.8 million). In 2020, the outflow was due to the payment of lease liabilities (US$3.2 million), an interest payment on the exchangeable notes (US$4.0 million) and partially offset by the receipt of loans in 2020 under the U.S. government’s PPP (US$4.5 million).

C. Research and Development, Patents and Licences, etc.

For information on research and development, patents and licences see “Item 4. Information on the Company—Item 4.B Business overview.”

D. Trend Information

The Group’s revenues decreased in 2021 mainly due to lower demand and selling prices for PCR VTM products compared to 2020 when there was exceptional demand due to limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices in 2021.

The outlook for our Covid-19 related portfolio of products is unpredictable and will depend on numerous factors, including but not limited to, the future duration and extent of the pandemic and public health policies regarding Covid-19 testing protocols. Outside of our Covid-19 related portfolio of products, there has been a partial recovery since the second half of 2020 and this continued into 2021. We have seen some growth in other products beyond pre-pandemic levels, in particular our Sjögrens laboratory test and we expect this to continue. Overall, our business remains susceptible to the impact of COVID-19 and associated public health measures which makes it difficult to predict the future trends at this point.

E. Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with IFRS. The preparation of these financial statements requires us to make estimates and judgements that affect the reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, we evaluate our estimates, including those related to intangible assets, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the critical accounting policies described below reflect our more significant judgements and estimates used in the preparation of our consolidated financial statements.

~~Revenue Recognition~~Impact of Currency Fluctuation

~~Goods sold~~Trinity Biotech’s revenue and ~~services rendered~~expenses are affected by fluctuations in currency exchange rates especially the exchange rate between the US Dollar and the Euro, the Brazilian Real and Canadian Dollar. Trinity Biotech’s revenues are primarily denominated in US Dollars and its expenses are incurred principally in US Dollars, Euro and Brazilian Real. The weakening of the US Dollar could have an adverse impact on future profitability.

~~The Group recognises revenue when it transfers control over a good~~Trinity Biotech holds most of its cash assets in US Dollars. As Trinity Biotech reports in US Dollars, fluctuations in exchange rates do not result in exchange differences on these cash assets. Fluctuations in the exchange rate between the Euro or ~~service to a customer. Revenue is recognised to the extent that it is probable that economic benefit will flow to the Group~~Brazilian Real and the revenue can be measured. No revenue is recognised if there is uncertainty regarding recovery of the consideration due at the outset of the transaction or the possible return of goods. Revenue, including any amounts invoiced for shipping and handling costs, represents the transaction price the value of goods and services supplied to external customers, net of discounts and rebates and excluding sales taxes. The transaction price is determined by reference to the contract and arrangements with the customer.

Revenue from products is generally recorded as of the date of shipment, consistent with typical ex-works shipment terms. Where the shipment terms do not permit revenue to be recognised as of the date of shipment, revenue is recognised when the Group has satisfied all of its performance obligations to the customer in accordance with the shipping terms. Some contracts oblige the Group to ship product to the customer ahead of the agreed payment schedule. For these shipments, a contract asset is recognised when control over the goods has transferred to the customer. The financing component is insignificant as invoicing for these shipments occurs within a short period of time after shipment has occurred and standard 30 day credit terms apply.

~~Revenue from services rendered is recognised in the statement of operations in proportion to the stage of completion of the transaction at the balance sheet date.~~

We operate a licenced reference laboratory that specializes in diagnostics for autoimmune diseases. The laboratory provides testing services to two types of customers. Firstly, institutional customers, such as hospitals and commercial diagnostic testing providers, and secondly insurance companies on behalf of their policyholders. The revenue recognition for services provided to insurance companies requires some judgement. The laboratory is based in USA, where there are rules requiring all insurance companies to be billed the same amount per test. However, the amount that each insurance company pays for a particular test varies according to their own internal policies and this can typically be considerably less than the amount invoiced. We recognise laboratory services revenue for insurance companies by taking the invoiced amount and reducing it by an estimated percentage based on historical payment data. We review the percentage reduction annually based on the latest data. As a practical expedient, and in accordance with IFRS, we apply a portfolio approach to the insurance companies as they have similar characteristics. We judge that the effect on the financial statements of using a portfolio approach for the insurance companies will not differ materially from applying IFRS 15 to the individual contracts within that portfolio.

In some countries, the Group leases instruments to customers as part of a bundled package. Where a contract has multiple performance obligations and its duration is greater than one year, the transaction price is allocated to the performance obligations in the contract by reference to their relative standalone selling prices. As a practical expedient, no allocation of the transaction price is done for instrument contracts which are less than one year’s duration. For contracts where control of the instrument is transferred to the customer, the fair value of the instrument is recognised as revenue at the commencement of the lease and is matched by the related cost of sale. Fair value is determined on the basis of standalone selling price. In the case where control of the instrument does not transfer to the customer, revenue is recognised on the basis of customer usage of the instrument. See also Note 1(v).

~~A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.~~

~~The Group’s obligation to provide a refund for faulty products under the standard warranty terms is recognised as a provision, see Item 18, Note 24 for details.~~

~~Research and development expenditure~~

We write-off research and development expenditure as incurred, with the exception of expenditure on projects whose outcome has been assessed with reasonable certainty as to technical feasibility, commercial viability and recovery of costs through future revenues. Such expenditure is capitalised at cost within intangible assets and amortised over its expected useful life of 15 years, which commences when the product is launched.

In-process research and development (“IPR&D”) is tested for impairment on an annual basis, in the fourth quarter, or more frequently if impairment indicators are present, using projected discounted cash flow models. If IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to its revised fair value with the related impairment charge recognised in the period in which the impairment occurs. If the fair value of the asset becomes impaired as the result of unfavourable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercialising our programs, we could incur significant charges in the period in which the impairment occurs. The valuation techniques utilised in performing impairment tests incorporate significant assumptions and judgments to estimate the fair value, as described above. The use of different valuation techniques or different assumptions could result in materially different fair value estimates.

At December 31, 2019 the carrying value of capitalised development costs was US$22,778,000 (2018 US$26,265,000) (see Item 18, Note 14 to the consolidated financial statements). The decrease in 2019 was mainly as a result of an impairment loss charge of US$11,904,000. This charge was partially offset by additions of US$9,569,000 and amortisation of US$1,182,000.

~~Impairment of intangible assets and goodwill~~

Definite lived intangible assets are reviewed for indicators of impairment annually while goodwill and indefinite lived assets are tested for impairment annually, either individually or at the cash generating unit level. Factors considered important, as part of an impairment review, include the following:

~~Significant underperformance relative to expected, historical or projected future operating results;~~

~~Significant changes in the manner of our use of the acquired assets or the strategy for our overall business;~~

~~Obsolescence of products;~~

~~Significant decline in our stock price for a sustained period; and~~

~~Our market capitalisation relative to net book value.~~

~~When we determine that the carrying value of intangibles, non-current assets and related goodwill~~US Dollar may not be recoverable based upon the existence of one or more of the above indicators of impairment, any impairment is measured based on our estimates of projected net discounted cash flows expected to result from that asset, including eventual disposition. Our estimated impairment could prove insufficient if our analysis overestimated the cash flows or conditions change in the future.

Goodwill and other intangibles are subject to impairment testing on an annual basis. The recoverable amount of each of the cash-generating units (“CGU”) is determined based on a value-in-use computation, which is the only methodology applied by the Group and which has been selected due to the impracticality of obtaining fair value less costs to sell measurements for each reporting period. For the purpose of the annual impairment tests, goodwill is allocated to the relevant CGU. The impairment test performed as at December 31, 2019 identified a total impairment loss of US$76,740,000 in seven cash generating units (“CGUs”), of which US$24,295,000 has been recorded in the 2019 financial statements. Refer to Item 18, Note 14 for further information.

~~The value-in-use calculations use cash flow projections based on the 2020 budget and projections for a further four years using projected revenue and cost growth rates of between 0% and 7%.~~

At the end of the five year forecast period, terminal values for each CGU, based on a long term growth rate of 2%, are used in the value-in-use calculations. The value-in-use represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to each CGU.

The key assumptions employed in arriving at the estimates of future cash flows are subjective and include projected EBITDA, net cash flows, discount rates and the duration of the discounted cash flow model. The assumptions and estimates used were derived from a combination of internal and external factors based on historical experience. The pre-tax discount rates used range from 20% to 27% (2018: 20% to 35%). Post tax discount rates have been calculated using external inputs such as prevailing short and long term interest rates, a small stock premium, a stock beta and the corporate tax rates applicable to each CGU. The discount rates reflect the risk profile of each CGU. See Item 18, Note 14 to the consolidated financial statements for further information.

~~The value-in-use calculation is subject to significant estimation, uncertainty and accounting judgements and is particularly sensitive in the following areas;~~

In the event that there was a variation of 10% in the assumed level of future growth in revenues, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss of US$743,000 at December 31, 2019

In the event there was a 10% variation in the discount rate used to calculate the potential impairment of the carrying values, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss of US$5,420,000 at December 31, 2019.

~~Allowance for slow-moving and obsolete inventory~~

We evaluate the realisability of our inventory on a case-by-case basis and make adjustments to our inventory provision based on our estimates of expected losses. We write off inventory that is approaching its “use-by” date and for which no further re-processing can be performed. We also consider recent trends in revenues for various inventory items and instances where the realisable value of inventory is likely to be less than its carrying value. Given the allowance is calculated on the basis of the actual inventory on hand at the particular balance sheet date, there were no material changes in estimates made during 2019, 2018 or 2017 which would have an impact on the carrying values of inventory during those periods, except as discussed below. At December 31, 2019 our allowance for slow moving and obsolete inventory was US$6,716,000 which represents approximately 17.33% of gross inventory value. This compares with US$6,299,000,Group’s Euro or approximately 17.18% of gross inventory value, at December 31, 2018 and US$7,543,000, or approximately 18.70% of gross inventory value, at December 31, 2017 (see Item 18, Note 17 to the consolidated financial statements). The estimated allowance for slow moving and obsolete inventory as a percentage of gross inventory has increased between 2019 and 2018 due our decision to cull some old and declining product lines. In the case of raw materials and work in progress, the size of the provision has been based on expected future production of these products. Management is satisfied that the assumptions made with respect to future sales and production levels of these products are reasonable to ensure the adequacy of this provision. In the event that the estimate of the provision required for slow moving and obsolete inventory was to increase or decrease by 2% of gross inventory, which would represent a reasonably likely range of outcomes, then a change in allowance of US$774,000 at December 31, 2019 (2018: US$733,000) (2017: US$807,000) would result.

~~Allowance for impairment of receivables~~

We make judgements as to our ability to collect outstanding receivables and where necessary make allowances for impairment. Such impairments are made based upon a specific review of all significant outstanding receivables. In determining the allowance, we analyse our historical collection experience and current economic trends. If the historical data we use to calculate the allowance for impairment of receivables does not reflect the future ability to collect outstanding receivables, additional allowances for impairment of receivables may be needed and the future results of operations could be materially affected. Given the specific manner in which the allowance is calculated, there were no material changes in estimates made during 2019, 2018 or 2017 which would have an impact on the carrying values of receivables in these periods. At December 31, 2019, the allowance was US$5,443,000 which represents approximately 6.0% of Group revenues. This compares with US$4,202,000 at December 31, 2018 which represented approximately 4.3% of Group revenues and to US$3,590,000 at December 31, 2017 which represented approximately 3.6% of Group revenues. The increase in the allowance for impairment of receivables in the year ended December 31, 2019 was due to a general deterioration in the age of receivables. In the event that the estimate of impairment was to increase or decrease by 0.5% of Group revenues, which would represent a reasonably likely range of outcomes, then a change in the allowance of US$452,000 at December 31, 2019 (2018: US$485,000) (2017: US$496,000) would result.

~~Accounting for income taxes~~

Significant judgement is required in determining our worldwide income tax expense provision. In the ordinary course of a global business, there are many transactions and calculations where the ultimate tax outcome is uncertain.

Some of these uncertainties arise as a consequence of revenue sharing and cost reimbursement arrangements among related entities, the process of identifying items of revenue and expense that qualify for preferential tax treatment and segregation of foreign and domestic income and expense to avoid double taxation. In addition, we operate within multiple taxing jurisdictions and are subject to audits in these jurisdictions. These audits can involve complex issues that may require an extended period of time for resolution. Although we believe that our estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision and profit in the period in which such determination is made. Deferred tax assets and liabilities are determined using enacted or substantively enacted tax rates for the effects of net operating losses and temporary differences between the book and tax bases of assets and liabilities.

While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing whether deferred tax assets can be recognised, there is no assurance that these deferred tax assets may be realisable. The extent to which recognised deferred tax assets are not realisable could have a material adverse impact on our income tax provision and net income in the period in which such determination is made. In addition, we operate within multiple taxing jurisdictions and are subject to audits in these jurisdictions. These audits can involve complex issues that may require an extended period of time for resolution. In management’s opinion, adequate provisions for income taxes have been made.

~~Item 18, Note 15 to the consolidated financial statements outlines the basis for the deferred tax~~Real monetary assets and liabilities and ~~includes details of the unrecognised deferred tax assets at year end. The Group does not recognise deferred tax assets arising~~ on ~~unused tax losses except to the extent that there are sufficient taxable temporary differences relating to the same taxation authority~~Euro, Swedish Krona or Real expenses and ~~the same taxable entity which will result in taxable amounts against which the unused tax losses can be utilised before they expire.~~

~~Share-based payments~~

For equity-settled share-based payments (share options), the Group measures the services received and the corresponding increase in equity at fair value at the measurement date (which is the grant date) using a trinomial model. Given that the share options granted do not vest until the completion of a specified period of service, the fair value, which is assessed at the grant date, is recognised on the basis that the services to be rendered by employees as consideration for the granting of share options will be received over the vesting period.

~~The share options issued by the Group are not subject to market-based vesting conditions as defined in IFRS 2,~~ ~~Share-based Payment~~. Non-market vesting conditions are not taken into account when estimating the fair value of share options as at the grant date; such conditions are taken into account through adjusting the number of equity instruments included in the measurement of the transaction amount so that, ultimately, the amount recognised equates to the number of equity instruments that actually vest. The expense in the statement of operations in relation to share options represents the product of the total number of options anticipated to vest and the fair value of those options; this amount is allocated to accounting periods on a straight-line basis over the vesting period.

~~Given that the performance conditions underlying~~consequently the Group’s share options are non-market in nature, the cumulative charge to the statement of operations is only reversed where the performance condition is not met or where an employee in receipt of share options relinquishes service prior to completion of the expected vesting period. Share based payments, to the extent they relate to direct labour involved in development activities, are capitalised.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The Group does not operate any cash-settled share-based payment schemes or share-based payment transactions with cash alternatives as defined in IFRS 2.

~~Exchangeable notes and derivative financial instruments~~

The exchangeable notes are treated as a host debt instrument with embedded derivatives attached. On initial recognition, the host debt instrument is recognised at the residual value of the total net proceeds of the bond issue less fair value of the embedded derivatives. Subsequently, the host debt instrument is measured at amortised cost using the effective interest rate method.

The embedded derivatives are initially recognised at fair value and are restated at their fair value at each reporting date. The fair value changes of the embedded derivatives are recognised in the statement of operations. See Item 18, Note 25 to the consolidated financial statements for further information.earnings.

Impact of ~~Recently Issued Accounting Pronouncements~~Covid-19 Pandemic

~~The consolidated financial statements have been prepared~~Our revenues decreased by 8.8% in ~~accordance~~2021 compared to 2020. This was mainly due to lower demand and selling prices for PCR Viral Transport Media (“VTM”) products compared to 2020 when there was exceptional demand due to limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with IFRS both as issued by the IASB and as subsequently adopted by the EU. The IFRS applied are those effective for accounting periods beginning 1 January 2019. Consolidated financial statements are required by Irish law to comply with IFRS as adopted by the EU which differ in certain respects from IFRS as issued by the IASB.

These differences predominantly relate to the timing of adoption of new standards by the EU. However, as none of the differences are relevant in the context of Trinity Biotech, the consolidated financial statements for the periods presented comply with IFRS both as issued by the IASB and as adopted by the EU. During 2019, the IASB and the International Financial Reporting Interpretations Committee (“IFRIC”) issued additional standards, interpretations and amendments to existing standards which are effective for periods starting after the date of these financial statements. A list of these additional standards, interpretations and amendments, and the potentiala consequent negative impact on ~~the financial statements~~selling prices in 2021.

In 2020, most of ~~the Group, is outlined in Item 18~~, ~~Note 1(xxx).~~

~~Subsequent Events~~

~~Decision to close Carlsbad manufacturing plant in 2020~~

The last number of years have seen a steady migration of customers away from using the Western Blot testing format for diagnosing Lyme in favour of alternative testing platforms. Production volumes at our Carlsbad, California facility (which specialises in Western Blot manufacturing) have declined steadily to the extent that it no longer makes economic sense to continue. Consequently, in the early part of 2020, management decided to close this facility from June 30, 2020.

~~During the period until closure, final batches of Lyme Western Blot for remaining customers will be produced, whilst simultaneously transferring non-Lyme~~ product manufacturing to other Group facilities. No provision has been reflected in the 2019 financial statements relating to the costs associated with closing this facility, terminating employment contracts, transferring assets to new locations in the Group. The Company recorded a provision of US$2.4 million in its income statement for Q1, 2020 to cover the related closure costs. This primarily includes the write-off of inventory and redundancy costs and is mainly non-cash in nature.

~~Covid-19 pandemic~~

~~Impact on Revenues~~

~~Subsequent to the balance sheet date, the Company’s revenues have been significantly~~lines were negatively impacted by the Covid-19 ~~Pandemic~~pandemic. Our business relies on people attending hospitals and clinics with ~~the greater impact being seen from April~~ailments that need to be diagnosed through testing. Due to quarantine restrictions and peoples’ fear of catching Covid-19, there was a marked decrease in 2020 ~~onwards. In particular, this resulted~~ in ~~significant reduction in:~~

people attending hospitals and clinics. Haemoglobins revenues ~~– including~~reduced for both ~~instrument~~instruments and consumables ~~revenues~~ with the impact being greater on diabetes (A1c) rather than on haemoglobin variant revenues.

~~Autoimmune revenues –~~ In autoimmunity, testing volumes were particularly impacted at our reference laboratory in Buffalo, New York but there were also lower product sales in all major markets.

HIV revenues in Africa were negatively impacted by logistical and testing constraints arising from COVID-19.

~~HIV, Infectious Diseases~~In 2021, there was an easing of quarantine restrictions and ~~Clinical chemistry product sales.~~

~~However, there were increases in sales~~vaccination programs gave patients the confidence to visit their doctors again. For this reason, on a product-for-product basis, revenues outside of our ~~transport medium~~Covid-19 product ~~(used~~portfolio returned to near pre-pandemic levels in 2021.

Covid-19 products

When the pandemic started, we were was well-positioned to respond with our established expertise in infectious disease products including our existing Viral Transport Media product which could be used to transport testing samples for Covid-19 patient samples in a stable environment), respiratory tests for Legionnaire’s Disease and Strep Pneumoniae and of coronavirus-related antibodies sold by our life sciences supply business, Fitzgerald.

~~Covid-19 Expenditure Reduction Measures~~

~~All~~PCR tests. Since the start of the ~~company’s operations have remained open during the~~ pandemic ~~though at reduced levels of output in line with expected demand. However, in response~~ to the ~~expected reduction~~end of 2021, VTM revenues have been in ~~revenues, the company~~excess of US$50 million.

Beginning in 2020, we undertook development of three different Covid-19 diagnostic tests. A Covid-19 antibody test using an ELISA platform, a ~~number cost cutting measures~~Covid-19 rapid antibody test and a rapid Covid-19 antigen test, with which ~~included the following:~~

we intend will leverage our existing rapid infectious disease test design.

Operations and Employee Safety

~~The company~~Many governments have implemented restrictive lockdowns requiring non-essential businesses to shut down operations. Our business is typically deemed “essential” and we continued to operate, manufacture and distribute products to customers throughout most of 2020 with no closures in 2021. We furloughed ~~a large percentage~~many of ~~its~~our work forces in the USA, Ireland and Canada in April ~~2020. Meanwhile,~~2020 but the majority of employees returned the following month.

We have implemented health and safety policies to help safeguard our on-site employees and maintain business continuity. We have also enhanced cleaning procedures, provided additional personal hygiene supplies and protective equipment to employees, limited access to our facilities to visitors, trained employees on social distancing and mask wearing. Where practical, we have facilitated many employees to work remotely. These measures have created additional challenges from our work methods and on our infrastructure and I.T. systems which may have resulted in ~~Brazil~~decreased productivity and ~~other locations, staff costs were also significantly reduced by means of pay cuts.~~

some increased operating costs. However, the various responses we have put in place have to date resulted in limited disruption to our normal business operations. To date, we have been able to maintain our operations without significant interruption and have been able to develop and quickly scale manufacturing capacity for new products related to the Covid-19 pandemic.

~~The elimination of virtually all travel costs and significant reductions in discretionary sales and marketing expenditure.~~

~~Availing~~We have availed of governmental supports. This included the receipt of ~~US$4.5 million of~~forgivable loans under the U.S. government’s Paycheck Protection Program (“PPP”). Under the provisions of the PPP, these loans will be partially or totally forgiven, based on the extent to which a borrower’s workforce returns to normal levels in the eight-week period immediately following the loans being granted. Upon receipt of these loans, the Company ended the furloughing of all staff in the USA and therefore expects that a large percentage of these loans will be forgiven later in 2020, once the necessary verification has taken place. In Ireland, the company also availed of economic support mechanisms in 2020 being provided by the Irish Government ~~though a significant level~~mainly in the form of ~~furloughing continued into June, 2020, mainly~~wage subsidies.

Supply Chains

The pandemic has caused delays in deliveries of certain raw materials and components for our products, particularly those related to our Viral Transport Media product. Such delays can result in disruption to our business operations. We are continuously evaluating our supply chain to identify potential gaps and take steps intended to ensure continuity. Our inventory levels continue to fluctuate due to the ~~expected lower demand~~change in our sales mix and the increased size of customer orders for ~~HIV products~~Covid-19 related products. We successfully increased our production capacity for our viral transport media product, with the ~~African market.~~

workforce mainly comprising of temporary staff.

~~Impact on Working Capital~~Outlook

~~Due~~Management continues to monitor the ~~measures implemented by~~pandemic situation closely and seeks to minimise the company in response to falling demand for products the Company’s cash position at May 31, 2020 was similar to that reported in the financial statements as at 31 December, 2019. Furthermore, the Company has not seen any significant deterioration in the recoverability of its inventory and accounts receivables balances as at 31 December, 2019. Meanwhile, the company is continuing to pay its creditors.

~~Asset Impairment~~

The annual impairment test on the carrying value of goodwill and other assets was carried out as at December 31, 2019 – see note 14. In determining whether a potential asset impairment exists, a range of internal and external factors are considered. However, the impairment test only takes into account conditions existing at the end of the reporting period. Covid-19 began to impact the population of Wuhan, China in December 2019 and initially the outbreak was largely concentrated in China. It was declared to be a pandemic by the World Health Organization in March 2020. The Company’s impairment test as at December 31, 2019 therefore does not reflect the downturn in economic activity or the aforementionednegative impacts on the ~~Company’s revenues~~business, while at the same time, optimising the opportunities presented to us as a medical diagnostic company. We sell our products in approximately 100 countries and ~~expenditure caused by~~there can be a large variance globally in the impact of the virus, the virus infection rates and public healthcare measures from country to country. It is therefore difficult to generalise about the recovery of demand for our products given the number of variables.

While the outlook is subject to significant uncertainty, we expect demand for our non-Covid related products to further increase in 2022 compared to 2021 as vaccination rollout allows for more patients to return to their doctors, which is what mainly drives our business. The extent to which demand for our Covid-19 portfolio of products is sustained into 2022 and beyond is highly uncertain and very difficult to predict. The launch of our rapid Covid-19 antigen test during 2022 is expected to drive growth as the market for that type of product is exceptionally large. Generally, demand for the Covid-19 ~~pandemic.~~tests depends on new information that may emerge concerning the severity of the coronavirus, the incidence of Covid-19 variants and the vaccination programmes plus competition from competing products.

If the impairment test was reperformed using projections which take into account the aforementioned impacts on revenues and expenditure, the impairment loss as at December 31, 2019 for Primus Corp. and Immco Diagnostics would be higher by US$1.8 million and US$1.7 million respectively. The reason these two Cash Generating Units are the only units affected is that the other Cash Generating Units’ assets were already fully impaired, except Fitzgerald, as at December 31, 2019.

4449

~~Results of Operations~~

Year ended December 31, ~~2019~~2021 compared to the year ended December 31, ~~2018~~2020

~~The following compares our results in the year ended December 31, 2019 to those of the year ended December 31, 2018 under IFRS. Our analysis is divided as follows:~~Revenues

~~Overview~~

~~Revenues~~

~~Operating Loss~~

~~Loss for the year~~

~~Discontinued operations~~

~~1. Overview~~

In ~~2019,~~2021, revenues decreased by ~~6.8%~~8.8% from US$~~97.0~~102.0 million in ~~2018~~2020 to US$~~90.4~~93.0 million. The ~~three main factors behind the~~ decrease ~~in revenues are:~~

~~Lyme disease revenues decreased following the loss of certain large customers that migrated their Lyme testing away from Western Blot assays to alternative testing platforms,~~

~~ii.~~

~~HIV point-of-care sales decreased following our decision to discontinue sales of the Unigold HIV test in the USA and~~

~~iii.~~

~~Revenues for our Fitzgerald business, which sells antibodies to the life sciences and research industries, reduced following higher than average revenues in 2018.~~

~~These declines were partially offset by Haemoglobins and Autoimmunity revenues which continued to grow in 2019.~~

~~Geographically, 58% of our sales were generated in the Americas, 30% in Africa/Asia and 12% in Europe.~~

~~There was a slight decrease in gross margin in 2019 (42.2% versus 42.7%) and this~~ is mainly due to ~~the impact of~~ lower ~~revenues, particularly in the context~~sales of our ~~relatively high fixed cost base and~~PCR VTM products. In 2020, demand for VTM products was exceptional while there was limited worldwide manufacturing capacity. As the ~~adverse currency movements. Selling General & Administrative Expenditure (excluding impairment charges and tax settlement) decreased from US$29.5 million~~pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices in 2018 to US$27.7 million in 2019, which represents a decrease of 6.2%. The decrease is mainly attributable to a cost reduction programme, lower amortization charges and the impact of foreign currency fluctuations.2021.

The Company recognized an impairment charge of US$24.3 million in 2019 (2018: US$26.9 million). A number of factors contributed to the impairment charges including the Company’s market capitalisation at the end of the year which was lower when compared to the end of 2018, the inclusion of the latest cash flow projections and net asset values for each cash generating unit and increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected future cash flows.

~~The settlement of a tax audit, mainly relating to payroll taxes, resulted in a charge of US$5.0m, excluding interest.~~

The operating loss for continuing operations was US$24.1 million for the year, which compares to US$20.2 million for 2018. Excluding the impairment charge and the once-off tax settlement, the operating profit for continuing operations for 2019 is US$5.2 million, compared to US$6.7 million in 2018. This decrease in operating profit before impairment charges and tax audit settlement in 2019 is mainly attributable to lower revenues and to a lesser extent the lower gross margin.

In 2019, net financing expense was US$5.9 million compared to US$3.0 million in 2018. The increase of US$2.9 million was due to the inclusion of notional interest expense on facility leases of US$0.9m due to the adoption of IFRS 16, Leases, interest on a tax audit settlement of US$1.0 million and lower deposit interest, offset by a reduction in interest payable on our Exchangeable Notes of $0.4m following the buyback of a portion of the notes in 2018.

The loss for the year from continuing operations amounted to US$29.0 million, compared to US$22.7 million in 2018. Before the impact of impairment charges and the tax audit settlement, the loss for 2019 from continuing operations would have been US$0.3 million, compared to a US$4.3 million profit for 2018.

~~2. Revenues~~

Trinity Biotech’s revenues consist of sales of diagnostic kits and related instrumentation, laboratory testing services sales and sales of raw materials to the life sciences industry. The Group recognises revenue when it transfers control over a good or service to a customer. Revenue is recognised to the extent that it is probable that economic benefit will flow to the Group and the revenue can be measured. Revenue from products is generally recorded as of the date of shipment, consistent with typical ex-works shipment terms. Where the shipment terms do not permit revenue to be recognised as of the date of shipment, revenue is recognised when the Group has satisfied all of its performance obligations to the customer in accordance with the shipping terms. Some contracts oblige the Group to ship product to the customer ahead of the agreed payment schedule. For these shipments, a contract asset is recognised when control over the goods has transferred to the customer. Revenue from services rendered is recognised in the statement of operations in proportion to the stage of completion of the transaction at the balance sheet date.

In some countries, the Group leases instruments to customers as part of a bundled package. Where a contract has multiple performance obligations and its duration is greater than one year, the transaction price is allocated to the performance obligations in the contract by reference to their relative standalone selling prices. For contracts where control of the instrument is transferred to the customer, the fair value of the instrument is recognised as revenue at the commencement of the lease and is matched by the related cost of sale. Fair value is determined based on standalone selling prices. In the case where control of the instrument does not transfer to the customer, revenue is recognised on the basis of customer usage of the instrument.

~~Revenues by Product Line~~

Trinity Biotech’s revenues for the year ended December 31, ~~2019~~2021 were US$~~90,435,000~~93.0 million compared to revenues of US$~~97,035,000~~102.0 million for the year ended December 31, ~~2018,~~2020, which represents a decrease of US$~~6,600,000~~9.0 million or ~~6.8%~~8.8%. The following table sets forth selected sales data for each of the periods indicated.

Year ended December 31,

2019
US$ ’000

2018
US$’000
% Change
Revenues
Clinical Laboratory 68,127 71,618 (4.9 )%
Point-of-Care 11,393 14,836 (23.2 )%
Laboratory Services 10,915 10,581 3.2 %

Total 90,435 97,035 6.8 %

	Year ended December 31,
		2021 US$’000	2020 US$’000	% Change
Revenues
Clinical laboratory goods		74,700	84,280		(11.4	)%
Clinical laboratory services		7,928	8,485		(6.6	)%
Point-of-Care		10,337	9,215		12.2	%
		92,965	101,980		(8.8	)%

Clinical Laboratory Goods

Clinical Laboratory goods revenues ~~decrease~~decreased by US$~~3,491,000~~9.6 million in ~~2019,~~2021, which represents a decrease of ~~4.9%~~11.4%. ~~This~~The decrease was mainly attributable to a 16% decrease in Infectious Diseases revenues. Lower sales of Western Blot tests for Lyme disease in USA mainly accounted for this decrease caused by the on-going migration of Lyme confirmatory testing to alternative testing platforms. Similarly, revenues for our other infectious diseases tests on ELISA platforms have also been declining for several years, particularly in USA but we have succeeded in partially making up for these declines by selling more to emerging markets, with China being the largest market. Our Fitzgerald business, which sells antibodies to the life sciences and research industries, had a decrease in revenues of 14% following a higher than average level of sales in 2018 driven by high sales in Asia. Partially offsetting these decreases was higher revenues for haemoglobin A1c testing.

~~Point-of-Care~~

~~Point-of-Care revenues decreased from US$14,836,000 in 2018 to US$11,393,000 in 2019, which~~ is ~~a decrease of US$3,443,000 (-23.2%). This decrease was~~ mainly due to lower ~~HIV~~sales of our PCR VTM. In 2020, demand for VTM products was exceptional while there was limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices.

Fitzgerald Industries, our life science raw materials business and our clinical chemistry product line both recorded single digit revenue growth in 2021. Similarly, autoimmune product revenues in ~~USA following the decision during 2019~~2021 recorded single digit revenue growth compared to ~~discontinue sales~~2020, mainly due to a lessening of the ~~Unigold HIV test in that market. The reduction in funding for public health HIV testing programs in addition to~~impact of the CDC’s recommendations in favour of fourth generation antigen testing led to the decline of HIV Point-of-Care sales in the USA for the last number of years. Volumes had declined to the extent that when manufacturing and marketing costs were taken into account it was no longer an economically viable product. The remaining decrease is due to lower Syphilis Point-of-Care tests revenues.Covid-19 pandemic.

Clinical Laboratory Services

Our New York reference laboratory offers laboratory-testing services for autoimmune disorders, such as Sjogren’s syndrome, hearing loss, celiac disease, lupus, rheumatoid arthritis and systemic sclerosis. ~~The laboratory had another good year in 2019, growing revenue by 3.2% to US$10,915,000.~~ Revenues for ~~Sjögrens Syndrome accounts~~the laboratory decreased by 6.6% to US$7.9 million. While revenues for ~~23%~~our proprietary Sjogren’s syndrome test increased by 46% compared to 2020 these were offset by a reduction in testing for other disorders due to fewer patients visiting their physicians for pandemic reasons and due to the ending of ~~the total revenues in 2019.~~certain testing that was carried out for a high-volume customer.

4650

Point-of-Care

Revenues by Geographical Region

The following table sets forth selected sales data, analysed by geographic region, based on location of customer:

	Year ended December 31,						Year ended December 31,
		2019 US$‘000	2018 US$‘000	% Change				2021 US$‘000	2020 US$‘000	% Change
Revenues
Americas		52,183	57,559		(9.3	)%		57,799	70,408		(17.9	)%
Asia/Africa		27,686	29,466		(6.0	)%		25,504	22,567		13.0	%
Europe		10,566	10,010		5.6	%		9,662	9,005		7.3	%

Total		90,435	97,035		(6.8	)%		92,965	101,980		(8.8	)%

In the Americas, revenues decreased US$~~5,376,000~~12.6 million or ~~9.3%~~17.9% mainly due to ~~three factors:~~decreased sales of our VTM products which were used in the Covid-19 testing programs in U.S. and Canada. To a lesser extent, haemoglobin revenues were impacted by the recall of the Ultra II instrument in U.S. in the early part of 2021, following a FDA warning letter in the prior year.

Cost of sales, gross profit and gross margin

Other operating income

Research and development expenses

Selling, general and administrative expenses

Recognition of contingent asset

Closure costs

Impairment charges

Operating profit

The operating profit for continuing operations was US$6.6 million for the year, which compares to an operating profit of US$0.1 million for 2020.

Net financing expenses

Net financing expense was US$5.9 million for the year-end December 31, 2021 compared to US$6.7 million in 2020.

Income tax credit

Profit from continuing operations

The profit for the year from continuing operations was US$0.9 million, compared to a loss of US$6.0 million in 2020.

Loss from discontinued operations

Year Ended December 31, 2020 Compared with Year Ended December 31, 2019

Revenues

Revenues by Product Line

	Year ended December 31,
		2020 US$’000	$	2019 US$’000	% Change
Revenues
Clinical laboratory goods		84,280		68,127		23.7	%
Clinical laboratory services		8,485		10,915		(22.3	)%
Point-of-Care		9,215		11,393		(19.1	)%
		101,980		90,435		12.8	%

Clinical Laboratory Goods

Clinical Laboratory Services

Our New York reference laboratory offers laboratory-testing services for autoimmune disorders, such as Sjogren’s syndrome, hearing loss, celiac disease, lupus, rheumatoid arthritis and systemic sclerosis. Revenues for the laboratory decreased by 22.3% to US$8.5 million due to lower testing volumes mainly on account of the pandemic.

Point-of-Care

Revenues by Geographical Region

The following table sets forth selected sales data, analysed by geographic region, based on location of customer:

	Year ended December 31,
		2020 US$‘000	2019 US$‘000	% Change
Revenues
Americas		70,408	52,183		34.9	%
Asia/Africa		22,567	27,686		(18.5	)%
Europe		9,005	10,566		(14.8	)%
Total		101,980	90,435		12.8	%

Asia/Africa revenues decreased by ~~6.0%~~18.5%, or US$~~1,780,000~~5.1 million compared to ~~2018.~~2019. The ~~main reason for this was~~decrease is due i) to lower Point-of-Care revenues in ~~Asia for~~Africa where logistical and testing constraints arose due to Covid-19 particularly in the second and third quarters and ii) a decrease in haemoglobins revenues as patients’ scheduled diabetes tests in China and our ~~Fitzgerald business, which sells antibodies~~other Asian markets were cancelled or postponed due to government quarantine enforcement in response to the life sciences and research industries. In 2018, Fitzgerald achieved higher than average revenues in Asia and 2019 saw a return to a more normal level of sales in that territory. Higher haemoglobin A1c revenues partially offsetpandemic. Our haemoglobins customers also deferred their instrument purchases as healthcare resources were stretched by the ~~reduction in Fitzgerald sales in the territory.~~pandemic.

In Europe, revenues ~~increased~~decreased by ~~5.6%~~14.8% or US$~~556,000,~~1.6 million, compared to ~~2018.~~2019. The ~~increase~~decrease was due to ~~higher~~lower haemoglobin A1c ~~revenues due to the continued success of the Premier instrument. This was partly offset by lower sales of~~and infectious diseases revenues in the ~~territory.~~territory, mainly due to the reduction in patients attending their doctors for heath checks on account of the public healthcare emergency. Similar to Asia/Africa, there was a drop in haemoglobins instrument sales in Europe as customers postponed their instrument purchases due to uncertainty created by the pandemic.

~~For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”.~~

~~3. Operating Loss – continuing operations~~

~~The following table sets forth the Group’s operating loss from continuing operations:~~

Year ended December 31,

2019
US$’000

2018
US$’000
% Change
Revenues 90,435 97,035 (6.8 )%
Cost of sales (52,315 ) (55,586 ) (5.9 )%

Gross profit 38,120 41,449 (8.0 )%
Other operating income 91 102 (10.8 )%
Research & development (5,325 ) (5,369 ) (0.8 )%
SG&A expenses (27,661 ) (29,477 ) (6.2 )%
Selling, general and administrative expenses – tax audit settlement (5,042 ) — —
Selling, general and administrative expenses - impairment charges (24,295 ) (26,932 ) (9.8 )%

Operating loss on continuing operations (24,112 ) (20,227 ) 19.2 %

4754

Cost of sales, gross profit and gross margin

Total cost of sales ~~decreased~~increased by US$~~3,271,000~~1.1 million from US$~~55,586,000 for the year ended December 31, 2018 to US$52,315,000,~~52.3 million for the year ended December 31, 2019 to US$53.4 million, for the year ended December 31, 2020, an increase of 2.1%. This resulted in a ~~decrease~~gross profit of ~~5.9%.~~US$48.6 million for 2020 compared to a gross profit of US$38.1 million for 2019. The gross margin of ~~42.2%~~47.6% in ~~2019~~2020 compares to a gross margin of ~~42.7%~~42.2% in ~~2018.~~2019. This ~~decrease~~increase was ~~mainly~~largely due to the impact of strong sales within our Covid-19 related portfolio of products, fewer instrument placements (which are lower ~~revenues, particularly in the context~~than average margin), lower depreciation and a range of ~~our relatively high fixed~~ cost ~~base and the adverse currency movements mentioned above. This was partly offset by cost savings that were~~saving measures implemented during the ~~year and the changes resulting from the adoption of IFRS 16, Leases.~~year.

Other operating income

Other operating income increased from US$0.09 million in 2019 to US$1.9 million in 2020. In 2020, other operating income mainly relates to funding received under the U.S. government’s Cares Act, principally its PPP. Two out of six PPP loans received by the Company were forgiven during the year. The four loans which remained unforgiven at year end, totaling US$2,905,000, are treated as short term liabilities at December 31, 2020. In 2019, other operating income mainly ~~comprises income from~~comprised the provision of canteen services ~~recognised under a Transitional Services Agreement with Diagnostica Stago. Other operating income decreased by 10.8%~~ to ~~US$91,000 mainly due~~third parties in Ireland. Due to ~~currency movements.~~

~~Research and development expenses (“R&D”)~~Covid-19 restrictions, these services were suspended in the second quarter of 2020.

Research and development expenses

R&D expenditure recorded in the Statement of Operations decreased from US$~~5,369,000~~5.3 million in ~~2018~~2019 to US$~~5,325,000~~5.1 million in ~~2019.~~2020. The decrease in ~~2019~~2020 is ~~mainly~~ due to ~~lower salaries expenses resulting from a~~ cost ~~reduction programme.~~saving measures implemented during the year including the furloughing of employees. For details of the Company’s various R&D projects see “Research and Products under Development” below.

Selling, General & Administrative expenses ~~(“SG&A”)~~

Total ~~SG&A~~selling, general and administrative expenses decreased by US$~~1,816,000~~1.3 million from US$~~29,477,000~~27.7 million for the year ended December 31, ~~2018~~2019 to US$~~27,661,000~~26.4 million for the year ended December 31, ~~2019.~~2020.

~~The following table outlines the breakdown of SG&A expenses in 2019 compared to 2018.~~

Year ended December 31,

2018
US$’000

2018
US$’000
% Change
SG&A (excl. share-based payments and amortisation) 24,561 25,317 (3.0 )%
Share-based payments 732 1,335 (45.2 )%
Amortisation 2,368 2,825 (16.2 )%

Total 27,661 29,477 (6.2 )%

Selling, ~~General & Administrative Expenditure (excluding share-based payments~~general and ~~amortisation)~~

~~SG&A~~administrative expenses excluding share-based payments and amortisation decreased from US$~~25,317,000 for the year ended December 31, 2018 to US$24,561,000~~24.6 million for the year ended December 31, 2019 to US$24.2 million for the year ended December 31, 2020, which represents a decrease of ~~3.0%~~1.4%. The decrease of US$~~756,000~~0.4 million is mainly attributable to:

~~full year effect~~A range of cost ~~savings~~saving measures implemented in ~~2018 as part~~response to the Covid-19 pandemic including the furloughing of ~~a cost saving programme. This resulted~~employees in ~~lower costs under a wide range~~the second quarter of ~~headings including salaries, I.T.~~2020, the receipt of government payroll subsidies, significantly reduced travel costs and ~~discretionary sales~~the cancellation of trade shows and other marketing ~~costs and commission payments,~~

activities.

~~lower~~Partially offsetting these savings were increased foreign currency losses mainly due to the re-translation of Euro-denominated lease liabilities for right-of-use assets and increased performance-related pay ~~for employees as a consequence of lower~~due to higher revenues

and profits.

~~the foreign currency impact which resulted in Euro-denominated and Brazilian-denominated costs being lower by 5% and 7% respectively,~~

partly offset by a gain on the purchase of a portion of our exchangeable notes recorded in 2018 (US$463,000) and higher legal fees and tax professional fees mainly associated with the tax audit which was concluded in 2019 in one of the jurisdictions in which the Group operates.

~~Share-based~~The share-based payments

~~The~~ expense represents the fair value of share options granted to directors, employees and ~~employees,~~contractors, which is charged to the statement of operations over the vesting period of the underlying options. The Group has used a trinomial valuation model for the purposes of valuing these share options with the key inputs to the model being the expected volatility over the life of the options, the expected life of the option, the option price, the dividend yield and the ~~risk free~~risk-free rate.

The Group recorded a total share-based payments charge of US$~~758,000 (2018:~~0.79 million (2019: US$~~1,369,000)~~0.76 million). The ~~decrease~~increase of US$~~611,000~~0.03 million in the total share-based payments expense is mainly due to a ~~lower~~higher number of ~~share~~ options ~~still~~ being in their vesting period in ~~2019~~2020 compared to ~~2018.~~2019 due to options granted in 2020. The total charge is shown in the following expense headings in the statement of operations: US$~~26,000 (2018:~~0.01 million (2019: US$~~34,000)~~0.02 million) was charged against cost of sales and US$~~732,000 (2018:~~0.8 million (2019: US$~~1,335,000)~~0.7 million) was charged against selling, general & administrative expenses.

~~For further details, refer to Item 18, Note 22 to the consolidated financial statements.~~

~~Amortisation~~

Amortisation decreased from US$~~2,825,000~~2.4 million for the year ended December 31, ~~2018~~2019 to US$~~2,368,000~~1.4 million for the year ended December 31, ~~2019.~~2020. The decrease of US$~~457,000~~1.0 million is due to ~~lower amortisation on development projects. The decrease was partly as a consequence of~~ the impairment recorded at December 31, ~~2018~~2019 which resulted in a lower carrying value for development ~~projects.~~projects and other intangible assets such as acquired technology, customer and supplier lists.

Selling, general and administrative expenses – recognition of contingent asset

Selling, general and administrative expenses – tax audit settlement

AIn the year end December 31, 2019, a tax audit settlement of US$~~6,442,000~~6.4 million arising in one of the jurisdictions in which the company operates was ~~reached in the year end December 31, 2019. The tax audit concluded in December 2019.~~reached. The settlement consisted of US$~~3,863,000~~3.9 million in relation to a patent dividend scheme, which had operated via Rayville Limited from 1995 to 2010, US$~~1,231,000~~1.2 million in relation to payments for CEO Services made to Darnick Company (a company controlled by the family of Ronan O’Caoimh), and US$~~75,000~~0.08 million in relation to R&D tax credits. Penalties were US$~~273,000.~~0.3 million. Interest charges were US$~~1,000,000~~1.0 million and this is shown as a financial expense. The total settlement excluding interest of US$~~1,000,000~~1.0 million was US$~~5,442,000~~5.4 million and this was partially offset by an existing provision of US$~~400,000,~~0.4 million, resulting in an expense of US$~~5,042,000.~~5.0 million. There was no tax audit settlement charge recorded in the year end December 31, 2020.

Selling, general and administrative expenses – closure costs

Selling, general and administrative expenses - impairment charges

Impairment charges of US$~~24,295,000~~17.8 million for the year ended December 31, ~~2019~~2020 are included in selling, general and administrative expenses. In ~~2018,~~2019, the impairment charges were US$24.3 million. In accordance with the provisions of ~~US$26,932,000 were included in selling, general and administrative expenses. The Group carries~~accounting standards under IFRS, a company is required to carry out an annual impairment ~~review~~reviews in order to determine the appropriate carrying value of ~~asset valuations. In determining whether a potential asset impairment exists, a range of internal and external factors are considered.~~its net assets. A number of factors ~~affected~~impacted this calculation ~~in 2019 including:~~

~~the Company’s market capitalisation at the end of the year which was lower when compared to the end of 2018.~~

~~the inclusion of the latest~~including cash flow projections and net asset values ~~for~~across each of the Company’s cash generating ~~unit; and~~

~~increased volatility in~~units, the Company’s share price at December 31, 2020 and ~~higher market interest rates~~the cost of capital. Primus Corporation, which ~~resulted~~recorded an impairment loss of US$16.7 million in 2020, has been particularly impacted by the pandemic and changes to its product offering. Trinity Biotech Do Brasil also incurred a ~~higher discount factor being applied~~significant impairment loss in 2020 as this CGU continues to be impacted by the ~~Company’s expected future cash flows.~~

~~For further details, see Item 18, Notes 13, 14 and 18.~~

~~4. Loss for the year~~

~~The following table sets forth selected statement of operations data for each~~weakness of the ~~periods indicated.~~Brazilian Real.

Year ended December 31,

2019
US$‘000

2018
US$‘000
% Change
Operating loss (24,112 ) (20,227 ) 19.2 %
Net financing expense (5,885 ) (2,956 ) 99.1 %

Loss before tax (29,997 ) (23,183 ) 29.4 %
Income tax credit 1,006 525 91.6 %

Loss for the year from continuing operations (28,991 ) (22,658 ) 28.0 %

Net Financing ~~income~~Expense

Net financing expense was US$~~5,885,000~~6.7 million for the year-end December 31, 2020 compared to US$5.9 million in 2019. Financial income decreased by US$0.7 million from US$0.7 million for the year-end December 31, 2019 ~~compared~~ to US$~~2,956,000~~0.04 million in ~~2018. Financial income decreased by US$1,427,000 from US$2,124,000 for the year-end December 31, 2018 to US$697,000 in 2019.~~2020. There was a decrease of US$~~1,155,000 in the income arising from the revaluation of embedded derivatives at fair value and a decrease of US$272,000~~0.4 million in bank deposit interest due to the lower cash deposits and lower interest ~~rates.~~rates and a decrease of US$0.2 million in the income arising from the revaluation of embedded derivatives at fair value.

Financial expenses increased by US$~~1,502,000~~0.2 million to US$~~6,582,000~~6.8 million during ~~2019~~2020 mainly due to an expense of US$1.2 million arising from revaluation of embedded derivatives at fair value, partly offset by non-recurring interest of US$1.0 million arising on a tax audit settlement ~~of US$1,000,000 and an increase of US$908,000~~ in ~~lease interest mainly resulting from the adoption of IFRS 16, Leases on January 1,~~ 2019. The new accounting treatment brings operating leases onto the Balance Sheet with a related interest expense. Offsetting this increase was lower cash and non-cash exchangeable notes interest (down by US$406,000) following the buyback of a portion of the exchangeable notes in the third quarter of 2018.

Taxation

The Group recorded a tax credit on continuing operations of US$~~1,006,000~~0.6 million for the year ended December 31, ~~2019~~2020 compared to a tax credit of US$~~525,000~~1.0 million for the year ended December 31, ~~2018.~~2019. The ~~2019~~2020 tax credit comprises US$~~165,000~~0.5 million of current tax credit and US$~~841,000~~0.2 million of a deferred tax credit. For further details on the Group’s tax charge please refer to Item 18, Note 9 and Note 15 to the consolidated financial statements.

Loss for the year from continuing operations

The loss for the year ended December 31, 2020 amounted to US$~~28,991,000,~~6.0 million, compared to a loss of US$~~22,658,000~~29.0 million in ~~2018, representing an increase of 28.0%.~~2019.

5. Discontinued operations

Year ended December 31,

2019
US$‘000

2018
US$‘000

Profit on discontinued operations 77 568

The ~~profit~~loss on discontinued operations iswas US$~~77,000~~0.4 million in year ended December 31, ~~2019,~~2020, which is mainly due to the unwinding of ~~cardiac point-of-care business~~closure provisions and a change of estimate in relation to a tax receivable balance. The profit on discontinued operations was US$0.1 million in year ended December 31, 2019, which was mainly due to the release of Fiomi ~~Diagnostics~~Diagnostic’s accumulated foreign currency translation reserve. ~~A profit of US$568,000 was recorded in the year ended December 31, 2018 mainly due to the recovery of taxes paid in Sweden by Fiomi. For further details, see Item 18, Note 10.~~

5056

~~Results of Operations~~

B.	Liquidity and Capital Resources

~~Year ended December 31, 2018 compared to~~In 2021, the ~~year ended December 31, 2017~~Group financed its operations mainly from internal sources in the form of existing cash resources and cash generated from operations. The only new external financing received in 2021 came from government-backed Covid-19 loans received by our U.S. subsidiaries.

The ~~following compares our results in~~Group’s capital structure is a mixture of debt and equity. The Group maintains a relationship with a number of lending banks. In 2021, the ~~year ended December 31, 2018 to those~~outstanding debt consisted of ~~the year ended December 31, 2017 under IFRS. Our analysis is divided as follows:~~exchangeable notes, finance leases and government-backed Covid-19 loans.

~~Overview~~

~~Revenues~~

~~Operating Loss~~

~~Loss for the year~~

~~Discontinued operations~~

~~1. Overview~~

In 2018, revenues decreased by 2.1% from US$99.1 million in 2017 to US$97.0 million. This was mainly attributable to a 12% fall in point-of-care revenues primarily due to lower HIV sales in the African market where there was some overstocking in one of the larger countries in which we operate. Clinical Laboratory revenues decreased by 2% with a decline in US infectious diseases revenues being partially offset by higher revenues for haemoglobin A1c testing. These declines were partially offset by lab services revenues which performed strongly.

~~Geographically, 59% of our sales were generated in the Americas, 30% in Africa/Asia and 11% in Europe.~~

There was a slight increase in gross margin in 2018 (42.7% versus 42.3%) and this is mainly attributable to cost savings implemented during the year. Selling General & Administrative Expenditure (excluding impairment charges and inventory write-offs) decreased from US$32.2 million in 2017 to US$29.5 million for 2018, which represents a decrease of 9%. The decrease is mainly attributable to a cost reduction programme, lower amortization charges and certain non-recurring costs in the prior year.

The annual impairment test resulted in impairment charges of US$26.9 million in 2018 (2017: US$41.8 million). A number of factors contributed to the impairment charges including the Company’s market capitalisation at the end of the year that was lower when compared to the end of 2017, the inclusion of the latest cash flow projections and net asset values for each cash generating unit and increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected future cash flows.

The operating loss for continuing operations is US$20.2 million for the year, which compares to US$37.7 million for 2017. Excluding the impairment charge, the operating profit for continuing operations for 2018 is US$6.7 million, compared to US$4.1 million in 2017. The increase of US$2.6 million in operating profit before impairment charges in 2018 is mainly attributable to the higher gross profit and lower selling, general and administrative expenses.

In 2018, net financing expense was US$3.0 million compared to US$2.2 million in 2017. The increase of US$0.8 million is mainly attributable to the revaluation of embedded derivatives at fair value, which resulted in lower income of US$1.0 million in 2018 compared to 2017.

The loss for the year from continuing operations amounted to US$22.7 million, compared to US$38.7 million in 2017. Before the impact of impairment charges, the profit for 2018 from continuing operations would have been US$4.3 million, compared to US$3.1 million for 2017.

~~2. Revenues~~

Exchangeable Notes

The Group ~~leases instruments to customers typically as part~~originally issued US$115.0 million of a bundled package. Where a contract has multiple performance obligations and its duration is greater than one year, the transaction price is allocated to the performance obligations in the contract by reference to their relative standalone selling prices. For contracts where control of the instrument is transferred to the customer, the fair value of the instrument is recognised as revenue at the commencement of the lease and is matched by the related cost of sale. Fair value is determined based on standalone selling price. In the case where control of the instrument does not transfer to the customer, revenue is recognised on the basis of customer usage of the instrument.

~~Revenues by Product Line~~

Trinity Biotech’s revenues for the year ended December 31, 2018 were US$97,035,000 compared to revenues of US$99,140,000 for the year ended December 31, 2017, which represents a decrease of US$2,105,000 or 2.1%. The following table sets forth selected sales data for each of the periods indicated.

Year ended December 31,

2018
US$’000

2017
US$’000
% Change
Revenues
Clinical Laboratory 71,618 73,366 (2.4 )%
Point-of-Care 14,836 16,774 (11.6 )%
Laboratory Services 10,581 9,000 17.6 %

Total 97,035 99,140 (2.1 )%

~~Clinical Laboratory~~

Clinical Laboratory revenues decrease by US$1,748,000 in 2018, which represents a decrease of 2.4%. This decrease was mainly attributable to a 14% decrease in Infectious Diseases revenues. These tests are used to detect infectious and sexually transmitted diseases, and disorders of the liver and intestine. Revenues for these tests have been declining for several years, particularly in USA but we have succeeded in partially making up for these declines by selling more to emerging markets, with China being the largest market. Another factor was that a significant Lyme disease contract with one of the major clinical laboratory service providers in the US was lost. Partially offsetting these decreases was higher revenues for haemoglobin A1c testing, which increased by 4% compared to 2017.

~~Point-of-Care~~

Point-of-Care revenues decreased by US$1,938,000, which represents a reduction of 11.6%. Revenues for our Unigold HIV test in 2018 were down $1.9 million compared to 2017. Sales prices were relatively stable during 2018 and the reduction in point-of-care revenues arose in the African market, where sales are more erratic and variable in nature and was in a large part due to overstocking in one of the larger countries in which we operate. In the Americas, HIV revenues in USA declined slightly but this was offset by a strong performance in Latin America.

~~Laboratory Services~~

We offer laboratory-testing services for autoimmune disorders from our lab in Buffalo, New York. In recent years, there has been a growing demand for autoimmune diagnostic testing and this growth accelerated in 2018 with laboratory services revenues recording a 17.6% increase equating to US$1,581,000. Revenues for Sjögrens Syndrome accounts for 23% of the total revenues.

~~Revenues by Geographical Region~~

~~The following table sets forth selected sales data, analysed by geographic region, based on location of customer:~~

Year ended December 31,

2018
US$‘000

2017
US$‘000
% Change
Revenues
Americas 57,559 59,539 (3.3 )%
Asia/Africa 29,466 27,131 8.6 %
Europe 10,010 12,470 (19.7 )%

Total 97,035 99,140 (2.1 )%

In the Americas, revenues decreased US$1,980,000 or 3.3% due to the multi-year trend of falling sales of infectious diseases tests in the USA. In addition, a significant Lyme disease contract with one of the major clinical laboratory service providers in the US was lost in 2018. These declines were partially offset by strong growth (17.6%) in laboratory testing revenues from our autoimmune reference laboratory, higher point-of-care revenues in Latin America and higher revenues from our diabetes testing business, although the increase was impacted negatively by a marked weakness in the Brazilian currency.

Asia/Africa revenues increased by 8.6%, or US$2,335,000 compared to 2017. The main reasons for this was increased revenues for haemoglobin A1c in Asia/Middle East and higher revenues in Asia for our Fitzgerald business, which sells antibodies to the life sciences and research industries. Haemoglobin A1c revenues in the territory were driven by continued strong demand for our diabetes analyser, the Premier. These increases were partially offset by lower HIV sales in Africa due to erratic ordering patterns and was contributed to by the impact of significant overstocking by one larger customer that occurred during 2017.

In Europe, revenues decreased by 19.7% or US$2,460,000, compared to 2017. The decrease was due to lower haemoglobin A1c revenues mainly caused by one major European customer purchasing significantly fewer instruments due to overstocking in the previous year. There was also lower sales of infectious diseases revenues in the territory.

~~For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”.~~

~~3. Operating Loss – continuing operations~~

~~The following table sets forth the Group’s operating loss from continuing operations:~~

Year ended December 31,

2018
US$’000

2017
US$’000
% Change
Revenues 97,035 99,140 (2.1 )%
Cost of sales (55,586 ) (57,250 ) (2.9 )%

Gross profit 41,449 41,890 (1.1 )%
Other operating income 102 100 2.0 %
Research & development (5,369 ) (5,657 ) (5.1 )%
SG&A expenses (29,477 ) (32,246 ) (8.6 )%
Selling, general and administrative expenses - impairment charges and inventory write-off/provision (26,932 ) (41,755 ) (35.5 )%

Operating loss on continuing operations (20,227 ) (37,668 ) (46.3 )%

~~Cost of sales and gross margin~~

Total cost of sales decreased by US$1,664,000 from US$57,250,000 for the year ended December 31, 2017 to US$55,586,000, for the year ended December 31, 2018, a decrease of 2.9%. The gross margin of 42.7% in 2018 compares to a gross margin of 42.3% in 2017. The increase in gross margin in 2018 is mainly attributable to cost savings implemented during the year and a lower depreciation charge. Both of these factors outweighed the negative impact of lower point-of-care and Lyme revenues.

~~Other operating income~~

In 2018, other operating income mainly comprises income from the provision of canteen services recognised under a Transitional Services Agreement with Diagnostica Stago. Other operating income increased by 2% to US$102,000 mainly due to currency movements.

~~Research and development expenses (“R&D”)~~

Research and development expenditure recorded in the Statement of Operations decreased from US$5,657,000 in 2017 to US$5,369,000 in 2018. The decrease in 2018 is mainly due to some non-recurring regulatory costs in 2017. For details of the Company’s various R&D projects see “Research and Products under Development” below.

~~Selling, General & Administrative expenses (“SG&A”)~~

~~Total SG&A expenses decreased by US$2,769,000 from US$32,246,000 for the year ended December 31, 2017 to US$29,477,000 for the year ended December 31, 2018.~~

~~The following table outlines the breakdown of SG&A expenses in 2018 compared to 2017.~~

Year ended December 31,

2018
US$’000

2017
US$’000
% Change
SG&A (excl. share-based payments and amortisation) 25,317 28,050 (9.7 )%
Share-based payments 1,335 893 (49.5 )%
Amortisation 2,825 3,303 (14.5 )%

Total 29,477 32,246 (8.6 )%

~~Selling General & Administrative Expenditure (excluding share-based payments and amortisation)~~

SG&A expenses excluding share-based payments and amortisation decreased from US$28,050,000 for the year ended December 31, 2017 to to US$25,317,000 for the year ended December 31, 2018, which represents a decrease of 9.7%. The decrease of US$2,733,000 is mainly attributable to:

~~flood damage incident at one of our U.S. plants in 2017 (US$894,000),~~

~~a settlement in relation to a licence royalty dispute in 2017 (US$497,000),~~

~~a gain on the purchase of a portion of our exchangeable notes in 2018 (US$463,000),~~

~~cost savings implemented in 2018 as part of a cost saving programme.~~

~~Share-based payments~~

The expense represents the fair value of share options granted to directors and employees, which is charged to the statement of operations over the vesting period of the underlying options. The Group has used a trinomial valuation model for the purposes of valuing these share options with the key inputs to the model being the expected volatility over the life of the options, the expected life of the option, the option price, the dividend yield and the risk free rate.

The Group recorded a total share-based payments charge of US$1,369,000 (2017: US$928,000). The increase of US$441,000 in the total share-based payments expense is due to a larger number of share options being in their vesting period in 2018 compared to 2017. The total charge is shown in the following expense headings in the statement of operations: US$34,000 (2017: US$35,000) was charged against cost of sales and US$1,335,000 (2017: US$893,000) was charged against selling, general & administrative expenses.

~~For further details, refer to Item 18, Note 22 to the consolidated financial statements.~~

~~Amortisation~~

Amortisation decreased from US$3,303,000 for the year ended December 31, 2017 to US$2,825,000 for the year ended December 31, 2018. The decrease of US$478,000 is due to lower amortisation on development projects.

~~Selling, general and administrative expenses - impairment charges and inventory write-off/provision~~

Impairment charges of US$26,932,000 for the year ended December 31, 2018 are included in selling, general and administrative expenses. In 2017, impairment charges of US$41,755,000 were included in selling, general and administrative expenses. The Group carries out an annual impairment review of the asset valuations. In determining whether a potential asset impairment exists, a range of internal and external factors are considered. A number of factors affected this calculation including:

~~the Company’s market capitalisation at the end of the year that was lower when compared to the end of 2017.~~

~~the inclusion of the latest cash flow projections and net asset values for each cash generating unit; and~~

~~increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected future cash flows.~~

~~For further details, see Item 18, Notes 13, 14 and 18.~~

~~4. Loss for the year~~

~~The following table sets forth selected statement of operations data for each of the periods indicated.~~

Year ended December 31,

2018
US$‘000

2017
US$‘000
% Change
Operating loss (20,227 ) (37,668 ) (46.2 )%
Net financing expense (2,956 ) (2,207 ) 33.9 %

Loss before tax (23,183 ) (39,875 ) (41.9 )%
Income tax credit 525 1,214 (56.8 )%

Loss for the year from continuing operations (22,658 ) (38,661 ) (41.4 )%

~~Net Financing income~~

Net financing expense was US$2,956,000 for the year-end December 31, 2018 compared to US$2,207,000 in 2017. Financial income decreased by US$1,074,000 from US$3,198,000 for the year-end December 31, 2017 to US$2,124,000 in 2018. There was a decrease of US$1,002,000 in the income arising from the revaluation of embedded derivatives at fair value and a decrease of US$72,000 in bank deposit interest due to the lower cash deposits.

~~Financial expenses decreased by US$325,000 to US$5,080,000 during 2018 mainly due to lower interest following the buyback of a portion of the exchangeable notes in the third quarter of 2018.~~

~~Taxation~~

The Group recorded a tax credit on continuing operations of US$525,000 for the year ended December 31, 2018 compared to a tax credit of US$1,214,000 for the year ended December 31, 2017. The 2018 tax credit comprises US$119,000 of current tax credit and US$406,000 of a deferred tax credit. For further details on the Group’s tax charge please refer to Item 18, Note 9 and Note 15 to the consolidated financial statements.

~~Loss for the year from continuing operations~~

~~The loss for the year amounted to US$22,658,000, compared to a loss of US$38,661,000 in 2017, representing a decrease of 41.4.%.~~

~~5. Discontinued operations~~

The Cardiac Point-of-Care operation was discontinued during year ended December 31, 2016. Expenses, gains and losses relating to the discontinuation of the Cardiac point-of-care tests operation have been eliminated from profit or loss from the Group’s continuing operations and are shown as a single line item on the face of the Consolidated Statement of Operations. The following table sets forth selected statement of operations data for each of the periods indicated.

Year ended December 31,

2018
US$‘000

2017
US$‘000

Profit/(Loss) on discontinued operations 568 (1,609 )

The profit on discontinued operations is US$568,000 in year ended December 31, 2018, which mainly comprises recovery of taxes paid in Sweden by the cardiac point-of-care business Fiomi Diagnostics. A loss of US$1,609,000 was recorded in the year ended December 31, 2017 mainly due to the unwinding of Fiomi’s accumulated foreign currency translation reserve. For further details, see Item 18, Note 10.

~~Liquidity and Capital Resources~~

~~Financing~~

The Group entered into finance lease arrangements with Allied Irish Bank in 2015 and 2018 and with Wells Fargo in 2018. The Group has no other bank borrowings. During 2015, the Group issued US$115,000,000 of30-year exchangeable senior notes ~~which will mature on April 1, 2045, subject to earlier repurchase, redemption or exchange.~~in 2015. The notes are senior unsecured obligations and accrue interest at an annual rate of 4%, payable semi-annually in ~~arrears on April 1 and October 1 of each year, beginning on October 1, 2015.~~arrears. In August 2018, the Group purchased US$~~15,100,000~~15.1 million of the exchangeable notes. The nominal amount of the debt ~~after~~since this purchase has been US$99.9 million. The notes are convertible into ordinary shares of the ~~purchase~~parent entity at the applicable exchange rate, at any time prior to the close of business on the second business day immediately preceding the maturity date, at the option of the holder, or repayable on April 1, 2045. The conversion rate is ~~US$99,900,000.~~47.112 ADSs per $1,000 principal amount of notes, equivalent to an exchange price of approximately $21.88 per ADS. The ~~exchangeable note was issued in order to fund potential future acquisitions and for general corporate purposes, including continued product development and commercialization and share buyback.~~notes include a number of non-financial covenants, all of which were complied with at December 31, 2021.

Term loan with Perceptive Advisors

Government-backed Covid-19 loans

To mitigate the financial impact of the Covid-19 outbreak, the Company has availed of governmental supports. ~~This included~~In 2020, the ~~receipt of~~Company received US$4.5 million of ~~loans in 2020 under the U.S. government’s~~ Paycheck Protection Program (“PPP”)~~. Under the provisions~~ loans and in 2021, a further US$1.8 million of PPP loans were received. All of the ~~PPP,~~loans received under the program have been forgiven by the U.S. government before December 31, 2021 and therefore no liability for these loans exists at December 31, 2021.

Leases

Cash and cash equivalents

At December 31, 2021, the cash and cash equivalents balance was US$25.9 million. In the future, the amount of cash generated from operations will ~~be partially or totally forgiven, based~~depend on a number of factors which include the following:

The ability of the Group to continue to generate revenue growth from its existing product lines and from new products following the successful completion of its development projects;

The ability of the Group to mitigate the negative impacts of the Covid-19 pandemic and maximize the opportunities to sell our Covid-19 related portfolio of products;

The extent to which a borrower’s workforce returns to normal levels in the eight-week period immediately following the loans being granted. Upon receipt of these loans, the Company ended the furloughing of all staff in the USAcapital expenditure is incurred on additional property plant and ~~therefore expects that a large percentage of these loans will be forgiven later in 2020, once the necessary verification has taken place.~~equipment;

~~Working capital~~

The level of investment required to undertake both new and existing development projects; and

• Successful working capital management in the context of a growing business.

Liquidity

In the Directors’ opinion, the Group will have access to sufficient funds to support its existing operations for at least the next 12 months by utilising existing cash resources and cash generated from ~~operations.~~operations and external financing. The directors have considered the Group’s current financial position and cash flow projections, taking into account all known events and developments including the Covid-19 ~~pandemic. While acknowledging that there will be a temporary decrease in revenues due to Covid-19,~~pandemic and the company has taken measures to reduce expenditure, to obtain government pandemic supports in Ireland and USA and to exploit sales opportunities of products related to coronavirus. (For more information onpending financing from the ~~impact of Covid-19 – refer to Subsequent Events in Item 18, Note 31).~~

MiCo Group.

In April 2022, the Company announced a US$45.0 million strategic investment and partnership with the MiCo Group, a KOSDAQ-listed company. The ~~amount~~investment is subject to customary Korean central bank approvals. The investment consists of ~~cash generated from operations will depend on~~an equity investment of approximately US$25.2 million (11.2 million ADSs at a ~~number~~price of ~~factors which include~~US$2.25 per ADS) and a seven-year, unsecured junior convertible note issued by Trinity Biotech of US$20 million, with a fixed interest rate of 1.5% and an ADS conversion price of US$3.24 per ADS. The convertible note mandatorily converts into ADS if the ~~following:~~volume weighted average price of the Company’s ADSs is at or above US$3.24 for any five consecutive NASDAQ trading days.

~~The ability~~It is intended that the Company will use these funds primarily to repay a portion of the ~~Group to continue to generate revenue growth from its existing product lines;~~

Group’s US$81.25 million term loan. The ~~ability~~Company also expects that this investment will facilitate it exploring lower cost debt funding options, in the short-term, with the aim of further reducing the company’s interest expense through refinancing the balance of the ~~Group to generate revenues from new products following the successful completion of its development projects;~~

Company’s term loan at substantially lower interest rates.

~~The extent to which capital expenditure is incurred on additional property plant and equipment;~~

~~The level of investment required to undertake both new and existing development projects; and~~

~~Successful working capital management in the context of a growing business.~~

5658

Cash Flows

~~Cash management~~

As at December 31, ~~2019, Trinity Biotech’s~~2021, our consolidated cash and cash equivalents ~~and short term investments~~ were US$~~15,231,000 and US$1,169,000 respectively. This compares to~~25.9 million. Our cash and cash equivalents consist primarily of cash in bank accounts and short-term ~~investments~~deposits.

The following table presents the major components of ~~US$30,277,000~~net cash flows used in and ~~US$nil respectively at December 31, 2018.~~

provided by operating, investing and financing activities.

	Year ended December 31,
		2021 US$‘000		2020 US$‘000
Net cash inflow from operating activities		13,238		23,755
Net cash outflow from investing activities		(8,691	)	(10,198	)
Net cash outflow from financing activities		(6,019	)	(2,716	)
Net (decrease)/increase in cash and cash equivalents and short-term investments		(1,472	)	10,841

~~Cash~~Operating Activities

Net cash generated from ~~operations~~operating activities for the year ended December 31, ~~2019~~2021 amounted to US$~~5,875,000 (2018:~~13.2 million (2020: US$~~5,978,000)~~23.8 million), a decrease of US$~~103,000.~~10.5 million. The decrease in net cash generated from ~~operations~~operating activities of US$~~103,000~~10.5 million is attributable to ~~a decrease~~an increase in working capital outflows of US$~~5,028,000~~4.8 million and a decrease in operating cash flows before changes in working capital of US$~~5,131,000.~~8.2 million partially offset by a decrease in interest and taxes paid of US$2.5 million. The decrease in operating cash flows before changes in working capital ~~of US$5,131,000~~ is primarily driven by a lower operating profit before impairment losses during the ~~increase in~~current financial year compared with an operating loss before impairment losses during the ~~current financial~~prior year. The working capital outflow ~~decrease,~~increase, when compared to the prior year, is due to an increase outflow in trade and other payables of US$~~3,570,000~~12.5 million partially offset by an increase in cash inflows for trade and another receivables of US$8.7 million and increase in cash outflows for inventories of US$~~4,947,000 offset by the decrease in cash outflows for trade and other receivables of US$6,405,000.~~

1.0 million.

The cash generated from operations was mainly attributable to an operating loss of US$24,112,000 (2018: loss of US$20,227,000), as adjusted for non cash items of US$32,273,000 (2018: US$33,618,000) plus cash outflows due to changes in working capital of US$2,363,000 (2018: cash outflows of US$7,391,000).

Investing Activities

Other non-cash charges decreased from US$33,618,000 for the year ended December 31, 2018 to US$32,273,000 for the year ended December 31, 2019. Once off charges in 2019 are mainly attributable to the impairment of intangible assets (US$16,570,000), property, plant and equipment (US$6,349,000) and prepayments (US$1,376,000).

~~The net cash outflows in 2019 due to changes in working capital of US$2,363,000 are due to the following:~~

~~An decrease in trade and other receivables of US$445,000 partially due to the decrease, year on year, in the debtors days number;~~

~~An increase in trade and other payables balance of US$151,000 due to timing of payments; and~~

~~An increase in inventory of US$2,959,000 due to the strategic management of inventory levels during the course of the year.~~

~~Net interest received amounted to US$560,000 (2018: US$874,000). This included interest received of US$464,000 (2018: US$735,000) on the Group’s cash deposits.~~

Net cash outflows from investing activities for the year ended December 31, ~~2019~~2021 amounted to US$~~11,853,000 (2018:~~8.7 million (2020: US$~~17,391,000)~~10.2 million) which were principally made up as follows:

Payments to acquire intangible assets of US$~~9,718,000 (2018:~~6.9 million (2020: US$~~9,863,000)~~7.0 million), which principally related to development expenditure capitalised as part of the Group’s on-going product development activities; and

Acquisition of property, plant and equipment of US$~~2,118,000 (2018:~~1.8 million (2020: US$~~7,528,000)~~3.2 million) incurred as part of the Group’s investment programme for its manufacturing and ~~distribution~~distributing activities, and placement of instruments.

Financing Activities

Disposal of property, plant and equipment of US$17,000 (2018: US$nil) incurred as part of the Group’s investment programme for its manufacturing and distribution activities, and placement of instruments.

Net cash outflows from financing activities for the year ended December 31, ~~2019~~2021 amounted to US$~~7,529,000 (2018:~~6.0 million (2020: outflows of US$~~16,872,000)~~2.7 million). This outflow is due to the payment of lease liabilities (US$~~3,533,000)~~3.0 million) and an ~~Interest~~interest payment on the exchangeable notes (US$3,996,000). In 2018 the outflow was primarily due to the purchase of exchangeable notes of $12,042,000 and interest payments related to exchangeable notes of $4,503,000. In 2018 payments of finance lease liabilities in the year were US$374,000,4.0 million), refinancing costs (US$0.8m) partially offset by the receipt of ~~US$481,000 from sale~~loans in 2021 under the U.S. government’s PPP (US$1.8 million). In 2020, the outflow was due to the payment of lease liabilities (US$3.2 million), an interest payment on the exchangeable notes (US$4.0 million) and ~~leaseback transactions.~~partially offset by the receipt of loans in 2020 under the U.S. government’s PPP (US$4.5 million).

C. Research and Development, Patents and Licences, etc.

For information on research and development, patents and licences see “Item 4. Information on the Company—Item 4.B Business overview.”

The majority of the Group’s transactions are conducted in US Dollars. The primary foreign exchange risk arises from the fluctuating value of the Group’s Euro denominated expenses as a result of the movement in the exchange rate between the US Dollar and the Euro. The Group also faces foreign exchange risk from movement in the exchange rate between the US Dollar and British Sterling, Canadian Dollar and Brazilian Real. Trinity Biotech continuously monitors its exposure to foreign currency movements and expectations of future exchange rate exposure and, if deemed necessary, will cover a portion of this exposure through the use of forward contracts. When used, these forward contracts are cash flow hedging instruments whose objective is to cover a portion of these Euro forecasted transactions.D. Trend Information

For a more comprehensive discussion of the Group’s use of financial instruments, its currency and interest rate structure and its funding and treasury policies please refer to Item 11 “Quantitative and Qualitative Disclosures about Market Risk”.

57The Group’s revenues decreased in 2021 mainly due to lower demand and selling prices for PCR VTM products compared to 2020 when there was exceptional demand due to limited worldwide manufacturing capacity. As the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices in 2021.

~~Contractual obligations~~

The ~~following table summarises~~outlook for our ~~minimum contractual obligations~~Covid-19 related portfolio of products is unpredictable and ~~commercial commitments,~~will depend on numerous factors, including ~~interest, as of December 31, 2019:~~

Payments due by Period

Contractual Obligations
Total
US$’000

less than 1
year
US$’000

1-2 Years
US$’000

2-5 Years
US$’000

more than
5 years
US$’000

Exchangeable note* 99,900 — — — 99,900
Exchangeable note interest 101,898 3,996 3,996 11,988 81,918
Right of asset leases obligations 19,630 2,156 2,012 4,840 10,622
Sale and leaseback lease obligations 519 247 95 177 —

Total 221,947 6,399 6,103 17,005 192,440

* The exchangeable notes will mature in 2045, however, they can be called early on April 1, 2022 and other subsequent dates.

In the past, Trinity Biotech incurred debt and raised equity to pursue its policy of growth through acquisition. However, since the divestiture of the Coagulation product line in 2010, the Group has eliminated bank debt (with the exception of some equipment leasing) and has adequate cash resources. The Group raised US$110,529,000 (net of fees) during 2015 through the issuance of exchangeable loan notes (see Item 18, Note 25 for further information). The Group intends to grow organically for the foreseeable future and Trinity Biotech believes that it will have sufficient funds to meet its capital commitments and continue existing operations inbut not limited to, the future duration and extent of the pandemic and public health policies regarding Covid-19 testing protocols. Outside of our Covid-19 related portfolio of products, there has been a partial recovery since the second half of 2020 and this continued into 2021. We have seen some growth in ~~excess~~other products beyond pre-pandemic levels, in particular our Sjögrens laboratory test and we expect this to continue. Overall, our business remains susceptible to the impact of ~~12 months. If~~COVID-19 and associated public health measures which makes it difficult to predict the ~~Group was~~future trends at this point.

E. Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with IFRS. The preparation of these financial statements requires us to make ~~a large~~estimates and ~~unanticipated cash outlay,~~judgements that affect the ~~Group would have further funding requirements~~reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, we evaluate our estimates, including those related to intangible assets, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which ~~could be met through access to equity~~form the basis for making judgements about the carrying values of assets and ~~debt markets.~~liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the critical accounting policies described below reflect our more significant judgements and estimates used in the preparation of our consolidated financial statements.

~~Impact of Currency Fluctuation~~Haemoglobin Development Group

Premier Hb9210 Instrument for Haemoglobin A1c Testing

As part of our continuous improvement a new monitor, keyboard and frit housing have been customised and validated. These improvements maintain the competitiveness of the instruments.

Premier Resolution Instrument for Haemoglobin Variant Testing

Tri-stat 2.0

Low to Medium throughput Haemoglobin instrument for A1c Testing

Point-of-Care Development Group

We are developing a rapid Covid-19 antigen test, which we expect to have CE marked for professional use only in the second quarter of 2022.

Autoimmunity Development Group

IFA Smart Reader Project

Patents and Licences

Patents

Many of Trinity Biotech’s ~~revenue and expenses~~tests are ~~affected~~not protected by ~~fluctuations~~specific patents, due to the significant cost of putting patents in ~~currency exchange rates especially the exchange rate between the US Dollar and the Euro, the Brazilian Real and Canadian Dollar.~~place for Trinity Biotech’s ~~revenues~~wide range of products. However, Trinity Biotech believes that substantially all of its tests are ~~primarily denominated~~protected by proprietary know-how, manufacturing techniques and trade secrets.

From time-to-time, certain companies have asserted exclusive patent, copyright and other intellectual property rights to technologies that are important to the industry in ~~US Dollars~~which Trinity Biotech operates. In the event that any of such claims relate to its planned products, Trinity Biotech intends to evaluate such claims and, if appropriate, seek a licence to use the protected technology. There can be no assurance that Trinity Biotech would, firstly, be able to obtain licences to use such technology or, secondly, obtain such licences on satisfactory commercial terms. If Trinity Biotech or its ~~expenses~~suppliers are ~~incurred principally~~unable to obtain or maintain a licence to any such protected technology that might be used in ~~US Dollars, Euro and Brazilian Real. The weakening of~~Trinity Biotech’s products, Trinity Biotech could be prohibited from marketing such products. It could also incur substantial costs to redesign its products or to defend any legal action taken against it. If Trinity Biotech’s products should be found to infringe protected technology, Trinity Biotech could also be required to pay damages to the ~~US Dollar could have an adverse impact on future profitability.~~infringed party.

Licences

Trinity Biotech ~~holds most~~has entered into a number of ~~its cash assets~~licensing arrangements including the following:

Immco entered into a licence agreement on January 19, 2012, and subsequently an amended licence agreement on June 14, 2018. The licence pertains to any product or service relating to identifying indicators of Sjogren’s disease. The agreement is effective through January 21, 2036 and is worldwide in ~~US Dollars. As~~scope. Royalties are payable based on agreement in place.

In 2013, Trinity Biotech ~~reports~~entered into a licence agreement with a leading market participant, giving the Group a non-exclusive, worldwide licence access to a significant HIV-2 patent portfolio for the purpose of making, using and selling a HIV test kit, subject to certain limitations.

On December 19, 1999 Trinity Biotech obtained a non-exclusive commercial licence from the National Institute of Health (“NIH”) in ~~US Dollars, fluctuations~~the United States for NIH patents relating to the general method of producing HIV-1 in ~~exchange rates do not~~cell culture and methods of serological detection of antibodies to HIV-1.

Each of the licensing arrangements disclosed under this subheading terminates on the date expiration or adjudication of invalidity or unenforceability of the last of the particular licenced patents covered by the respective agreement. Each licensor has the right to terminate the arrangement in the event of non-performance by Trinity Biotech. The key licensing arrangements, with the exception of the agreement entered into in 2013 which provides for the payment of a lump sum licence fee, require the Group to pay a royalty to the licence holder which is based on sales of the products which utilise the relevant technology being licenced. The total amount paid by Trinity Biotech under key licensing arrangements in 2021 was US$540,000 (2020: US$470,000).

Government Regulation

The process of obtaining authorisation to market our products varies, depending on the product categorisation and the country, from merely notifying the authorities of intent to sell, to lengthy formal approval procedures which often require detailed laboratory and clinical testing and other costly and time-consuming processes. The main regulatory bodies which require extensive clinical testing are the FDA in the United States, the Health Products Regulatory Authority (as the authority over Trinity Biotech in Europe), the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom and Health Canada.

The process in each country varies considerably depending on the nature of the test, the perceived risk to the user and patient, the facility at which the test is to be used and other factors. As 62% of Trinity Biotech’s 2021 revenues were generated in the Americas (with a large concentration of this in the United States) and as the United States represents a substantial proportion of the worldwide diagnostics market, an overview of FDA regulation has been included below.

Food and Drug Administration

Many of our products sold in the United States are medical devices subject to the Federal Food, Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the U.S. Food and Drug Administration (“FDA”). Certain products sold in the United States require FDA clearance to market under Section 510(k) of the FDCA. Other products sold in the United States require premarket approval (“PMA”) to market.

Failure by us or by our suppliers to comply with applicable regulatory requirements can result in ~~exchange differences~~enforcement action by the FDA or other regulatory authorities, which may result in sanctions including, but not limited to:

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

unanticipated expenditures to address or defend such actions

customer notifications for repair, replacement, refunds;

recall, detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;

operating restrictions;

withdrawing 510(k) clearances or PMA approvals that have already been granted;

refusal to grant export approval for our products; or

criminal prosecution.

The FDA governs the following activities that we perform or that are performed on ~~these cash assets. Fluctuations~~our behalf, to ensure that medical products distributed domestically or exported internationally are safe and effective for their intended uses:

product design, development and manufacture;

product safety, testing, labelling and storage;

record keeping procedures;

product marketing, sales and distribution; and

post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.

FDA premarket clearance and approval requirements

Access to U.S. Market. Each medical device that Trinity Biotech may wish to commercially distribute in the ~~exchange rate between~~U.S. will require either pre-market notification (more commonly known as 510(k)) clearance or approval of a pre-market approval (“PMA”) application prior to commercial distribution, unless specifically exempt. Under the ~~Euro~~FDCA, medical devices are classified into one of three classes -- Class I, Class II or ~~Brazilian Real~~Class III -- depending on the degree of risk associated with each medical device and the ~~US Dollar~~extent of control needed to ensure safety and effectiveness. Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s general regulatory controls for medical devices, which include compliance with the applicable portions of the FDA's Quality System Regulation ("QSR"), facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labelling, advertising, and promotional materials (the “General Controls”). Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

In reviewing a pre-market notification, the FDA may request additional information, including clinical data, which may significantly prolong the review process.

Clinical Studies

Per the IDE regulations, clinical studies that involve investigational devices are divided into two categories, based on the type of device. Studies of devices considered by the agency to present a significant risk require prior approval by an Institutional Review Board (“IRB”), informed consent of patients, and FDA approval of an IDE application, which details in part the clinical study protocol, pursuant to 21 C.F.R. § 812. A significant risk device study is defined as a study of a device that presents a potential for serious risk to the health, safety, or welfare of a subject and falls into at least one of the following categories: (1) it is intended as an implant; (2) it is used in supporting or sustaining human life; (3) it is of substantial importance in diagnosing, curing, mitigating or treating a disease, or otherwise prevents impairment of human health; or (4) it otherwise presents a potential for serious risk to the health, safety, or welfare of a subject. See 21 C.F.R. 812.3(m). Studies of non-significant risk investigational devices require IRB approval and informed consent; however, the sponsor of the study does not have to obtain FDA approval of an IDE application before beginning the study.

Are non-invasive;

Do not require an invasive sampling procedure that poses a significant risk;

Do not introduce energy into a subject by design or intention;

Are not to be used as a diagnostic procedure without confirmation of the diagnosis by another medically established diagnostic product or procedure; and

Comply with the labelling requirements for IUO devices, as outlined in 21 C.F.R. § 812.2(c)(3).

Post-market Regulation

After the FDA permits a device to enter commercial distribution, numerous regulatory requirements apply. These include:

product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;

labelling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;

clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices;

approval of product modifications that affect the safety or effectiveness of one of our approved devices;

post-approval restrictions or conditions, including post-approval study commitments;

post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;

the FDA's recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;

regulations pertaining to voluntary recalls; and

notices of corrections or removals.

There can be no assurances that the Group will not be required to incur significant costs to comply with laws and regulations in the future or ~~Real monetary assets and liabilities and on Euro, Swedish Krona~~that laws or ~~Real expenses and consequently~~regulations will not have a material adverse effect upon the Group’s ~~earnings.~~revenues, earnings and financial standing.

Clinical Laboratory Improvement Amendments of 1988, (“CLIA”)

~~Off-Balance Sheet Arrangements~~

~~After consideration~~To renew the CLIA certificate for our Autoimmune Reference Laboratory, we are subject to survey and inspection every two years to assess compliance with program standards. We also may be subject to additional unannounced inspections. Laboratories performing high complexity testing are required to meet more stringent requirements than laboratories performing less complex tests. CLIA requires full validation including accuracy, precision, specificity, sensitivity and establishment of a reference range for any test used in clinical testing. The regulatory and compliance standards applicable to the testing we perform may change over time and any such changes could have a material effect on our business.

Federal Oversight of Laboratory Developed Tests and Research Use Only Products

Trinity Biotech supplies clinical laboratories with raw materials, such as reagent products, that may be used by clinical laboratories in clinical laboratory tests, which are regulated under CLIA, as well as by applicable state laws. Although the FDA has statutory authority to assure that medical devices are safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable regulations with respect to laboratory developed tests, or LDTs. The FDA defines the term “laboratory developed test” as an in vitro diagnostic test that is intended for clinical use and designed, manufactured and used within a single laboratory. Until 2014, the FDA exercised enforcement discretion such that it did not enforce provisions of the ~~following items~~Food, Drug and Cosmetic Act with respect to LDTs. In July 2014, due to the ~~Group’s management~~increased proliferation of LDTs for complex diagnostic testing, and concerns with several high-risk LDTs related to lack of evidentiary support for claims and erroneous results, the FDA issued guidance that, when finalized, would adopt a risk based framework that would increase FDA oversight of LDTs. As part of this developing framework, FDA issued draft guidance in October 2014, informing Congress and manufacturers of LDTs of its intent to collect information from laboratories regarding their current LDTs and newly developed LDTs through a notification process. The FDA will use this information to classify LDTs and to prioritize enforcement of premarket review requirements for categories of LDTs based on risk, using a public process. Specifically, FDA plans to use advisory panels to provide recommendations to the agency on LDT risks, classification and prioritization of enforcement of applicable regulatory requirements on certain categories of LDTs, as appropriate. FDA issued a discussion paper on LDTs in January 2017 discussing possible approaches to oversight of LDTs.

Some products are for research use only (“RUO”), or for IUO. RUO and IUO products are not intended for human clinical use and must be properly labeled in accordance with FDA guidance. Claims for RUOs and IUOs related to safety, effectiveness, or diagnostic utility or that it are intended for human clinical diagnostic or prognostic use are prohibited. In November 2013, the FDA issued guidance titled “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only - Guidance for Industry and Food and Drug Administration Staff.” This guidance sets forth the requirements to utilize such designations, labelling requirements and acceptable distribution practices, among other requirements. Mere placement of an RUO or IUO label on an in vitro diagnostic product does not render the device exempt from otherwise applicable clearance, approval or other requirements. The FDA may determine that the device is intended for use in clinical diagnosis based on other evidence, including how the device is marketed.

We cannot predict the potential effect the FDA’s current and forthcoming guidance on LDTs and IUOs/RUOs will have ~~determined~~on our reagents or materials that ~~there are no off-balance sheet arrangements which need~~we market to ~~be reflected~~the life sciences industry, and that we may use in the ~~financial statements.~~development of assays in our reference laboratory. We cannot be certain that the FDA might not promulgate rules or issue guidance documents that could affect our ability to sell these materials to the market. Should any of the reagents marketed by us to the life sciences industry and used in conducting diagnostic services be affected by future regulatory actions, our business could be adversely affected by those actions.

~~Leases~~We cannot provide any assurance that FDA regulation, including premarket review, will not be required in the future for LDTs that rely on our reagents or through our reference laboratory, whether through additional guidance or regulations issued by the FDA, new enforcement policies adopted by the FDA or new legislation enacted by Congress.

Product Imports/Exports

Foreign countries often require, among other things, an FDA certificate for products for export, also called a Certificate for Foreign Government (“CFG”). To obtain this certificate from the FDA, the device manufacturer must apply to the FDA. The FDA certifies that the product has been granted clearance or approval in the United States and that the manufacturing facilities were in compliance with ~~Related Parties~~QSR regulations at the time of the last FDA inspection. If the FDA determines that our facilities or procedures do not comply with the QSR regulations, it may refuse to provide such certificates until we resolve the issues to the FDA’s satisfaction. Failure to obtain a CFG could inhibit our ability to export our products to countries that require such certificates.

Foreign Corrupt Practices Act and Other Anti-Corruption Laws

Healthcare Reform

requires certain medical device manufacturers to pay an excise tax in an amount equal to 2.3% of the price for which such manufacturer sells its medical devices that are listed with the FDA; and

State and Federal Privacy and Security Laws

Federal and State Anti-Kickback Laws

The Federal Anti-Kickback Statute makes it a felony for a person or entity, including a laboratory, to knowingly and wilfully offer, pay, solicit or receive any remuneration, directly or indirectly, to induce or in return for either the referral of an individual or the purchase, lease or order, or arranging for the purchase, lease or order, of items, services or other business that is reimbursable under any federal health care program, including Medicare and Medicaid. Courts have stated that an arrangement may violate the Anti-Kickback Statute if any one purpose of the arrangement is to encourage patient referrals or other federal health care program business, regardless of whether there are other legitimate purposes for the arrangement. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. The definition of "remuneration" has been broadly interpreted to include anything of value, including for example, gifts, discounts, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests and providing anything at less than its fair market value. The Anti-Kickback Statute is broad and prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry.

Physician Self-Referral Prohibitions

Civil Monetary Penalties Law

Federal Physician Payment Sunshine Act

Other Federal and State Fraud and Abuse Laws

New York Laboratory Licensing

Because our reference laboratory located in New York receives specimens from New York State, our clinical reference laboratory is required to be licenced under New York laws and regulations, which establish standards for, among other things:

day-to-day operation of a clinical laboratory, including training and skill levels required of laboratory personnel;

physical requirements of a facility;

equipment; and

validation and quality control.

New York law also mandates proficiency testing for laboratories licenced under New York state law, regardless of whether such laboratories are located in New York. If a laboratory is out of compliance with New York statutory or regulatory standards, the state regulatory agency may suspend, limit, revoke or annul the laboratory's New York licence, censure the holder of the licence or assess civil money penalties. Statutory or regulatory noncompliance may result in a laboratory's operator being found guilty of a misdemeanor under New York law. The state regulatory agency also must approve any LDT before the test is offered in New York. Should we be found out of compliance with New York laboratory requirements, we could be subject to such sanctions, which could harm our business. We cannot provide assurance that the state will at all times find us to be in compliance with applicable laws.

Other States' Laboratory Licensing

Regulation outside the United States

C. Organizational Structure

Please refer to Note 32 to our audited consolidated financial statements (“Group ~~has~~Undertakings”) included elsewhere in this Annual Report for a listing of our significant subsidiaries, including name, country of incorporation, and proportion of ownership interest.

D. Property, Plants and Equipment

Our headquarters, manufacturing and research and development facilities as well as our sales offices are located in Bray Ireland. We have entered into ~~lease arrangements for premises in Ireland~~a number of related party transactions with JRJ Investments (“JRJ”), a partnership currently owned by Mr Ronan O’Caoimh and Dr Walsh, directors of the Company, and directly with Mr O’Caoimh, to provide current and potential future needs for the Group’s manufacturing and research and development facilities in Bray, Ireland. We have entered into an agreement for a 25 year lease with JRJ, for 15,780 square feet of offices at an annual rent of €381,000 (US$432,000), which expires in 2027 and have entered into lease agreements with Mr. O’Caoimh for a 43,860 square foot manufacturing facility in Bray, Ireland and an adjacent warehouse of 16,000 square feet. The annual rent for the manufacturing facility is €787,605 (US$891,000) and the annual rent for the warehouse is €144,000 (US$163,000). These two leases expire in 2028 and 2026 respectively. Towards the end of 2020, the Group occupied some additional space adjoining the warehouse. This is a short-term arrangement, and no payments were made for the additional space during 2020 and 2021. A sum of US$90,000 was accrued for rent payable to Mr O’Caoimh in relation to this additional space. See Item 7 – Major Shareholders and Related Party Transactions.

We have six main manufacturing sites worldwide, five in the Americas (Amherst, Williamsville and Jamestown, NY, Kansas City, MO, and Extrema, Brazil), and one in Bray, Ireland. An additional facility is owned in Burlington, Canada which serves as a distribution centre and also carries out some research and development activities.

The U.S. and Irish facilities are each FDA registered and ISO certified facilities. As part of our ongoing commitment to quality, each Trinity Biotech facility was granted the latest ISO 13485 certification. This certification was granted by internationally recognised notified bodies. This serves as external verification that Trinity Biotech has established an effective quality system in accordance with an internationally recognised standard. By having an established quality system there is a presumption that we will consistently manufacture products in a controlled manner. To achieve this certification, each Trinity Biotech facility performed an extensive review of the existing quality system and implemented any additional regulatory requirements.

The facilities at Jamestown, NY, Kansas City, MO and Bray, Ireland also achieved certification to the requirements of the Medical Device Single Audit Programme (MDSAP). The Medical Device Single Audit Program allows an MDSAP recognized Auditing Organization to conduct a single regulatory audit of a medical device manufacturer that satisfies the relevant requirements of the regulatory authorities participating in the program. International regulatory authorities that are participating in the MDSAP include, US Food and Drug Administration, Therapeutic Goods Administration of Australia, Brazil’s Agência Nacional de Vigilância Sanitária, Health Canada, Japan’s Ministry of Health, Labour and Welfare, and the Japanese Pharmaceuticals and Medical Devices Agency The World Health Organization (WHO) Prequalification of In Vitro Diagnostics (IVDs) Programme and the European Union (EU) are Official Observers.

Trinity Biotech USA operates from a 25,610 square foot FDA registered facility in Jamestown, New York. The facility was purchased in 1994. Additional warehousing space is also leased in Jamestown, New York at an annual rental charge of US$183,000.

Immco Diagnostics Inc. operates from a 20,520 square foot facility in Amherst, New York and a 31,731 square foot facility in Williamsville, New York, subject to leases expiring in 2022 and 2033 respectively. The annual rent for the Amherst facility is US$259,000. The Williamsville facility’s annual rent is currently US$416,000, rising to US$452,000 by 2029. An additional 5,120 square foot facility is owned by Trinity Biotech in Burlington, Canada.

Additional office and factory space is leased by the Group in Acton, Massachusetts, Sao Paulo, Brazil and Extrema, Brazil at an annual cost of US$96,000, US$8,000 and US$41,000 respectively.

Bray, Ireland – Point-of-Care/HIV, Clinical Chemistry and Viral Transport Media products are manufactured at this site.

Carlsbad, California – this facility specialises in the development and manufacture of products utilising Western Blot and lateral flow technology. Our suite of Lyme products were manufactured at this facility and our new Infectious Diseases Point-of-Care range were manufactured at this site. In 2020, management made the decision to close this facility permanently (see above).

We are in material compliance with all environmental legislation, regulations and rules applicable in each jurisdiction in which we operate.

Principal Capital Expenditure and Divestitures

Item 4A.

Unresolved Staff Comments

Not applicable.

Item 5.Operating and Financial Review and Prospects

A. Operating Results

Overview

Our consolidated financial statements include the attributable results of Trinity Biotech plc and ~~directly~~all its subsidiaries. This discussion covers the years ended December 31, 2021 and December 31, 2020 and should be read in conjunction with ~~Mr O’Caoimh. When entering into~~ the ~~lease arrangements, independent valuers~~consolidated financial statements and notes thereto appearing elsewhere in this Form 20-F. The financial statements have ~~advised~~been prepared in accordance with IFRS both as issued by the International Accounting Standards Board (“IASB”) and as subsequently adopted by the European Union (“EU”) (together “IFRS”). Consolidated financial statements are required by Irish law to comply with IFRS as adopted by the EU which differ in certain respects from IFRS as issued by the IASB. These differences predominantly relate to the timing of adoption of new standards by the EU. However, as none of the differences are relevant in the context of Trinity Biotech, ~~that~~ the ~~rent fixed~~consolidated financial statements for the periods presented comply with ~~respect~~IFRS both as issued by the IASB and as adopted by the EU.

We have relied on an exemption under the SEC’s rules to ~~these leases represents~~prepare consolidated financial statements without a ~~fair~~reconciliation to U.S. generally accepted accounting principles (“U.S. GAAP”) as at and for the three year period ended December 31, 2021 as Trinity Biotech is a foreign private issuer and the financial statements have been prepared in accordance with IFRS as issued by the IASB.

Factors affecting our results

The global diagnostics market ~~rent. Details~~is growing due to, among other reasons, the ageing population and the increasing demand for rapid tests in a clinical environment.

Our revenues are directly related to our ability to identify significant revenue-generating products, carry out the necessary development work and to bring them to market quickly and effectively. Efficient and productive research and development is crucial in this environment as we, like our competitors, search for effective and cost-efficient solutions to diagnostic problems. The growth in new technology will almost certainly have a fundamental effect on the diagnostics industry as a whole and upon our future development.

The comparability of ~~these leases with related parties are set out in~~our financial results for the years ended December 31, 2021 and 2020 were impacted by impairment losses as a result of impairment reviews during the years ended December 31, 2020 and 2021 (See Item 18, Note 14).

For further information about the Group’s principal products, principal markets and competition please refer to Item 4, “Information on the Company”~~, Item 7 “Major Shareholders and Related Party Transactions” and Item 18, Note 28 to the~~.

Going Concern

The accompanying consolidated financial ~~statements.~~

~~Research & Development (“R&D”) carried out by third parties~~

~~Certain R&D activities of the Group~~statements have been ~~outsourced to third parties. These activities are carried out~~prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

The directors have considered the Group’s current financial position and cash flow projections, taking into account all known events and developments including the closing of the financing with ~~these companies. During 2019,~~Perceptive Advisers and the Covid-19 pandemic. The directors believe that the Group will be able to continue its operations for at least the next 12 months from the date of this report and that it is appropriate to continue to prepare the consolidated financial statements on a ~~number~~going concern basis.

At the date of ~~third party consultants~~this report the Group’s financial position has substantially improved following the successful re-financing of the Group’s debt in early 2022. This has significantly improved the Group’s capital structure by reducing gross debt by approximately US$19 million and ~~contractors were engaged~~there are no material debt maturities until 2026. Furthermore, the pending investment by MiCo IVD Holdings LLC, a subsidiary of the MiCo Group, will facilitate our exploring lower cost debt funding options, in the short-term, with the aim of further reducing our interest expense through refinancing the balance of the Group’s term loan at substantially lower interest rates. In April 2022, the Company announced a US$45 million strategic investment and partnership with the MiCo Group, a KOSDAQ-listed company. The investment is subject to ~~assist with development projects, working principally on the Autoimmune Smart Reader project.~~customary Korean central bank approvals. The ~~total amount paid to these R&D consultants~~investment consists of an equity investment of approximately US$25.2 million and ~~contractors in 2019 was US$1,285,000 (2018: US$363,000).~~

~~Research and Products under Development~~

a seven-year, unsecured junior convertible note issued by Trinity Biotech ~~has research~~of US$20 million, with a fixed interest rate of 1.5% and development groups focusing separately on haemoglobin products, infectious diseases and autoimmune products. During 2019, these groups were located in Ireland and the USA and largely mirror the production capability at each production site. In addition to in-house activities, Trinity Biotech sub-contracts some research and development from time to time to independent researchers based in the USA and Europe.

~~Principal Development Projects~~

~~The following table sets forth for each~~an ADS conversion price of ~~Trinity Biotech’s main development projects, the costs incurred during each period presented and the cumulative costs (before amortization and impairment) incurred as at 31 December 2019:~~

2019

2018

Total project
costs to
December 31,
2019 ¹

Product Name

US$’000

US$’000

US$’000

HIV screening rapid test 2,587 1,657 8,474
Premier Instrument for Haemoglobin A1c testing 1,930 2,653 32,027
Autoimmune Smart Reader 1,325 746 2,071
Syphilis point-of-care test 870 454 1,324
Uni-Gold antigen improvement 691 453 2,362
G-6-PDH test 582 850 2,244
Uni-gold test enhancement 376 796 4,718
Tri-stat Point-of-Care instrument 361 727 9,029

~~¹ Cumulative costs to December 31, 2019 are shown before deduction of amortization and impairment losses.~~

The following table sets forth the estimated cost to complete each of the main development projects which were underway in 2019 and not yet completed. The total estimated completion costs are anticipated to be incurred evenly up to the completion date of the relevant project.

Total estimated
cost to complete

Estimated date
for completion

Product Name
US$’000
Premier Instrument for Haemoglobin A1c testing² 900 2020
HIV screening rapid test 1,250 2020
Autoimmune Smart Reader 1,315 2021

~~² The cost to complete the Premier Instrument does not include the cost of developing the Premier 9210 v2.0.~~

There are inherent risks and uncertainties associated with completing development projects on schedule. In the experience of Trinity Biotech, the main risks to the achievement of a project’s planned completion date occur primarily during the product’s verification and validation phase. During this phase the product must attain successful results from in-house product testing and from third party clinical trials. Obtaining regulatory approval on a timely basis is another variable in achieving a project’s planned completion date.

Some aspects of the development of a new product are outside of the control of Trinity Biotech. Notwithstanding the uncertainty surrounding these external factors, Trinity Biotech believes the planned completion dates of these projects are realistic and achievable. If major development projects were severely delayed, in the opinion of Trinity Biotech it would not impact significantly on Trinity Biotech’s financial position or on the capitalisation criteria. As the manufacturing lead time for these new products is relatively short, it is anticipated that material cash inflows will commence shortly after each of the project’s planned completion date.

US$3.24 per ADS.

~~The following is a description of the principal projects which are currently being undertaken by the research and development groups within Trinity Biotech:~~

Haemoglobin Development Group

Premier Hb9210 Instrument for Haemoglobin A1c Testing

This project entails the development of a new HPLC instrument for testingHbA1c. Development was initiated in late 2007, and was launched outside of the United States in 2011 ~~followed by within~~and in the United States in early 2012.

As part of our continuous improvement a new monitor, ~~key board~~keyboard and frit housing have been customised and validated. These improvements maintain the ~~competiveness~~competitiveness of the instruments. ~~Looking forward, the Premier Hb9210 v2.0 is in the initial stages and design with an expected release date of mid-2021 and will feature a new faster and more advanced column.~~

Premier Resolution Instrument for Haemoglobin Variant Testing

~~The company has~~We have developed the Premier Resolution instrument which is utilised for haemoglobin variant testing and is currently being rolled out in certain international markets outside of the USA. ~~The company intends submitting~~We intend to submit it to the FDA for clearance ~~later~~ in ~~2020.~~2022. Meanwhile, Premier Resolution continues to be enhanced with unique features such as lot specific gradients, an optimised internally ~~developed~~designed column with extended column life, and a rapidly expanding on-board variant library.

Tri-stat 2.0

Tri-stat 2.0 represents a new HbA1c device that offers rapid, precise analysis in a simple and highly cost effective manner. Using boronate affinity technology and a two phase optical system, three samples can be analysed simultaneously. This instrument though often characterised as point-of-care is ~~being~~ targeted at very low volume laboratories and governmental outreach programs. The ability to perform three samples simultaneously enables the instrument to address these segments. Taking advantage of the latest technology the instrument features a colour touchscreen, multiple language capability, modern connectivity, increased storage capacity as well as replaceable diodes for state-of-the-art performance. Whilst the product has been launched in international markets, the company continues to make enhancements to further improve its operational efficiency and accuracy. In 2020 an enhanced version of the Tri-stat analyser was launched which includes a dual detector for improved performance.

Low to Medium throughput Haemoglobin instrument for A1c Testing

~~The company is~~We are developing a low to medium throughput Haemoglobin A1c instrument with a view to targeting the market segment for testing volumes which lie between the Tri-stat 2.0 and Premier Hb9210. ~~The company is~~We are targeting a launch date ~~of 2021.~~in 2022.

Point-of-Care Development Group

~~Trinity Biotech is~~We are developing a rapid Covid-19 antigen test, which we expect to have CE marked for professional use only in the ~~process~~second quarter of ~~developing~~2022.

A syphilis point-of-care ~~tests for~~rapid test is also being developed using our existing lateral flow format. In 2021, other projects were prioritized, but it is expected this project will resume within the detection of HIV (TrinScreen) for the HIV screening market in Africa. The product which was developed at the company’s Carlsbad facility is currently in its clinical trials phase after which the product will be submitted to the World Health Organisation for approval.next twelve months.

Autoimmunity Development Group

IFA Smart Reader Project

~~The company is~~We are developing two devices which will enable cell based Immunofluorescence Assays (IFA) to be read in a more automated manner. The first device, ScopeSmart will be an automated IFA reader capable of performing image capture, pattern recognition and analysis on IFA slides. This will then be followed by SlideSmart which will fully automate this entire testing process by integrating the sample preparation.

Patents and Licences

Patents

~~Covid-19 Tests~~34

Licences

Trinity Biotech has entered into a number of licensing arrangements including the following:

Immco entered into a licence agreement on January 19, 2012, and subsequently an amended licence agreement on June 14, 2018. The licence pertains to any product or service relating to identifying indicators of Sjogren’s disease. The agreement is effective through January 21, 2036 and is worldwide in scope. Royalties are payable based on agreement in place.

Government Regulation

The process of obtaining authorisation to market our products varies, depending on the product categorisation and the country, from merely notifying the authorities of intent to sell, to lengthy formal approval procedures which often require detailed laboratory and clinical testing and other costly and time-consuming processes. The main regulatory bodies which require extensive clinical testing are the FDA in the United States, the Health Products Regulatory Authority (as the authority over Trinity Biotech in Europe), the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom and Health Canada.

The process in each country varies considerably depending on the nature of the test, the perceived risk to the user and patient, the facility at which the test is to be used and other factors. As 62% of Trinity Biotech’s 2021 revenues were generated in the Americas (with a large concentration of this in the United States) and as the United States represents a substantial proportion of the worldwide diagnostics market, an overview of FDA regulation has been included below.

Food and Drug Administration

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

unanticipated expenditures to address or defend such actions

customer notifications for repair, replacement, refunds;

recall, detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;

operating restrictions;

withdrawing 510(k) clearances or PMA approvals that have already been granted;

refusal to grant export approval for our products; or

criminal prosecution.

product design, development and manufacture;

product safety, testing, labelling and storage;

record keeping procedures;

product marketing, sales and distribution; and

post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.

FDA premarket clearance and approval requirements

Access to U.S. Market. Each medical device that Trinity Biotech may wish to commercially distribute in the U.S. will require either pre-market notification (more commonly known as 510(k)) clearance or approval of a pre-market approval (“PMA”) application prior to commercial distribution, unless specifically exempt. Under the FDCA, medical devices are classified into one of three classes -- Class I, Class II or Class III -- depending on the degree of risk associated with each medical device and the extent of control needed to ensure safety and effectiveness. Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s general regulatory controls for medical devices, which include compliance with the applicable portions of the FDA's Quality System Regulation ("QSR"), facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labelling, advertising, and promotional materials (the “General Controls”). Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.