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Trinity Biotech Nabs $45 Million Investment from MiCo, Reports 41 Percent Drop in Q4 Revenues

NEW YORK ─ Irish diagnostics firm Trinity Biotech on Monday announced a $45 million strategic investment and partnership with South Korea-based MiCo.

In a separate announcement, Trinity reported a 41 percent year-over-year decrease in fourth quarter revenues.

The investment consists of approximately 11.2 million American Depositary Shares at a price of $2.25 per share, representing an approximately 130 percent premium to the closing price of $0.98 of Trinity's shares on April 8.

Following the investment MiCo will hold 29.9 percent of the voting share capital of Trinity.

In addition to the newly issued equity, Trinity is issuing a seven-year, unsecured junior convertible note in the amount of $20 million, with a fixed interest rate of 1.5 percent and a conversion price of $3.24 per ADS.

The convertible note will convert into ADSs if the volume weighted average price of Trinity's ADSs is at or above $3.24 for any five consecutive trading days on the Nasdaq.

Bray, Ireland-based Trinity said it intends to use the funds primarily to repay a portion of a $81.25 million term loan, which is expected to reduce its annual interest cost by approximately $4 million each year.

Trinity added that it also expects that the investment will enable it to explore lower cost debt funding options in the short term, with the aim of further reducing the company's interest expense by refinancing the balance of its term loan at substantially lower interest rates.

The deal is expected to close before the end of this month.

Trinity noted that MiCo BioMed, one of MiCo's affiliates, is an in vitro diagnostic company with lab-on-a-chip- and artificial intelligence-based rapid point of care testing applications in various diseases that are supported by a large-scale manufacturing base in Korea.

MiCo BioMed has a desktop molecular PCR testing platform with approximately 800 placements over the past two years in Africa, Asia, South America, and European markets, Trinity said.

Trinity said the strategic investment and partnership are intended to accelerate growth with a focus on point-of-care and at-home diagnostic products and services.

Through distribution and joint development agreements, it is intended that Trinity will distribute MiCo BioMed's molecular PCR and next-generation ELISA diagnostic platforms in Trinity's core markets including North America and Western Europe.

MiCo BioMed is expected to obtain commercial rights to sell certain of Trinity's products in numerous global markets including countries within the Asia-Pacific market, Trinity said.

The companies also expect to collaborate on R&D, pan-global regulatory certifications, and manufacturing, Trinity said.

In conjunction with the strategic investment, MiCo Founder and Chair Sun-Q Jeon will become chairperson of Trinity.

When the financing has been completed, Aris Kekedjian and Michael Sung Soo Kim are expected to join Trinity's board.

Kekedjian, a strategic senior executive, worked for 30 years at General Electric in a number of senior roles, including five years as its chief investment officer and was most recently CEO of Icahn Enterprises.

Sung Soo Kim has held a number of senior executive positions include CEO of Hyundai Securities Asia.

Current directors Kevin Tansley, Clint Severson, and James Merselis will retire from the board upon completion of the financing. Trinity CEO Ronan O'Caoimh and CFO John Gillard will continue in their current roles with the firm and remain board members.

Trinity also reported that for the three-month period ended Dec. 31, 2021, its revenues fell to $19.5 million from $32.8 million in the year-ago period.

Clinical laboratory revenues were down 43 percent to $17.1 million from $30.2 million, mainly due to lower revenues from its PCR viral transport media (VTM) products.

In Q4 2020, demand for PCR VTM products was exceptional while there was limited worldwide manufacturing capacity, and as the pandemic has persisted, manufacturing capacity has ramped up significantly with a consequent negative impact on selling prices, Trinity said.

Its Q4 point-of-care revenues fell 4 percent year over year to $2.4 million from $2.5 million.

The company posted a Q4 loss after tax of $1.3 million, or $.004 per ADS, versus $10.0 million, or $.31 per ADS, in the same period the year before.

R&D spending in the quarter decreased 28 percent year over year to $941,000 from $1.3 million, while SG&A costs dropped 25 percent year over year to $5.2 million from $6.9 million.

For full-year 2021, Trinity's revenues fell 9 percent year over year to $93.0 million from $102.0 million.

For 2021, its clinical laboratory revenues dropped 11 percent year over year to $82.6 million from $92.7 million, while 2021 point-of-care revenues rose 12 percent year over year to $10.3 million from $9.2 million.

Trinity posted income after tax for 2021 of $875,000, or about $.16 per ADS, compared with a loss of $6.4 million, or about $.02 per ADS, the year before.

In 2021, Trinity's R&D expenses were down 12 percent year over year to $4.5 million from $5.1 million, while its SG&A costs declined 3 percent year over year to $23.4 million from $24.2 million.

At the end of 2021, Trinity had cash, cash equivalents, and deposits totaling $25.9 million.

In Monday morning trading on the Nasdaq, shares of Trinity were up 56 percent to $1.53.