Title of each class | Trading Symbol | Name of each exchange on which registered |
American Depositary Shares (each representing 4 ‘A’ Ordinary Shares, par value US$0.0109) | TRIB | NASDAQ Global Market |
U.S. GAAP ☐ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ | Other ☐ |
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PART I |
2 | |||
2 | |||
2 | |||
A. | [Reserved] | 2 | |
B. | Capitalization and Indebtedness | 2 | |
C. | Reasons for the Offer and Use of Proceeds | 2 | |
D. | Risk Factors | 3 | |
A. | History and Development of the Company | ||
B. | Business Overview | ||
C. | Organizational Structure | ||
D. | Property, Plants and Equipment | ||
47 | |||
A. | Operating Results | ||
B. | Liquidity and Capital Resources | ||
C. | Research and Development, Patents and Licenses,etc. | ||
D. | Trend Information | ||
E. | Critical Accounting Estimates | ||
A. | Directors and Senior Management | ||
B. | Compensation | ||
C. | Board Practices | ||
D. | Employees | ||
E. | Share Ownership | ||
A. | Major Shareholders | ||
B. | Related Party Transactions | ||
C. | Interests of Experts and Counsel | ||
A. | Consolidated Statements and Other Financial Information | ||
B. | Significant Changes | ||
A. | Offer and Listing Details | ||
B. | Plan of Distribution | ||
C. | Markets | 76 | |
D. | Selling Shareholders | 76 | |
E. | Dilution | ||
F. | Expense of the Issue | ||
A. | Share Capital | ||
B. | Memorandum and Articles of Association | ||
C. | Material Contracts | ||
D. | Exchange Controls | ||
E. | Taxation | ||
F. | Dividends and Paying Agents | ||
G. | Statement by Experts | ||
H. | Documents on Display | ||
I. | Subsidiary Information | ||
PART II | ||||
PART III | ||||
Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
A. |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
• | Competition and trading conditions - our ability to sell products could be adversely affected by competition from new and existing diagnostic products, changing conditions in the diagnostic market, including, inter alia, reductions in government funding and sector consolidation. |
• |
Borrowings - we have incurred substantial debt, which could impair our flexibility and access to capital and adversely affect our financial position. To the extent we are unable to repay our debt as it becomes due with cash on hand or from other sources, we will need to refinance our debt, sell assets or repay the debt with the proceeds from equity offerings in order to continue in business. Our ability to obtain additional funding may determine our ability to continue as a going concern. Failure to comply with the terms of the credit agreement for our term loan could result in a default under its terms and, if uncured, could result in action against our pledged assets. We are exposed to interest rate risk on some of our borrowings, which could cause our debt service obligations to increase significantly. |
• | Capital structure - we expect we will require future additional capital. |
• | New product development - our long-term success depends upon the successful development and commercialization of new products. |
• | Supply chains - significant interruptions in production at our principal manufacturing facilities and/or third-party manufacturing facilities would adversely affect our business and operating results. We are dependent on third-party suppliers for certain critical components and the primary raw materials required for our test kits. Our inability to manufacture products in accordance with applicable specifications, performance standards or quality requirements could adversely affect our business. |
• | Product recalls and claims - our products may in the future be subject to product recalls that could harm our reputation, business and financial results. If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or regulatory agency enforcement actions. We may be subject to liability resulting from our products or services. |
• | Financial impairment - the large amount of intangible assets and goodwill recorded on our balance sheet may lead to significant impairment charges in the future. |
• | Corporate strategy - failure to achieve our financial and strategic objectives could have a material adverse impact on our business prospects. |
• | Global economic conditions – changes in global economic conditions may have a material adverse impact on our results. |
• | People - we are highly dependent on our senior management team and other key employees, and the loss of one or more of these employees or the inability to attract and retain qualified personnel as necessary could adversely affect our operations. |
• | Distributor network - our revenues are highly dependent on a network of distributors worldwide. Our success depends on our ability to service and support our products directly or in collaboration with our strategic partners. |
• | Cyber security - 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. |
• | Foreign exchange - our sales and operations are subject to the risks of fluctuations in currency exchange rates. |
• | Taxation - 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. |
• | Acquisitions - 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. |
• |
• | Environmental, Social and Governance - 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. |
• | Clinical trials - 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. 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. The results of our clinical trials may not support our product candidate claims. |
• | Regulatory compliance - 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. 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. |
• | Product approvals - if we fail to maintain regulatory approvals and clearances our ability to commercially distribute and market these products could suffer. 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. 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. 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. |
• | International regulations - we face risks relating to our international sales and business operations, including regulatory risks, which could impact our current business operations and growth strategy. |
• | Healthcare industry laws and public company regulations - we are subject to various laws targeting fraud and abuse in the healthcare industry. Changes in healthcare regulation could affect our revenues, costs and financial condition. Compliance with regulations governing public company corporate governance and reporting is complex and expensive. |
• | Proprietary rights - we may be unable to protect or obtain proprietary rights that we utilise or intend to utilise. |
• | Patent protection – our patent protection may not be sufficiently broad to compete effectively, the existing patents could be challenged; and trade secrets and confidential know-how could be obtained by competitors. Our patent protection could be reduced or eliminated for non-compliance with various procedural requirements or due to changes in patent law. 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. Product infringement claims by other companies could result in costly disputes and could limit our ability to sell our products. |
• | Significant shareholder - MiCo IVD Holdings, LLC (“MiCo”) currently owns approximately 29.3% of the voting share capital of our Company, which may give MiCo significant influence over our management and affairs and may deter a change in control or other transaction that may be favorable to our shareholders. |
• | Information - as a foreign private issuer we are exempt from a number of reporting requirements under the Exchange Act and are permitted to file less information with the SEC than a domestic U.S. reporting company. |
• | Passive foreign investment company - we may be classified as a passive foreign investment company, or PFIC, which would subject our U.S. investors to adverse tax rules. |
• | Volatility - the market price of our ADSs has been, and may continue to be, highly volatile. Future sales of our ADSs could reduce the market price of the ADSs. |
• | Capital - we expect we will need additional capital in the future. |
• | Dilution - the conversion of our outstanding employee share options, any new employee share options and existing warrants would dilute the ownership interest of existing shareholders. |
• | Governed by Irish law - it could be difficult for U.S. holders of ADSs to enforce any securities laws claims against Trinity Biotech, its officers or directors in Irish Courts. |
• | Dividends - we have no plans to pay dividends on our ADSs, and you may not receive funds without selling the ADSs. |
• | Voting rights of holders of ADSs – the terms of the deposit agreement limit the voting rights of holders of ADSs. |
• | NASDAQ listing standards - our securities could be delisted from Nasdaq if we do not comply with Nasdaq’s listing standards. |
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; 21 |
• | 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; |
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 |
● | announcements of new products by us or others; | |
● | announcements by us of significant acquisitions, disposals, 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. |
Item 4. | Information on the Company |
A. | History and Development of the Company |
Point-Of-Care | Clinical Laboratory | |||||||||
Infectious Diseases | Infectious Diseases | Haemoglobin | Autoimmune | Clinical Chemistry | Blood Bank Screening | |||||
UniGold | MarDx | Premier | ImmuBlot | EZ | Captia | |||||
Recombigen | FlexTrans | Ultra | ImmuGlo | |||||||
Trinscreen | ImmuLisa | |||||||||
OTOblot |
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 |
2022 | 2021 | Total project costs to December 31, 2022¹ | ||||||||||
Product Name | US$’000 | US$’000 | US$’000 | |||||||||
Premier Instruments for A1c and haemoglobinopathies testing | 1,904 | 2,538 | 37,828 | |||||||||
HIV screening rapid test | 379 | 1,488 | 12,619 | |||||||||
COVID-19 tests² | 1,378 | 1,320 | 3,165 | |||||||||
Mid-tier haemoglobins instrument | 484 | 303 | 1,093 |
Item | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
A. | Operating Results |
Year ended December 31, | ||||||||||||
2022 US$’000 | 2021 US$’000 | % Change | ||||||||||
Revenues | ||||||||||||
Clinical laboratory goods | 58,294 | 74,700 | (22.0% | ) | ||||||||
Clinical laboratory services | 7,272 | 7,928 | (8.3% | ) | ||||||||
Point-of-Care | 9,213 | 10,337 | (10.9% | ) | ||||||||
74,779 | 92,965 | (19.6% | ) |
Year ended December 31, | ||||||||||||
2022 US$‘000 | 2021 US$‘000 | % Change | ||||||||||
Revenues | ||||||||||||
Americas | 40,176 | 57,799 | (30.5% | ) | ||||||||
Asia/Africa | 25,022 | 25,504 | (1.9% | ) | ||||||||
Europe | 9,581 | 9,662 | (0.8% | ) | ||||||||
Total | 74,779 | 92,965 | (19.6% | ) |
i. | VTM inventory write down (US$3.5 million) – as disclosed previously, we have not seen any evidence during the winter season of 2022-23 of significant peaks in demand for VTM products. This has led management to revisit our strategy of maintaining significant levels of raw materials inventory to meet demand peaks. Consequently, the value of inventory was written down in Q3, 2022 to our estimate of its net realisable value. |
ii. | Other inventory write down (US$0.9 million) - the value of certain excess raw materials and work in progress was written down in Q3, 2022 following a review and an update to our relevant quality assurance policy. |
iii. | Tri-stat inventory write down (US$0.3 million) - as disclosed previously, we undertook a strategic review of our Tri-stat instrument line as part of a broader review of our haemoglobins product portfolio. Management decided to limit sales of Tri-stat to certain targeted partnerships and as a consequence the value of this inventory was written down to reflect the revised outlook. |
o | The share-based payments expense was US$0.7m higher in 2022 compared to 2021, mainly due to share options granted during 2022. The majority of the options granted in 2022 are performance share options and are structured such that they are exercisable only if the market price for Company’s ADSs exceeds certain levels ($3.00, $4.00 and $5.00 per ADS) during the life of the option. These performance share options align the goals of our team and our shareholders in the creation of shareholder value. |
o | With the lifting of COVID-related travel restrictions, we have tasked our sales and marketing teams to increase travel to customers and trade shows as we continue to revitalise our sales activities. Similarly, some key functional leaders based in Ireland have resumed visits to our overseas facilities as we seek to drive operational efficiencies. All of this has led to an approximately US$1.1 million increase in travel and promotional costs in 2022. |
o | Due diligence and other legal and professional fees increased by approximately US$0.8 million in 2022 as we took an active, but disciplined, approach to pursuing a pipeline of attractive M&A opportunities. |
o | Non-recurring professional fees, primarily associated with the debt refinancing, of US$0.6 million were expensed in 2022. |
o | Increased expected credit loss on trade receivables, with the majority of the increase due to one distributor. |
o | Higher recruitment fees in 2022 due to the hiring of more employees in senior management roles. |
o | Autoimmune smart reader (impairment charge US$1.3 million) - there is significant uncertainty whether the Company will complete the project to develop its own in-house autoimmune smart reader. While we may re-visit this decision in the future, in the interests of prudence we impaired the project’s carrying value. |
o | Tri-stat instrument (impairment charge US$1.0 million) - following a strategic review of the Tri-stat instrument, it was decided that Tri-stat sales would be restricted to only certain targeted partnerships, and this led to an impairment in the carrying value of the Tri-stat intangible asset. |
o | COVID-19 antigen test on a rapid lateral flow format (impairment charge US$2.2 million) - this test is approved for professional use in the EU. However, the demand for our COVID-19 portfolio of products is highly uncertain and very difficult to predict and in our experience the market has moved to over the counter (“OTC”) rapid COVID-19 tests, for which this product is not yet approved. As such the Company’s efforts to commercialise this test have been unsuccessful. In addition, pricing for rapid COVID-19 tests in the EU is relatively weak, with stronger pricing available in, for example, the US market, for which this product is not yet approved. Given the market outlook for rapid COVID-19 testing products and continued uncertainty regarding regulatory approval pathways in key markets, including the US, management chose not to immediately pursue further regulatory approvals but does intend to monitor these markets and regulatory pathways with a view to potentially seeking additional regulatory approvals. As the Company has no imminent plans to pursue these regulatory approvals, under IFRS accounting rules these intangible assets were written down to zero. |
o | COVID-19 test on an ELISA format (impairment charge US$0.1 million) – this development project was written off because the market changed and there was no demand for a test on this format. |
2022 US$’000 | 2021 US$’000 | |
Loss on disposal of exchangeable notes | 9.7 | - |
Penalty for early settlement of term loan | 3.5 | - |
Term loan interest | 9.8 | - |
Convertible note interest | 0.7 | - |
Notional interest on lease liabilities for Right-of-use assets | 0.7 | 0.8 |
Exchangeable note interest | 0.4 | 4.6 |
Loan origination costs - term loan | - | 1.6 |
Fair value movement for derivative asset | 0.1 | - |
Total | 24.7 | 7.1 |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||
2021 US$’000 | 2020 US$’000 | % Change | 2021 US$’000 | 2020 US$’000 | % Change | |||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Clinical laboratory goods | 74,700 | 84,280 | (11.4 | )% | 74,700 | 84,280 | (11.4% | ) | ||||||||||||||||
Clinical laboratory services | 7,928 | 8,485 | (6.6 | )% | 7,928 | 8,485 | (6.6% | ) | ||||||||||||||||
Point-of-Care | 10,337 | 9,215 | 12.2 | % | 10,337 | 9,215 | 12.2% | |||||||||||||||||
92,965 | 101,980 | (8.8 | )% | 92,965 | 101,980 | (8.8% | ) |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||
2021 US$‘000 | 2020 US$‘000 | % Change | 2021 US$‘000 | 2020 US$‘000 | % Change | |||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Americas | 57,799 | 70,408 | (17.9 | )% | 57,799 | 70,408 | (17.9% | ) | ||||||||||||||||
Asia/Africa | 25,504 | 22,567 | 13.0 | % | 25,504 | 22,567 | 13.0% | |||||||||||||||||
Europe | 9,662 | 9,005 | 7.3 | % | 9,662 | 9,005 | 7.3% | |||||||||||||||||
Total | 92,965 | 101,980 | (8.8 | )% | 92,965 | 101,980 | (8.8% | ) |
Year ended December 31, | ||||||||||||
2020 US$’000 | $ | 2019 US$’000 | % Change | |||||||||
Revenues | ||||||||||||
Clinical laboratory goods | 84,280 | 68,127 | 23.7 | % | ||||||||
Clinical laboratory services | 8,485 | 10,915 | (22.3 | )% | ||||||||
Point-of-Care | 9,215 | 11,393 | (19.1 | )% | ||||||||
101,980 | 90,435 | 12.8 | % |
Year ended December 31, | ||||||||||||
2020 US$‘000 | 2019 US$‘000 | % Change | ||||||||||
Revenues | ||||||||||||
Americas | 70,408 | 52,183 | 34.9 | % | ||||||||
Asia/Africa | 22,567 | 27,686 | (18.5 | )% | ||||||||
Europe | 9,005 | 10,566 | (14.8 | )% | ||||||||
Total | 101,980 | 90,435 | 12.8 | % |
B. | Liquidity and Capital Resources |
Year ended December 31, | Year ended December 31, | |||||||||||||||
2021 US$‘000 | 2020 US$‘000 | 2022 US$‘000 | 2021 US$‘000 | |||||||||||||
Net cash inflow from operating activities | 13,238 | 23,755 | ||||||||||||||
Net cash (used in) / generated by operating activities | (921 | ) | 13,238 | |||||||||||||
Net cash outflow from investing activities | (8,691 | ) | (10,198 | ) | (5,977 | ) | (8,691 | ) | ||||||||
Net cash outflow from financing activities | (6,019 | ) | (2,716 | ) | (12,322 | ) | (6,019 | ) | ||||||||
Net (decrease)/increase in cash and cash equivalents and short-term investments | (1,472 | ) | 10,841 | |||||||||||||
Net decrease in cash and cash equivalents and short-term investments | (19,220 | ) | (1,472 | ) |
(i) | VTM inventory – there was no evidence during the winter season of 2022-23 of significant peaks in demand for VTM products. This has led management to revisit the strategy of maintaining significant levels of raw materials inventory to meet demand peaks. Consequently, the provision for this inventory was increased by US$3.5 million in 2022 reflecting our estimate of its net realisable value. |
(ii) | Tri-stat inventory – the Company undertook a strategic review of our Tri-stat instrument line as part of a broader review of our haemoglobins product portfolio. Management decided to limit sales of Tri-stat to certain targeted partnerships and as a consequence the value of this inventory was written down by US$0.3 million to reflect the revised outlook. |
(iii) | Raw materials and work in progress failing to meet our revised quality policy - the value of certain excess raw materials and work in progress was written down by US$0.9 million in 2022 following a review and an update to our relevant quality assurance policy. |
Name | Age | Title |
Directors | ||
Chairman and Chief Executive Officer | ||
Ronan O’Caoimh | 67 | Founder & Director |
Jim Walsh, PhD | Executive Director of Business Development | |
John Gillard | Chief Financial Officer, Company Secretary, | |
Senior Management | ||
Ian Wells, PhD | 54 | Vice President of Quality and Regulatory Affairs |
Simon Dunne | Chief Accounting Officer | |
Eibhlín Kelly | Chief Information Officer | |
Group Director of Human Resources and Culture | ||
John Mee | 59 | Global Supply Chain Director |
Nick O’Hare | 50 | Vice President of |
Mícheál Roche | 63 | Vice President of Global Health |
Director | Title | Salary/ Benefits US$’000 | Performance related bonus US$’000 | Defined contribution pension US$’000 | Total 2021 US$’000 | Total 2020 US$’000 | |||||||||||||||||
Ronan O’Caoimh | Chairman and CEO | 643 | — | — | 643 | 1,052 | |||||||||||||||||
Jim Walsh | Executive Director | 20 | — | — | 20 | 38 | |||||||||||||||||
John Gillard | Chief Financial Officer | 346 | 227 | 20 | 593 | 52 | |||||||||||||||||
Kevin Tansley | Executive Director | 56 | — | 4 | 60 | 757 | |||||||||||||||||
Denis R. Burger | Non-Executive director | — | — | — | — | 48 | |||||||||||||||||
James Merselis | Non-Executive director | 49 | — | — | 49 | 57 | |||||||||||||||||
Clint Severson | Non-Executive director | 49 | — | — | 49 | 57 | |||||||||||||||||
1,163 | 227 | 24 | 1,414 | 2,061 |
Director | Title | Salary/Other payments/ Benefits US$’000 | Performance related bonus US$’000 | Transaction related bonus US$’000 | Defined contribution pension US$’000 | Total 2022 US$’000 | Total 2021 US$’000 | |||||||||||||||||||
Aris Kekedjian1, 2 | Chairman and Chief Executive officer | 262 | 125 | — | — | 387 | — | |||||||||||||||||||
Ronan O’Caoimh1 | Executive Director | 340 | — | — | — | 340 | 643 | |||||||||||||||||||
Jim Walsh | Executive Director | 20 | — | — | — | 20 | 20 | |||||||||||||||||||
John Gillard 3 | Executive Director | 452 | 183 | 204 | 24 | 863 | 593 | |||||||||||||||||||
Tom Lindsay4 | Director | — | — | — | — | — | — | |||||||||||||||||||
Kevin Tansley5 | Former Director | 19 | — | — | — | 19 | 60 | |||||||||||||||||||
Clint Severson6 | Former Director | 17 | — | — | — | 17 | 49 | |||||||||||||||||||
James Merselis7 | Former Director | 17 | — | — | — | 17 | 49 | |||||||||||||||||||
1,127 | 308 | 204 | 24 | 1,663 | 1,414 |
Year Ended December 31, | Year Ended December 31, 2022 | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Numbers of employees by geographic location | ||||||||||||||||||||||||
United States | 237 | 310 | 334 | 217 | 237 | 310 | ||||||||||||||||||
Ireland | 211 | 199 | 215 | 146 | 211 | 199 | ||||||||||||||||||
United Kingdom | 2 | 3 | 2 | 1 | 2 | 3 | ||||||||||||||||||
Brazil | 27 | 31 | 28 | 34 | 27 | 31 | ||||||||||||||||||
Total workforce | 477 | 543 | 579 | 398 | 477 | 543 | ||||||||||||||||||
Numbers of employees by category of activity | ||||||||||||||||||||||||
Research scientists & technicians | 41 | 52 | 57 | 30 | 41 | 52 | ||||||||||||||||||
Manufacturing/Operations | 239 | 280 | 303 | 188 | 239 | 280 | ||||||||||||||||||
Quality Assurance | 63 | 63 | 60 | 61 | 63 | 63 | ||||||||||||||||||
Finance/Administration | 68 | 65 | 66 | 75 | 68 | 65 | ||||||||||||||||||
Sales & Marketing | 66 | 83 | 93 | 44 | 66 | 83 | ||||||||||||||||||
Total workforce | 477 | 543 | 579 | 398 | 477 | 543 |
Name | Number of ‘A’ Ordinary Shares Beneficially Owned (1) | Percentage of Ownership (2) | ||||||
Ronan O’Caoimh (3) | 17,228,160 | 15.0 | % | |||||
Jim Walsh (4) | 2,863,612 | 2.6 | % | |||||
John Gillard (5) | 150,000 | * | ||||||
Kevin Tansley (6) | 1,547,336 | 1.4 | % | |||||
Clint Severson (7) | 878,000 | * | ||||||
James Merselis (8) | 778,600 | * | ||||||
Simon Dunne (9) | 210,000 | * | ||||||
Fernando Devia (10) | 330,000 | * | ||||||
Sanjiv Suri (11) | 280,000 | * | ||||||
Terence Dunne (12) | 283,336 | * | ||||||
Dan Goldsand | - | * | ||||||
Eibhlín Kelly | - | * | ||||||
Executive officers and directors as a group (12 persons) | 24,549,044 | 20.4 | % |
Name | Number of ‘A’ Ordinary Shares Beneficially Owned (1) | Percentage of Ownership (2) | ||||||
Ronan O’Caoimh (3) | 18,761,496 | 11.6 | % | |||||
Aris Kekedjian (4) | 4,000,000 | 2.6 | % | |||||
Jim Walsh (5) | 2,743,612 | 1.8 | % | |||||
John Gillard (6) | 1,900,000 | 1.2 | % | |||||
Tom Lindsay | - | - | ||||||
Simon Dunne (7) | 240,000 | * | ||||||
Ian Wells | - | - | ||||||
Eibhlín Kelly | - | - | ||||||
Gary Keating | - | - | ||||||
Colm Molloy | - | - | ||||||
John Mee | - | - | ||||||
Nick O’Hare | - | - | ||||||
Mícheál Roche | - | - | ||||||
Executive officers and directors as a group (13 persons) | 27,645,108 | 16.3 | % |
* | Less than 1% |
(1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Ordinary Shares relating to options currently exercisable or exercisable within 60 days of the date of this table are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Share options that have a performance condition related to the share price of the equity of the Company are deemed to be exercisable irrespective of whether the performance condition has been, or is expected to be, satisfied within 60 days of the date of this table. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. |
(2) | The percentages shown are based on ‘A’ Ordinary Shares issued and outstanding as of April 15, |
(3) | Represents (a) 9,724,160 ‘A’ ordinary shares and (b) |
(4) | Represents |
(5) | Represents (a) 1,393,612 ‘A’ ordinary shares and (b) 1,350,000 ‘A’ ordinary shares underlying options that are currently vested and exercisable or that vest within sixty days of April 15, 2023. Note that 1,393,612 ‘A’ ordinary shares of Dr Walsh’s shares are held in trust for the benefit of Dr Walsh’s immediate family. |
Represents |
Represents |
Director/Company Secretary | Number of Options ‘A’ Shares | Number of Options ADS Equivalent | Exercise Price (Per ‘A’ Share) | Exercise Price (Per ADS) | Expiration Date of Options | Number of Options ‘A’ Shares | Number of Options ADS Equivalent | Exercise Price (Per ‘A’ Share) | Exercise Price (Per ADS) | Hurdle Price 2 (Per ADS) | Expiration Date of Options | |||||||||||||||||||||||||||
Ronan O’Caoimh* | 1,000,000 | 250,000 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||||||||||||||||||||||
Aris Kekedjian | 8,000,000 | 2,000,000 | 0.27 | 1.07 | None | 03/10/2029 | ||||||||||||||||||||||||||||||||
4,000,000 | 1,000,000 | 0.27 | 1.07 | $ | 3.00 | 03/10/2029 | ||||||||||||||||||||||||||||||||
4,000,000 | 1,000,000 | 0.27 | 1.07 | $ | 4.00 | 03/10/2029 | ||||||||||||||||||||||||||||||||
4,000,000 | 1,000,000 | 0.27 | 1.07 | $ | 5.00 | 03/10/2029 | ||||||||||||||||||||||||||||||||
John Gillard | 600,000 | 150,000 | 0.67 | 2.69 | None | 23/10/2027 | ||||||||||||||||||||||||||||||||
1,000,000 | 250,000 | 1.34 | 5.35 | 07/09/2024 | 1,400,000 | 350,000 | 0.27 | 1.09 | None | 25/03/2029 | ||||||||||||||||||||||||||||
244,000 | 61,000 | 1.34 | 5.35 | 07/09/2024 | 3,200,000 | 800,000 | 0.29 | 1.14 | None | 19/12/2029 | ||||||||||||||||||||||||||||
2,030,000 | 507,500 | 0.69 | 2.74 | 14/06/2026 | 1,600,000 | 400,000 | 0.29 | 1.14 | $ | 3.00 | 19/12/2029 | |||||||||||||||||||||||||||
2,030,000 | 507,500 | 0.69 | 2.74 | 14/06/2026 | 1,600,000 | 400,000 | 0.29 | 1.14 | $ | 4.00 | 19/12/2029 | |||||||||||||||||||||||||||
333,336 | 83,334 | 0.19 | 0.77 | 20/03/2027 | 1,600,000 | 400,000 | 0.29 | 1.14 | $ | 5.00 | 19/12/2029 | |||||||||||||||||||||||||||
Ronan O’Caoimh 1 | 2,244,000 | 561,000 | 1.34 | 5.35 | None | 07/09/2024 | ||||||||||||||||||||||||||||||||
4,060,000 | 1,015,000 | 0.69 | 2.74 | None | 14/06/2026 | |||||||||||||||||||||||||||||||||
1,200,000 | 300,000 | 0.73 | 2.90 | 17/11/2027 | 333,336 | 83,334 | 0.19 | 0.77 | None | 20/03/2027 | ||||||||||||||||||||||||||||
1,200,000 | 300,000 | 0.73 | 2.90 | 17/11/2027 | 2,400,000 | 600,000 | 0.73 | 2.90 | None | 17/11/2027 | ||||||||||||||||||||||||||||
Jim Walsh | 53,333 | 13,333 | 2.43 | 9.73 | 24/02/2023 | 750,000 | 187,500 | 1.34 | 5.35 | None | 07/09/2024 | |||||||||||||||||||||||||||
53,333 | 13,333 | 2.43 | 9.73 | 24/02/2023 | 600,000 | 150,000 | 0.19 | 0.77 | None | 20/03/2027 | ||||||||||||||||||||||||||||
53,334 | 13,334 | 2.43 | 9.73 | 24/02/2023 | ||||||||||||||||||||||||||||||||||
360,000 | 90,000 | 1.34 | 5.35 | 07/09/2024 | ||||||||||||||||||||||||||||||||||
360,000 | 90,000 | 1.34 | 5.35 | 07/09/2024 | ||||||||||||||||||||||||||||||||||
30,000 | 7,500 | 1.34 | 5.35 | 07/09/2024 | ||||||||||||||||||||||||||||||||||
280,000 | 70,000 | 0.19 | 0.77 | 20/03/2027 | ||||||||||||||||||||||||||||||||||
280,000 | 70,000 | 0.19 | 0.77 | 20/03/2027 | ||||||||||||||||||||||||||||||||||
40,000 | 10,000 | 0.19 | 0.77 | 20/03/2027 | ||||||||||||||||||||||||||||||||||
Kevin Tansley | 340,000 | 85,000 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||||||||||||||||||||||
340,000 | 85,000 | 1.34 | 5.35 | 07/09/2024 | ||||||||||||||||||||||||||||||||||
184,000 | 46,000 | 1.34 | 5.35 | 07/09/2024 | ||||||||||||||||||||||||||||||||||
266,668 | 66,667 | 0.19 | 0.77 | 20/03/2027 | ||||||||||||||||||||||||||||||||||
266,668 | 66,667 | 0.19 | 0.77 | 20/03/2027 | ||||||||||||||||||||||||||||||||||
266,664 | 66,666 | 0.19 | 0.77 | 20/03/2027 |
Jim Merselis | 20,000 | 5,000 | 2.43 | 9.73 | 24/02/2023 | ||||||||||||
20,000 | 5,000 | 2.43 | 9.73 | 24/02/2023 | |||||||||||||
20,000 | 5,000 | 2.43 | 9.73 | 24/02/2023 | |||||||||||||
95,000 | 23,750 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||
95,000 | 23,750 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||
20,000 | 5,000 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||
160,000 | 40,000 | 0.19 | 0.77 | 20/03/2027 | |||||||||||||
160,000 | 40,000 | 0.19 | 0.77 | 20/03/2027 | |||||||||||||
40,000 | 10,000 | 0.19 | 0.77 | 20/03/2027 | |||||||||||||
Clint Severson | 20,000 | 5,000 | 2.43 | 9.73 | 24/02/2023 | ||||||||||||
20,000 | 5,000 | 2.43 | 9.73 | 24/02/2023 | |||||||||||||
20,000 | 5,000 | 2.43 | 9.73 | 24/02/2023 | |||||||||||||
95,000 | 23,750 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||
95,000 | 23,750 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||
20,000 | 5,000 | 1.34 | 5.35 | 07/09/2024 | |||||||||||||
160,000 | 40,000 | 0.19 | 0.77 | 20/03/2027 | |||||||||||||
160,000 | 40,000 | 0.19 | 0.77 | 20/03/2027 | |||||||||||||
40,000 | 10,000 | 0.19 | 0.77 | 20/03/2027 | |||||||||||||
John Gillard | 150,000 | 37,500 | 0.67 | 2.69 | 23/10/2027 | ||||||||||||
150,000 | 37,500 | 0.67 | 2.69 | 23/10/2027 | |||||||||||||
150,000 | 37,500 | 0.67 | 2.69 | 23/10/2027 | |||||||||||||
150,000 | 37,500 | 0.67 | 2.69 | 23/10/2027 |
Number of ‘A’ Ordinary Shares Subject to Option | Range of Exercise Price per Ordinary Share | Range of Exercise Price per ADS | ||||||||||
Total options outstanding |
A. | Major Shareholders |
Number of ‘A’ Ordinary Shares Beneficially Owned | Number of ADSs Beneficially Owned (1) | Percentage ‘A’ Ordinary Shares (2) | Percentage Total Voting Power | |||||||||||||
Renaissance Technologies LLC | 6,274,220 | (3) | 1,568,555 | 5.8 | % | 5.8 | % | |||||||||
Paradice Investment Management, LLC | 6,172,460 | (4) | 1,543,115 | 5.7 | % | 5.7 | % | |||||||||
Ronan O’Caoimh | 17,228,160 | (5) | 4,307,040 | 15.0 | % | 15.0 | % | |||||||||
Stonehill Capital Management LLC | 9,272,872 | (6) | 2,318,218 | 8.6 | % | 8.6 | % | |||||||||
Perceptive Credit Holdings III, LP | 10,000,000 | (7) | 2,500,000 | 8.5 | % | 8.5 | % |
Name | Number of ‘A’ Ordinary Shares Beneficially Owned | Number of ADSs Beneficially Owned (1) | Percentage ownership (2) | |||||||||
MiCo IVD Holdings, LLC | 44,759,388 | (3) | 11,189,847 | 29.3 | % | |||||||
All directors and officers as a group | 27,645,108 | 6,911,277 | 16.3 | % | ||||||||
Perceptive Credit Holdings III, LP | 10,000,000 | (4) | 2,500,000 | 6.1 | % |
(1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Ordinary Shares relating to options currently exercisable or exercisable within 60 days of the date of this table are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Share options that have a performance condition related to the share price of the equity of the Company are deemed to be exercisable irrespective of whether the performance condition has been, or is expected to be, satisfied within 60 days of the date of this table. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. |
(2) | The percentages shown are based on ‘A’ Ordinary Shares outstanding (excluding treasury shares). | |
(3) | Based | |
Based upon warrant agreement issued to Perceptive Credit Holdings III, LP in January 2022 in respect of 10,000,000 ‘A’ Ordinary Shares (2,500,000 ADSs). |
Number of ‘A’ Ordinary Shares Beneficially Owned | Number of ADSs Beneficially Owned (1) | Percentage ‘A’ Ordinary Shares (2) | Percentage Total Voting Power | Date of Filing | Number of ‘A’ Ordinary Shares Beneficially Owned | Number of ADSs Beneficially Owned (1) | Percentage ‘A’ Ordinary Shares (2) | Percentage Total Voting Power | Date of Filing | |||||||||||||||||||||||||
Whitefort Capital Master Fund, LP | 2,342,280 | 585,570 | 2.2 | % | 2.2 | % | February 16, 2021 | 2,342,280 | 585,570 | 1.5 | % | 1.5 | % | February 16, 2021 | ||||||||||||||||||||
Highbridge Capital Management, LLC | 675,064 | 168,766 | 0.6 | % | 0.6 | % | April 14, 2022 | 675,064 | 168,766 | 0.4 | % | 0.4 | % | April 14, 2022 | ||||||||||||||||||||
Renaissance Technologies LLC | 5,573,752 | 1,393,438 | 3.6 | % | 3.6 | % | February 13, 2023 | |||||||||||||||||||||||||||
Stonehill Capital Management LLC | 6,690,592 | 1,672,648 | 4.4 | % | 4.4 | % | February 13, 2023 | |||||||||||||||||||||||||||
Paradice Investment Management, LLC | 6,172,460 | 1,543,115 | 4.0 | % | 4.0 | % | February 7, 2020 |
- | Options to purchase 2 million ADS at an exercise price of US$1.071 (the closing price on 30 September 2022). The options will vest on a quarterly basis over 24 months from the date of commencement of employment. |
- | Options to purchase 3 million ADS which become exercisable in the event the closing price of the ADS reach certain levels for ten (10) trading days out of the thirty (30) previous trading days, of which: (i) options to purchase 1 million ADSs become exercisable if and when the closing price of the ADSs is equal to or greater than $3.00, (ii) options to purchase 1 million ADSs become exercisable if and when the closing price of the ADSs is equal to or greater than $4.00, and (iii) options to purchase 1 million ADSs become exercisable if and when the closing price of the ADSs is equal to or greater than $5.00, in each case adjusted for any stock splits, reverse splits or equivalent reorganisations. These options have an exercise price of US$1.071 and vest rateably over 3 years from the date of commencement of employment. |
- | Accelerated vesting of the share options in certain circumstances. |
Service | Rate | By whom paid |
(1) Issuance of ADSs upon deposit of ordinary shares. | Up to $10.00 per 100 ADSs (or portion thereof) issued. | Persons depositing ordinary shares or person receiving ADSs. |
(2) Delivery of deposited securities against surrender of ADSs. | Up to $10.00 per 100 ADSs (or portion thereof) issued. | Persons surrendering ADSs for the purpose of withdrawal of deposited securities or persons to whom deposited securities are delivered. |
(3) Issuance of ADSs in connection with a distribution of shares. | Up to $10.00 per 100 ADSs (or portion thereof) issued. | Person to whom distribution is made. |
(4) Distribution of cash dividends or other cash distributions, including distribution of cash proceeds following the sale of rights, shares or other property in accordance with the deposit agreement | Up to $0.02 per 1 ADS | Person to whom distribution is made. |
(5) Transfer of ADSs | Up to $1.50 per certificate for ADRs or ADRs transferred | Person to whom Receipt is transferred. |
Item | Defaults, Dividend Arrearages and Delinquencies |
Item | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item | Controls and Procedures |
Item 16. | Reserved |
Year ended December 31, 2021 | Year ended December 31, 2020 | Year ended December 31, 2022 | Year ended December 31, 2021 | |||||||||||||||||||||||||||||
US$’000 | % | US$’000 | % | US$’000 | % | US$’000 | % | |||||||||||||||||||||||||
Audit | 477 | 72 | % | 495 | 80 | % | 1,064 | 92 | % | 571 | 86 | % | ||||||||||||||||||||
Audit-related | 94 | 14 | % | - | - | |||||||||||||||||||||||||||
Tax | 89 | 14 | % | 124 | 20 | % | 89 | 8 | % | 89 | 14 | % | ||||||||||||||||||||
Total | 660 | 619 | 1,153 | 660 |
16 I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections |
• | We evaluated the design effectiveness of controls over management’s selection of the discount rates, short-term forecasts of future revenues and margins, and long-term growth rates used to determine the recoverable amount of each selected CGU. |
• | We |
• | performing a look-back analysis and comparing actual results to management’s historical forecasts; and |
• | assessing the reasonableness of the impact of new products, |
• | We assessed the reasonableness of the valuation model used by the Company compared to generally accepted valuation practices and accounting standards. |
• | We tested the source information underlying the determination of the discount rates through use of observable inputs from independent external |
• | We developed independent estimates and compared those to the discount rates selected by management. |
• | We compared the long-term growth rates, used by management to grow cash flows in order to calculate a terminal value, to independent external sources to assess the reasonableness of these rates. |
• | We examined the supporting documents of internally generated development costs additions in the financial year to ensure they constituted development phase costs allowable for capitalization as stipulated by accounting standards. |
• | We tested the key assumptions used by management in concluding that development projects capitalized during the financial year demonstrate the required characteristics to permit capitalization, particularly the commercial and technical feasibility of on-going development projects. |
• | We conducted detailed discussions with senior project personnel in charge of the developments to understand their rationale for concluding on the appropriateness of capitalization of the development phase costs and, where necessary, challenged the underlying reasoning. |
• | We obtained a detailed understanding of the role of the employees in the development of the relevant projects whose salaries are capitalized. |
• | We on-going projects. |
Year ended December 31 | |||||||||||||||
Notes | 2021 Total US$‘000 | 2020 Total US$‘000 | 2019 Total US$‘000 | ||||||||||||
Revenues | 2 | 92,965 | 101,980 | 90,435 | |||||||||||
Cost of sales | (54,888 | ) | (53,400 | ) | (52,315 | ) | |||||||||
Gross profit | 38,077 | 48,580 | 38,120 | ||||||||||||
Other operating income | 4 | 4,672 | 1,860 | 91 | |||||||||||
Research and development expenses | (4,497 | ) | (5,080 | ) | (5,325 | ) | |||||||||
Selling, general and administrative expenses | (24,683 | ) | (26,390 | ) | (27,661 | ) | |||||||||
Selling, general and administrative expenses – recognition of contingent asset | 26 | 0 | 1,316 | 0 | |||||||||||
Selling, general and administrative expenses – closure costs | 5 | 0 | (2,425 | ) | 0 | ||||||||||
Selling, general and administrative expenses – tax audit settlement | 6 | 0 | 0 | (5,042 | ) | ||||||||||
Impairment charges | 7 | (6,944 | ) | (17,779 | ) | (24,295 | ) | ||||||||
Operating profit/(loss) | 6,625 | 82 | (24,112 | ) | |||||||||||
Financial income | 2,8 | 1,223 | 36 | 697 | |||||||||||
Financial expenses | 2, 8 | (7,097 | ) | (6,751 | ) | (6,582 | ) | ||||||||
Net financing expense | (5,874 | ) | (6,715 | ) | (5,885 | ) | |||||||||
Profit/(Loss) before tax | 11 | 751 | (6,633 | ) | (29,997 | ) | |||||||||
Total income tax credit | 2, 9 | 178 | 620 | 1,006 | |||||||||||
Profit/(Loss) for the year on continuing operations | 2 | 929 | (6,013 | ) | (28,991 | ) | |||||||||
(Loss)/Profit for the year on discontinued operations | 10 | (54 | ) | (375 | ) | 77 | |||||||||
Profit(Loss) for the year (all attributable to owners of the parent) | 2 | 875 | (6,388 | ) | (28,914 | ) | |||||||||
Basic profit/(loss) per ADS (US Dollars) – continuing operations | 12 | 0.04 | (0.29 | ) | (1.39 | ) | |||||||||
Diluted profit/(loss) per ADS (US Dollars) – continuing operations | 12 | 0.04 | (0.29 | ) | (1.39 | ) | |||||||||
Basic profit/(loss) per ‘A’ ordinary share (US Dollars) –continuing operations | 12 | 0.01 | (0.07 | ) | (0.35 | ) | |||||||||
Diluted profit/(loss) per ‘A’ ordinary share (US Dollars) – continuing operations | 12 | 0.01 | (0.07 | ) | (0.35 | ) | |||||||||
Basic profit/(loss) per ADS (US Dollars) – group | 12 | 0.04 | (0.31 | ) | (1.38 | ) | |||||||||
Diluted profit/(loss) per ADS (US Dollars) – group | 12 | 0.04 | (0.31 | ) | (1.38 | ) | |||||||||
Basic profit/(loss) per ‘A’ ordinary share (US Dollars) – group | 12 | 0.01 | (0.08 | ) | (0.35 | ) | |||||||||
Diluted profit/(loss) per ‘A’ ordinary share (US Dollars) – group | 12 | 0.01 | (0.08 | ) | (0.35 | ) |
Year ended December 31 | ||||||||||||||||
Notes | 2022 Total US$‘000 | 2021 Total US$‘000 | 2020 Total US$‘000 | |||||||||||||
Revenues | 2 | 74,779 | 92,965 | 101,980 | ||||||||||||
Cost of sales | (52,731 | ) | (54,888 | ) | (53,400 | ) | ||||||||||
Gross profit | 22,048 | 38,077 | 48,580 | |||||||||||||
Other operating income | 4 | 343 | 4,672 | 1,860 | ||||||||||||
Research and development expenses | (4,138 | ) | (4,497 | ) | (5,080 | ) | ||||||||||
Selling, general and administrative expenses | (29,166 | ) | (24,683 | ) | (26,390 | ) | ||||||||||
Selling, general and administrative expenses – closure costs | 9 | - | - | (2,425 | ) | |||||||||||
Selling, general and administrative expenses – recognition of contingent asset | 24 | - | - | 1,316 | ||||||||||||
Impairment charges | 5 | (5,839 | ) | (6,944 | ) | (17,779 | ) | |||||||||
Operating (loss)/profit | (16,752 | ) | 6,625 | 82 | ||||||||||||
Financial income | 6 | 303 | 1,223 | 36 | ||||||||||||
Financial expenses | 6 | (24,745 | ) | (7,097 | ) | (6,751 | ) | |||||||||
Net financing expense | (24,442 | ) | (5,874 | ) | (6,715 | ) | ||||||||||
(Loss)/profit before tax | 9 | (41,194 | ) | 751 | (6,633 | ) | ||||||||||
Total income tax credit | 2, 7 | 192 | 178 | 620 | ||||||||||||
(Loss)/profit for the year on continuing operations | 2 | (41,002 | ) | 929 | (6,013 | ) | ||||||||||
Loss for the year on discontinued operations | 8 | (7 | ) | (54 | ) | (375 | ) | |||||||||
(Loss)/profit for the year (all attributable to owners of the parent) | 2 | (41,009 | ) | 875 | (6,388 | ) | ||||||||||
Basic (loss)/profit per ADS (US Dollars) – continuing operations | 10 | (1.22 | ) | 0.04 | (0.29 | ) | ||||||||||
Diluted (loss)/profit per ADS (US Dollars) – continuing operations | 10 | (1.22 | ) | 0.04 | (0.29 | ) | ||||||||||
Basic (loss)/profit per ‘A’ ordinary share (US Dollars) –continuing operations | 10 | (0.30 | ) | 0.01 | (0.07 | ) | ||||||||||
Diluted (loss)/profit) per ‘A’ ordinary share (US Dollars) – continuing operations | 10 | (0.30 | ) | 0.01 | (0.07 | ) | ||||||||||
Basic (loss)/profit per ADS (US Dollars) – group | 10 | (1.22 | ) | 0.04 | (0.31 | ) | ||||||||||
Diluted (loss)/profit per ADS (US Dollars) – group | 10 | (1.22 | ) | 0.04 | (0.31 | ) | ||||||||||
Basic (loss)/profit per ‘A’ ordinary share (US Dollars) – group | 10 | (0.30 | ) | 0.01 | (0.08 | ) | ||||||||||
Diluted (loss)/profit) per ‘A’ ordinary share (US Dollars) – group | 10 | (0.30 | ) | 0.01 | (0.08 | ) |
Year ended December 31 | Year ended December 31 | |||||||||||||||||||||||||||||
Notes | 2021 US$‘000 | 2020 US$‘000 | 2019 US$‘000 | Notes | 2022 US$‘000 | 2021 US$‘000 | 2020 US$‘000 | |||||||||||||||||||||||
Profit/(Loss) for the year | 2 | 875 | (6,388 | ) | (28,914 | ) | ||||||||||||||||||||||||
(Loss)/profit for the year | 2 | (41,009 | ) | 875 | (6,388 | ) | ||||||||||||||||||||||||
Other comprehensive loss | ||||||||||||||||||||||||||||||
Items that will be reclassified subsequently to profit or loss | ||||||||||||||||||||||||||||||
Foreign exchange translation differences | (86 | ) | (1,360 | ) | (167 | ) | (396 | ) | (86 | ) | (1,360 | ) | ||||||||||||||||||
Other comprehensive loss | (86 | ) | (1,360 | ) | (167 | ) | (396 | ) | (86 | ) | (1,360 | ) | ||||||||||||||||||
Total Comprehensive Profit/(Loss) (all attributable to owners of the parent) | 789 | (7,748 | ) | (29,081 | ) | |||||||||||||||||||||||||
Total Comprehensive (Loss)/profit (all attributable to owners of the parent) | (41,405 | ) | 789 | (7,748 | ) |
At December 31 | |||||||||||
Notes | 2022 US$‘000 | 2021 US$‘000 | |||||||||
ASSETS | |||||||||||
Non-current assets | |||||||||||
Property, plant and equipment | 11 | 5,682 | 5,918 | ||||||||
Goodwill and intangible assets | 12 | 35,269 | 35,981 | ||||||||
Deferred tax assets | 13 | 4,218 | 4,101 | ||||||||
Derivative financial instruments | 22 | 128 | - | ||||||||
Other assets | 14 | 139 | 207 | ||||||||
Total non-current assets | 45,436 | 46,207 | |||||||||
Current assets | |||||||||||
Inventories | 15 | 22,503 | 29,123 | ||||||||
Trade and other receivables | 16 | 15,753 | 16,116 | ||||||||
Income tax receivable | 1,834 | 1,539 | |||||||||
Cash and cash equivalents | 17 | 6,578 | 25,910 | ||||||||
Total current assets | 46,668 | 72,688 | |||||||||
TOTAL ASSETS | 2 | 92,104 | 118,895 | ||||||||
EQUITY AND LIABILITIES | |||||||||||
Equity attributable to the equity holders of the parent | |||||||||||
Share capital | 18 | 1,963 | 1,213 | ||||||||
Share premium | 18 | 46,458 | 16,187 | ||||||||
Treasury shares | 18 | (24,922 | ) | (24,922 | ) | ||||||
Accumulated (deficit)/surplus | 18 | (26,695 | ) | 12,559 | |||||||
Translation reserve | 18 | (5,775 | ) | (5,379 | ) | ||||||
Equity component of convertible note | 18, 22 | 6,709 | - | ||||||||
Other reserves | 18 | 86 | 23 | ||||||||
Total deficit | (2,176 | ) | (319 | ) | |||||||
Current liabilities | |||||||||||
Income tax payable | 28 | 22 | |||||||||
Trade and other payables | 20 | 15,375 | 15,127 | ||||||||
Provisions | 21 | 50 | 50 | ||||||||
Exchangeable notes and other borrowings | 22 | 210 | 83,312 | ||||||||
Lease liabilities | 23 | 1,676 | 1,980 | ||||||||
Total current liabilities | 17,339 | 100,491 | |||||||||
Non-current liabilities | |||||||||||
Senior secured term loan | 22 | 44,301 | - | ||||||||
Derivative financial liability | 22 | 1,569 | - | ||||||||
Convertible Note | 22 | 13,746 | - | ||||||||
Lease liabilities | 23 | 12,267 | 13,865 | ||||||||
Deferred tax liabilities | 13 | 5,058 | 4,858 | ||||||||
Total non-current liabilities | 76,941 | 18,723 | |||||||||
TOTAL LIABILITIES | 2 | 94,280 | 119,214 | ||||||||
TOTAL EQUITY AND LIABILITIES | 92,104 | 118,895 |
At December 31 | |||||||||||
Notes | 2021 US$‘000 | 2020 US$‘000 | |||||||||
ASSETS | |||||||||||
Non-current assets | |||||||||||
Property, plant and equipment | 13 | 5,918 | 8,547 | ||||||||
Goodwill and intangible assets | 14 | 35,981 | 33,860 | ||||||||
Deferred tax assets | 15 | 4,101 | 4,185 | ||||||||
Derivative financial instruments | 24 | 0 | 150 | ||||||||
Other assets | 16 | 207 | 355 | ||||||||
Total non-current assets | 46,207 | 47,097 | |||||||||
Current assets | |||||||||||
Inventories | 17 | 29,123 | 30,219 | ||||||||
Trade and other receivables | 18 | 16,116 | 22,668 | ||||||||
Income tax receivable | 1,539 | 3,086 | |||||||||
Cash and cash equivalents | 19 | 25,910 | 27,327 | ||||||||
Total current assets | 72,688 | 83,300 | |||||||||
TOTAL ASSETS | 2 | 118,895 | 130,397 | ||||||||
EQUITY AND LIABILITIES | |||||||||||
Equity attributable to the equity holders of the parent | |||||||||||
Share capital | 20 | 1,213 | 1,213 | ||||||||
Share premium | 20 | 16,187 | 16,187 | ||||||||
Treasury shares | 20 | (24,922 | ) | (24,922 | ) | ||||||
Accumulated surplus | 20 | 12,559 | 10,573 | ||||||||
Translation reserve | 20 | (5,379 | ) | (5,293 | ) | ||||||
Other reserves | 20 | 23 | 23 | ||||||||
Total deficit | (319 | ) | (2,219 | ) | |||||||
Current liabilities | |||||||||||
Income tax payable | 22 | 154 | |||||||||
Trade and other payables | 22 | 15,127 | 24,335 | ||||||||
Provisions | 23 | 50 | 416 | ||||||||
Exchangeable notes and other borrowings | 24 | 83,312 | 0 | ||||||||
Lease liabilities | 25 | 1,980 | 2,153 | ||||||||
Total current liabilities | 100,491 | 27,058 | |||||||||
Non-current liabilities | |||||||||||
Exchangeable notes and other borrowings | 24 | 0 | 82,695 | ||||||||
Derivative financial instruments | 24 | 0 | 1,370 | ||||||||
Lease liabilities | 25 | 13,865 | 16,588 | ||||||||
Deferred tax liabilities | 15 | 4,858 | 4,905 | ||||||||
Total non-current liabilities | 18,723 | 105,558 | |||||||||
TOTAL LIABILITIES | 2 | 119,214 | 132,616 | ||||||||
TOTAL EQUITY AND LIABILITIES | 118,895 | 130,397 |
Share capital ‘A’ ordinary shares US$’000 | Share premium US$’000 | Treasury Shares US$’000 | Translation reserve US$’000 | Hedging reserves US$’000 | Accumulated surplus US$’000 | Total US$’000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | 1,213 | 16,187 | (24,922 | ) | (3,766 | ) | 23 | 55,319 | 44,054 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Loss for the period | - | - | - | - | - | (28,914 | ) | (28,914 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | - | - | - | (167 | ) | - | - | (167 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive loss | - | - | - | (167 | ) | - | (28,914 | ) | (29,081 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based payments | - | - | - | - | - | 839 | 839 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment on transition to IFRS 16 (Note 13) | - | - | - | - | - | (11,099 | ) | (11,099 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 1,213 | 16,187 | (24,922 | ) | (3,933 | ) | 23 | 16,145 | 4,713 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital ‘A’ ordinary shares US$’000 | Share premium US$’000 | Treasury Shares US$’000 | Translation reserve US$’000 | Equity Component of Convertible Note US$’000 | Other reserves US$’000 | Accumulated | Total US$’000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | 1,213 | 16,187 | (24,922 | ) | (3,933 | ) | 23 | 16,145 | 4,713 | 1,213 | 16,187 | (24,922 | ) | (3,933 | ) | - | 23 | 16,145 | 4,713 | |||||||||||||||||||||||||||||||||||||||||
Loss for the period | - | - | - | - | - | (6,388 | ) | (6,388 | ) | - | - | - | - | - | - | (6,388 | ) | (6,388 | ) | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | - | - | - | (1,360 | ) | - | - | (1,360 | ) | - | - | - | (1,360 | ) | - | - | - | (1,360 | ) | |||||||||||||||||||||||||||||||||||||||||
Total comprehensive loss | - | - | - | (1,360 | ) | - | (6,388 | ) | (7,748 | ) | - | - | - | (1,360 | ) | - | - | (6,388 | ) | (7,748 | ) | |||||||||||||||||||||||||||||||||||||||
Share-based payments (Note 21) | - | - | - | - | - | 816 | 816 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based payments (Note 19) | - | - | - | - | - | - | 816 | 816 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 1,213 | 16,187 | (24,922 | ) | (5,293 | ) | 23 | 10,573 | (2,219 | ) | 1,213 | 16,187 | (24,922 | ) | (5,293 | ) | - | 23 | 10,573 | (2,219 | ) | |||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | 1,213 | 16,187 | (24,922 | ) | (5,293 | ) | 23 | 10,573 | (2,219 | ) | 1,213 | 16,187 | (24,922 | ) | (5,293 | ) | - | 23 | 10,573 | (2,219 | ) | |||||||||||||||||||||||||||||||||||||||
Profit for the period | - | - | - | - | - | 875 | 875 | - | - | - | - | - | - | 875 | 875 | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | - | - | - | (86 | ) | - | - | (86 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | - | - | - | (86 | ) | - | - | - | (86 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive profit/(loss) | - | - | - | (86 | ) | - | 875 | 789 | - | - | - | (86 | ) | - | - | 875 | 789 | |||||||||||||||||||||||||||||||||||||||||||
Share-based payments (Note 21) | - | - | - | - | - | 1,111 | 1,111 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based payments (Note 19) | - | - | - | - | - | - | 1,111 | 1,111 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 1,213 | 16,187 | (24,922 | ) | (5,379 | ) | 23 | 12,559 | (319 | ) | 1,213 | 16,187 | (24,922 | ) | (5,379 | ) | - | 23 | 12,559 | (319 | ) | |||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | 1,213 | 16,187 | (24,922 | ) | (5,379 | ) | - | 23 | 12,559 | (319 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Loss for the period | - | - | - | - | - | - | (41,009 | ) | (41,009 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | - | - | - | (396 | ) | - | - | - | (396 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive loss | - | - | - | (396 | ) | - | - | (41,009 | ) | (41,405 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in the year (Note 18) | 750 | 30,271 | - | - | - | - | - | 31,021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares to be issued | - | - | - | - | - | 63 | - | 63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity component of convertible note (Note 18) | - | - | - | - | 6,709 | - | - | 6,709 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based payments (Note 19) | - | - | - | - | - | 1,755 | 1,755 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 1,963 | 46,458 | (24,922 | ) | (5,775 | ) | 6,709 | 86 | (26,695 | ) | (2,176 | ) |
Year ended December 31, | ||||||||||||||||
Notes | 2022 US$‘000 | 2021 US$‘000 | 2020 US$‘000 | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
(Loss)/profit for the year | (41,009 | ) | 875 | (6,388 | ) | |||||||||||
Adjustments to reconcile net profit/(loss) to cash provided by operating activities: | ||||||||||||||||
Depreciation | 9,11 | 1,410 | 1,827 | 1,674 | ||||||||||||
Amortisation | 9,12 | 923 | 917 | 1,403 | ||||||||||||
Income tax credit | 7 | (192 | ) | (167 | ) | (182 | ) | |||||||||
Financial income | 6 | (303 | ) | (1,223 | ) | (36 | ) | |||||||||
Financial expense | 6 | 24,745 | 7,097 | 6,751 | ||||||||||||
Share-based payments (net of capitalized amounts) | 19 | 1,755 | 1,100 | 792 | ||||||||||||
Foreign exchange gains on operating cash flows | (76 | ) | (251 | ) | (663 | ) | ||||||||||
Loss/(gain) on disposal or retirement of property, plant and equipment | 9 | 2 | (1 | ) | 30 | |||||||||||
Movement in inventory provision | 15 | 7,391 | 5,589 | 5,059 | ||||||||||||
Impairment of prepayments | 5, 16 | 482 | 583 | 562 | ||||||||||||
Impairment of property, plant and equipment | 5, 11 | 733 | 2,508 | 1,795 | ||||||||||||
Impairment of intangible assets | 5, 12 | 4,624 | 3,853 | 15,422 | ||||||||||||
Other non-cash items | 269 | (5,317 | ) | (634 | ) | |||||||||||
Operating cash flows before changes in working capital | 754 | 17,390 | 25,585 | |||||||||||||
(Increase)/decrease in trade and other receivables | (966 | ) | 6,236 | (2,489 | ) | |||||||||||
(Increase) in inventories | (877 | ) | (4,406 | ) | (3,419 | ) | ||||||||||
Increase/(decrease) in trade and other payables | 181 | (7,591 | ) | 4,994 | ||||||||||||
Cash (used in)/generated from operations | (908 | ) | 11,629 | 24,671 | ||||||||||||
Interest paid | - | (11 | ) | (48 | ) | |||||||||||
Interest received | 2 | 1 | 104 | |||||||||||||
Income taxes (paid)/received | (15 | ) | 1,619 | (972 | ) | |||||||||||
Net cash (used in)/generated by operating activities | (921 | ) | 13,238 | 23,755 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Payments to acquire intangible assets | (4,876 | ) | (6,879 | ) | (6,990 | ) | ||||||||||
Acquisition of property, plant and equipment | (1,101 | ) | (1,812 | ) | (3,178 | ) | ||||||||||
Disposal of property, plant and equipment | - | - | (30 | ) | ||||||||||||
Net cash used in investing activities | (5,977 | ) | (8,691 | ) | (10,198 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||
Issue of ordinary share capital including share premium (net of issuance costs) | 18 | 25,336 | - | - | ||||||||||||
Proceeds from shares to be issued | 63 | - | - | |||||||||||||
Net proceeds from senior secured term loan | 22 | 80,015 | - | - | ||||||||||||
Proceeds from convertible note issued | 22 | 20,000 | - | - | ||||||||||||
Expenses paid in connection with debt financing | 22 | (2,356 | ) | (848 | ) | - | ||||||||||
Purchase of exchangeable notes | 22 | (86,730 | ) | - | - | |||||||||||
Repayment of senior secured term loan | 22 | (34,500 | ) | - | - | |||||||||||
Penalty for early settlement of term loan | 22 | (3,450 | ) | - | - | |||||||||||
Repayment of other loan | (23 | ) | - | - | ||||||||||||
Interest paid on senior secured term loan | (6,424 | ) | - | - | ||||||||||||
Interest paid on convertible note | (199 | ) | - | - | ||||||||||||
Proceeds from Paycheck Protection loans | - | 1,764 | 4,520 | |||||||||||||
Interest paid on exchangeable notes | 27 | (1,293 | ) | (3,996 | ) | (3,996 | ) | |||||||||
Payment of lease liabilities | 27 | (2,761 | ) | (2,939 | ) | (3,240 | ) | |||||||||
Net cash used in financing activities | (12,322 | ) | (6,019 | ) | (2,716 | ) | ||||||||||
(Decrease)/increase in cash and cash equivalents and short-term investments | (19,220 | ) | (1,472 | ) | 10,841 | |||||||||||
Effects of exchange rate movements on cash held | (112 | ) | 55 | 86 | ||||||||||||
Cash and cash equivalents and short-term investments at beginning of year | 25,910 | 27,327 | 16,400 | |||||||||||||
Cash and cash equivalents and short-term investments at end of year | 17 | 6,578 | 25,910 | 27,327 |
Year ended December 31, | |||||||||||||||
Notes | 2021 US$‘000 | 2020 US$‘000 | 2019 US$‘000 | ||||||||||||
Cash flows from operating activities | |||||||||||||||
Profit/(Loss) for the year | 875 | (6,388 | ) | (28,914 | ) | ||||||||||
Adjustments to reconcile net profit/(loss) to cash provided by operating activities: | |||||||||||||||
Depreciation | 11 | 1,827 | 1,674 | 2,526 | |||||||||||
Amortisation | 11,14 | 917 | 1,403 | 2,368 | |||||||||||
Income tax credit | 9 | (167 | ) | (182 | ) | (1,006 | ) | ||||||||
Financial income | 8 | (1,223 | ) | (36 | ) | (697 | ) | ||||||||
Financial expense | 8 | 7,097 | 6,751 | 6,582 | |||||||||||
Share-based payments (net of capitalized amounts) | 21 | 1,100 | 792 | 758 | |||||||||||
Foreign exchange gains on operating cash flows | (251 | ) | (663 | ) | (93 | ) | |||||||||
(Gain)/Loss on disposal or retirement of property, plant and equipment | 11 | (1 | ) | 30 | 17 | ||||||||||
Movement in inventory provision | 17 | 5,589 | 5,059 | 1,567 | |||||||||||
Impairment of prepayments | 7, 18 | 583 | 562 | 1,376 | |||||||||||
Impairment of property, plant and equipment | 7, 13 | 2,508 | 1,795 | 6,349 | |||||||||||
Impairment of intangible assets | 7, 14 | 3,853 | 15,422 | 16,570 | |||||||||||
Other non-cash items | (5,317 | ) | (634 | ) | 835 | ||||||||||
Operating cash flows before changes in working capital | 17,390 | 25,585 | 8,238 | ||||||||||||
Decrease / (Increase) in trade and other receivables | 6,236 | (2,489 | ) | 445 | |||||||||||
(Increase) in inventories | (4,406 | ) | (3,419 | ) | (2,959 | ) | |||||||||
(Decrease) / Increase in trade and other payables | (7,591 | ) | 4,994 | 151 | |||||||||||
Cash generated from operations | 11,629 | 24,671 | 5,875 | ||||||||||||
Interest paid | (11 | ) | (48 | ) | (1,000 | ) | |||||||||
Interest received | 1 | 104 | 560 | ||||||||||||
Income taxes received / (paid) | 1,619 | (972 | ) | (18 | ) | ||||||||||
Net cash generated by operating activities | 13,238 | 23,755 | 5,417 | ||||||||||||
Cash flows from investing activities | |||||||||||||||
Payments to acquire intangible assets | (6,879 | ) | (6,990 | ) | (9,718 | ) | |||||||||
Acquisition of property, plant and equipment | (1,812 | ) | (3,178 | ) | (2,118 | ) | |||||||||
Disposal of property, plant and equipment | 0 | (30 | ) | (17 | ) | ||||||||||
Net cash used in investing activities | (8,691 | ) | (10,198 | ) | (11,853 | ) | |||||||||
Cash flows from financing activities | |||||||||||||||
Proceeds from Paycheck Protection loans | 1,764 | 4,520 | 0 | ||||||||||||
Interest payment on exchangeable notes | 29 | (3,996 | ) | (3,996 | ) | (3,996 | ) | ||||||||
Loan Origination Costs | (848 | ) | 0 | 0 | |||||||||||
Payment of lease liabilities | 29 | (2,939 | ) | (3,240 | ) | (3,533 | ) | ||||||||
Net cash used in financing activities | (6,019 | ) | (2,716 | ) | (7,529 | ) | |||||||||
(Decrease) / Increase in cash and cash equivalents and short term investments | (1,472 | ) | 10,841 | (13,965 | ) | ||||||||||
Effects of exchange rate movements on cash held | 55 | 86 | 88 | ||||||||||||
Cash and cash equivalents and short-term investments at beginning of year | 27,327 | 16,400 | 30,277 | ||||||||||||
Cash and cash equivalents and short-term investments at end of year | 19 | 25,910 | 27,327 | 16,400 |
9899
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. | BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES |
i) | General information |
ii) | Statement of compliance |
iii) | Basis of preparation |
99100
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. |
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting policies have been applied consistently by all Group entities.
Subsidiaries Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and reporting policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Transactions eliminated on consolidation Intra-group balances and any unrealised gains or losses or income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.
Owned assets Items of property, plant and equipment are stated at cost less any accumulated depreciation and any impairment losses (see Note 1(viii)). The cost of self-constructed assets includes the cost of materials, direct labour and attributable overheads. It is not Group policy to revalue any items of property, plant and equipment. Depreciation is charged to the statement of operations on a straight-line basis to write-off the cost of the assets over their expected useful lives as follows:
Land is not depreciated. The residual values, if not insignificant, useful lives and depreciation methods of property, plant and equipment are reviewed and adjusted if appropriate on a prospective basis, at each balance sheet date. There were no changes to useful lives in the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in separate lines within the current liabilities and non-current liabilities sections. Leased assets - as lessor The Group’s accounting policy under IFRS 16 has not changed from the comparative period. As a lessor, the Group classifies its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying asset, and classified as an operating lease if it does not.
In respect of business combinations that have occurred since January 1, 2004 (being the transition date to IFRS), goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired. In respect of acquisitions prior to this date, goodwill is included on the basis of its deemed cost, which represents the amount recorded under the old basis of accounting, Irish GAAP, (“Previous GAAP”). Save for retrospective restatement of deferred tax as an adjustment to retained earnings in accordance with IAS 12, Income Taxes, the classification and accounting treatment of business combinations undertaken prior to the transition date were not reconsidered in preparing the Group’s opening IFRS balance sheet as at January 1, 2004. To the extent that the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired exceeds the cost of a business combination, the identification and measurement of the related assets, liabilities and contingent liabilities are revisited accompanied by a reassessment of the cost of the transaction, and any remaining balance is immediately recognised in the statement of operations. At the acquisition date, any goodwill is allocated to each of the 102 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured reliably. The asset is deemed to be identifiable when it is separable (that is, capable of being divided from the entity and sold, transferred, licenced, rented or exchanged, either individually or together with a related contract, asset or liability) or when it arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the Group or from other rights and obligations. Intangible assets acquired as part of a business combination are capitalised separately from goodwill if the intangible asset meets the definition of an asset and the fair value can be reliably measured on initial recognition. Subsequent to initial recognition, these intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses (Note 1(viii)). Intangible assets with definite useful lives are reviewed for indicators of impairment annually while intangible assets with indefinite useful lives and those not yet brought into use are tested for impairment at least annually, either individually or at the
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible and the Group has sufficient resources to complete the development. The expenditure capitalised includes the cost of materials, direct labour and attributable overheads and third party costs. Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. The technical feasibility of a new product is determined by a specific feasibility study undertaken at the first stage of any development project. The majority of our new product developments involve the transfer of existing product know-how to a new application. Since the technology is already proven in an existing product which is being used by customers, this facilitates the proving of the technical feasibility of that same technology in a new product. The results of the feasibility study are reviewed by a design review committee comprising senior managers. The feasibility study occurs in the initial research phase of a project and costs in this phase are not capitalised. The commercial feasibility of a new product is determined by preparing a discounted cash flow projection. This projection compares the discounted sales revenues for future periods with the relevant costs. As part of preparing the cash flow projection, the size of the relevant market is determined, feedback is sought from customers and the strength of the proposed new product is assessed against competitors’ offerings. Once the technical and commercial feasibility has been established and the project has been approved for commencement, the project moves into the development phase. All other development expenditure is expensed as incurred. Subsequent to initial recognition, the capitalised development expenditure is carried at cost less any accumulated amortisation and any accumulated impairment losses (Note 1(viii)). Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the statement of operations as an expense as incurred. Expenditure on internally generated goodwill and brands is recognised in the statement of operations as an expense as incurred. Amortisation Amortisation is charged to the statement of operations on a straight-line basis over the estimated useful lives of intangible assets, unless such lives are indefinite. Intangible assets are amortised from the date they are available for use in its intended market. The estimated useful lives are as follows:
103 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The Group uses a useful economic life of 15 years for capitalised development costs. This is a conservative estimate of the likely life of the products. The Group is confident that products have a minimum of 15 years life given the inertia that characterizes the medical diagnostics industry and the barriers to enter into the industry. The following factors have been considered in estimating the useful life of developed products:
Certain trade names acquired are deemed to have an indefinite useful life as there is no foreseeable limit to the period over which these assets are expected to generate cash inflows for the Group. Where amortisation is charged on assets with finite lives, this expense is taken to the statement of operations through the ‘selling, general and administrative expenses’ line. Useful lives are examined on an annual basis and adjustments, where applicable, are made on a prospective basis.
The carrying amount of the Group’s assets, other than inventories, accounts receivable, cash and cash equivalents, short-term investments and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount (being the greater of fair value less costs to sell and value in use) is assessed at each balance sheet date. Fair value less costs to sell is defined as the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable and willing parties, less the costs that would be incurred on disposal. Value in use is defined as the present value of the future cash flows expected to be derived through the continued use of an asset or cash-generating unit. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not yet been adjusted. The estimates of future cash flows exclude cash inflows or outflows attributable to financing activities. For an asset that does not generate largely independent cash flows, the recoverable amount is determined by reference to the For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date at the In-process research and development (IPR&D) is tested for impairment on an annual basis, in the periodically and always at year end, 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 unfavorable 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 commercializing our programs, we could incur significant charges in the period in which the impairment occurs. The valuation techniques utilized 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. 104 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of operations. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of other assets in the cash-generating units on a pro-rata basis. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. An impairment loss in respect of goodwill is not reversed. Following recognition of any impairment loss (and on recognition of an impairment loss reversal), the depreciation or amortisation charge applicable to the asset or
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in, first-out principle and includes all expenditure which has been incurred in bringing the products to their present location and condition and includes an appropriate allocation of manufacturing overhead based on the normal level of operating capacity. Net realisable value is the estimated selling price of inventory on hand in the ordinary course of business less all further costs to completion and costs expected to be incurred in selling these products. The Group provides for inventory, based on estimates of the expected realisability. The estimated realisability is evaluated on a case-by-case basis and any inventory that is approaching its “use-by” date and for which no further re-processing can be performed is written off. Any reversal of an inventory provision is recognised in the statement of operations in the year in which the reversal occurs.
Trade receivables are amounts due from customers for products sold or services provided in the ordinary course of business. Trade and other receivables are stated at their amortised cost less impairment losses incurred. Cost approximates fair value given the short-term nature of these assets. The Group records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. Expected credit losses are recorded on all of trade receivables based on an assessment of the probability of default or delinquency in payments and the probability that debtor will enter into financial difficulties or bankruptcy.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Trade and other payables are stated at cost. Cost approximates fair value given the short term nature of these liabilities.
Cash and cash equivalents comprise cash balances and short-term deposits which are readily available at year-end. Deposits with maturities less than six months as at the year-end date are recognised as cash and cash equivalents and are carried at fair value when there is no expected loss in value on early termination. The Group has no short-term bank overdraft facilities. Where restrictions are imposed by third parties, such as lending institutions, on cash balances held by the Group these are treated as financial assets in the financial statements.
Short-term investments comprise short-term bank deposits which have maturities greater than six months as at the year-end date. Short-term deposits made for varying periods depending on the immediate cash requirements of the Group and earn interest at the respective deposit rates in place. Where restrictions are imposed by third parties, such as lending institutions, on short-term deposits held by the Group these are treated as financial assets in the financial statements. 105 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
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 expense in the consolidated 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. Share based payments, to the extent they relate to direct labour involved in development activities, are 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.
The Group Grants that compensate the Group for expenses incurred such as research and development, employment and training are recognised as income in the statement of operations on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the Group for the cost of an asset are recognised in the statement of operations as other operating income on a systematic basis over the useful life of the asset.
Goods sold and services rendered 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. No revenue is recognised if there is uncertainty regarding recovery of the consideration due at the outset of the transaction. Revenue, including any amounts invoiced for shipping and handling costs, represents the value of goods and services supplied to external customers, net of discounts and rebates and excluding sales taxes. 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. 106 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
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 typically apply.Some contracts could be regarded as offering the customer a right of return. Due to the uncertainty of the magnitude and likelihood of product returns, there is a level of estimation involved in assessing the amount of revenue to be recognized for these types of contracts. In accordance with IFRS 15, when estimating the effect of an uncertainty on an amount of variable consideration to which the Group will be entitled, all information that is reasonably available, including historical, current and forecast, is considered. The Group operates a licenced referenced laboratory in the US, which provides testing services to institutional customers and insurance companies. In the US, 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 lab 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.
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. The Group leases instruments to customers typically 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 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 Item 18, Note 1(v). In obtaining these contracts, the Group incurs a number of incremental costs, such as sales bonus paid to sales staff commissions paid to distributors and royalty payments. As the amortisation period of these costs, if capitalised, would be less than one year, the Group makes use of the practical expedient in IFRS 15.94 and expenses them as they incur. 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 Other operating income Other operating income includes income for the provision of canteen services. This income has not been treated as revenue since the canteen activities are incidental to the main revenue-generating activities of the Group. Other operating income also includes government-backed Covid-19 financial
Defined contribution plans The Group operates defined contribution schemes in various locations where its subsidiaries are based. Contributions to the defined contribution schemes are recognised in the statement of operations in the period in which the related service is received from the employee. 107 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Other long-term benefits Where employees participate in the Group’s other long-term benefit schemes (such as permanent health insurance schemes under which the scheme insures the employees), or where the Group contributes to insurance schemes for employees, the Group pays an annual fee to a service provider, and accordingly the Group expenses such payments as incurred. Termination benefits Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
A majority of the revenue of the Group is generated in US Dollars. The Group’s management has determined that the US Dollar is the primary currency of the economic environment in which the Company and its subsidiaries (with the exception of the Group’s subsidiaries in Brazil, Canada and Sweden) principally operate. Thus, the functional currency of the Company and its subsidiaries (other than the Brazilian, Canadian and Swedish subsidiaries) is the US Dollar. The functional currency of the Brazilian entity is the Brazilian Real, the functional currency of the Canadian subsidiary, Nova Century Scientific Inc, is the Canadian Dollar and the functional currency of the Swedish subsidiary is the Swedish Kroner. The presentation currency of the Company and Group is the US Dollar. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. The resulting gains and losses are included in the consolidated statement of operations. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Results and cash flows of subsidiary undertakings, which have a functional currency other than the US Dollar, are translated into US Dollars at average exchange rates for the year, and the related balance sheets have been translated at the rates of exchange ruling on the balance sheet date. Any exchange differences arising from the translations are recognised in the currency translation reserve via the statement of changes in equity. Where Euro, Brazilian Real, Canadian Dollar or Swedish Kroner amounts have been referenced in this document, their corresponding US Dollar equivalent has also been included and these equivalents have been calculated with reference to the foreign exchange rates prevailing at December 31,
The activities of the Group expose it primarily to changes in foreign exchange rates and interest rates. The Group uses derivative financial instruments, from time to time, such as forward foreign exchange contracts to hedge these exposures. The Group enters into forward contracts to sell US Dollars forward for Euro. The principal exchange risk identified by the Group is with respect to fluctuations in the Euro as a substantial portion of its expenses are denominated in Euro but its revenues are primarily denominated in US Dollars. Trinity Biotech monitors its exposure to foreign currency movements and may use these forward contracts as cash flow hedging instruments whose objective is to cover a portion of this Euro expense. At the inception of a hedging transaction entailing the use of derivatives, the Group documents the relationship between the hedged item and the hedging instrument together with its risk management objective and the strategy underlying the proposed transaction. The Group also documents its quarterly assessment of the effectiveness of the hedge in offsetting movements in the cash flows of the hedged items. Derivative financial instruments are recognised at fair value. Where derivatives do not fulfil the criteria for hedge accounting, they are classified as held-for-trading and changes in fair values are reported in the statement of operations. The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles and equates to the current market price at the balance sheet date. The portion of the gain or loss on a hedging instrument that is deemed to be an effective cash flow hedge is recognised directly in the hedging reserve in equity and the ineffective portion is recognised in the statement of operations. As the forward contracts are exercised the net cumulative gain or loss recognised in the hedging reserve is transferred to the statement of operations and reflected in the same line as the hedged item. 108 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The Company’s 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 consolidated statement of operations, except for changes in fair value related to the Group’s own credit risk, which are recorded in the statement of comprehensive income. Where the exchangeable notes are redeemed early or repurchased in a way that does not alter the original conversion privileges, the consideration paid is allocated to the respective components and the amount of any gain or loss is recognised in the consolidated statement of operations.
The company issued warrants to Perceptive (“the warrants”) which are exercisable into ADSs of the Company at a fixed exercise price. The Warrants are exercisable, in whole or part, until the seventh anniversary of the date of drawdown of the funding. The warrants were issued to Perceptive in consideration of them entering into the term loan on the same date and Perceptive paid no other consideration to the company for the warrants issued. A warrant contract might be accounted for as an equity instrument or a financial liability under IFRS depending on the terms of a warrant. A warrant contract that will or might be settled by an entity by delivering a fixed number of its own equity instruments, in exchange for a fixed amount of cash or another financial asset, is an equity instrument. As Perceptive has the option to choose a cashless exercise option, the Company will have to deliver a variable number of ADS, since the number of shares will vary depending on the ADS traded price. Even though the cashless exercise option is economically comparable to the cash exercise option, the fact that the company will issue a variable number of shares under the cashless exercise option results in one settlement alternative violating the ‘fixed for fixed’ requirement. The warrant contract therefore meets the definition of a financial liability and given the value of the warrant changes in response to the price of the Company’s ADS, with no initial investment and settlement occurring in the future it meets the definition of a derivative liability under IFRS 9. The warrant is issued in a separate contract, is transferable independently of the term loan and can be exercised while the term loan remains outstanding. Therefore, the warrant is a separate instrument to the term loan. The warrant contracts are initially recognised as a derivative liability at fair value and subsequently measured at fair value at each reporting period with any changes recognised in the consolidated statement of operations. The Company has the option to prepay the senior secured term loan in whole or in part for an amount equal to the principal, accrued interest and prepayment premium. In accordance with IFRS 9, this option is separated from the term loan and is initially recognised as a derivative asset at fair value and subsequently measured at fair value at each reporting period with any changes recognised in the consolidated statement of operations.
The convertible note is accounted for as a compound financial instrument containing both an equity and liability element. The convertible note has a contractual obligation to deliver cash on redemption equal to the principal amount plus accrued interest and therefore has a liability component in line with the definition of a financial liability in IAS 32. The convertible loan note also has a conversion feature where it mandatorily converts into ADS if the volume weighted average price of the Company’s ADSs is at a certain price for any five consecutive NASDAQ trading days or any other time at the discretion of the Noteholder. Where a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments, the conversion feature represents an equity component of the convertible note. The equity component is measured as the residual amount that results from deducting the fair value of the liability component from the initial carrying amount of the instrument as a whole. There is no remeasurement of the equity element following initial recognition. The debt component is accounted for at amortised cost employing the effective interest methodology.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the consolidated statement of operations except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax represents the expected tax payable or recoverable on the taxable profit for the year using tax rates enacted or substantively enacted at the balance sheet date in the countries where the company and its subsidiaries operate and generate income and taking into account any adjustments stemming from prior years. Deferred tax is provided on the basis of the balance sheet liability method on all temporary differences at the balance sheet date which is defined as the difference between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets and liabilities are not subject to discounting and are measured at the tax rates that are anticipated to apply in the period in which the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised when it is probable that future taxable profits will be available to utilize the associated losses or temporary differences. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. Deferred tax assets and liabilities are recognised for all temporary differences (that is, differences between the carrying amount of the asset or liability and its tax base) with the exception of the following:
Where goodwill is tax deductible, a deferred tax liability is not recognised on initial recognition of goodwill. It is recognised subsequently for the taxable temporary difference which arises when the goodwill is amortised for tax with no corresponding adjustment to the carrying value of the goodwill. The carrying amounts of deferred tax assets are subject to review at each balance sheet date and are derecognised to the extent that future taxable profits are considered to be inadequate to allow all or part of any deferred tax asset to be utilised.
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Cost of sales comprises product cost including manufacturing and payroll costs, quality control, shipping, handling, and packaging costs and the cost of services provided.
Financing expenses comprise interest costs payable on senior secured term loan, convertible note, leases and exchangeable notes along with non-recurring financing expenses such as penalty for early settlement of term loan and loss on disposal of exchangeable notes. Interest payable on finance leases is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Financing expenses also includes the financing element of long term liabilities which have been discounted. Finance income includes interest income on deposits and is recognised in the consolidated statement of operations as it accrues, using the effective interest method. Finance income also includes fair value adjustments for derivative assets and liabilities related to the senior secured term loan and to embedded derivatives associated with exchangeable notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
When the Group purchases its own equity instruments (treasury shares), the costs, including any directly attributable incremental costs, are deducted from equity. No gain or loss is recognised in the consolidated statement of operations on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in share premium. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to them.
Share capital represents the nominal (par) value of shares that have been issued. Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale. Profit or loss from discontinued operations comprises the post-tax profit or loss of discontinued operations and the post-tax gain or loss resulting from the measurement and disposal of assets classified as held for sale.
For financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: valuation techniques for which the lowest level of inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: valuation techniques for which the lowest level of inputs that have a significant effect on the recorded fair value are not based on observable market data
The following
The standard amendments did not result in a material impact on the Group’s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Board of Directors. Management has determined the operating segments based on the reports reviewed by the Board of Directors, which are used to make strategic decisions. The Board considers the business from a geographic perspective based on the Group’s management and internal reporting structure. Sales of product between companies in the Group are made on commercial terms which reflect the nature of the relationship between the relevant companies. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise interest-bearing loans, borrowings and expenses and corporate expenses. Segment capital expenditure is the total cost during the year to acquire segment plant, property and equipment and intangible assets that are expected to be used for more than one period, whether acquired on acquisition of a business combination or through acquisitions as part of the current operations. The Group comprises two main geographical segments (i) the Americas and (ii) Rest of World - Ireland. The Group’s geographical segments are determined by the location of the Group’s assets and operations. The Group has also presented a geographical analysis of the segmental data for Ireland as is consistent with the information used by the Board of Directors. The reportable operating segments derive their revenue primarily from one source (i.e., the market for diagnostic tests for a range of diseases and other medical conditions). In determining the nature of its segmentation, the Group has considered the nature of the products, their risks and rewards, the nature of the production base, the customer base and the nature of the regulatory environment. The Group acquires, manufactures and markets a range of diagnostic products. The Group’s products are sold to a similar customer base and the main body whose regulation the Group’s products must comply with is the Food and Drug Administration (“FDA”) in the US. The following presents revenue and profit information and certain asset and liability information regarding the Group’s geographical segments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
114 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
115
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
116 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
See Note 19 for further information on share-based payments.
117 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The average number of persons employed by the Group is as follows:
Employment costs charged in the
Employment costs are shown net of capitalisations and Irish government wage subsidies. Total employment costs, inclusive of amounts capitalised for wages and salaries, social welfare costs and pension costs, for the year ended December 31,
The Group operates defined contribution pension schemes for certain of its
118 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
In 2020, the Company received an interest-free loan received 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 was repaid in the year ended December 31, 2022 and an amount of CAD$10,000 (US$7,000) was forgiven, which has been recognised as income. In 2021 and 2020, government supports - COVID-19
In accordance with IAS 36, Impairment of Assets, the Group carries out periodic impairment reviews of the asset valuations. A number of factors impacted this calculation including the Company’s market capitalization during the year ended 31 December The impact of the above items on the consolidated statement of operations for the year ended December 31, 2022, December 31, 2021, December 31, 2020
119 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
120 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
121 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The following table reconciles the applicable Republic of Ireland statutory tax rate to the effective total tax rate for the Group:
The distribution of
At December 31,
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
At December 31,
The accounting policy for deferred tax is to calculate the deferred tax asset that is deemed recoverable, considering all sources for future taxable profits. The deferred tax assets in the above table have not been recognised due to uncertainty regarding the full utilization of these losses in the related tax jurisdiction in future periods. Only when it is probable that future profits will be available to utilize the forward losses or temporary differences is a deferred tax asset recognised. When there is a reversing deferred tax liability in that jurisdiction that reverses in the same period, the deferred tax asset is restricted so that it equals the reversing deferred tax liability.
In 2016, management decided to cease the development of Cardiac point-of-care tests on the Meritas platform. These products were being developed by the Group’s subsidiary Fiomi Diagnostics (“Fiomi”) located in Sweden. 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 (net of related taxes) on the face of the
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, The operating loss for the Cardiac point-of-care tests operation in Sweden and the
Basic Basic Diluted Diluted In June 2005, Trinity Biotech adjusted its ADS ratio from 1 ADS: 1 ordinary share to 1 ADS: 4 ordinary shares. Earnings per ADS for all periods presented have been restated to reflect this exchange ratio. Basic Diluted
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Cash flows The cash flows attributable to discontinued operations are as follows:
There were no cash flows from investing or financing activities attributable to discontinued operations for the years ended December 31, 2022, 2021 The following amounts were charged / (credited) to the statement of operations:
125 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Basic (loss)/earnings per As at December 31, 2022, the number of ‘A’ ordinary shares for the purposes of the calculation of basic (loss)/earnings per share are 134,939,327 shares (2021: 83,606,810 shares) (2020:
Diluted (loss)/earnings per Diluted (loss)/earnings per ordinary share is
The following potential ‘A’ ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ‘A’ ordinary shares for the purposes of calculating diluted (loss)/earnings per
126 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
(Loss)/earnings per ADS Trinity Biotech’s ADS to ‘A’ ordinary share ratio is 1 ADS: 4 ‘A’ ordinary shares. Basic (loss)/earnings per ADS is calculated by dividing the (loss)/earnings attributable to owners of the parent of US$41,009,000 (2021: profit of US$875,000) (2020: loss of US$6,388,000) by the weighted average number of ADS in issue, net of any Treasury Shares, during the year. Basic (loss)/earnings per ADS from continuing operations is calculated by dividing the (loss)/earnings of US$41,002,000 (2021: profit of US$929,000) (2020: loss of US$6,013,000) by the weighted average number of ADS in issue, net of any Treasury Shares, during the year. As at December 31, 2022, the number of ADS for the purposes of the calculation of basic (loss)/earnings per ADS were 33,734,832 ADS (2021: 20,901,703 ADS) (2020: 20,901,703 ADS).
Diluted (loss)/earnings per ADS Diluted (loss)/earnings per ADS is calculated by dividing the net (loss)/earnings attributable to owners of the parent by the weighted average number of ADS in issue, net of any Treasury Shares, during the year, plus the weighted average number of ADS that would be issued on the conversion of all the dilutive potential ADS into ADS. As the potentially dilutive instruments were anti-dilutive in all periods presented, basic (loss)/earnings per ADS and diluted earnings per ADS are equivalent. The following potential ADS are anti-dilutive and are therefore excluded from the weighted average number of ADS for the purposes of calculating dilutive (loss)/earnings per ADS.
127 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
128 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The assets of the Group are pledged as security for the senior secured term loan from Perceptive Advisors. 129 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Additional information on the right-of-use assets by class of assets is as follows:
Income from sub-letting right-of-use buildings amounted to US$3,000 in the year ended December 31, 2022 (2021: US$3,000).
130 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The details of the impairment review are described in Note Assets held under operating leases (where the Company is the lessor) The Company has a number of assets included in plant and equipment which generate operating lease revenue for the Group. The net book value of these assets as at December 31, Property, plant and equipment under construction There were
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Included within development costs are
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The following represents the costs incurred during each period presented for each of the principal development projects:
Other intangible assets Other intangible assets consist primarily of acquired customer and supplier lists, trade names, website and software Amortisation Amortisation is charged to the consolidated statement of operations through the selling, general and administrative expenses line.
Impairment testing for intangibles including goodwill and indefinite lived assets Goodwill and other intangibles are subject to impairment testing on a periodic The recoverable amount of seven CGUs is determined based on a value-in-use The value-in-use calculations use cash flow projections based on the Sources of estimation uncertainty The cash flows have been arrived at taking into account the Group’s financial position, its recent financial results and cash flow generation and the nature of the medical diagnostic industry, where product obsolescence can be a feature. However, expected future cash flows are inherently uncertain and are therefore liable to material change over time. The key assumptions employed in arriving at the estimates of future cash flows factored into impairment testing are subjective and include projected EBITDA margins, net cash flows, discount rates used and the duration of the discounted cash flow model. Significant under-performance in any of the Group’s major CGUs may give rise to a material impairment which would have a substantial impact on the Group’s income and equity. 133 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Specific asset impairment charges
The rapid COVID-19 test is approved for professional use in the EU. However, as previously disclosed by the Company, the demand for our COVID-19 portfolio of products is highly uncertain and very difficult to predict and in our experience the market has moved to over the counter (“OTC”) rapid COVID-19 tests, for which this product is not yet approved. As such the Company’s efforts to commercialise this test have been unsuccessful. In addition, pricing for rapid COVID-19 tests in the EU is relatively weak, with stronger pricing available in, for example, the US market, for which this product is not yet approved. Given the market outlook for rapid COVID-19 testing products and continued uncertainty regarding regulatory approval pathways in key markets, including the US, the Company has chosen to not immediately pursue further regulatory approvals but does intend to monitor these markets and regulatory pathways with a view to potentially seeking additional regulatory approvals. As the Company has no imminent plans to pursue these regulatory approvals, this development project was written down from US$2,214,000 to zero in 2022. For similar reasons, the carrying value of our internally developed COVID-19 ELISA test was fully impaired and the impairment charge for this project was US$120,000. The development project for the autoimmune smart reader was paused in 2022 as management reviewed other options, including the potential to proceed with a third-party reader instead of our own internally developed reader. Following this review, we determined that there were likely greater opportunities to capture more market share in a more capital efficient manner through partnering with a third-party reader manufacturer rather than pursuing an independent strategy. There is significant uncertainty if we will complete the project to develop our own in-house autoimmune smart reader and thus while we may re-visit this decision in the future, in the interests of prudence the project’s carrying value of US$1,265,000 was impaired to zero. In 2022, there was a strategic review of our Tri-stat instrument as part of a broader review of our haemoglobins product portfolio. In order to rationalise the haemoglobins product portfolio and to allow us to focus our resources on the higher growth products within that portfolio, management decided that Tri-stat sales would be restricted to only certain targeted partnerships, and this led to the carrying value for the Tri-stat intangible asset of US$1,024,000 being written down to zero.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The table below sets forth the breakdown of the impairment loss for each class of asset:
The value-in-use calculation is subject to significant estimation, uncertainty and accounting judgements and the following sensitivity analysis has been performed:
135 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Significant Goodwill and Intangible Assets with Indefinite Useful Lives CGUs or combinations of CGUs for which the carrying amount of goodwill is significant for the purposes of impairment testing periodically, in comparison with the Group’s total carrying amount of goodwill are those where the percentage is greater than 20% of the total.
The additional disclosures required for the CGU with significant goodwill are as follows:
The key assumptions and methodology used in respect of this CGU are consistent with those described above. The assumptions and estimates used are specific to the individual CGU and were derived from a combination of internal and external factors based on historical experience.
The trade name assets purchased as part of the acquisition of Fitzgerald in 2004, Primus and RDI in 2005 and Immco Diagnostics in 2013 were valued using the relief from royalty method and based on factors such as (1) the market and competitive trends and (2) the expected usage of the name. It was considered that these trade names will generate net cash inflows for the Group for an indefinite period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Recognised deferred tax assets and liabilities Deferred tax assets and liabilities of the Group are attributable to the following:
The deferred tax asset in The deferred tax liability is caused by the net book value of non-current assets being greater than the tax written down value of non-current assets, temporary differences due to the acceleration of the recognition of certain charges in calculating taxable income permitted in Ireland and the US. The deferred tax liability Deferred tax assets and liabilities are only offset when the entity has a legally enforceable right to set off current tax assets against current tax liabilities and where the intention is to settle current tax liabilities and assets on a net basis or to realise the assets and settle the liabilities simultaneously. At December 31, Most temporary differences are expected to reverse after Movement in temporary differences during the year
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Unrecognised deferred tax assets Deferred tax assets have not been recognised by the Group in respect of the following
The Group leases instruments as part of its business. For details of future minimum finance lease receivables with non-cancellable terms, please refer to Note
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The assets of the Group, including inventories have been pledged as security for the term loan from Perceptive Advisors. All inventories are stated at the lower of cost or net realisable value. Total inventories for the Group are shown net of provisions of US$ The movement on the inventory provision for the
During
Trade receivables are shown net of an impairment losses provision of US$
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Long-term contract receivable (i) Finance lease commitments – Group as lessor The Group leases instruments as part of its business. Future minimum receivables with non-cancellable terms are as follows:
The Group classified future minimum lease receivables between one and five years of US$ (ii) Operating lease commitments – Group as lessor The Group leases instruments under operating leases as part of its business. Future minimum rentals receivable under non-cancellable operating leases are as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
OTHER RECEIVABLES (CONTINUED)
(ii) Operating lease commitments – Group as lessor
Share capital
141 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The amounts in the tables above are inclusive of Treasury Shares. The number of Treasury Shares is as follows:
Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign currency denominated operations of the Group since January 1, 2004.
Other reserves Other reserves comprise the hedging reserve of US$23,000 and shares to be issued of US$63,000. The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions entered into but not yet crystallised. The hedging reserve is shown within Other Reserves in the Consolidated Statement of Financial Position. Shares to be issued as at December 31, 2022 have been issued in 2023. 142 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Equity component of Convertible Note In May 2022, the Company announced the successful closure of a US$45.2 million investment from MiCo Ltd (“MiCo”). MiCo, a KOSDAQ-listed and Korea-based company. The investment consisted of an equity investment of US$25.2 million and a seven-year, unsecured junior convertible note of US$20.0 million. The convertible note mandatorily converts into ADSs 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. The convertible loan is accounted for as a compound financial instrument containing both an equity and liability element. The equity component of the convertible note is US$6.7 million. There is no remeasurement of the equity element following initial recognition. Treasury shares During
Options Under the terms of the Company’s Employee Share Option Plans, options to purchase The terms and conditions of the grants are as follows, whereby all options are settled by physical delivery of shares: Vesting conditions The options vest following a period of service by the officer or employee. The required period of service is determined by the Board and Remuneration Committee at the date of grant of the options (usually the date of approval by the Compensation Committee) and it is generally over a Non-vesting conditions In 2022, share options were granted to certain directors for which there is a condition that the options only become exercisable into ADSs when the market price of an ADS reaches a certain level. This is deemed to be a non-vesting condition. The term ‘non- vesting condition’ is not explicitly defined in IFRS 2, Share based Payment, but is inferred to be any condition that does not meet the definition of a vesting condition. The only condition for these particular options to vest is that the director continues service and there were no other conditions which would be considered non-vesting conditions. Non-vesting conditions are reflected in measuring the grant-date fair value of the share-based payment and there is no true-up in the measurement of the share-based payment for differences between the expected and the actual outcome of non-vesting conditions. If all service conditions are met, then the share-based payment cost will be recognized even if the director does not receive the share-based payment due to a failure to meet the non-vesting condition. 143 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Contractual life The term of an option is determined by the Board, Compensation Committee and Remuneration Committee provided that the term may not exceed a period of between seven to ten years from the date of grant. All options will terminate 90 days after termination of the option holder’s employment, service or consultancy with the Group (or one year after such termination because of death or disability) except where a longer period is approved by the Board of Directors. Under certain circumstances involving a change in control of the Group, the Compensation Committee may accelerate the exercisability and termination of options. The number and weighted average exercise price of share options per ordinary share is as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
In 2022, 2,733,328 share options were exercised in 2022 at an average share price of US$0.28 or US$1.13 per ADS at the date of exercise. There were no share options exercised during 2021 The opening share price per ‘A’ Ordinary share at the start of the financial year was US$0.36 or US$1.43 per ADS (2021: US$0.95 or US$3.81 per A summary of the range of prices for the Company’s share options for the year ended December 31, 2022 follows:
145 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The weighted-average remaining contractual life of options outstanding at December 31, 2022 was 5.58 years (2021: 4.35 years). A summary of the range of prices for the Company’s
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Charge for the year under IFRS 2 The charge for the year is calculated based on the fair value of the options granted which have not yet vested. The fair value of the options is expensed over the vesting period of the option. US$
The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of services received is measured based on a
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility is based on the historic volatility (calculated based on the expected life of the options). The Group has considered how future experience may affect historical volatility. The profile and activities of the Group are not expected to change in the immediate future and therefore Trinity Biotech would expect estimated volatility to be consistent with historical volatility.
Included in Other Other payables
During
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The carrying value of interest-bearing loans, borrowings and related balances is as follows:
In January 2022, the Company retired approximately US$99.7 million of the Exchangeable Notes as part of a debt re-financing. This represented approximately 99.7% of the total Exchangeable Notes. Consideration was in The
At date of disposal, the carrying value of the extinguished Exchangeable Notes was US$83.2m. As the IFRS measure of consideration was higher by US$9.7 million, the resulting loss on disposal was recorded as a financial expense in the year ended December 31, 2022. The
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The movement in the Exchangeable Notes balance was as follows:
During the year ended December 31, 2022, the Company acquired two new debt liabilities, as follows:
The Company and its subsidiaries entered into a US$81.3 million senior secured term loan credit facility in December 2021 (the “Term Loan”) with Perceptive Credit Holdings III, LP (“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 term loan is secured by a charge over the Group’s assets. 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 (later changed to the Term SOFR Reference Rate effective from October 28, 2022) 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. 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 was US$1.30. In February 2023, in connection with an increased Term Loan facility, the Company agreed to reprice the 2,500,000 warrants originally issued to Perceptive, with the Warrants now having a per ADS price of US$1.071. The warrants are exercisable, in whole or part, until the seventh anniversary of the date of drawdown of the funding under the Term Loan. At the discretion of the Company, the Term Loan can be repaid, in part or in full, at a premium before the end of the four-year term. In May 2022, the Company repaid US$34.5 million of the term loan principal and incurred an early payment penalty of approximately US$3.5 million, which has been recorded as a financial expense in the year ended December 31, 2022. In accordance with IFRS accounting standards, the Term Loan is represented by three separate balances in the statement of financial position. US$44.3 million is shown in non-current liabilities as a senior secured term loan. At initial recognition, the balance comprised the principal loan amount of US$81.25 million less loan origination costs of US$3.6 million, less two derivative financial balances totaling US$1.7 million to give a balance of US$76.0 million. During the year ended December 31, 2022 accretion interest of US$2.8 million was accrued and the repayment of US$34.5 million reduced the liability to leave a closing carrying value of US$44.3 million. The early repayment of a portion of the Term Loan necessitated an accretion interest adjustment of US$2.1 million in the year ended December 31, 2022, recognised as a financial expense, to discount the revised expected future cash flows for the loan. The other two balances related to the Term Loan are: a) a derivative financial asset and b) a derivative financial liability. The fair value of the derivative financial asset is estimated at US$128,000 at December 31, 2022 and represents the value to the Company of being able to repay the Term Loan early and potentially refinance at a lower interest rate. The fair value of the derivative financial liability is estimated at US$1,569,000 at December 31, 2022 and represents the fair value of the warrants issued to Perceptive. The fair value remeasurement for these two derivative financial balances resulted in a net financial income of US$0.2m being recognised in the consolidated statement of operations. 150 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The movement in the derivative financial asset in the year ended December 31, 2022 was as follows:
151 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The Group has leases for some of its manufacturing plants, all warehouses, offices, motor vehicles and some IT equipment. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset (net of any depreciation and/or impairment) and a lease liability. Variable lease payments which do not depend on an index or a rate (such as lease payments based on a percentage of Group sales) are excluded from the initial measurement of the lease liability and asset. The Group classifies its right-of-use assets in a consistent manner to its property, plant and equipment (see Note Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to purchase the underlying leased asset outright at the end of the lease, or to extend the lease for a further term. The Group is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and factory premises the Group must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Group must insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts. Lease liabilities Lease liabilities are payable as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Lease payments not recognised as a liability No
Terms and debt repayment schedule The terms and conditions of outstanding interest-bearing loan and borrowing at December 31, 2022 are shown in the table below. A Euro-denominated sale and leaseback liability, which had a maturity date in 2023, was settled in full in 2022.
The terms and conditions of outstanding interest bearing loans and borrowings at December 31, 2021 are as follows:
The total paid in respect of lease liabilities in the year ended December 31,
The Group has capital commitments authorised and contracted for of US$
The Group’s leasing commitments are shown in Note 153 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The Credit Agreement for the senior secured term loan is secured by substantially all of our property and assets, including our equity interests in our subsidiaries, refer to Note 22. At December 31,
Pursuant to the provisions of Section 357, Irish Companies Act, 2014, the Company has guaranteed the liabilities of Trinity Biotech Manufacturing Limited, Trinity Research Limited
In the 2019 financial statements, a contingent asset of US$1,231,000 was disclosed in connection with the 2019 tax audit settlement 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. 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$1,231,000 to US$1,316,000. The settlement amount received by the Company was US$177,000 more than the balance owed and this overpayment
The Group has received training and employment grant income from Irish development agencies. Subject to existence of certain conditions specified in the grant agreements, this income may become repayable. No such conditions existed as at December 31, To mitigate the financial impact of the Covid-19 outbreak, the
The Company has other contingencies primarily relating to claims and legal proceedings, onerous contracts, product warranties and employee related provisions. The status of each significant claim and legal proceeding in which the Company is involved is reviewed by management on a periodic basis and the Group’s potential financial exposure is assessed. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, a liability is recognised for the estimated loss. Because of the uncertainties inherent in such matters, the related provisions are based on the best information available at the time; the issues taken into account by management and factored into the assessment of legal contingencies include, as applicable, the status of settlement negotiations, interpretations of contractual obligations, prior experience with similar contingencies/claims, and advice obtained from legal counsel and other third parties. The Group expects the majority of these provisions will be utilised within one to three years of the balance sheet date; however due to the nature of the legal provisions there is a level of uncertainty in the timing of settlement as the Group generally cannot determine the extent and duration of the legal process. 154 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The Group has related party relationships with its subsidiaries, and with its directors and executive officers. Leasing arrangements with related parties The following is a description of our related party transactions since January 1, The Group has entered into various arrangements with JRJ Investments (“JRJ”), a partnership owned by Mr O’Caoimh and Dr Walsh, directors of Trinity Biotech, and directly with Mr O’Caoimh, to provide
In late 2020, the Group occupied some additional space adjoining the Trinity Biotech and its directors (excepting Mr O’Caoimh and Dr Walsh who express no opinion on this point) believe at the time that the arrangements were entered into Compensation of key management personnel of the Group
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The amounts disclosed in respect of directors’ emoluments in Note 9 includes non-executive directors’ fees of US$53,000 (2021: US$98,000) and share-based compensation benefits of US$17,000 (2021: US$61,000). Total directors’ remuneration is also included in “employment” (Note 3) and “(Loss)/profit before tax” (Note 9). The performance bonuses for Mr. Kekedjian and Mr. Gillard in respect of fiscal year 2022 have been accrued as at December 31, 2022. Directors’ interests in the Company’s shares and share option plan
Rayville Limited, an Irish registered company, which was wholly owned by three executive directors and certain other former executives of the Group, owned all of the ‘B’ non-voting Ordinary Shares in Trinity Research Limited, one of the Group’s subsidiaries, and these ‘B’ shares were surrendered through Trinity Research Limited in 2021. The ‘B’ shares do not entitle the holders thereof to receive any assets of the company on a winding up. All of the ‘A’ voting ordinary shares in Trinity Research Limited are held by the Group. All liabilities in relation to Rayville Limited and Trinity Research Limited were extinguished as at December 31, 2021 and December 31, 2022.
Capital Management The Group’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors (loss)/earnings per share as a measure of performance, which the Group defines as (loss)/profit after tax divided by the weighted average number of shares in issue.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Fair Values The table below sets out the Group’s classification of each class of financial assets/liabilities, their fair values and under which valuation method they are valued:
For financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: valuation techniques for which the lowest level of inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: valuation techniques for which the lowest level of inputs that have a significant effect on the recorded fair value are not based on observable market data. 157 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
The valuation techniques used for instruments categorised as level 2 are described below: The fair values of the options associated with the exchangeable notes are calculated in consultation with third-party valuation specialists due to the complexity of their nature. There are a number of inputs utilised in the valuation of the options, including share price, historical share price volatility, risk-free rate and the expected borrowing cost spread over the risk-free rate.
The Group uses a range of financial instruments (including cash, finance leases, receivables, payables and derivatives) to fund its operations. These instruments are used to manage the liquidity of the Group. Working capital management is a key additional element in the effective management of overall liquidity. The Group does not trade in financial instruments or derivatives. The main risks arising from the utilization of these financial instruments are interest rate risk, liquidity risk and credit risk. 158 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
Interest rate risk Effective and repricing analysis The following table sets out all interest-earning financial assets and
¹ The senior secured term loan is a variable instrument which bears interest at an annual rate equal to 11.25% plus the greater of (a) one-month Term SOFR Reference Rate and (b) one percent per annum. 2 The convertible note is a fixed rate instrument which bears a fixed rate of interest of 1.5% per annum. 3 The maturity of the Exchangeable Notes is based on the contractual maturity date of April 1, 2045.
¹ The maturity of the Exchangeable Notes is based on the contractual maturity date of April 1,
In broad terms, a one-percentage point increase in interest rates would increase interest income by US$ In accordance with the UK Financial Conduct Authority’s announcement in
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Interest rate profile of financial assets / liabilities The interest rate profile of financial assets/liabilities of the Group was as follows:
Fair value sensitivity analysis for fixed rate instruments The Group does not account for any fixed rate financial liabilities at fair value through profit and loss. Therefore, a change in interest rates at December 31, 2022 or December 31, 2021 would not affect profit or loss. There was no significant difference between the fair value and carrying value of the Group’s trade receivables and trade and other payables at December 31, Liquidity risk The following are the contractual maturities of financial liabilities, including estimated interest payments:
160 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
¹ The maturity of the Exchangeable Notes is based on the contractual maturity date of April 1,
Foreign exchange risk The majority of the Group’s activities are conducted in US Dollars. 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. Foreign currency
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Sensitivity analysis A 10% strengthening of the US Dollar against the Euro at December 31,
A 10% weakening of the US Dollar against the Euro at December 31,
Credit Risk The Group has no significant concentrations of credit risk. Exposure to credit risk is monitored on an ongoing basis. The Group maintains specific provisions for potential credit losses. To date such losses have been within management’s expectations. Due to the large number of customers and the geographical dispersion of these customers, the Group has no significant concentrations of accounts receivable. With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, The Group maintains cash and cash equivalents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk is as follows:
The maximum exposure to credit risk for trade receivables and finance lease income receivable by geographic location is as follows:
The maximum exposure to credit risk for trade receivables and finance lease income receivable by type of customer is as follows:
Due to the large number of customers and the geographical dispersion of these customers, the Group has no significant concentrations of accounts receivable.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Impairment Losses The ageing of trade receivables at December 31,
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
The allowance for impairment in respect of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the account owing is possible. At this point the amount is considered irrecoverable and is written off against the financial asset directly.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The changes in the Group’s liabilities arising from financing activities can be classified as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Amendment and restatement of Term Loan On February 21, 2023, the Company and certain of its subsidiaries entered into an amended and restated senior secured term loan credit facility In connection with TrinScreen HIV’s inclusion in the
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
Divestiture of Fitzgerald Life Sciences business and partial repayment of term loan On April 20, 2023, the Company announced it had entered into an agreement to sell its Fitzgerald Industries life sciences supply business, consisting of Benen Trading Ltd and Fitzgerald Industries International, Inc, to Biosynth for cash proceeds of approximately US$30 million subject to customary adjustments. The Fitzgerald life sciences supply business generated revenue of approximately US$12 million in the year ended 31 December 2022, and was EBITDA positive. The cash proceeds from Biosynth includes funding to Fitzgerald Industries to allow it repay intercompany loans owed to Trinity Biotech. The Fitzgerald Industries life sciences supply business is included in the Rest of World - Ireland segment in the Company’s segmental disclosures.
The preparation of these financial statements requires the Group 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, the Group evaluates these estimates, including those related to intangible assets, contingencies and litigation. The estimates are based 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. Key sources of estimation uncertainty Note Critical accounting judgements in applying the Group’s accounting policies Certain critical accounting judgements in applying the Group’s accounting policies are described below: Revenue Recognition No revenue is recognised if there is uncertainty regarding recovery of the consideration due at the outset of the transaction. We make a judgement as to the collectability of invoiced sales based on an assessment of the individual debtor taking into account past payment history, the probability of default or delinquency in payments and the probability that debtor will enter into financial difficulties or bankruptcy. Some customer contracts could be regarded as offering the customer a right of return. Due to the uncertainty of the magnitude and likelihood of product returns, there is a level of estimation involved in assessing the amount of revenue to be recognized for these
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
We operate a licenced reference laboratory in New York, USA 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. In the US, 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 lab 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. At December 31, Research and development expenditure – capitalized development costs Under IFRS as issued by IASB, the Group writes 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 commercial production starts. For further information, refer to Note Acquired in-process research and development (IPR&D) is valued at its fair value at acquisition date in accordance with IFRS 3. The Company determines this fair value by adopting the income approach valuation technique. Once the fair value has been determined, the Company will recognise the IPR&D as an intangible asset when it: (a) meets the definition of an asset and (b) is identifiable (i.e., is separable or arises from contractual or other legal rights). Factors which impact our judgement to capitalise certain research and development expenditure include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. We review these factors each year to determine whether our previous estimates as to feasibility, viability and recovery should be changed. At December 31, Impairment of intangible assets and goodwill Definite lived intangible assets are reviewed for indicators of impairment periodically while goodwill and indefinite lived assets are tested for impairment at least annually, individually or at the Factors considered important, as part of an impairment review, include the following:
168 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2022
When we determine that the carrying value of intangibles, non-current assets and related goodwill 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.
The impairment testing performed during the year ended December 31, 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
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$
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The directors have considered the Group’s current financial position and cash flow projections, taking into account all known events and At December 31,
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
The consolidated financial statements include the financial statements of Trinity Biotech plc and the following principal subsidiary undertakings:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,
These Group consolidated financial statements were authorised for issue by the Board of Directors on May Signatures The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on its behalf.
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