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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Name of each exchange on which registered
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American Depositary Shares (each representing 4 ‘A’ Ordinary
Shares, par value US$0.0109)
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NASDAQ Global Market
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U.S. GAAP ☐
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International Financial Reporting Standards as issued
by the International Accounting Standards Board ☒
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Other ☐
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Page
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1
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1
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PART I
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1
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1
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1
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24 | ||
39
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39
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61 |
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65
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67
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67
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69 | ||
80
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82
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PART II
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83
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83
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83
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85
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85
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85
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86
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86
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86
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86
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86
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PART III
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87
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87
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166
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Item 2 |
Offer Statistics and Expected Timetable
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Item 3 |
Key Information
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Year ended December 31,
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|||||||||||||||||||
|
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2019
US$ ‘000
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2018
US$‘000
|
2017
US$‘000
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2016
US$‘000
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2015 US$‘000 |
||||||||||||||
Revenues
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90,435
|
97,035
|
99,140
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99,611
|
100,195
|
|||||||||||||||
Cost of sales
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(52,315
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)
|
(55,586
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)
|
(57,250
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)
|
(56,127
|
)
|
(53,683
|
)
|
||||||||||
|
||||||||||||||||||||
Gross profit
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38,120
|
41,449
|
41,890
|
43,484
|
46,512
|
|||||||||||||||
Other operating income
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91
|
102
|
100
|
239
|
288
|
|||||||||||||||
Research and development expenses
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(5,325
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)
|
(5,369
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)
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(5,657
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)
|
(5,040
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)
|
(5,069
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)
|
||||||||||
Selling, general and administrative expenses
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(27,661
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)
|
(29,477
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)
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(32,246
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)
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(30,366
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)
|
(28,225
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)
|
||||||||||
Selling, general and administrative expenses - impairment charges and inventory write-off/provision
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(24,295
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)
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(26,932
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)
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(41,755
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)
|
(48,165
|
)
|
—
|
|||||||||||
Selling, general and administrative expenses – tax audit settlement
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(5,042
|
)
|
—
|
—
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—
|
—
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||||||||||||||
|
||||||||||||||||||||
Operating (loss)/profit
|
(24,112
|
)
|
(20,227
|
)
|
(37,668
|
)
|
(39,848
|
)
|
13,506
|
|||||||||||
Financial income
|
697
|
2,144
|
3,198
|
3,147
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13,491
|
|||||||||||||||
Financial expenses
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(6,582
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)
|
(5,080
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)
|
(5,405
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)
|
(5,439
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)
|
(4,054
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)
|
||||||||||
Net financing (expense)/income
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(5,885
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)
|
(2,956
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)
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(2,207
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)
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(2,292
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)
|
9,437
|
|||||||||||
(Loss)/Profit before tax
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(29,997
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)
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(23,183
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)
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(39,875
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)
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(42,140
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)
|
22,943
|
|||||||||||
Income tax credit/(expense)
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1,006
|
525
|
1,214
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3,557
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(756
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)
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||||||||||||||
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||||||||||||||||||||
(Loss)/Profit for the year
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(28,991
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)
|
(22,658
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)
|
(38,661
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)
|
(38,583
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)
|
22,187
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|||||||||||
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||||||||||||||||||||
(Loss)/Profit for the year on discontinued operations
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77
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568
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(1,609
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)
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(62,042
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)
|
(391
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)
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||||||||||||
(Loss)/Profit for the year (all attributable to owners of the parent)
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(28,914
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)
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(22,090
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)
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(40,270
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)
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(100,625
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)
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21,796
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|||||||||||
Basic (loss)/earnings per ADS (US Dollars)
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(1.38
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)
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(1.06
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)
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(1.86
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)
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(4.38
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)
|
0.94
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|||||||||||
Diluted (loss)/earnings per ADS (US Dollars)
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(1.38
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)
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(1.06
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)
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(1.86
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)
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(4.38
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)
|
0.46
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|||||||||||
Basic (loss)/earnings per ‘A’ ordinary share
(US Dollars) |
(0.35
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)
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(0.27
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)
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(0.47
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)
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(1.10
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)
|
0.24
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|||||||||||
Diluted (loss)/earnings per ‘A’ ordinary share
(US Dollars) |
(0.35
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)
|
(0.27
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)
|
(0.47
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)
|
(1.10
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)
|
0.12
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Weighted average number of shares used in computing basic EPS per ADS
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20,901,703
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20,903,227
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21,621,602
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22,964,703
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23,161,773
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|||||||||||||||
Weighted average number of shares used in computing diluted EPS per ADS
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25,467,516
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25,877,205
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26,877,544
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28,299,399
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27,407,793
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|||||||||||||||
Weighted average number of shares used in computing basic EPS per ‘A’ ordinary share
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83,606,810
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83,612,908
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86,486,409
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91,858,813
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92,647,091
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|||||||||||||||
Weighted average number of shares used in computing diluted EPS per ‘A’ ordinary share
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101,870,064
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103,508,820
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107,510,179
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113,197,598
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109,631,172
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December 31,
2019 US$’000
|
December 31,
2018 US$’000
|
December 31,
2017 US$’000
|
December 31,
2016 US$’000
|
December 31,
2015 US$’000
|
|||||||||||||||
Net current assets (current assets less current liabilities)
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51,941
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69,057
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91,362
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108,208
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143,085
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|||||||||||||||
Non-current liabilities
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(106,909
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)
|
(90,001
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)
|
(106,549
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)
|
(115,585
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)
|
(129,646
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)
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||||||||||
Total assets
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131,071
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151,659
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192,974
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249,592
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363,683
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|||||||||||||||
Capital stock
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1,213
|
1,213
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1,213
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1,213
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1,209
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|||||||||||||||
Shareholders’ equity
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4,713
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44,054
|
65,196
|
108,727
|
213,892
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• |
Our long-term viability and growth will depend upon the successful discovery, development and commercialization of other products from our research and development (“R&D”) activities. In order to remain competitive, we are committed
to significant expenditures on R&D and the commercialization of new or enhanced products. The R&D process generally takes a significant amount of time from product inception to commercial launch. However, there is no certainty that
this investment in research and development will yield technically feasible or commercially viable products. We may have to abandon a new or enhanced product or a product during its development phase in which we have invested substantial
time and money. During the fiscal years ended December 31, 2019, 2018 and 2017, we incurred US$9.6 million, US$9.9 million and US$10.4 million, respectively, in capitalised R&D expenses. We expect to continue to incur significant costs
related to our research and development activities.
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• |
Successful products require significant development and investment, including testing to demonstrate their performance capabilities, cost-effectiveness or other benefits prior to commercialization. In addition, unless exempt, regulatory
clearance or approval must be obtained before our medical device products may be sold. Additional development efforts on these products may be required before we are ready to submit applications for marketing authorisation to any regulatory
authority. Regulatory authorities may not clear or approve these products for commercial sale or may substantially delay or condition clearance or approval. In addition, even if a product is successfully developed and all applicable
regulatory clearances or approvals are obtained, there may be little or no market for the product. Accordingly, if we fail to develop and gain commercial acceptance for our products, or if we have to abandon a new product during its
development phase, or if competitors develop more effective products or a greater number of successful new products, customers may decide to use products developed by our competitors. This would result in a loss of revenues and adversely
affect our results of operations, cash flow and business.
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• |
Our future growth in the United States is dependent in part on Food and Drug Administration (“FDA”) clearance of products. If FDA clearance is delayed or not achieved for these products, it could have a material impact on the future
growth of our business. Similarly, future growth outside of USA is dependent on clearance of products by the relevant regulatory authorities in those countries.
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• |
We have invested in research and development but there can be no guarantees that our R&D programmes will not be rendered technologically obsolete or financially non-viable by the technological advances of our competitors, which would
also adversely affect our existing product lines and inventory. The main competitors of Trinity Biotech (and their principal products with which Trinity Biotech competes) include: Abbott Diagnostics (AxSYM™, IMx™, i-STAT®,
Determine™, Wampole™, Athena™, Biosite Triag®), Arkray (HA-8180), Bio-Rad (Bio-Plex™, Variant II, Turbo and D10™), Diasorin Inc. (Liasion™, ETIMAX™), The Carlyle Group – Ortho Clinical Diagnostics (Vitros™), OraSure Technologies,
Inc. (OraQuick®), Roche Diagnostics (COBAS AMPLICOR™, Ampliscreen™, Accutrend™, Tina Quant™), Siemens – Beckman Coulter (Uni-Cel), Siemens – Dade-Behring (BEP 2000, Enzygnost®), Siemens – Bayer (Centaur™), Siemens –
DPC (Immulite™), Thermo Fisher (Konelab™) and Tosoh (G8™).
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• |
The diagnostics industry is focused on the testing of biological specimens in a laboratory or at
the point-of-care and is highly competitive and rapidly changing. As new products enter the market, our products may become obsolete or a competitor’s products may be more effective or more effectively marketed and sold than ours. If we
fail to maintain and enhance our competitive position, our customers may decide to use products developed by competitors which could result in a loss of revenues.
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We may in certain instances also face competition from products that are sold at a lower price. Where this occurs, customers may choose to buy lower cost products from third parties or we may be forced to sell our products at a lower
price, both of which could result in a loss of revenues or a lower gross margin contribution from the sale of our products. We may also be required to increase our marketing efforts in order to compete effectively, which would increase our
costs.
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• |
Our tests compete with products made by our competitors. Multiple competitors are making investments in competing technologies and products, and a number of our competitors may have a competitive advantage because of their greater
financial, technical, research and other resources. Some competitors offer broader product lines and may have greater market presence or name recognition than we have. If we receive FDA clearance, and in order to achieve market acceptance,
we and/or our distributors will likely be required to undertake substantial marketing efforts and spend significant funds to inform potential customers and the public of the existence and perceived benefits of our products. Our marketing
efforts for these products may not be successful. As such, there can be no assurance that these products will obtain significant market acceptance and fill the market needs that are perceived to exist on a timely basis, or at all.
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• |
Our medical device products and operations are subject to rigorous government regulation in the United States by the FDA, and numerous other federal, state and foreign governmental authorities, as well as and by comparable regulatory
authorities in other jurisdictions such as the Health Products Regulatory Authority (“HPRA”) in Ireland. In particular, we are subject to strict governmental controls on the development, manufacture, labelling, storage, testing,
advertising, promotion, marketing, distribution and import and export of our products. In addition, we or our distributors are often required to register with and/or obtain clearances or approvals from foreign governments or regulatory
bodies before we can import and sell our products in foreign countries. The clearance and approval process for our products, while variable across countries, is generally lengthy, time consuming, detailed and expensive.
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• |
The process of obtaining regulatory clearances or approvals to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all. In particular, the FDA
permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (“FDCA”), or is the subject of an approved premarket approval application
(“PMA”) unless the device is specifically exempt from those requirements. The FDA will clear marketing of a lower risk medical device through the 510(k) process if the manufacturer demonstrates that the new product is substantially
equivalent to other 510(k)-cleared products. High risk devices deemed to pose the greatest risk, such as life-sustaining, life-supporting, or implantable devices, or devices not deemed substantially equivalent to a previously cleared
device, require the approval of a PMA.
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• |
In the United States, the majority of our currently commercialized products have received pre-market clearance under Section 510(k) of the FDCA. If the FDA requires us to go through a lengthier, more rigorous examination for future
products or modifications to existing products than we had expected, our product introductions or modifications could be delayed or cancelled, which could cause our sales to decline. In addition, the FDA may determine that future products
will require the more costly, lengthy and uncertain PMA process. Although we currently market only one device pursuant to an approved PMA, the FDA may demand that we obtain a PMA prior to marketing certain of our future products.
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• |
FDA can delay, limit or deny clearance or approval of a device for many reasons, including:
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• |
our ability to demonstrate to the FDA’s satisfaction that our products are safe and effective for their intended users;
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• |
insufficient data from our pre-clinical studies and clinical trials to support clearance or approval, where required; and
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• |
the failure of the manufacturing process or facilities we use to meet applicable requirements.
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• |
In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products under development or
impact our ability to modify our currently cleared products on a timely basis. For example, in response to industry and healthcare provider concerns regarding the predictability, consistency and rigor of the 510(k) regulatory pathway, the
FDA initiated an evaluation of the program, and in January 2011, announced several proposed actions intended to reform the review process governing the clearance of medical devices. FDA’s review of its 510(k) clearance process could result
in additional changes to regulatory requirements or guidance documents which could increase the costs of compliance, or restrict our ability to maintain current clearances. In addition, as part of the Food and Drug Administration Safety and
Innovation Act (“FDASIA”), Congress reauthorised the Medical Device User Fee Amendments with various FDA performance goal commitments and enacted several “Medical Device Regulatory Improvements” and miscellaneous reforms which are further
intended to clarify and improve medical device regulation both pre- and post-clearance and approval.
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• |
Our continued success is dependent on our ability to develop and market new products, some of which are currently awaiting clearance or approval from the applicable regulatory authorities. There is no certainty that such clearance or
approval will be granted or, even once granted, will not be revoked during the continuing review and monitoring process. Further, regulatory authorities, including the FDA, may not approve or clear our future products for the indications
that are necessary or desirable for successful commercialization. A regulatory authority may impose requirements as a condition to granting a marketing authorisation, may include significant restrictions or limitations as part of a
marketing authorisation it grants and may delay or refuse to authorise a product for marketing, even though a product has been authorised for marketing without restrictions or limitations in another country or by another agency. Failure to
receive clearance or approval for our new products, or commercially undesirable limitations on our clearances or approvals, would have an adverse effect on our ability to expand our business.
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• |
Initiating and completing clinical trials necessary to support approval of future products under development, is time consuming and expensive and the outcome uncertain. Moreover, the results of early clinical trials are not necessarily
predictive of future results, and any product we advance into clinical trials may not have favorable results in later clinical trials.
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• |
Conducting successful clinical studies will require the enrollment of patients who may be difficult to identify and recruit. Patient enrollment in clinical trials and completion of patient participation and follow-up depends on many
factors, including the size of the patient population, the nature of the trial protocol, and the availability of appropriate clinical trial investigators. Patients may not participate in our clinical trials if they choose to participate in
contemporaneous clinical trials of competitive products.
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• |
Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required and we may not adequately develop such protocols to support clearance and approval. Further, the FDA may require us to submit
data on a greater number of patients than we originally anticipated and/or for a longer follow-up period or change the data collection requirements or data analysis applicable to our clinical trials. Any challenges to patient enrollment may
cause an increase in costs and delays in the approval and attempted commercialization of our products or result in the failure of the clinical trial. In addition, despite considerable time and expense invested in our clinical trials, FDA
may not consider our data adequate to demonstrate safety and efficacy. Such increased costs and delays or failures could adversely affect our business, operating results and prospects.
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• |
Our facilities and our clinical investigational sites operate under procedures that govern the conduct and management of FDA-regulated clinical studies under 21 CFR Parts 50, 56 and 812, and Good Clinical Practices. Although the majority
of our in-vitro diagnostic (“IVD”) clinical studies meet the definition of exempted investigations under 21 Part 812 and are exempt from the Investigational Device Exemption (“IDE”) regulations in 21 CFR Part 812, we are still required to
meet the requirements of 21 CFR Parts 50 and 56 for informed consent and Institutional Review Board (“IRB”) approval. FDA may conduct Bioresearch Monitoring (“BiMo”) inspections of us and/or our clinical sites to assess compliance with FDA
regulations, our procedures, and the clinical protocol. If the FDA were to find that we or our clinical investigators are not operating in compliance with applicable regulations, we could be subject to the above FDA enforcement action as
well as refusal to accept all or part of our data in support of a 510(k) or PMA and/or we may need to conduct additional studies.
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• |
We may not have the ability to independently conduct our pre-clinical studies and clinical trials for our products and we may rely on third parties, such as contract research organizations, medical institutions, clinical investigators
and contract laboratories to conduct such trials. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if these third parties need to be replaced, or if the
quality or accuracy of the data they obtain is compromised due to the failure to adhere to our pre-clinical or clinical protocols or regulatory requirements or for other reasons, our pre-clinical development activities or clinical trials
may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize, our products on a timely basis, if at all, and our business, operating results and prospects may be
adversely affected. Furthermore, our third-party clinical trial investigators may be delayed in conducting our clinical trials for reasons outside of their control.
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• |
Even if our clinical trials are completed as planned, we cannot be certain that their results will support our product candidate claims or that the FDA or foreign authorities will agree with our conclusions regarding them. The clinical
trial process may fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others. Any delay or termination of
our clinical trials will delay the filing of our product submissions and, ultimately, our ability to commercialize our product candidates and generate revenues.
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• |
Even after we obtain clearance or approval for our medical devices, we are still subject to ongoing and extensive post market regulatory requirements. Regulation by the FDA and other federal, state and foreign regulatory agencies, such
as the HPRA in E.U., impacts many aspects of our operations, and the operations of our suppliers and distributors, including manufacturing, labeling, packaging, adverse event reporting, storage, advertising, promotion, marketing, record
keeping, import and export. For example, the manufacture of medical devices must comply with the FDA’s Quality System Regulation (“QSR”), which covers the methods and documentation of the design, testing, production, control, quality
assurance, labeling, packaging, sterilization, storage and shipping of our products. Our manufacturing facilities and those of our suppliers and distributors are, or can be, subject to periodic regulatory inspections by the FDA to assess
compliance with the QSR and other regulations, and by other comparable foreign regulatory authorities with respect to similar requirements in other jurisdictions. The FDA and foreign regulatory agencies may require post-marketing testing
and surveillance to monitor the performance of approved products or place conditions on any product clearances or approvals that could restrict the commercial applications of those products. The failure by us or one of our suppliers to
comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among
other things, any of the following enforcement actions:
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• |
untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
|
• |
unanticipated expenditures to address or defend such actions;
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• |
customer notifications for repair, replacement, refunds;
|
• |
recall, detention or seizure of our products;
|
• |
operating restrictions or partial suspension or total shutdown of production;
|
• |
refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;
|
• |
operating restrictions;
|
• |
withdrawing 510(k) clearances on PMA approvals that have already been granted;
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• |
refusal to grant export approval for our products; or
|
• |
criminal prosecution.
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• |
Even if regulatory clearance or approval of a product is granted, such clearance or approval may be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully commercialize
the product and generate revenue from the product. If the FDA determines that our promotional materials, labeling, training or other marketing or educational activities constitute promotion of an unapproved use, it could request that we
cease or modify our training or promotional materials or subject us to regulatory enforcement actions. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our training or other
promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.
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• |
In addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products, and we must comply with medical device reporting requirements, including the reporting of
adverse events and malfunctions related to our products. Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing
problems, or failure to comply with regulatory requirements such as QSR, may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory
recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties which
would adversely affect our business, operating results and prospects.
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• |
In the ordinary course of business, we must frequently make subjective judgments with respect to compliance with applicable laws and regulations. If regulators subsequently disagree with the manner in which we have sought to comply with
these regulations, we could be subjected to substantial civil and criminal penalties, as well as product recall, seizure or injunction with respect to the sale of our products. The assessment of any civil and criminal penalties against us
could severely impair our reputation within the industry and any limitation on our ability to manufacture and market our products could have a material adverse effect on our business.
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• |
In addition to the FDA and other regulations described above, laws and regulations in some countries may restrict our ability to sell products in those countries. While we intend to comply with any applicable restrictions, there is no
guarantee we will be successful in these efforts.
|
• |
We must also comply with numerous laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, disposal of hazardous substances and labour or employment practices.
Compliance with these laws or any new or changed laws regulating our business could result in substantial costs. Because of the number and extent of the laws and regulations affecting our industry, and the number of governmental agencies
whose actions could affect our operations, it is impossible to reliably predict the full nature and impact of these requirements. To the extent the costs and procedures associated with complying with these laws and requirements are
substantial or it is determined that we do not comply, our business and results of operations could be adversely affected.
|
• |
Manufacturers may, on their own initiative, initiate actions, including a non-reportable market withdrawal or a reportable product recall, for the purpose of correcting a material deficiency, improving device performance, or for other
reasons. Additionally, the FDA and similar foreign health or governmental authorities have the authority to require an involuntary recall of commercialized products in the event of material deficiencies or defects in design, manufacturing
or labeling or in the event that a product poses an unacceptable risk to health. In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is a reasonable probability that a device intended for
human use would cause serious, adverse health consequences or death. A government-mandated or voluntary recall by us or one of our distributors could occur as a result of component failures, manufacturing errors, design or labeling defects
or other deficiencies and issues. Recalls of any of our products would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. The FDA requires that certain classifications
of recalls be reported to FDA within 10 working days after the recall is initiated.
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• |
Companies are required to maintain certain records of post-market actions, even if they determine such actions are not reportable to the FDA. If we determine that certain actions do not require notification of the FDA, the FDA may
disagree with our determinations and require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action
for failing to report the recalls when they were conducted or failing to timely report or initiate a reportable product action. Further, depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA may
require, or we may decide, that we will need to obtain new approvals or clearances before we may market or distribute the corrected device. Seeking such approvals or clearances may delay our ability to replace the recalled devices in a
timely manner.
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We are also required to comply with the FDA’s Medical Device Reporting (“MDR”), requirements in the United States and comparable regulations worldwide, such as the HPRA. For example, under the FDA’s MDR regulations, we are required to
report to the FDA any incident in which our product may have caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would likely cause or contribute to death or
serious injury. In addition, all manufacturers placing medical devices in European Union markets are legally bound to report any serious or potentially serious incidents involving devices they produce or sell to the Competent Authority in
whose jurisdiction the incident occurred.
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We have reported MDRs in the past, and we anticipate that in the future it is likely that we may experience events that would require reporting to the FDA pursuant to the MDR regulations. Any adverse event involving our products could
result in future voluntary corrective actions, or agency actions, such as inspection, mandatory recall or other enforcement action.
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Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and
financial results.
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Any modification to a 510(k)-cleared device in the United States that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, design or manufacture, requires a new 510(k)
clearance or, possibly, approval of a PMA. The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer’s decision. The FDA may not agree with our decisions regarding whether
new clearances or approvals are necessary.
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For example, we obtained 510(k) clearance for our Primus Variant System for the separation and quantification of normal and abnormal haemoglobin species as an aid in the diagnosis of haemoglobinopathies. The sample type used by this
system was blood tubes. We subsequently introduced two systems based on the original Primus Variant System and they were named as ultra² GeneSys Variant System and ultra² Resolution Variant System. The primary focus of the GeneSys was on
newborn screening using Dried Blood Spots as the sample type, while the Resolution was intended for confirmatory testing on the adult population using blood tubes as the sample type. We determined that these modifications to the indications
for use were within our existing clearance and did not require the submission of a new 510(k) notification. The FDA stated that the use of Dried Blood Spots was not part of the original submission and represented a new modified Intended
Use. The FDA informed us that it disagreed with our decision not to seek new 510(k) clearances for these modifications, and we filed new 510(k) notifications to obtain clearance for these indications. The FDA rejected our filing on the
basis that the predicate devise chosen did not meet their requirements. Additionally the FDA asked us to withdraw our product from the market. This has been done in order to stay compliant. A new filing is underway using the predicate
device indicated by the FDA. The new application is expected to be filed in the second half of 2020.
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Furthermore, the FDA’s ongoing review of the 510(k) program may make it more difficult for us to make modifications to any products for which we obtain clearance, either by imposing more strict requirements on when a manufacturer must
submit a new 510(k) notification for a modification to a previously cleared product, or by applying more onerous review criteria to such submissions. For example, in accordance with FDASIA, the FDA was obligated to prepare a report for
Congress on the FDA’s approach for determining when a new 510(k) clearance will be required for modifications or changes to a previously cleared device. The FDA issued this report and indicated that manufacturers should continue to adhere
to the FDA’s 1997 Guidance on this topic when making a determination as to whether or not a new 510(k) clearance is required for a change or modification to a device. However, the practical impact of the FDA’s continuing scrutiny of the
510(k) program remains unclear.
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Our promotional materials must comply with FDA and other applicable laws and regulations. We believe that the specific uses for which our products are marketed fall within the scope of the indications for use that have been cleared or
approved by the FDA. However, the FDA could disagree and require us to stop promoting our products for those specific uses until we obtain FDA clearance or approval for them. In addition, if the FDA determines that our promotional materials
constitutes promotion of an unapproved use, it could request that we modify our promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure,
civil fine and criminal penalties.
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Although the FDA has statutory authority to assure that medical devices are safe and effective for their intended uses, the FDA has generally exercised its enforcement discretion and not enforced applicable regulations with respect to
laboratory developed tests (“LDTs”), although reagents, instruments, software or components provided by third parties and used to perform LDTs may be subject to FDA regulation.
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We cannot provide any assurance that FDA regulation, including premarket review, will not be required in the future for any of our LDTs, whether through additional guidance or regulations issued by the FDA, new enforcement policies
adopted by the FDA or new legislation enacted by Congress. It is possible that legislation will be enacted into law, regulations could be promulgated or guidance could be issued by the FDA which may result in increased regulatory burdens
for us to continue to offer our current LDTs or to develop and introduce new LDTs. We cannot predict the timing or content of future legislation enacted, regulations promulgated or guidance issued regarding LDTs, or how it will affect our
business.
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If FDA premarket review, including clearance or approval, is required for our current or future LDTs (either alone or together with sample collection devices), products or services we may develop, or we decide to voluntarily pursue FDA
clearance or approval, we may be forced to stop selling our LDTs while we work to obtain such FDA clearance or approval. Our business would be negatively affected until such review was completed and clearance to market or approval was
obtained. The regulatory process may involve, among other things, successfully completing additional clinical studies and submitting premarket notification or filing a premarket approval application with the FDA. If premarket review is
required by the FDA or if we decide to voluntarily pursue FDA premarket review of our LDTs, there can be no assurance that any tests, products or services we may develop in the future will be cleared or approved on a timely basis, if at
all, nor can there be assurance that labeling claims will be consistent with our current claims or adequate to support continued adoption of for our LDTs. If our LDTs are allowed to remain on the market but there is uncertainty in the
marketplace about our tests, if we are required by the FDA to label them investigational and we cannot offer the LDTs for diagnostic purposes, or if labeling claims the FDA allows us to make are limited, orders may decline.
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Ongoing compliance with FDA regulations would increase the cost of conducting our business, and subject us to heightened regulation by the FDA and penalties for failure to comply with these requirements.
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If we fail to comply with federal and state health care laws, including fraud and abuse, false claims, physician payment transparency and privacy and security laws, we could face substantial penalties and our business, operations and
financial condition could be adversely affected. We are subject to anti-kickback laws, self-referral laws, false claims laws, and laws constraining the sales, marketing and other promotional activities of manufacturers of medical devices by
limiting the kinds of financial arrangements we may enter into with physicians, hospitals, laboratories and other potential purchasers of our products. The laws that may affect our ability to operate include, but are not limited to:
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the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly
and wilfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which
payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have
committed a violation; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False
Claims Act;
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the Physician Self-Referral Law, also known as the “Stark Law”, which provides for strict liability for referrals by physicians to entities with which they or their immediate family members have a financial arrangement for certain
designated health services, including clinical laboratory services provided by our CLIA-certified laboratory owned and operated by our subsidiary Immco Diagnostics Inc., that are reimbursable by
federal healthcare programs, unless an exception applies. Penalties for violating the Stark Law include denial of payment, civil monetary penalties of up to fifteen thousand dollars per claim submitted, and exclusion from federal health
care programs, as well as a penalty of up to one-hundred thousand dollars for attempts to circumvent the law;
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federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal third-party payors that are false or
fraudulent. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals, commonly known as “whistleblowers”, may share in any amounts paid by the
entity to the government in fines or settlement. When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each
separate false claim;
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the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision
to order or receive items or services reimbursable by the government from a particular provider or supplier;
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federal criminal laws that prohibit executing a scheme to defraud any federal healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not
need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
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the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and
protects the security and privacy of protected health information;
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the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain
exceptions) to report annually to the Centers for Medicare & Medicaid Services (“CMS”), information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists
and chiropractors) and teaching hospitals, and requires applicable manufacturers to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments
or other “transfers of value” to such physician owners. Manufacturers are required to submit reports to CMS by the 90th day of each calendar year. We cannot assure you that we have and will successfully report all transfers of value by us,
and any failure to comply could result in significant fines and penalties. Failure to submit the required information may result in civil monetary penalties up to an aggregate of $150,000 per year (and up to an aggregate of $1 million per
year for “knowing failures”) for all payments, transfers of value or ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws or regulations;
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federal and state laws governing the certification and licensing of clinical laboratories, including operational, personnel and quality requirements designed to ensure that testing services are accurate and timely, and federal and state
laws governing the health and safety of clinical laboratory employees;
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the U.S. Foreign Corrupt Practices Act, or the FCPA, which prohibits corporations and individuals
from paying, offering to pay or authorising the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise
influence a person working in an official capacity; the UK Bribery Act, which prohibits both domestic and international bribery, as well as bribery across both public and private sectors; and bribery provisions contained in the German
Criminal Code, which makes the corruption and corruptibility of physicians in private practice and other healthcare professionals a criminal offense; and
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analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any payor, including commercial insurers; state laws that
require device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and
other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state laws
governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
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Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbours available under such laws, it is possible that some of our business activities, including our relationships with physicians and other
healthcare providers, some of whom may recommend, purchase and/or order our tests, our sales and marketing efforts and certain arrangements with customers, including those where we provide our instrumentation for free in exchange for
minimum purchase requirements of our reagents, and our billing and claims processing practices, could be subject to challenge under one or more of such laws. By way of example, some of our consulting arrangements with physicians do not meet
all of the criteria of the personal services safe harbour under the federal Anti-Kickback Statute. Accordingly, they do not qualify for safe harbour protection from government prosecution. A business arrangement that does not substantially
comply with a safe harbour, however, is not necessarily illegal under the Anti-Kickback Statute, but may be subject to additional scrutiny by the government. We are also exposed to the risk that our employees, independent contractors,
principal investigators, consultants, vendors and distributors may engage in fraudulent or other illegal activity. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur
significant legal expenses and divert our management’s attention from the operation of our business.
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To enforce compliance with the federal laws, the U.S. Department of Justice (“DOJ”), has recently increased its scrutiny of interactions between health care companies and health care providers, which has led to a number of
investigations, prosecutions, convictions and settlements in the health care industry. Dealing with investigations can be time and resource consuming and can divert management’s attention from the business. In addition, settlements with the
DOJ or other law enforcement agencies have forced healthcare providers to agree to additional compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Any such investigation or settlement could
increase our costs or otherwise have an adverse effect on our business.
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Many of the existing requirements are new and have not been definitively interpreted by state authorities or courts, and available guidance is limited. In addition, changes in or evolving interpretations of these laws, regulations, or
administrative or judicial interpretations, may require us to change our business practices or subject our business practices to legal challenges, which could have a material adverse effect on our business, financial condition and results
of operations.
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We have not yet developed a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements to which we are or may become subject. Although the development and
implementation of such compliance programs can mitigate the risk of investigation, prosecution, and penalties assessed for violations of these laws, or any other laws that may apply to us, the risks cannot be entirely eliminated.
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The diagnostics industry is in transition with a number of changes that affect the market for diagnostic test products. The diagnostics industry has experienced considerable consolidation through mergers and acquisitions in the past
several years. For example, major consolidation among reference laboratories and the formation of multi-hospital alliances, reducing the number of institutional customers for diagnostic test products. There can be no assurance that we will
be able to enter into and/or sustain contractual or other marketing or distribution arrangements on a satisfactory commercial basis with these institutional customers.
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limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes;
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limit our ability to use our cash flow or obtain additional financing for working capital, capital expenditures, acquisitions or other general business purposes;
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require us to use a substantial portion of our cash flow from operations to make debt service payments;
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limit our flexibility to plan for, or react to, changes in our business and industry;
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result in dilution to our existing shareholders in the event exchanges of the exchangeable notes are settled in our ordinary shares;
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place us at a competitive disadvantage compared to our less leveraged competitors; and
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increase our vulnerability to the impact of adverse economic and industry conditions.
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Trinity Biotech has historically grown organically and through the acquisition of, and investment in, other companies, product lines and technologies. We may enter into strategic acquisitions or investments as a way to expand our
business. These activities, and their impact on our business, are subject to many risks, including the following:
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Suitable acquisitions or investments may not be found or consummated on terms or schedules that are satisfactory to us or consistent with our objectives;
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The benefits expected to be derived from an acquisition may not materialize and could be affected by numerous factors, such as regulatory developments, insurance reimbursement, general economic conditions and increased competition;
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We may be unable to successfully integrate an acquired company’s personnel, assets, management systems, products and/or technology into our business;
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Worse than expected performance of an acquired business may result in the impairment of intangible assets;
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Acquisitions may require substantial expense and management time and could disrupt our business;
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We may not be able to accurately forecast the performance or ultimate impact of an acquired business;
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An acquisition and subsequent integration activities may require greater capital and other resources than originally anticipated at the time of acquisition;
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An acquisition may result in the incurrence of unexpected expenses, the dilution of our earnings or our existing stockholders’ percentage ownership, or potential losses from undiscovered liabilities not covered by an indemnification from
the seller(s) of the acquired business;
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An acquisition may result in the loss of our or the acquired company’s key personnel, customers, distributors or suppliers;
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An acquisition of a foreign business may involve additional risks, including, but not limited to, foreign currency exposure, liability or restrictions under foreign laws or regulations, and our inability to successfully assimilate
differences in foreign business practices or overcome language or cultural barriers; and
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Our ability to integrate future acquisitions may be adversely affected by inexperience in dealing with new technologies.
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Trinity Biotech currently distributes its product portfolio through distributors in approximately 100 countries worldwide. Our continuing economic success and financial security is dependent on our ability to secure effective channels of
distribution on favourable trading terms with suitable distributors.
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The loss or termination of our relationship with these key distributors could significantly disrupt our existing business unless suitable alternatives were quickly found or lost sales to one distributor are absorbed by another
distributor. Finding a suitable alternative to a lost or terminated distributor may pose challenges in our industry’s competitive environment, and another suitable distributor may not be found on satisfactory terms, if at all. For
instance, some distributors already have exclusive arrangements with our competitors, and others do not have the same level of penetration into our target markets as our existing distributors. If total revenue from these or any of our
other significant distributors were to decrease in any material amount in the future or we are not successful in timely transitioning business to new distributors, our business, operating results and financial condition could be
materially and adversely affected.
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We sell our products into the public health market, which consists of state, county and other governmental public health agencies, community based organizations, service organizations and similar entities. Many of these customers depend
to a significant degree on grants or funding provided by governments or governmental agencies to run their operations, including programs that use our products, such as our HIV testing products. In international markets, we often sell our
products to parties funded by such agencies. The level of available government grants or funding is unpredictable, and certain organizations may not have their contracts renewed for funding. Available funding may be affected by various
factors including future economic conditions, legislative and regulatory developments, political changes, civil unrest and changing priorities for research and development activities. Any reduction or delay in government funding or change
in organizational contracts could cause our customers to delay, reduce or forego purchases of our products or cause short term or long term fluctuations in our product revenues through these channels.
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Trinity Biotech may be subject to claims for personal injuries or other damages if any of our products, or any product which is made with the use or incorporation of any of our technologies, causes injury of any type or is found
otherwise unsuitable during product testing, manufacturing, marketing, sale or usage. There is no assurance that we would be successful in defending any product liability lawsuits brought against us. Regardless of merit or eventual outcome,
product liability claims could result in:
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Decreased demand for our products;
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Lost revenues;
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Damage to our image or reputation;
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Costs related to litigation;
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Diversion of management time and attention; and
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Incurrence of damages payable to plaintiffs.
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Trinity Biotech has global product liability insurance in place for its manufacturing subsidiaries up to a maximum of €6,500,000 (US$7,291,000) for any one accident, limited to a maximum of €6,500,000 (US$7,291,000) in any one year
period of insurance. A deductible of €5,000 ($5,600) for each claim and every claim increasing to US$25,000 in respect of USA/Canada is applicable to each insurance event that may arise. There can be no assurance that our product liability
insurance is sufficient to protect us against liability that could have a material adverse effect on our business. In addition, although we believe that we will be able to continue to obtain adequate coverage in the future, there is no
assurance that we will be able to do so at acceptable costs.
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Products manufactured at our facilities in Bray, Ireland, Jamestown and Buffalo, New York, Kansas City, Missouri and Carlsbad, California comprised approximately 85% of revenues during the fiscal year ended December 31, 2019. Our global
supply of these products and services is dependent on the uninterrupted and efficient operation of these facilities. In addition, we currently rely on a small number of third-party manufacturers to produce certain of our diagnostic products
and product components.
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If we do not negotiate long-term contracts, our suppliers will likely not be required to provide us with any guaranteed minimum production levels. As a result, we cannot assure you that we will be able to obtain sufficient quantities of
product in the future.
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contract manufacturers or suppliers may fail to comply with regulatory requirements or make errors in manufacturing that could negatively affect the efficacy or safety of our products or cause delays in shipments of our products;
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we or our contract manufacturers and suppliers may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, we or our suppliers may have excess or inadequate inventory of materials and
components;
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we or our contract manufacturers and suppliers may be subject to price fluctuations due to a lack of long-term supply arrangements for key components;
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we or our contract manufacturers and suppliers may lose access to critical services and components, resulting in an interruption in the manufacture, assembly and shipment of our systems;
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we may experience delays in delivery by our contract manufacturers and suppliers due to changes in demand from us or their other customers;
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fluctuations in demand for products that our contract manufacturers and suppliers manufacture for others may affect their ability or willingness to deliver components to us in a timely manner;
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our suppliers or those of our contract manufacturer may wish to discontinue supplying components or services to us for risk management reasons;
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we may not be able to find new or alternative components or reconfigure our system and manufacturing processes in a timely manner if the necessary components become unavailable; and
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our contract manufacturers and suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
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The operations of our facilities or these third-party manufacturing facilities could be adversely affected by fire, power failures, natural or other disasters, such as earthquakes, floods, or terrorist threats. Although we carry
insurance to protect against certain business interruptions at our facilities, some pieces of manufacturing equipment are difficult to replace and could require substantial replacement lead-time. There can be no assurance that such coverage
will be adequate or that such coverage will continue to remain available on acceptable terms, if at all.
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If any of these risks materialize, it could significantly increase our costs and impact our ability to meet demand for our products. If we are unable to satisfy commercial demand for our products in a timely manner, our ability to
generate revenue would be impaired, market acceptance of our products could be adversely affected, and customers may instead purchase or use our competitors’ products. In addition, we could be forced to secure new or alternative contract
manufacturers or suppliers. Securing a replacement contract manufacturer or supplier could be difficult. The introduction of new or alternative manufacturers or suppliers also may require design changes to our products that are subject to
FDA and other regulatory clearances or approvals.
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Trinity Biotech’s success is dependent to a large extent upon the contributions of certain key management personnel. Our key employees at December 31, 2019 were Ronan O’Caoimh, our CEO and Chairman, Jim Walsh, Executive Director, and
Kevin Tansley, our CFO/Executive Director. We may not be able to attract or retain a sufficient number of qualified employees in the future due to the intense competition for qualified personnel among medical products and other life science
businesses.
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If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience constraints that will adversely affect our ability to effectively manufacture, sell and market our products, to
meet the demands of our strategic partners in a timely fashion, or to support research, development and clinical programs. Although we believe we will be successful in attracting and retaining qualified personnel, competition for
experienced scientists and other personnel from numerous companies and academic and other research institutions may limit our ability to do so on acceptable terms.
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The primary raw materials required for Trinity Biotech’s test kits consist of antibodies, antigens or other reagents, glass fibre and packaging materials which are acquired from third parties. If our third-party suppliers are unable or
unwilling to supply or manufacture a required component or product or if they make changes to a component, product or manufacturing process or do not supply materials meeting our specifications, we may need to find another source and/or
manufacturer. This could require that we perform additional development work.
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Some of our products, which we acquire from third parties, are highly technical and are required to meet exacting specifications, and any quality control problems that we experience with respect to the products supplied by third-party
vendors could adversely and materially affect our reputation, our attempts to complete our clinical trials or commercialization of our products and adversely and materially affect our business, operating results and prospects. We may also
need to obtain FDA or other regulatory authorisations for the use of an alternative component or for certain changes to our products or manufacturing process. We may also have difficulty obtaining similar components from other suppliers
that are acceptable to the FDA or foreign regulatory authorities and the failure of our suppliers to comply with strictly enforced regulatory requirements could expose us to regulatory action including, warning letters, product recalls,
termination of distribution, product seizures, or civil penalties. Completing that development and obtaining such authorisations could require significant time and expense and we may not obtain such authorisations on a timely basis, or at
all. The availability of critical components and products from other third parties could also reduce our control over pricing, quality and timely delivery. These events could either disrupt our ability to manufacture and sell certain of our
products into one or more markets or completely prevent us from doing so, and could increase our costs. Any such event could have a material adverse effect on our results of operations, cash flow and business. Furthermore, since some of
these suppliers are located outside of the United States, we are subject to foreign export laws and United States import and customs regulations, which complicate and could delay shipments of components to us.
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Although Trinity Biotech does not expect to be dependent upon any one source for these critical components or raw materials, alternative sources of antibodies with the characteristics and quality desired by Trinity Biotech may not be
available. Such unavailability could affect the quality of our products and our ability to meet orders for specific products.
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In December 2019, Covid-19 began to impact the population of Wuhan, China, a disease caused by a novel and highly contagious form of coronavirus. While initially the outbreak was largely concentrated in China and caused significant
disruptions to its economy, it has now spread to several other countries and infections have been reported globally. The severity of the outbreak resulted in travel restrictions, quarantine and social distancing measures imposed by
governments in virtually all of the countries in which we market our products. The Covid-19 outbreak made it difficult to carry out our marketing activities to promote our products to potential customers and gave rise to sudden
significant changes in regional and global economic conditions that could interfere with purchases of products or services. We currently are unable to predict the duration and severity of the spread of the Covid-19, and responses
thereto, and the impact on our business, results of operations, financial condition, cash flows and liquidity, as these depend on rapidly evolving developments, which are highly uncertain. Many factors are beyond our control, such as
the continued spread or recurrence of contagion, the implementation of effective preventative and containment measures, the development of effective medical solutions, financial and other market reactions to the foregoing, and
reactions and responses of communities and societies. However, we know the Covid-19 outbreak will result in lower revenues in 2020 and potentially beyond.
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Any similar future outbreak of a contagious disease, other adverse public health developments around the world, or the measures taken by the governments around the world in response to a future outbreak of a contagious disease may
restrict economic activities in affected regions, resulting in reduced business volume, temporary closure of our facilities and offices or otherwise disrupt our business operations and adversely affect our results of operations.
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We currently generate significant operating cash flows, which combined with access to the credit
markets provides us with discretionary funding capacity for research and development and other strategic activities. Uncertainty in global economic conditions may continue for the foreseeable future and intensify. This uncertainty poses a
risk to the overall economy that could impact demand for our products, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors, including financial institutions. Volatile economic
conditions have adversely affected and could continue to adversely affect our financial performance and condition or those of our customers and suppliers. These circumstances could adversely affect our access to liquidity needed to
conduct or expand our business or conduct future acquisitions or make other discretionary investments. Many of our customers rely on public funding provided by federal, state and local governments, and this funding has been and may
continue to be reduced or deferred as a result of economic conditions.
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If global economic conditions deteriorate significantly, our business could be negatively impacted, including such areas as reduced demand for our products from a slow-down in the general economy, supplier or customer disruptions
resulting from tighter credit markets and/or temporary interruptions in our ability to conduct day-to-day transactions through our financial intermediaries involving the payment to or collection of funds from our customers, vendors and
suppliers. These circumstances may adversely impact our customers and suppliers, which, in turn, could adversely affect their ability to purchase our products or supply us with necessary equipment, raw materials or components. Even with the
improvement of economic conditions, it may take time for our customers and suppliers to establish new budgets and return to normal purchasing and shipping patterns. We cannot predict the reoccurrence of any economic slowdown or the strength
or sustainability of the economic recovery.
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Our international sales and operations are subject to various United States and foreign laws and regulations relating to export controls (including, without limitation, the U.S. Commerce Department’s Export Administration Regulations),
economic sanctions (including, without limitation, various sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control), and anti-corruption (including, without limitation, the United States Foreign
Corrupt Practice Act). Failure to comply with such applicable laws and regulations could subject us to civil or criminal penalties, government investigations, debarment from export privileges, and reputational harm, which could have a
material adverse effect on our business.
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The United Kingdom (“U.K.”) exited the E.U. on January 31, 2020. There is now a transition period until the end of 2020 while the U.K. and E.U. negotiate additional arrangements. The existing rules on trade, travel, and business for the
U.K. and E.U. continue to apply during the transition period. Our business in the U.K., the E.U. and world-wide could be affected by the impact of U.K.’s withdrawal from membership of the E.U. The U.K.’s exit from the E.U. could cause
volatility in global financial markets, including in global currency exchange rates, resulting in a slow-down in economic activity in the U.K., Europe or globally, negatively impact new trade agreements between the U.K and other countries,
and result in significant regulatory changes and uncertainty. One or more of these events could make it more difficult or costly to sell our products, particularly in the U.K. and Europe, and negatively affect our revenues and results of
operations. The U.K.’s exit may also influence other countries and result in additional countries deciding to leave the E.U. This in turn could result in additional changes and uncertainty, any or all of which could negatively impact our
business.
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• |
A substantial portion of our operations is based in Ireland and Europe is one of our main sales territories. As a result, changes in the exchange rate between the U.S. Dollar and the Euro can have significant effects on our results of
operations. In addition, in markets where we invoice in U.S. Dollars but where the local currency has weakened, we have been required to reduce our pricing in order to preserve our competiveness. The Group has an exposure to the Canadian
Dollar through its two Canadian entities (Nova Century Scientific and Phoenix Biotech) and to the Brazilian Real through its Brazilian entity. The Group also has revenues and costs denominated in British Sterling. The discontinued operation
in Sweden, Fiomi Diagnostics, also gives us a Swedish Krona exposure.
|
• |
In the future, we may enter into hedging instruments to manage our currency exchange rate risk. However, our attempts to hedge against these risks may not be successful. If we are unable to successfully hedge against unfavourable foreign
currency exchange rate movements, our consolidated financial results may be adversely impacted.
|
• |
The total share options exercisable at December 31, 2019, as described in Item 18, Note 20 to the
consolidated financial statements, are convertible into American Depository Shares (ADSs), 1 ADS representing 4 “A” Ordinary Shares. The exercise of the share options exercisable will likely occur only when the conversion price is below
the trading price of our ADSs and will dilute the ownership interests of existing shareholders. For instance, should the options of the 6,622,667 “A” Ordinary Shares (1,655,667ADSs) exercisable at December 31, 2019 be exercised, Trinity
Biotech would have to issue 6,622,667 additional “A” Ordinary Shares (1,655,667 ADSs). On the basis of 96,162,410 “A” Ordinary Shares outstanding at December 31, 2019, this would effectively dilute the ownership interest of the existing shareholders by approximately 7%.
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• |
At present, no treaty exists between the United States and Ireland for the reciprocal enforcement of foreign judgments. The laws of Ireland do however, as a general rule, provide that the judgments of the courts of the United States have
in Ireland the same validity as if rendered by Irish Courts. Certain important requirements must be satisfied before the Irish Courts will recognise the United States judgment. The originating court must have been a court of competent
jurisdiction, the judgment may not be recognised if it is based on public policy, was obtained by fraud or its recognition would be contrary to Irish public policy. Any judgment obtained in contravention of the rules of natural justice will
not be enforced in Ireland.
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• |
The materials and processes used to manufacture our products must meet detailed specifications, performance standards and quality requirements to ensure our products will perform in accordance with their label claims, our customers’
expectations and applicable regulatory requirements.
|
• |
As a result, our products and the materials used in their manufacture or assembly undergo regular inspections and quality testing. Factors such as defective materials or processes, mechanical failures, human errors, environmental
conditions, changes in materials or production methods by our vendors, and other events or conditions could cause our products or the materials used to produce or assemble our products to fail inspections and quality testing or otherwise
not perform in accordance with our label claims or the expectations of our customers.
|
• |
Any failure or delay in our ability to meet the applicable specifications, performance standards, quality requirements or customer expectations could adversely affect our ability to manufacture and sell our products or comply with
regulatory requirements. These events could, in turn, adversely affect our revenues and results of operations.
|
• |
Many laws and regulations impose obligations on public companies, which have increased the scope, complexity and cost of corporate governance, reporting and disclosure practices. Our implementation of certain aspects of these laws and
regulations has required and will continue to require substantial management time and oversight and may require us to incur significant additional accounting and legal costs. We continually evaluate and monitor developments with respect to
new and proposed rules and cannot predict or estimate the ultimate amount of additional costs we may incur or the timing of such costs. These laws and regulations are also subject to varying interpretations, in many cases due to their lack
of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. Although we are committed to maintaining high standards of corporate governance and public disclosure, if we fail to comply with any of these requirements, legal
proceedings may be initiated against us, which may adversely affect our business.
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• |
As a result of any number of risk factors identified herein, no assurance can be given that we will be successful in implementing our financial and strategic objectives. In addition, the funds for research, clinical development and other
projects have in the past come primarily from our business operations. If our business slows and we have less money available to fund research and development and clinical programs, we will have to decide at that time which programs to cut,
and by how much. Similarly, if adequate financial, personnel, equipment or other resources are not available, we may be required to delay or scale back our business. Our operations will be adversely affected if our total revenue and gross
profits do not correspondingly increase or if our technology, product, clinical and market development efforts are unsuccessful or delayed.
|
• |
Furthermore, our failure to successfully introduce new or enhanced products and develop new markets could have a material adverse effect on our business and prospects.
|
• |
Our future liquidity and ability to meet our future capital requirements will depend on numerous factors, including, but not limited to, the following:
|
• |
The costs and timing of expansion of sales and marketing activities;
|
• |
The timing and success of the commercial launch of new products;
|
• |
The extent to which we gain or expand market acceptance for existing, new or enhanced products;
|
• |
The costs and timing of the expansion of our manufacturing capacity;
|
• |
The success of our research and product development efforts;
|
• |
The time, cost and degree of success of conducting clinical trials and obtaining regulatory approvals;
|
• |
The magnitude of capital expenditures;
|
• |
Changes in existing and potential relationships with distributors and other business partners;
|
• |
The costs involved in obtaining and enforcing patents, proprietary rights and necessary licenses;
|
• |
The costs and liability associated with patent infringement or other types of litigation;
|
• |
Competing technological and market developments; and
|
• |
The scope and timing of strategic acquisitions.
|
• |
If additional financing is needed, we may seek to raise funds through the sale of equity or other securities or through bank borrowings. There can be no assurance that financing through the sale of securities, bank borrowings or
otherwise will be available to us on satisfactory terms, or at all.
|
• |
We expect that our internal controls will continue to evolve as our business activities change. Although we seek to diligently and vigorously review our internal control over financial reporting in an effort to ensure compliance with the
Section 404 requirements, any control system, regardless of how well designed, operated and evaluated, can provide only reasonable, not absolute, assurance that its objectives will be met. In addition, the overall quality of our internal
controls may be affected by the internal control over financial reporting implemented by any business we acquire and our ability to assess and successfully integrate the internal controls of any such business.
|
• |
We could conclude that our internal control over financial reporting is not effective. These events could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our
financial statements and effectiveness of our internal controls, which ultimately could negatively impact the market price of our common stock.
|
• |
We regularly review our long-lived assets, including identifiable intangible assets and goodwill, for impairment. Goodwill and acquired indefinite life intangible assets are subject to impairment review on an annual basis and whenever
potential impairment indicators are present. Other long-lived assets are reviewed when there is an indication that an impairment may have occurred. The amount of goodwill and identifiable intangible assets on our consolidated balance sheet
is US$44 million (2018: US$53 million). In 2019, we recorded total impairment charges of US$24 million (2018: US$27 million). We may record further significant impairment charges in the future if there are changes in market conditions, a
significant reduction in share price or other changes in the future outlook. In addition, we may from time to time sell assets that we determine are not critical to our strategy or execution. Future events or decisions may lead to asset
impairments and/or related charges. Certain non-cash impairments may result from a change in our strategic goals, business direction or other factors relating to the overall business environment. Any significant impairment charges could
have a material adverse effect on our results of operations.
|
• |
To the extent that we or our strategic partners fail to maintain a high quality level of service and support for diagnostic products, there is a risk that the perceived quality of our products will be diminished in the marketplace.
Likewise, we may fail to provide the level, quantity or quality of service expected by the marketplace. This could result in slower adoption rates and lower than anticipated utilisation of our products which could have a material adverse
effect on our business, financial condition and results of operations.
|
• |
The health care industry has undergone significant consolidation resulting in increased purchasing leverage for customers and consequently increased pricing pressures on our business. Additionally, some of our customers have become
affiliated with group purchasing organisations. Group purchasing organisations typically offer members price discounts on laboratory supplies and equipment if they purchase a bundled group of one supplier’s products, which results in a
reduction in the number of manufacturers selected to supply products to the group purchasing organization and increases the group purchasing organization’s ability to influence its members’ buying decisions. Further consolidation among
customers or their continued affiliation with group purchasing organizations may result in significant pricing pressures and correspondingly reduce the gross margins of our business or may cause our customers to reduce their purchases of
our products, thereby adversely affecting our business, prospects, operating results or financial condition.
|
• |
In developing and manufacturing our products, we employ a variety of proprietary and patented technologies. In addition, we have licensed, and expect to continue to license, various complementary technologies and methods from academic
institutions and public and private companies. We cannot provide any assurance that the technologies that we own or license provide protection from competitive threats or from challenges to our intellectual property. In addition, we cannot
provide any assurances that we will be successful in obtaining licenses or proprietary or patented technologies in the future, or that licenses granted to us by third parties will not be granted to other third parties who could potentially
compete with us.
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• |
Filing, prosecuting and defending patents covering our current and future products throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection
to develop their own products and, further, may export otherwise infringing products to territories where we may obtain patent protection, but where patent enforcement is not as strong as that in the United States. These products may
compete with our products in jurisdictions where we do not have any issued or licensed patents and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.
|
• |
Trinity Biotech currently owns 6 U.S. patents with remaining patent lives varying from 1 year to 14 years.
|
• |
We may fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The patent applications that we own or in-license may fail to result in issued patents with claims that
cover our current products or any future products in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which
can invalidate a patent or prevent a patent from issuing from a pending patent application.
|
• |
We can provide no assurance that third parties will not challenge the validity, enforceability or scope of the patents Trinity Biotech may apply for, or obtain, which may result in such patents being narrowed, invalidated, or held
unenforceable. Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any products covered by those patents.
|
• |
Trade secrets and confidential know-how are important to our scientific and commercial success. Although we seek to protect our proprietary information through confidentiality agreements and other contracts, we can provide no assurance
that others will not independently develop the same or similar information or gain access to our proprietary information.
|
• |
Periodic maintenance fees on any issued patent are due to be paid to the United States Patent and Trademark Organization (“USPTO”) and other foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various
foreign national or international patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be
cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete
loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of patent rights include, but are not limited to, failure to timely file national and regional stage patent applications
based on our international patent application, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalise and submit formal documents. If we or our licensors fail to maintain
the patents and patent applications covering our current or future products, our competitors might be able to enter the market, which would have an adverse effect on our business.
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• |
Depending on actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we
have licensed or that we might obtain in the future.
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• |
For example, the United States has enacted and implemented wide-ranging patent reform legislation, which could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defence of
our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions
that affect the way patent applications are prosecuted and may also affect patent litigation. The United States Patent Office recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the
substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have
on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defence of our issued patents,
all of which could have an adverse effect on our business and financial condition.
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• |
Additionally, the U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In
addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
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• |
Litigation over intellectual property rights is prevalent in the diagnostic industry, including patent infringement lawsuits, interferences, derivation and administrative law proceedings, inter party review, and post-grant review before
the USPTO, as well as oppositions and similar processes in foreign jurisdictions.
|
• |
As the market for diagnostics continues to grow and the number of participants in the market increases, we may increasingly be subject to patent infringement claims. It is possible that a third-party may claim infringement against us.
For example, because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our products may infringe. Defence of these claims, regardless of their
merit, would involve substantial litigation expense and would be a substantial diversion of managerial and financial resources from our business. Parties making claims against us may obtain injunctive or other equitable relief, which could
effectively block our ability to further develop and commercialise one or more of our products. The pendency of any litigation may cause our distributors and customers to reduce or terminate purchases of our products. If found to infringe,
we may have to pay substantial damages, including treble damages and attorneys’ fees for wilful infringement, obtain one or more licenses from third parties, pay royalties or redesign our affected products, which may be impossible or
require substantial time and monetary expenditure. Any substantial loss resulting from such a claim could cause our revenues to decrease and have a material adverse affect on our profitability, and the damage to our reputation in the
industry could have a material adverse affect on our business.
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• |
If we need to obtain a license as a result of litigation, we cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of
litigation, we may need to obtain licenses from third parties to advance our research or allow commercialisation of our products. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that
event, we would be unable to further develop and commercialise one or more of our products, which could harm our business significantly.
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• |
Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorised use, we may be required to file legal claims, which can be
expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue
on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defence proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our
patent applications at risk of not issuing. The initiation of a claim against a third party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable. In patent
litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of
novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the
USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte re-examinations, inter partes review, or post-grant
review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
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• |
We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. For the patents and patent applications that we have licensed, we may have limited or no right to
participate in the defence of any licensed patents against challenge by a third party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any future patent
protection on our current or future products. Such a loss of patent protection could harm our business.
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• |
We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could
be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in
substantial costs and distract our management and other employees.
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• |
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of
litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse
effect on the price of our ordinary shares.
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• |
We are highly dependent on information technology networks and systems, including the Internet, to securely process, transmit and store electronic information, including personal information of our customers. Security breaches of this
infrastructure, including physical or electronic break-ins, computer viruses, malware attacks by hackers and similar breaches, can cause all or portions of our websites to be unavailable, create system disruptions, shutdowns, erasure of
critical data and software or unauthorised disclosure of confidential information. We invest in security technology to protect our data against risks of data security breaches and cyber-attacks and we have implemented solutions, processes,
and procedures to help mitigate these risks, such as encryption, virus protection, security firewalls and comprehensive information security and privacy policies. However, despite our security measures, our information technology and
infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. The age of our information technology systems, as well as the level of our protection and business continuity or
disaster recovery capability, varies from site to site, and there can be no guarantee that any such plans, to the extent they are in place, will be effective. In addition, a security breach or privacy violation that leads to disclosure of
consumer information (including personally identifiable information or protected health information) could harm our reputation, compel us to comply with disparate state breach notification laws and otherwise subject us to liability under
laws that protect personal data, resulting in increased costs or loss of revenue. If we are unable to prevent further security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, we
may be subject to legal claims or proceedings, or we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information, including sensitive consumer data, which could have a material
adverse impact on our business, financial condition and results of operations. While we currently expend resources to protect against cyber-attacks and security breaches, hackers and other cyber criminals are using increasingly
sophisticated and constantly evolving techniques, and we may need to expend additional resources to continue to protect against potential security breaches or to address problems caused by such attacks or any breach of our safeguards. In
addition, a data security breach could distract management or other key personnel from performing their primary operational duties.
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• |
In addition, the interpretation and application of consumer and data protection laws in the United States, Europe and elsewhere are often uncertain, contradictory and in flux. It is possible that these laws may be interpreted and applied
in a manner that is inconsistent with our data practices. If so, this could result in government-imposed fines or orders requiring that we change our data practices, which could have an adverse effect on our business. Complying with these
various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.
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• |
We sell our products into the public health market, which consists of state, county and other governmental public health agencies, community-based organisations, service organisations and similar entities. Many of these customers
depend to a significant degree on grants or funding provided by governmental agencies to run their operations including programs that use our products. In international markets, we often sell our products to parties funded by such
agencies. The level of available government grants or funding is unpredictable and may be affected by various factors including future economic conditions, legislative and regulatory developments, political changes, civil unrest and
changing priorities for research and development activities. Any reduction or delay in government funding could cause our customers to delay, reduce or forego purchases of our products.
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• |
In the United States in recent years, there have been numerous initiatives at the federal and state level for comprehensive reforms affecting the payment for, the availability of and reimbursement for healthcare services. These
initiatives have ranged from proposals to fundamentally change federal and state healthcare reimbursement programs, including providing comprehensive healthcare coverage to the public under government-funded programs, to minor modifications
to existing programs. One example is the Patient Protection and Affordable Care Act, the Federal healthcare reform law enacted in 2010 (the “Affordable Care Act”). Similar reforms may occur internationally.
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• |
Legislative and regulatory bodies are likely to continue to pursue healthcare reform initiatives in many forms and may continue to reduce funding in an effort to lower overall federal healthcare spending. The U.S. government recently
enacted legislation that eliminated what is known as the “individual mandate” under the Affordable Care Act and may enact other changes in the future. The ultimate content and timing of any of these types of changes in other healthcare
reform legislation and the resulting impact on us are impossible to predict. If significant reforms are made to the healthcare system in the U.S., or in other jurisdictions, those reforms may increase our costs or otherwise have an adverse
effect on our financial condition and results of operations.
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• |
We are subject to regular reviews, examinations, and audits by tax authorities in a number of jurisdictions across the world with respect to our taxes. Although we believe our tax estimates are reasonable, if a taxing authority disagrees
with the positions we have taken, we could face additional tax liability, including interest and penalties. There can be no assurance that payment of such additional amounts upon final adjudication of any disputes will not have a material
impact on our results of operations and financial position.
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• |
A significant portion of our business is located in the U.S. and is subject to income and other taxes in the U.S. and our operations, plans and results are affected by tax and other initiatives. In December, 2017, the U.S. Government
enacted comprehensive tax legislation known as the Tax Cuts and Jobs Act. This legislation made broad and complex changes to the U.S. tax code, including but not limited to reducing the corporate tax rate from 35% to 21%, requiring a
one-time mandatory deemed repatriation of certain deferred foreign earnings tax on and accelerating first year expensing of certain capital expenditures. The legislation also introduced new tax laws affecting our taxable income, which
includes, but is not limited to, a new provision designed to tax global intangible low taxed income, limitations on the deductibility of certain executive compensation, creating a base erosion anti-abuse tax and modifying or repealing many
deductions and credits. The ultimate impacts of the Tax Act may differ from the Company’s estimates due to changes in the interpretations and assumptions made, as well as any forthcoming regulatory guidance. The changes to the tax code
could also affect our valuation of deferred tax assets and liabilities. Any such change in valuation would have a material impact on our income tax expense and deferred tax balances.
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• |
Our laboratory operated by our subsidiary Immco Diagnostics Inc. is subject to CLIA, which is administered by CMS and extends federal oversight to virtually all clinical laboratories by requiring that they be certified by the federal
government or by a federally-approved accreditation agency. CLIA is designed to ensure the quality and reliability of clinical laboratories by, among other things, mandating specific standards in the areas of personnel qualifications,
administration, and participation in proficiency testing, patient test management, quality control, quality assurance and inspections. Laboratories must undergo on-site surveys at least every two years, which may be conducted by the Federal
CLIA program or by a private CMS approved accrediting agency such as the College of American Pathologists, among others. The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a laboratory’s
CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties.
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• |
We are also subject to regulation of laboratory operations under state clinical laboratory laws of New York and of certain other states from where we accept specimens. State clinical laboratory laws may require that laboratories and/or
laboratory personnel meet certain qualifications, specify certain quality controls or require maintenance of certain records. For example, California requires that we maintain a license to conduct testing in California, and California law
establishes standards for our day-to-day laboratory operations, including the training and skill required of laboratory personnel and quality control.
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• |
In some respects, notably with respect to qualifications of testing personnel, California’s clinical laboratory laws impose more rigorous standards than does CLIA. Certain other states, including Florida, Maryland, New York and
Pennsylvania, require that we hold licenses to test specimens from patients residing in those states, and additional states may require similar licenses in the future. Potential sanctions for violation of these statutes and regulations
include significant fines and the suspension or loss of various licenses, certificates and authorisations, which could adversely affect our business and results of operations.
|
Point-Of-Care
|
Clinical Laboratory
|
|||||||||
Infectious Diseases
|
Infectious Diseases
|
Haemoglobin
|
Autoimmune
|
Clinical Chemistry
|
Blood Bank Screening
|
|||||
UniGold™
|
MarDx®
|
Premier™
|
ImmuBlot™
|
EZ™
|
Captia™
|
|||||
Recombigen®
|
MarBlot®
|
Ultra™
|
ImmuGlo™
|
|
|
|||||
|
|
ImmuLisa™
|
|
|
||||||
|
|
OTOblot™
|
|
|
• |
Infectious diseases;
|
• |
Glycated haemoglobin (for diabetes monitoring and diagnosis) and haemoglobin variants for the detection of haemoglobinopathies (haemoglobin abnormalities);
|
• |
Autoimmune diseases
|
• |
Lyme disease,
|
• |
Sexually transmitted diseases, including Syphilis and Herpes.
|
• |
Markers for Epstein Barr, measles, mumps, toxoplasmosis, cytomegalovirus, rubella, varicella and other viral pathogens.
|
• |
Immunofluorescence Assay (“IFA”),
|
• |
Enzyme-linked immunosorbent (“ELISA”),
|
• |
Western Blot (“WB”) and
|
• |
Line immunoassay (“LIA”).
|
• |
Its Clinical Chemistry product range directly to hospitals and laboratories in Germany and France;
|
• |
Infectious Diseases and Clinical Chemistry product ranges directly to hospitals and laboratories in the UK; and
|
• |
All product lines through independent distributors and strategic partners in a further approximately 100 countries.
|
• |
untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
|
• |
unanticipated expenditures to address or defend such actions
|
• |
customer notifications for repair, replacement, refunds;
|
• |
recall, detention or seizure of our products;
|
• |
operating restrictions or partial suspension or total shutdown of production;
|
• |
refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;
|
• |
operating restrictions;
|
• |
withdrawing 510(k) clearances or PMA approvals that have already been granted;
|
• |
refusal to grant export approval for our products; or
|
• |
criminal prosecution.
|
• |
product design, development and manufacture;
|
• |
product safety, testing, labeling and storage;
|
• |
record keeping procedures;
|
• |
product marketing, sales and distribution; and
|
• |
post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.
|
• |
Are not to be used as a diagnostic procedure without confirmation of the diagnosis by another medically established diagnostic product or procedure; and
|
• |
product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;
|
• |
Quality System Regulation, (“QSR”), which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the
manufacturing process;
|
• |
labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;
|
• |
clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices;
|
• |
approval of product modifications that affect the safety or effectiveness of one of our approved devices;
|
• |
medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely
cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur;
|
• |
post-approval restrictions or conditions, including post-approval study commitments;
|
• |
post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;
|
• |
the FDA's recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;
|
• |
regulations pertaining to voluntary recalls; and
|
• |
notices of corrections or removals.
|
• |
includes a reduction in the annual update factor used to adjust payments under the CLFS for inflation. This update factor reflects the consumer price index for all urban consumers, or CPI-U, and the ACA
reduces the CPI-U by 1.75% for the years 2011 through 2015. The Affordable Care Act also imposes a multifactor productivity adjustment in addition to the CPI-U, which may further reduce payment rates;
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• |
requires certain medical device manufacturers to pay an excise tax in an amount equal to 2.3% of the price for which such manufacturer sells its medical devices that are listed with the FDA; and
|
• |
requires the coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies, such as bundling of
payments across the continuum of care by providers and clinicians and initiatives to promote quality indicators in payment methodologies.
|
• |
day-to-day operation of a clinical laboratory, including training and skill levels required of laboratory personnel;
|
• |
physical requirements of a facility;
|
• |
equipment; and
|
• |
validation and quality control.
|
• |
Trinity Biotech Manufacturing Limited, based in Bray, Ireland;
|
• |
Clark Laboratories Inc, based in Jamestown, New York;
|
• |
MarDx Diagnostics Inc, based in Carlsbad, California;
|
• |
Primus Corporation, based in Kansas City;
|
• |
Biopool US Inc (trading as Trinity Biotech USA), based in Jamestown, New York;
|
• |
Immco Diagnostics Inc, based in Amherst and Buffalo, New York;
|
• |
Nova Century Scientific Inc, based in Burlington, Canada; and
|
• |
Trinity Biotech Brazil based in Sao Paulo, Brazil.
|
Item 5 |
Operating and Financial Review and Prospects
|
• |
Significant underperformance relative to expected, historical or projected future operating results;
|
• |
Significant changes in the manner of our use of the acquired assets or the strategy for our overall business;
|
• |
Obsolescence of products;
|
• |
Significant decline in our stock price for a sustained period; and
|
• |
Our market capitalisation relative to net book value.
|
• |
In the event that there was a variation of 10% in the assumed level of future growth in revenues, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss of US$743,000 at December 31,
2019
|
• |
In the event there was a 10% variation in the discount rate used to calculate the potential impairment of the carrying values, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss of
US$5,420,000 at December 31, 2019.
|
• |
Haemoglobins revenues – including both instrument and consumables revenues with the impact being greater on diabetes (A1c) rather than on haemoglobin variant revenues.
|
• |
Autoimmune revenues – testing volumes were particularly impacted at our reference laboratory in Buffalo, New York but there were also lower product sales in all major markets.
|
• |
HIV, Infectious Diseases and Clinical chemistry product sales.
|
• |
The company furloughed a large percentage of its work forces in the USA, Ireland and Canada in April, 2020. Meanwhile, in Brazil and other locations, staff costs were also significantly reduced by means of
pay cuts.
|
• |
The elimination of virtually all travel costs and significant reductions in discretionary sales and marketing expenditure.
|
• |
Availing of governmental supports. This included the receipt of US$4.5 million of loans under the U.S. government’s Paycheck Protection Program (“PPP”). Under the provisions of the PPP, these loans will be
partially or totally forgiven, based on the extent to which a borrower’s workforce returns to normal levels in the eight-week period immediately following the loans being granted. Upon receipt of these loans, the Company ended the
furloughing of all staff in the USA and therefore expects that a large percentage of these loans will be forgiven later in 2020, once the necessary verification has taken place. In Ireland, the company also availed of economic support
mechanisms being provided by the Irish Government though a significant level of furloughing continued into June, 2020, mainly due to the expected lower demand for HIV products for the African market.
|
1. |
Overview
|
2. |
Revenues
|
3. |
Operating Loss
|
4. |
Loss for the year
|
5. |
Discontinued operations
|
i. |
Lyme disease revenues decreased following the loss of certain large customers that migrated their Lyme testing away from Western Blot assays to alternative testing platforms,
|
ii. |
HIV point-of-care sales decreased following our decision to discontinue sales of the Unigold HIV test in the USA and
|
iii. |
Revenues for our Fitzgerald business, which sells antibodies to the life sciences and research industries, reduced following higher than average revenues in 2018.
|
Year ended December 31,
|
||||||||||||
2019
US$ ’000
|
|
2018
US$’000
|
% Change
|
|||||||||
Revenues
|
||||||||||||
Clinical Laboratory
|
68,127
|
71,618
|
(4.9
|
)%
|
||||||||
Point-of-Care
|
11,393
|
14,836
|
(23.2
|
)%
|
||||||||
Laboratory Services
|
10,915
|
10,581
|
3.2
|
%
|
||||||||
|
||||||||||||
Total
|
90,435
|
97,035
|
6.8
|
%
|
Year ended December 31,
|
||||||||||||
|
2019
US$‘000
|
|
2018
US$‘000
|
% Change
|
||||||||
Revenues
|
||||||||||||
Americas
|
52,183
|
57,559
|
(9.3
|
)%
|
||||||||
Asia/Africa
|
27,686
|
29,466
|
(6.0
|
)%
|
||||||||
Europe
|
10,566
|
10,010
|
5.6
|
%
|
||||||||
|
||||||||||||
Total
|
90,435
|
97,035
|
(6.8
|
)%
|
|
Year ended December 31,
|
|||||||||||
|
|
2019
US$’000
|
|
2018
US$’000
|
% Change
|
|||||||
Revenues
|
90,435
|
97,035
|
(6.8
|
)%
|
||||||||
Cost of sales
|
(52,315
|
)
|
(55,586
|
)
|
(5.9
|
)%
|
||||||
|
||||||||||||
Gross profit
|
38,120
|
41,449
|
(8.0
|
)%
|
||||||||
Other operating income
|
91
|
102
|
(10.8
|
)%
|
||||||||
Research & development
|
(5,325
|
)
|
(5,369
|
)
|
(0.8
|
)%
|
||||||
SG&A expenses
|
(27,661
|
)
|
(29,477
|
)
|
(6.2
|
)%
|
||||||
Selling, general and administrative expenses – tax audit settlement
|
(5,042
|
)
|
—
|
—
|
||||||||
Selling, general and administrative expenses - impairment charges
|
(24,295
|
)
|
(26,932
|
)
|
(9.8
|
)%
|
||||||
|
||||||||||||
Operating loss on continuing operations
|
(24,112
|
)
|
(20,227
|
)
|
19.2
|
%
|
Year ended December 31,
|
||||||||||||
|
|
2018
US$’000
|
|
2018
US$’000
|
% Change
|
|||||||
SG&A (excl. share-based payments and amortisation)
|
24,561
|
25,317
|
(3.0
|
)%
|
||||||||
Share-based payments
|
732
|
1,335
|
(45.2
|
)%
|
||||||||
Amortisation
|
2,368
|
2,825
|
(16.2
|
)%
|
||||||||
|
||||||||||||
Total
|
27,661
|
29,477
|
(6.2
|
)%
|
• |
full year effect of cost savings implemented in 2018 as part of a cost saving programme. This resulted in lower costs under a wide range of headings including salaries, I.T. costs and discretionary sales and marketing costs and
commission payments,
|
• |
lower pay for employees as a consequence of lower revenues,
|
• |
the foreign currency impact which resulted in Euro-denominated and Brazilian-denominated costs being lower by 5% and 7% respectively,
|
• |
partly offset by a gain on the purchase of a portion of our exchangeable notes recorded in 2018 (US$463,000) and higher legal fees and tax professional fees mainly associated with the tax audit which was concluded in 2019 in one of the
jurisdictions in which the Group operates.
|
•
|
the Company’s market capitalisation at the end of the year which was lower when compared to the end of 2018.
|
•
|
the inclusion of the latest cash flow projections and net asset values for each cash generating unit; and
|
•
|
increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected
future cash flows.
|
Year ended December 31,
|
||||||||||||
|
|
2019
US$‘000
|
|
2018
US$‘000
|
% Change
|
|||||||
Operating loss
|
(24,112
|
)
|
(20,227
|
)
|
19.2
|
%
|
||||||
Net financing expense
|
(5,885
|
)
|
(2,956
|
)
|
99.1
|
%
|
||||||
|
||||||||||||
Loss before tax
|
(29,997
|
)
|
(23,183
|
)
|
29.4
|
%
|
||||||
Income tax credit
|
1,006
|
525
|
91.6
|
%
|
||||||||
|
||||||||||||
Loss for the year from continuing operations
|
(28,991
|
)
|
(22,658
|
)
|
28.0
|
%
|
|
Year ended December 31,
|
|||||||
|
|
2019
US$‘000
|
|
2018
US$‘000
|
||||
Profit on discontinued operations
|
77
|
568
|
1. |
Overview
|
2. |
Revenues
|
3. |
Operating Loss
|
4. |
Loss for the year
|
5. |
Discontinued operations
|
Year ended December 31,
|
||||||||||||
|
2018
US$’000
|
|
2017
US$’000
|
% Change
|
||||||||
Revenues
|
||||||||||||
Clinical Laboratory
|
71,618
|
73,366
|
(2.4
|
)%
|
||||||||
Point-of-Care
|
14,836
|
16,774
|
(11.6
|
)%
|
||||||||
Laboratory Services
|
10,581
|
9,000
|
17.6
|
%
|
||||||||
|
||||||||||||
Total
|
97,035
|
99,140
|
(2.1
|
)%
|
Year ended December 31,
|
||||||||||||
|
2018
US$‘000
|
|
2017
US$‘000
|
% Change
|
||||||||
Revenues
|
||||||||||||
Americas
|
57,559
|
59,539
|
(3.3
|
)%
|
||||||||
Asia/Africa
|
29,466
|
27,131
|
8.6
|
%
|
||||||||
Europe
|
10,010
|
12,470
|
(19.7
|
)%
|
||||||||
|
||||||||||||
Total
|
97,035
|
99,140
|
(2.1
|
)%
|
|
Year ended December 31,
|
|||||||||||
|
|
2018
US$’000
|
|
2017
US$’000
|
% Change
|
|||||||
Revenues
|
97,035
|
99,140
|
(2.1
|
)%
|
||||||||
Cost of sales
|
(55,586
|
)
|
(57,250
|
)
|
(2.9
|
)%
|
||||||
|
||||||||||||
Gross profit
|
41,449
|
41,890
|
(1.1
|
)%
|
||||||||
Other operating income
|
102
|
100
|
2.0
|
%
|
||||||||
Research & development
|
(5,369
|
)
|
(5,657
|
)
|
(5.1
|
)%
|
||||||
SG&A expenses
|
(29,477
|
)
|
(32,246
|
)
|
(8.6
|
)%
|
||||||
Selling, general and administrative expenses - impairment charges and inventory write-off/provision
|
(26,932
|
)
|
(41,755
|
)
|
(35.5
|
)%
|
||||||
|
||||||||||||
Operating loss on continuing operations
|
(20,227
|
)
|
(37,668
|
)
|
(46.3
|
)%
|
|
Year ended December 31,
|
|||||||||||
|
|
2018
US$’000
|
|
2017
US$’000
|
% Change
|
|||||||
SG&A (excl. share-based payments and amortisation)
|
25,317
|
28,050
|
(9.7
|
)%
|
||||||||
Share-based payments
|
1,335
|
893
|
(49.5
|
)%
|
||||||||
Amortisation
|
2,825
|
3,303
|
(14.5
|
)%
|
||||||||
|
||||||||||||
Total
|
29,477
|
32,246
|
(8.6
|
)%
|
• |
flood damage incident at one of our U.S. plants in 2017 (US$894,000),
|
• |
a settlement in relation to a licence royalty dispute in 2017 (US$497,000),
|
• |
a gain on the purchase of a portion of our exchangeable notes in 2018 (US$463,000),
|
• |
cost savings implemented in 2018 as part of a cost saving programme.
|
•
|
the Company’s market capitalisation at the end of the year that was lower when compared to the end of 2017.
|
•
|
the inclusion of the latest cash flow projections and net asset values for each cash generating unit; and
|
•
|
increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected
future cash flows.
|
Year ended December 31,
|
||||||||||||
|
|
2018
US$‘000
|
|
2017
US$‘000
|
% Change
|
|||||||
Operating loss
|
(20,227
|
)
|
(37,668
|
)
|
(46.2
|
)%
|
||||||
Net financing expense
|
(2,956
|
)
|
(2,207
|
)
|
33.9
|
%
|
||||||
|
||||||||||||
Loss before tax
|
(23,183
|
)
|
(39,875
|
)
|
(41.9
|
)%
|
||||||
Income tax credit
|
525
|
1,214
|
(56.8
|
)%
|
||||||||
|
||||||||||||
Loss for the year from continuing operations
|
(22,658
|
)
|
(38,661
|
)
|
(41.4
|
)%
|
|
Year ended December 31,
|
|||||||
|
|
2018
US$‘000
|
|
2017
US$‘000
|
||||
Profit/(Loss) on discontinued operations
|
568
|
(1,609
|
)
|
• |
The ability of the Group to continue to generate revenue growth from its existing product lines;
|
• |
The ability of the Group to generate revenues from new products following the successful completion of its development projects;
|
• |
The extent to which capital expenditure is incurred on additional property plant and equipment;
|
• |
The level of investment required to undertake both new and existing development projects; and
|
• |
Successful working capital management in the context of a growing business.
|
• |
An decrease in trade and other receivables of US$445,000 partially due to the decrease, year on year, in the debtors days number;
|
• |
An increase in trade and other payables balance of US$151,000 due to timing of payments; and
|
• |
An increase in inventory of US$2,959,000 due to the strategic management of inventory levels during the course of the year.
|
• |
Payments to acquire intangible assets of US$9,718,000 (2018: US$9,863,000), which principally related to development expenditure capitalised as part of the Group’s on-going product development activities; and
|
• |
Acquisition of property, plant and equipment of US$2,118,000 (2018: US$7,528,000) incurred as part of the Group’s investment programme for its manufacturing and distribution activities, and placement of instruments.
|
• |
Disposal of property, plant and equipment of US$17,000 (2018: US$nil) incurred as part of the Group’s investment programme for its manufacturing and distribution activities, and placement of instruments.
|
|
Payments due by Period
|
|||||||||||||||||||
Contractual Obligations
|
Total
US$’000 |
less than 1
year US$’000 |
1-2 Years
US$’000 |
2-5 Years
US$’000 |
more than
5 years US$’000 |
|||||||||||||||
Exchangeable note*
|
99,900
|
—
|
—
|
—
|
99,900
|
|||||||||||||||
Exchangeable note interest
|
101,898
|
3,996
|
3,996
|
11,988
|
81,918
|
|||||||||||||||
Right of asset leases obligations
|
19,630
|
2,156
|
2,012
|
4,840
|
10,622
|
|||||||||||||||
Sale and leaseback lease obligations
|
519
|
247
|
95
|
177
|
—
|
|||||||||||||||
|
||||||||||||||||||||
Total
|
221,947
|
6,399
|
6,103
|
17,005
|
192,440
|
|
2019
|
2018
|
Total project
costs to December 31, 2019 ¹ |
|||||||||
Product Name
|
US$’000
|
US$’000
|
US$’000
|
|||||||||
HIV screening rapid test
|
2,587
|
1,657
|
8,474
|
|||||||||
Premier Instrument for Haemoglobin A1c testing
|
1,930
|
2,653
|
32,027
|
|||||||||
Autoimmune Smart Reader
|
1,325
|
746
|
2,071
|
|||||||||
Syphilis point-of-care test
|
870
|
454
|
1,324
|
|||||||||
Uni-Gold antigen improvement
|
691
|
453
|
2,362
|
|||||||||
G-6-PDH test
|
582
|
850
|
2,244
|
|||||||||
Uni-gold test enhancement
|
376
|
796
|
4,718
|
|||||||||
Tri-stat Point-of-Care instrument
|
361
|
727
|
9,029
|
Total estimated
cost to complete |
Estimated date
for completion |
|||||||
Product Name
|
US$’000
|
|||||||
Premier Instrument for Haemoglobin A1c testing²
|
900
|
2020
|
||||||
HIV screening rapid test
|
1,250
|
2020
|
||||||
Autoimmune Smart Reader
|
1,315
|
2021
|
||||||
Name
|
Age
|
Title
|
Ronan O’Caoimh
|
64
|
Chairman and Chief Executive Officer
|
Jim Walsh, PhD
|
61
|
Executive Director
|
Kevin Tansley
|
49
|
Executive Director, Chief Financial Officer & Company Secretary
|
Denis R. Burger, PhD
|
76
|
Non Executive Director / Lead Director
|
Clint Severson
|
71
|
Non Executive Director
|
James D. Merselis
|
66
|
Non Executive Director
|
Executive Director
|
Salary/
Benefits
US$’000
|
Performance
related bonus
US$’000
|
Defined
contribution
pension
US$’000
|
Total
2019
US$’000
|
Total
2018
US$’000
|
|||||||||||||||
Ronan O’Caoimh1
|
425
|
—
|
—
|
425
|
585
|
|||||||||||||||
Jim Walsh
|
—
|
—
|
—
|
—
|
9
|
|||||||||||||||
Kevin Tansley
|
375
|
213
|
42
|
630
|
523
|
|||||||||||||||
|
800
|
213
|
42
|
1,055
|
1,117
|
Non-executive Director
|
Fees
US$’000
|
Total
2019
US$’000
|
Total
2018
US$’000
|
|||||||||
Denis R. Burger
|
75
|
75
|
—
|
|||||||||
Peter Coyne2
|
—
|
—
|
38
|
|||||||||
James Merselis
|
75
|
75
|
75
|
|||||||||
Clint Severson
|
75
|
75
|
75
|
|||||||||
|
225
|
225
|
188
|
1 |
Represents payments to Ronan O’Caoimh for director fees and to Darnick Company in respect of CEO services.
|
2 |
Peter Coyne resigned as Non-executive Director on June 5, 2018.
|
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
Option |
||||||||||||
Ronan O’Caoimh*
|
266,667
|
66,667
|
2.43
|
9.73
|
24/02/2023
|
||||||||||||
266,667
|
66,667
|
2.43
|
9.73
|
24/02/2023
|
|||||||||||||
266,666
|
66,667
|
2.43
|
9.73
|
24/02/2023
|
|||||||||||||
1,000,000
|
250,000
|
1.34
|
5.35
|
07/09/2024
|
|||||||||||||
1,000,000
|
250,000
|
1.34
|
5.35
|
07/09/2024
|
|||||||||||||
244,000
|
61,000
|
1.34
|
5.35
|
07/09/2024
|
|||||||||||||
2,030,000
|
507,500
|
0.69
|
2.74
|
14/06/2026
|
|||||||||||||
2,030,000
|
507,500
|
0.69
|
2.74
|
14/06/2026
|
|||||||||||||
Denis Burger
|
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
|
|||||||||||||
321,000
|
80,250
|
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
|
|||||||||||||
Jim Walsh
|
53,333
|
13,333
|
2.43
|
9.73
|
24/02/2023
|
||||||||||||
53,333
|
13,333
|
2.43
|
9.73
|
24/02/2023
|
|||||||||||||
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
|
|||||||||||||
Kevin Tansley
|
166,667
|
41,667
|
2.43
|
9.73
|
24/02/2023
|
||||||||||||
166,667
|
41,667
|
2.43
|
9.73
|
24/02/2023
|
|||||||||||||
166,666
|
41,667
|
2.43
|
9.73
|
24/02/2023
|
|||||||||||||
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
|
|||||||||||||
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
|
|||||||||||||
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
|
Number of ‘A’
Ordinary Shares
Subject to Option
|
Range of
Exercise Price
per Ordinary Share
|
Range of Exercise Price
per ADS
|
||||||||||
Total options outstanding
|
12,303,990
|
|
US$0.46-US$4.36
|
|
US$1.83-US$17.45
|
Number of ‘A’
Ordinary Shares Beneficially Owned
|
Number of
ADSs Beneficially Owned |
Percentage
‘A’ Ordinary
Shares (8) |
Percentage
Total Voting
Power |
|||||||||||||
Stonehill Capital Management, LLC
|
12,010,288
|
3,002,572
|
11.1
|
%
|
11.1
|
%
|
||||||||||
Paradice Investment Management, LLC
|
6,172,460
|
1,543,115
|
5.7
|
%
|
5.7
|
%
|
||||||||||
Hunter Associates, Inc.
|
5,918,000
|
1,479,500
|
5.5
|
%
|
5.5
|
%
|
||||||||||
Ronan O’Caoimh
|
14,161,496
|
(1)
|
3,540,374
|
13.1
|
%
|
13.1
|
%
|
|||||||||
Jim Walsh
|
2,303,611
|
(2)
|
575,903
|
2.1
|
%
|
2.1
|
%
|
|||||||||
Denis Burger
|
496,000
|
(3)
|
124,000
|
0.5
|
%
|
0.5
|
%
|
|||||||||
Clint Severson
|
558,000
|
(4)
|
139,500
|
0.5
|
%
|
0.5
|
%
|
|||||||||
James Merselis
|
458,600
|
(5)
|
114,650
|
0.4
|
%
|
0.4
|
%
|
|||||||||
Kevin Tansley
|
1,514,000
|
(6)
|
378,500
|
1.4
|
%
|
1.4
|
%
|
|||||||||
Directors & Co. Secretary as a group (6 persons)
|
19,491,707
|
(1)(2)(3)(4)(5)(6)(7)
|
4,872,927
|
18.0
|
%
|
18.0
|
%
|
(1) |
Includes 7,104,000 ‘A’ Ordinary shares issuable upon exercise of options issued to Darnick Company.
|
(2) |
Includes 910,000 ‘A’ Ordinary shares issuable upon exercise of options. Note that 1,200,000 ‘A’ Ordinary shares (300,000 ADSs) of Dr Walsh’s shares are held in trust for the benefit of Dr Walsh’s immediate family.
|
(3) |
Includes 496,000 ‘A’ Ordinary shares issuable upon exercise of options.
|
(4) |
Includes 250,000 ‘A’ Ordinary shares issuable upon exercise of options.
|
(5) |
Includes 250,000 ‘A’ Ordinary shares issuable upon exercise of options.
|
(6) |
Includes 1,364,000 ‘A’ Ordinary shares issuable upon exercise of options.
|
(7) |
Percentage ‘A’ Ordinary shares is based upon total outstanding ‘A’ Ordinary shares and total number of shares issuable upon exercise of options.
|
Year Ended December 31
|
High
|
Low
|
||||||
US$
|
US$
|
|||||||
2015
|
20.24
|
10.74
|
||||||
2016
|
13.68
|
5.76
|
||||||
2017
|
7.04
|
4.50
|
||||||
2018
|
6.06
|
2.14
|
||||||
2019
|
3.22
|
0.69
|
2019
|
High
|
Low
|
||||||
US$
|
US$
|
|||||||
Quarter ended March 31
|
3.22
|
2.31
|
||||||
Quarter ended June 30
|
3.02
|
1.57
|
||||||
Quarter ended September 30
|
2.59
|
1.21
|
||||||
Quarter ended December 31
|
1.20
|
0.69
|
Month Ended
|
High
|
Low
|
||||||
March 31, 2019
|
3.22
|
2.40
|
||||||
April 30, 2019
|
3.02
|
2.68
|
||||||
May 31, 2019
|
2.83
|
2.15
|
||||||
June 30, 2019
|
2.16
|
1.57
|
||||||
July 31, 2019
|
2.59
|
1.63
|
||||||
August 31, 2019
|
2.22
|
1.30
|
||||||
September 30, 2019
|
1.42
|
1.21
|
||||||
October 31, 2019
|
1.20
|
0.69
|
||||||
November 30, 2019
|
1.03
|
0.80
|
||||||
December 31, 2019
|
1.09
|
0.92
|
||||||
January 31, 2020
|
1.47
|
1.03
|
||||||
February 28, 2020
|
1.43
|
0.95
|
||||||
March 31, 2020
|
1.40
|
0.62
|
||||||
April 30, 2020
|
1.59
|
0.88
|
||||||
May 31, 2020
|
1.77
|
1.26
|
• |
which would have an effect of delaying, deferring or preventing a change in control of the Company and which would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its
subsidiaries); or
|
• |
governing the ownership threshold above which a shareholder ownership must be disclosed; or
|
• |
imposing conditions governing changes in the capital which are more stringent than is required by Irish law.
|
• |
Cash consideration of US$31,652,000;
|
• |
Issuance of share option as at the acquisition date with a fair value of US$1,121,000; and
|
• |
The transfer of 5,566 Trinity Biotech ADSs as at the acquisition date (fair value of US$110,000).
|
• |
An up-front cash payment of US$5.6m;
|
• |
The transfer of 408,000 Trinity Biotech ADSs as at the acquisition date (fair value of US$4.1m); and
|
• |
Contingent cash consideration (net present value) of US$3.2m.
|
• |
an individual resident in the U.S. (or certain other countries with which Ireland has a double taxation treaty) and who is neither resident nor ordinarily resident in Ireland; or
|
• |
a U.S. tax resident corporation not under the control of Irish residents; or
|
• |
a corporation that is not resident in Ireland and which is ultimately controlled by persons resident in the U.S. (or certain other countries with which Ireland has a double taxation treaty), with such person or persons not under the
control of persons who are not so resident; or
|
• |
a corporation that is not resident in Ireland and the principal class of whose shares (or its 75% parent’s principal class of shares) is substantially or regularly traded on a recognised stock exchange; or
|
• |
is otherwise entitled to an exemption from DWT.
|
• |
the recipient is the direct beneficial owner of the shares, and
|
• |
the depository bank’s ADS register shows that the direct beneficial owner of the dividends has a U.S. address on the register, and
|
• |
there is an intermediary between the depository bank and the beneficial shareholder and the depository bank receives confirmation from the intermediary that the beneficial shareholder’s address in the intermediary’s records is in the
U.S.
|
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 $1.50 per certificate for ADRs or ADRs transferred
|
Person to whom Receipt is transferred.
|
• |
transfer and registration fees of securities on Trinity Biotech’s securities register to or from the name of the depositary or its agent when ADS holders deposit or withdrawal securities;
|
• |
expenses for cable, telex and fax transmissions and for delivery of securities;
|
• |
expenses incurred for converting foreign currency into U.S. dollars; and
|
• |
taxes and duties upon the transfer of securities (i.e., when ordinary shares are deposited or withdrawn from deposit, other than taxes for which Trinity Biotech is liable).
|
Item 14 |
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15 |
Controls and Procedures
|
|
Year ended December 31,
2019
|
Year ended December 31,
2018
|
||||||||||||||
|
US$’000
|
US$’000
|
US$’000
|
%
|
||||||||||||
Audit
|
508
|
67
|
%
|
562
|
97
|
%
|
||||||||||
Audit-related
|
-
|
-
|
%
|
-
|
-
|
%
|
||||||||||
Tax
|
248
|
33
|
%
|
17
|
3
|
%
|
||||||||||
|
||||||||||||||||
Total
|
756
|
579
|
|
Year ended December 31
|
|||||||||||||||
|
Notes
|
2019
Total
US$‘000
|
2018
Total
US$‘000
|
2017
Total
US$‘000
|
||||||||||||
Revenues
|
2
|
90,435
|
97,035
|
99,140
|
||||||||||||
Cost of sales
|
(52,315
|
)
|
(55,586
|
)
|
(57,250
|
)
|
||||||||||
|
||||||||||||||||
Gross profit
|
38,120
|
41,449
|
41,890
|
|||||||||||||
Other operating income
|
5
|
91
|
102
|
100
|
||||||||||||
Research and development expenses
|
(5,325
|
)
|
(5,369
|
)
|
(5,657
|
)
|
||||||||||
Selling, general and administrative expenses
|
(27,661
|
)
|
(29,477
|
)
|
(32,246
|
)
|
||||||||||
Selling, general and administrative expenses – tax audit settlement
|
6
|
(5,042
|
)
|
-
|
-
|
|||||||||||
Impairment charges
|
7
|
(24,295
|
)
|
(26,932
|
)
|
(41,755
|
)
|
|||||||||
|
||||||||||||||||
Operating loss
|
(24,112
|
)
|
(20,227
|
)
|
(37,668
|
)
|
||||||||||
Financial income
|
2,8
|
697
|
2,124
|
3,198
|
||||||||||||
Financial expenses
|
2, 8
|
(6,582
|
)
|
(5,080
|
)
|
(5,405
|
)
|
|||||||||
|
||||||||||||||||
Net financing expense
|
(5,885
|
)
|
(2,956
|
)
|
(2,207
|
)
|
||||||||||
|
||||||||||||||||
Loss before tax
|
11
|
(29,997
|
)
|
(23,183
|
)
|
(39,875
|
)
|
|||||||||
Total income tax credit
|
2, 9
|
1,006
|
525
|
1,214
|
||||||||||||
|
||||||||||||||||
Loss for the year on continuing operations
|
2
|
(28,991
|
)
|
(22,658
|
)
|
(38,661
|
)
|
|||||||||
|
||||||||||||||||
Profit/(Loss) for the year on discontinued operations
|
10
|
77
|
568
|
(1,609
|
)
|
|||||||||||
|
||||||||||||||||
Loss for the year (all attributable to owners of the parent)
|
2
|
(28,914
|
)
|
(22,090
|
)
|
(40,270
|
)
|
|||||||||
|
||||||||||||||||
Basic loss per ADS (US Dollars) – continuing operations
|
12
|
(1.39
|
)
|
(1.08
|
)
|
(1.79
|
)
|
|||||||||
Diluted loss per ADS (US Dollars) – continuing operations
|
12
|
(1.39
|
)
|
(1.08
|
)
|
(1.79
|
)
|
|||||||||
Basic loss per ‘A’ ordinary share (US Dollars) –continuing operations
|
12
|
(0.35
|
)
|
(0.27
|
)
|
(0.45
|
)
|
|||||||||
Diluted loss per ‘A’ ordinary share (US Dollars) – continuing operations
|
12
|
(0.35
|
)
|
(0.27
|
)
|
(0.45
|
)
|
|||||||||
Basic loss per ADS (US Dollars) – group
|
12
|
(1.38
|
)
|
(1.06
|
)
|
(1.86
|
)
|
|||||||||
Diluted loss per ADS (US Dollars) – group
|
12
|
(1.38
|
)
|
(1.06
|
)
|
(1.86
|
)
|
|||||||||
Basic loss per ‘A’ ordinary share (US Dollars) – group
|
12
|
(0.35
|
)
|
(0.26
|
)
|
(0.47
|
)
|
|||||||||
Diluted loss per ‘A’ ordinary share (US Dollars) –group
|
12
|
(0.35
|
)
|
(0.26
|
)
|
(0.47
|
)
|
|
Year ended December 31
|
|||||||||||||||
|
Notes
|
2019
US$‘000
|
2018
US$‘000
|
2017
US$‘000
|
||||||||||||
Loss for the year
|
2
|
(28,914
|
)
|
(22,090
|
)
|
(40,270
|
)
|
|||||||||
Other comprehensive (loss)/income
|
||||||||||||||||
Items that will be reclassified subsequently to profit or loss
|
||||||||||||||||
Foreign exchange translation differences
|
(167
|
)
|
(520
|
)
|
3,086
|
|||||||||||
|
||||||||||||||||
Other comprehensive (loss)/income
|
(167
|
)
|
(520
|
)
|
3,086
|
|||||||||||
|
||||||||||||||||
Total Comprehensive Loss (all attributable to owners of the parent)
|
(29,081
|
)
|
(22,610
|
)
|
(37,184
|
)
|
|
At December 31
|
|||||||||||
|
Notes
|
2019
US$‘000
|
2018
US$‘000
|
|||||||||
ASSETS
|
||||||||||||
Non-current assets
|
||||||||||||
Property, plant and equipment
|
13
|
9,290
|
5,362
|
|||||||||
Goodwill and intangible assets
|
14
|
43,654
|
52,951
|
|||||||||
Deferred tax assets
|
15
|
6,252
|
6,127
|
|||||||||
Other assets
|
16
|
485
|
558
|
|||||||||
|
||||||||||||
Total non-current assets
|
59,681
|
64,998
|
||||||||||
|
||||||||||||
Current assets
|
||||||||||||
Inventories
|
17
|
32,021
|
30,359
|
|||||||||
Trade and other receivables
|
18
|
20,987
|
24,441
|
|||||||||
Income tax receivable
|
1,982
|
1,584
|
||||||||||
Cash and cash equivalents
|
19
|
15,231
|
30,277
|
|||||||||
Short term investments
|
20
|
1,169
|
-
|
|||||||||
|
||||||||||||
Total current assets
|
71,390
|
86,661
|
||||||||||
|
||||||||||||
TOTAL ASSETS
|
2
|
131,071
|
151,659
|
|||||||||
|
||||||||||||
EQUITY AND LIABILITIES
|
||||||||||||
Equity attributable to the equity holders of the parent
|
||||||||||||
Share capital
|
21
|
1,213
|
1,213
|
|||||||||
Share premium
|
21
|
16,187
|
16,187
|
|||||||||
Treasury shares
|
21
|
(24,922
|
)
|
(24,922
|
)
|
|||||||
Accumulated surplus
|
21
|
16,145
|
55,319
|
|||||||||
Translation reserve
|
21
|
(3,933
|
)
|
(3,766
|
)
|
|||||||
Other reserves
|
21
|
23
|
23
|
|||||||||
|
||||||||||||
Total equity
|
4,713
|
44,054
|
||||||||||
|
||||||||||||
Current liabilities
|
||||||||||||
Income tax payable
|
48
|
210
|
||||||||||
Trade and other payables
|
23
|
16,947
|
16,908
|
|||||||||
Provisions
|
24
|
50
|
50
|
|||||||||
Lease liabilities
|
26
|
2,404
|
436
|
|||||||||
|
||||||||||||
Total current liabilities
|
19,449
|
17,604
|
||||||||||
|
||||||||||||
Non-current liabilities
|
||||||||||||
Exchangeable notes
|
25
|
82,021
|
81,382
|
|||||||||
Derivative financial instruments
|
25
|
4
|
238
|
|||||||||
Lease liabilities
|
26
|
17,745
|
526
|
|||||||||
Deferred tax liabilities
|
15
|
7,139
|
7,855
|
|||||||||
|
||||||||||||
Total non-current liabilities
|
106,909
|
90,001
|
||||||||||
|
||||||||||||
TOTAL LIABILITIES
|
2
|
126,358
|
107,605
|
|||||||||
|
||||||||||||
TOTAL EQUITY AND LIABILITIES
|
131,071
|
151,659
|
|
Other reserves
|
|||||||||||||||||||||||||||||||
|
Share capital
‘A’ ordinary shares US$’000 |
Share
premium US$’000 |
Treasury
Shares US$’000 |
Translation
reserve US$’000 |
Warrant
reserve US$’000 |
Hedging
reserves US$’000 |
Accumulated
surplus US$’000 |
Total
US$’000 |
||||||||||||||||||||||||
Balance at January 1, 2017
|
1,213
|
16,187
|
(17,327
|
)
|
(6,332
|
)
|
4,529
|
23
|
110,434
|
108,727
|
||||||||||||||||||||||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(40,270
|
)
|
(40,270
|
)
|
||||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
3,086
|
-
|
-
|
-
|
3,086
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income/(loss)
|
-
|
-
|
-
|
3,086
|
-
|
-
|
(40,270
|
)
|
(37,184
|
)
|
||||||||||||||||||||||
Transfer of warrant reserve (Note 22)
|
-
|
-
|
-
|
-
|
(4,529
|
)
|
-
|
4,529
|
-
|
|||||||||||||||||||||||
Share-based payments (Note 22)
|
-
|
-
|
-
|
-
|
-
|
-
|
1,109
|
1,109
|
||||||||||||||||||||||||
Shares purchased (Note 21)
|
-
|
-
|
(7,456
|
)
|
-
|
-
|
-
|
-
|
(7,456
|
)
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
1,213
|
16,187
|
(24,783
|
)
|
(3,246
|
)
|
-
|
23
|
75,802
|
65,196
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Balance at January 1, 2018
|
1,213
|
16,187
|
(24,783
|
)
|
(3,246
|
)
|
-
|
23
|
75,802
|
65,196
|
||||||||||||||||||||||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(22,090
|
)
|
(22,090
|
)
|
||||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
(520
|
)
|
-
|
-
|
-
|
(520
|
)
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive loss
|
-
|
-
|
-
|
(520
|
)
|
-
|
-
|
(22,090
|
)
|
(22,610
|
)
|
|||||||||||||||||||||
Share-based payments (Note 22)
|
-
|
-
|
-
|
-
|
-
|
-
|
1,607
|
1,607
|
||||||||||||||||||||||||
Shares purchased (Note 21)
|
-
|
-
|
(139
|
)
|
-
|
-
|
-
|
-
|
(139
|
)
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2018
|
1,213
|
16,187
|
(24,922
|
)
|
(3,766
|
)
|
-
|
23
|
55,319
|
44,054
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
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 (Note 22)
|
-
|
-
|
-
|
-
|
-
|
-
|
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
|
|
Year ended December 31,
|
|||||||||||||||
|
Notes
|
|
2019
US$‘000
|
|
2018
US$‘000
|
|
2017
US$‘000
|
|||||||||
Cash flows from operating activities
|
||||||||||||||||
Loss for the year
|
(28,914
|
)
|
(22,090
|
)
|
(40,270
|
)
|
||||||||||
Adjustments to reconcile net loss to cash provided by operating activities:
|
||||||||||||||||
Depreciation
|
11
|
2,526
|
1,296
|
1,896
|
||||||||||||
Amortisation
|
11,14
|
2,368
|
2,825
|
3,303
|
||||||||||||
Income tax (credit) / expense
|
(1,006
|
)
|
(1,115
|
)
|
(374
|
)
|
||||||||||
Financial income
|
8
|
(697
|
)
|
(2,124
|
)
|
(3,198
|
)
|
|||||||||
Financial expense
|
8
|
6,582
|
5,080
|
5,405
|
||||||||||||
Share-based payments
|
22
|
758
|
1,369
|
928
|
||||||||||||
Foreign exchange (gains)/losses on operating cash flows
|
(93
|
)
|
311
|
307
|
||||||||||||
Loss on disposal or retirement of property, plant and equipment
|
11
|
17
|
15
|
3
|
||||||||||||
Movement in inventory provision
|
17
|
1,567
|
300
|
2,275
|
||||||||||||
Impairment of prepayments
|
7, 18
|
1,376
|
1,608
|
1,651
|
||||||||||||
Impairment of property, plant and equipment
|
7, 13
|
6,349
|
6,112
|
10,437
|
||||||||||||
Impairment of intangible assets
|
7, 14
|
16,570
|
19,212
|
29,667
|
||||||||||||
Provision for closure costs
|
10
|
-
|
-
|
(1,794
|
)
|
|||||||||||
Other non-cash items
|
835
|
570
|
(728
|
)
|
||||||||||||
Operating cash flows before changes in working capital
|
8,238
|
13,369
|
9,508
|
|||||||||||||
(Increase) / decrease in trade and other receivables
|
445
|
(5,960
|
)
|
306
|
||||||||||||
Decrease / (increase) in inventories
|
(2,959
|
)
|
1,988
|
(2,461
|
)
|
|||||||||||
(Decrease) / increase in trade and other payables
|
151
|
(3,419
|
)
|
2,017
|
||||||||||||
|
||||||||||||||||
Cash generated from operations
|
5,875
|
5,978
|
9,370
|
|||||||||||||
Interest paid
|
(1,000
|
)
|
(39
|
)
|
(53
|
)
|
||||||||||
Interest received
|
560
|
874
|
776
|
|||||||||||||
Income taxes received / (paid)
|
(18
|
)
|
416
|
(843
|
)
|
|||||||||||
Net cash generated by operating activities
|
5,417
|
7,229
|
9,250
|
|||||||||||||
|
||||||||||||||||
Cash flows from investing activities
|
||||||||||||||||
Payments to acquire intangible assets
|
(9,718
|
)
|
(9,863
|
)
|
(10,229
|
)
|
||||||||||
Acquisition of property, plant and equipment
|
(2,118
|
)
|
(7,528
|
)
|
(4,839
|
)
|
||||||||||
Disposal of property, plant and equipment
|
(17
|
)
|
||||||||||||||
Licence fees
|
23
|
-
|
-
|
(1,112
|
)
|
|||||||||||
|
||||||||||||||||
Net cash used in investing activities
|
(11,853
|
)
|
(17,391
|
)
|
(16,180
|
)
|
||||||||||
|
||||||||||||||||
Cash flows from financing activities
|
||||||||||||||||
Share buyback
|
-
|
(434
|
)
|
(7,799
|
)
|
|||||||||||
Interest payment on exchangeable notes
|
30
|
(3,996
|
)
|
(4,503
|
)
|
(4,600
|
)
|
|||||||||
Purchase of exchangeable notes
|
30
|
-
|
(12,042
|
)
|
-
|
|||||||||||
Proceeds from sale & leaseback transactions
|
-
|
481
|
51
|
|||||||||||||
Payment of lease liabilities
|
30
|
(3,533
|
)
|
(374
|
)
|
(295
|
)
|
|||||||||
|
||||||||||||||||
Net cash used in financing activities
|
(7,529
|
)
|
(16,872
|
)
|
(12,643
|
)
|
||||||||||
|
||||||||||||||||
Decrease in cash and cash equivalents and short term investments
|
(13,965
|
)
|
(27,034
|
)
|
(19,573
|
)
|
||||||||||
Effects of exchange rate movements on cash held
|
88
|
(296
|
)
|
71
|
||||||||||||
Cash and cash equivalents and short-term investments at beginning of year
|
30,277
|
57,607
|
77,109
|
|||||||||||||
|
||||||||||||||||
Cash and cash equivalents and short term investments at end of year
|
19,20
|
16,400
|
30,277
|
57,607
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
|
i) |
General information
|
ii) |
Statement of compliance
|
iii) |
Basis of preparation
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
iv) |
Basis of consolidation
|
v) |
Property, plant and equipment
|
• Leasehold improvements
|
5-15 years
|
|
• Buildings
|
50 years
|
|
• Office equipment and fittings
|
10 years
|
|
• Computer equipment
|
3-5 years
|
|
• Plant and equipment
|
5-15 years
|
• |
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group
|
• |
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract
|
• |
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
|
1.
|
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
1.
|
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
vi) |
Goodwill
|
vii) |
Intangibles, including research and development (other than goodwill)
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
• Capitalised development costs
|
15 years
|
|
• Patents and licences
|
6-15 years
|
|
• Other (including acquired customer and supplier lists)
|
6-15 years
|
(a) |
once a diagnostic test becomes established, customers are reluctant to change to new technology until it is fully proven, thus resulting in relatively long product life cycles. There is also reluctance in customers to change to a
new product as it can be costly both in terms of the initial changeover cost and as new technology is typically more expensive.
|
(b) |
demand for the diagnostic tests is enduring and robust within a wide geographic base. The diseases that the products diagnose are widely prevalent (HIV, Diabetes and Chlamydia being just three examples) in many countries. There
is a general consensus that these diseases will continue to be widely prevalent in the future.
|
(c) |
there are significant barriers to new entrants in this industry. Patents and/or licences are in place for many of our products, though this is not the only barrier to entry. There is a significant cost and time to develop new
products, it is necessary to obtain regulatory approval and tests are protected by proprietary know-how, manufacturing techniques and trade secrets.
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
viii) |
Impairment
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
ix) |
Inventories
|
x) |
Trade and other receivables
|
xi) |
Trade and other payables
|
xii) |
Cash and cash equivalents
|
xiii) |
Short-term investments
|
xiv) |
Share-based payments
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
xv) |
Government grants
|
xvi) |
Revenue recognition
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
xvii) |
Employee benefits
|
xviii) |
Foreign currency
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
xix) |
Hedging
|
xx) |
Exchangeable notes and derivative financial instruments
|
xxi) |
Segment reporting
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
xxii) |
Tax (current and deferred)
|
i. |
Where the deferred tax liability arises from goodwill not deductible for tax purposes or the initial recognition of an asset or a liability in a transaction that is not a business combination and affects neither the accounting
profit nor the taxable profit or loss at the time of the transaction; and
|
ii. |
Where, in respect of temporary differences associated with investments in subsidiary undertakings, the timing of the reversal of the temporary difference is subject to control and it is probable that the temporary difference will
not reverse in the foreseeable future.
|
xxiii) |
Provisions
|
xxiv) |
Cost of sales
|
xxv) |
Finance income and costs
|
1. |
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
xxvi) |
Treasury shares
|
xxvii) |
Equity
|
xxviii) |
Profit or loss from discontinued operations
|
xxix) |
Fair values
|
xxx) |
New IFRS Standards and Interpretations not applied
|
International Financial Reporting Standards (IFRS/IAS)
|
Effective date
|
|
IFRS 3
|
Business Combinations
|
January 1, 2020 (issued by the IASB with effectivity date of January 1, 2020)
|
IFRS 8
|
Operating Segments
|
January 1, 2020 (issued by the IASB with effectivity date of January 1, 2020)
|
IFRS 9
|
Financial Instruments
|
January 1, 2020 (issued by the IASB with effectivity date of January 1, 2020)
|
IAS 39
|
Financial Instruments
|
January 1, 2020 (issued by the IASB with effectivity date of January 1, 2020)
|
1.
|
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
Carrying amount at December 31, 2018
|
Re-measurement
|
Impairment
|
IFRS 16 carrying amount at January 1, 2019
|
|||||||||||||
US$000
|
US$000
|
US$000
|
US$000
|
|||||||||||||
Property, plant & equipment
|
5,362
|
21,185
|
(11,099
|
)
|
15,448
|
|||||||||||
Lease liabilities
|
(962
|
)
|
(21,185
|
)
|
-
|
(22,147
|
)
|
|||||||||
Retaining earnings
|
(55,319
|
)
|
-
|
11,099
|
(44,220
|
)
|
||||||||||
Total
|
(50,919
|
)
|
-
|
-
|
(50,919
|
)
|
2. |
SEGMENT INFORMATION
|
i) |
The distribution of revenue by geographical area based on location of assets was as follows:
|
|
Rest of World
|
|||||||||||||||||||
Revenue
|
Americas
|
Ireland
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Year ended December 31, 2019
|
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
|||||||||||||||
Revenue from external customers
|
64,045
|
26,390
|
-
|
-
|
90,435
|
|||||||||||||||
Inter-segment revenue
|
39,563
|
1,629
|
-
|
(41,192
|
)
|
-
|
||||||||||||||
|
||||||||||||||||||||
Total revenue
|
103,608
|
28,019
|
-
|
(41,192
|
)
|
90,435
|
|
Rest of World
|
|||||||||||||||||||
|
Americas
|
Ireland
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Year ended December 31, 2018
|
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
|||||||||||||||
Revenue from external customers
|
65,863
|
31,172
|
-
|
-
|
97,035
|
|||||||||||||||
Inter-segment revenue
|
38,665
|
2,899
|
-
|
(41,564
|
)
|
-
|
||||||||||||||
|
||||||||||||||||||||
Total revenue
|
104,528
|
34,071
|
-
|
(41,564
|
)
|
97,035
|
2. |
SEGMENT INFORMATION (CONTINUED)
|
|
Rest of World
|
|||||||||||||||||||
|
Americas
|
Ireland
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Year ended December 31, 2017
|
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
|||||||||||||||
Revenue from external customers
|
66,092
|
33,048
|
-
|
-
|
99,140
|
|||||||||||||||
Inter-segment revenue
|
42,147
|
3,587
|
-
|
(45,734
|
)
|
-
|
||||||||||||||
|
||||||||||||||||||||
Total revenue
|
108,239
|
36,635
|
-
|
(45,734
|
)
|
99,140
|
ii) |
The distribution of revenue by customers’ geographical area was as follows:
|
Revenue
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Americas
|
52,183
|
57,559
|
59,539
|
|||||||||
Asia / Africa
|
27,686
|
29,466
|
27,131
|
|||||||||
Europe (including Ireland) *
|
10,566
|
10,010
|
12,470
|
|||||||||
|
||||||||||||
|
90,435
|
97,035
|
99,140
|
* |
Revenue from customers in Ireland is not disclosed separately due to the immateriality of these revenues.
|
iii) |
The distribution of revenue by major product group was as follows:
|
Revenue
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Clinical laboratory
|
68,127
|
71,618
|
73,366
|
|||||||||
Point-of-Care
|
11,393
|
14,836
|
16,774
|
|||||||||
Laboratory services
|
10,915
|
10,581
|
9,000
|
|||||||||
|
||||||||||||
|
90,435
|
97,035
|
99,140
|
iv) |
The group has recognised the following amounts relating to revenue in the consolidated statement of operations:
|
Revenue
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Revenue from contracts with customers (a)
|
90,435
|
97,035
|
99,140
|
|||||||||
Revenue from other sources
|
-
|
-
|
-
|
|||||||||
|
||||||||||||
|
90,435
|
97,035
|
99,140
|
(a) |
Disaggregation of revenue from contracts with customers:
|
Timing of revenue recognition
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
Year ended December 31, 2019
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
At a point in time
|
63,300
|
26,390
|
—
|
89,690
|
||||||||||||
Over time
|
745
|
—
|
—
|
745
|
||||||||||||
|
||||||||||||||||
Total
|
64,045
|
26,390
|
—
|
90,435
|
Timing of revenue recognition
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
Year ended December 31, 2018
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
At a point in time
|
64,941
|
31,172
|
—
|
96,113
|
||||||||||||
Over time
|
922
|
—
|
—
|
922
|
||||||||||||
|
||||||||||||||||
Total
|
65,863
|
31,172
|
—
|
97,035
|
Timing of revenue recognition
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
Year ended December 31, 2017
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
At a point in time
|
65,164
|
33,048
|
—
|
98,212
|
||||||||||||
Over time
|
928
|
—
|
—
|
928
|
||||||||||||
|
||||||||||||||||
Total
|
66,092
|
33,048
|
—
|
99,140
|
(b) |
The Group derives revenue from the transfer of goods and services over time and at a point in time based on customers’ geographical area as follows:
|
Timing of revenue recognition
|
Americas
|
Asia / Africa
|
Europe
|
Total
|
||||||||||||
Year ended December 31, 2019
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
At a point in time
|
51,438
|
27,686
|
10,566
|
89,690
|
||||||||||||
Over time
|
745
|
—
|
—
|
745
|
||||||||||||
|
||||||||||||||||
Total
|
52,183
|
27,686
|
10,566
|
90,435
|
Timing of revenue recognition
|
Americas
|
Asia / Africa
|
Europe
|
Total
|
||||||||||||
Year ended December 31, 2018
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
At a point in time
|
56,637
|
29,466
|
10,010
|
96,113
|
||||||||||||
Over time
|
922
|
—
|
—
|
922
|
||||||||||||
|
||||||||||||||||
Total
|
57,559
|
29,466
|
10,010
|
97,035
|
2. |
SEGMENT INFORMATION (CONTINUED)
|
Timing of revenue recognition
|
Americas
|
Asia / Africa
|
Europe
|
Total
|
||||||||||||
Year ended December 31, 2017
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
At a point in time
|
58,611
|
27,131
|
12,470
|
98,212
|
||||||||||||
Over time
|
928
|
-
|
-
|
928
|
||||||||||||
|
||||||||||||||||
Total
|
59,539
|
27,131
|
12,470
|
99,140
|
v) |
The distribution of segment results by geographical area was as follows:
|
|
Rest of World
|
|||||||||||||||
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
Year ended December 31, 2019
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
Result before impairment and unallocated expenses
|
5,239
|
(4,334
|
)
|
(108
|
)
|
797
|
||||||||||
Impairment
|
(14,562
|
)
|
(9,733
|
)
|
—
|
(24,295
|
)
|
|||||||||
|
||||||||||||||||
Result after impairment
|
(9,323
|
)
|
(14,067
|
)
|
(108
|
)
|
(23,498
|
)
|
||||||||
Unallocated expenses *
|
(614
|
)
|
||||||||||||||
|
||||||||||||||||
Operating loss
|
(24,112
|
)
|
||||||||||||||
Net financing expense (Note 8)
|
(5,885
|
)
|
||||||||||||||
|
||||||||||||||||
Loss before tax
|
(29,997
|
)
|
||||||||||||||
Income tax credit (Note 9)
|
1,006
|
|||||||||||||||
|
||||||||||||||||
Loss for the year on continuing operations
|
(28,991
|
)
|
||||||||||||||
Profit for the year on discontinued operations (Note 10)
|
77
|
|||||||||||||||
|
||||||||||||||||
Loss for the year
|
(28,914
|
)
|
|
Rest of World
|
|||||||||||||||
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
Year ended December 31, 2018
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
Result before impairment and unallocated expenses
|
5,514
|
1,900
|
(44
|
)
|
7,370
|
|||||||||||
Impairment
|
(19,095
|
)
|
(7,837
|
)
|
—
|
(26,932
|
)
|
|||||||||
|
||||||||||||||||
Result after impairment
|
(13,581
|
)
|
(5,937
|
)
|
(44
|
)
|
(19,562
|
)
|
||||||||
Unallocated expenses *
|
(665
|
)
|
||||||||||||||
|
||||||||||||||||
Operating loss
|
(20,227
|
)
|
||||||||||||||
Net financing expense (Note 8)
|
(2,956
|
)
|
||||||||||||||
|
||||||||||||||||
Loss before tax
|
(23,183
|
)
|
||||||||||||||
Income tax credit (Note 9)
|
525
|
|||||||||||||||
|
||||||||||||||||
Loss for the year on continuing operations
|
(22,658
|
)
|
||||||||||||||
Loss for the year on discontinued operations (Note 10)
|
568
|
|||||||||||||||
|
||||||||||||||||
Loss for the year
|
(22,090
|
)
|
2. |
SEGMENT INFORMATION (CONTINUED)
|
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
Year ended December 31, 2017
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
Result before exceptional expenses
|
3,744
|
1,125
|
(44
|
)
|
4,825
|
|||||||||||
Impairment
|
(9,194
|
)
|
(32,561
|
)
|
—
|
(41,755
|
)
|
|||||||||
|
||||||||||||||||
Result after exceptional expenses
|
(5,450
|
)
|
(31,436
|
)
|
(44
|
)
|
(36,930
|
)
|
||||||||
Unallocated expenses *
|
(738
|
)
|
||||||||||||||
|
||||||||||||||||
Operating profit
|
(37,668
|
)
|
||||||||||||||
Net financing expense (Note 8)
|
(2,207
|
)
|
||||||||||||||
|
||||||||||||||||
Loss before tax
|
(39,875
|
)
|
||||||||||||||
Income tax credit (Note 9)
|
1,214
|
|||||||||||||||
|
||||||||||||||||
Loss for the year on continuing operations
|
(38,661
|
)
|
||||||||||||||
Loss for the year on discontinued operations (Note 10)
|
(1,609
|
)
|
||||||||||||||
|
||||||||||||||||
Loss for the year
|
(40,270
|
)
|
* |
Unallocated expenses represent head office general and administration costs of the Group, which cannot be allocated to the results of any specific geographical area.
|
vi) |
The distribution of segment assets and segment liabilities by geographical area was as follows:
|
|
Rest of World
|
|||||||||||||||
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
As at December 31, 2019
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
Assets and liabilities
|
||||||||||||||||
Segment assets
|
69,224
|
37,212
|
1
|
106,437
|
||||||||||||
Unallocated assets:
|
||||||||||||||||
Income tax assets (current and deferred)
|
8,234
|
|||||||||||||||
Cash and cash equivalents and short-term investments
|
16,400
|
|||||||||||||||
Total assets as reported in the Group balance sheet
|
131,071
|
|||||||||||||||
|
||||||||||||||||
Segment liabilities
|
14,575
|
104,396
|
200
|
119,171
|
||||||||||||
Unallocated liabilities:
|
||||||||||||||||
Income tax liabilities (current and deferred)
|
7,187
|
|||||||||||||||
|
||||||||||||||||
Total liabilities as reported in the Group balance sheet
|
126,358
|
|
Rest of World
|
|||||||||||||||
|
Americas
|
Ireland
|
Other
|
Total
|
||||||||||||
As at December 31, 2018
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
||||||||||||
Assets and liabilities
|
||||||||||||||||
Segment assets
|
75,658
|
38,009
|
4
|
113,671
|
||||||||||||
Unallocated assets:
|
||||||||||||||||
Income tax assets (current and deferred)
|
7,711
|
|||||||||||||||
Cash and cash equivalents and short-term investments
|
30,277
|
|||||||||||||||
|
||||||||||||||||
Total assets as reported in the Group balance sheet
|
151,659
|
|||||||||||||||
|
||||||||||||||||
Segment liabilities
|
||||||||||||||||
Unallocated liabilities:
|
8,946
|
90,444
|
150
|
99,540
|
||||||||||||
Income tax liabilities (current and deferred)
|
8,065
|
|||||||||||||||
|
||||||||||||||||
Total liabilities as reported in the Group balance sheet
|
107,605
|
2. |
SEGMENT INFORMATION (CONTINUED)
|
vii) |
The distribution of long-lived assets, which are property, plant and equipment, goodwill and intangible assets and other non-current assets (excluding deferred tax assets), by geographical area was as follows:
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
||||||
Rest of World – Ireland
|
14,626
|
14,864
|
||||||
Americas
|
38,803
|
44,007
|
||||||
|
||||||||
|
53,429
|
58,871
|
viii) |
The distribution of depreciation and amortisation by geographical area was as follows:
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Depreciation:
|
||||||||||||
Rest of World – Ireland
|
322
|
74
|
1,186
|
|||||||||
Americas
|
2,208
|
1,301
|
1,238
|
|||||||||
|
||||||||||||
|
2,530
|
1,375
|
2,424
|
|||||||||
|
||||||||||||
Amortisation:
|
||||||||||||
Rest of World – Ireland
|
642
|
655
|
1,164
|
|||||||||
Americas
|
1,726
|
2,170
|
2,139
|
|||||||||
|
||||||||||||
|
2,368
|
2,825
|
3,303
|
ix) |
The distribution of share-based payment expense by geographical area was as follows:
|
|
December 31, 2019
US$‘000 |
December 31, 2018
US$‘000 |
December 31, 2017
US$‘000 |
|||||||||
Rest of World – Ireland
|
659
|
1,265
|
841
|
|||||||||
Americas
|
99
|
104
|
87
|
|||||||||
|
||||||||||||
|
758
|
1,369
|
928
|
|||||||||
Share based-payments – discontinued operations
|
—
|
—
|
—
|
|||||||||
|
||||||||||||
|
758
|
1,369
|
928
|
2. |
SEGMENT INFORMATION (CONTINUED)
|
x) |
The distribution of interest income and interest expense by geographical area was as follows:
|
|
Rest of World
|
|||||||||||||||||||
Interest Income
Year ended December 31, 2019
|
Americas
US$‘000
|
Ireland
US$‘000
|
Other
US$‘000
|
Eliminations
US$‘000
|
Total
US$‘000
|
|||||||||||||||
Interest income earned
|
47
|
417
|
—
|
—
|
464
|
|||||||||||||||
Non-cash financial income
|
—
|
233
|
—
|
—
|
233
|
|||||||||||||||
Inter-segment interest income
|
—
|
—
|
4,853
|
(4,853
|
)
|
—
|
||||||||||||||
|
||||||||||||||||||||
Total
|
47
|
650
|
4,853
|
(4,853
|
)
|
697
|
|
Rest of World
|
|||||||||||||||||||
Interest Expense
Year ended December 31, 2019
|
Americas
US$‘000
|
Ireland
US$‘000
|
Other
US$‘000
|
Eliminations
US$‘000
|
Total
US$’000
|
|||||||||||||||
Interest on finance leases
|
294
|
653
|
—
|
—
|
947
|
|||||||||||||||
Interest on tax audit settlement (Note 6)
|
—
|
1,000
|
—
|
—
|
1,000
|
|||||||||||||||
Cash interest on exchangeable notes
|
—
|
3,996
|
—
|
—
|
3,996
|
|||||||||||||||
Non-cash interest on exchangeable notes ( Note 25)
|
—
|
639
|
—
|
—
|
639
|
|||||||||||||||
Inter-segment interest expense
|
4,853
|
—
|
—
|
(4,853
|
)
|
—
|
||||||||||||||
|
||||||||||||||||||||
Total
|
5,147
|
6,288
|
—
|
(4,853
|
)
|
6,582
|
|
Rest of World
|
|||||||||||||||||||
Interest Income
Year ended December 31, 2018
|
Americas
|
Ireland
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
US$‘000
|
US$‘000
|
US$‘000
|
US$’000
|
US$‘000
|
||||||||||||||||
Interest income earned
|
32
|
704
|
—
|
—
|
736
|
|||||||||||||||
Non-cash financial income
|
—
|
1,388
|
—
|
—
|
1,388
|
|||||||||||||||
Inter-segment interest income
|
—
|
—
|
4,853
|
(4,853
|
)
|
—
|
||||||||||||||
|
||||||||||||||||||||
Total
|
32
|
2,092
|
4,853
|
(4,853
|
)
|
2,124
|
|
Rest of World
|
|||||||||||||||||||
Interest Expense
Year ended December 31, 2018
|
Americas
US$‘000
|
Ireland
US$‘000
|
Other
US$‘000
|
Eliminations
US$’000
|
Total
US$‘000
|
|||||||||||||||
Interest on finance leases
|
7
|
32
|
—
|
—
|
39
|
|||||||||||||||
Cash interest on exchangeable notes
|
—
|
4,352
|
—
|
—
|
4,352
|
|||||||||||||||
Non-cash interest on exchangeable notes ( Note 25)
|
—
|
689
|
—
|
—
|
689
|
|||||||||||||||
Inter-segment interest expense
|
4,853
|
—
|
—
|
(4,853
|
)
|
—
|
||||||||||||||
|
||||||||||||||||||||
Total
|
4,860
|
5,073
|
—
|
(4,853
|
)
|
5,080
|
|
Rest of World
|
|||||||||||||||||||
Interest Income
Year ended December 31, 2017
|
Americas
US$‘000
|
Ireland
US$‘000
|
Other
US$‘000
|
Eliminations
US$’000
|
Total
US$‘000
|
|||||||||||||||
Interest income earned
|
44
|
764
|
—
|
—
|
808
|
|||||||||||||||
Non-cash financial income
|
—
|
2,390
|
—
|
—
|
2,390
|
|||||||||||||||
Inter-segment interest income
|
—
|
—
|
4,853
|
(4,853
|
)
|
—
|
||||||||||||||
|
||||||||||||||||||||
Total
|
44
|
3,154
|
4,853
|
(4,853
|
)
|
3,198
|
2. |
SEGMENT INFORMATION (CONTINUED)
|
|
Rest of World
|
|||||||||||||||||||
Interest Expense
Year ended December 31, 2017
|
Americas
US$‘000
|
Ireland
US$‘000
|
Other
US$‘000
|
Eliminations
US$’000
|
Total
US$‘000
|
|||||||||||||||
Interest on deferred consideration and licence fee
|
—
|
40
|
—
|
—
|
40
|
|||||||||||||||
Interest on finance leases
|
—
|
42
|
—
|
—
|
42
|
|||||||||||||||
Cash interest on exchangeable notes
|
—
|
4,600
|
—
|
—
|
4,600
|
|||||||||||||||
Non-cash interest on exchangeable notes (Note 25)
|
—
|
723
|
—
|
—
|
723
|
|||||||||||||||
Inter-segment interest expense
|
4,853
|
—
|
—
|
(4,853
|
)
|
—
|
||||||||||||||
|
||||||||||||||||||||
Total
|
4,853
|
5,405
|
—
|
(4,853
|
)
|
5,405
|
xi) |
The distribution of taxation (expense)/credit by geographical area was as follows:
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Rest of World – Ireland
|
831
|
(59
|
)
|
192
|
||||||||
Rest of World – Other
|
—
|
(3
|
)
|
(81
|
)
|
|||||||
Americas
|
175
|
587
|
1,103
|
|||||||||
|
||||||||||||
|
1,006
|
525
|
1,214
|
xii) |
During 2019, 2018 and 2017 there were no customers generating 10% or more of total revenues.
|
xiii) |
The distribution of capital expenditure by geographical area was as follows:
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
||||||
Rest of World – Ireland
|
20,758
|
7,148
|
||||||
Rest of World – Other
|
-
|
1,746
|
||||||
Americas
|
12,863
|
8,911
|
||||||
|
||||||||
|
33,621
|
17,805
|
3. |
PERSONNEL EXPENSES
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Wages and salaries
|
25,885
|
26,475
|
26,316
|
|||||||||
Social welfare costs
|
2,538
|
2,585
|
2,424
|
|||||||||
Pension costs
|
503
|
490
|
459
|
|||||||||
Tax settlement (Note 6)
|
5,094
|
—
|
—
|
|||||||||
Share-based payments
|
758
|
1,369
|
928
|
|||||||||
|
||||||||||||
|
34,778
|
30,919
|
30,127
|
3. |
PERSONNEL EXPENSES (CONTINUED)
|
|
December 31, 2019
|
December 31, 2018
|
December 31, 2017
|
|||||||||
Research and development
|
57
|
59
|
60
|
|||||||||
Administration and sales
|
159
|
163
|
162
|
|||||||||
Manufacturing and quality
|
363
|
353
|
334
|
|||||||||
|
||||||||||||
|
579
|
575
|
556
|
4. |
PENSION SCHEMES
|
5. |
OTHER OPERATING INCOME
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Rental income from premises
|
3
|
3
|
-
|
|||||||||
Other income
|
88
|
99
|
100
|
|||||||||
|
||||||||||||
|
91
|
102
|
100
|
6. |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES – TAX AUDIT SETTLEMENT
|
7. |
IMPAIRMENT CHARGES
|
• |
The Company’s market capitalisation at the end of the year that was lower when compared to the end of 2018.
|
• |
The inclusion of the latest cash flow projections and net asset values for each cash generating unit; and
|
• |
Increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected future cash flows.
|
December
|
December
|
December
|
||||||||||
31, 2019
|
31, 2018
|
31, 2017
|
||||||||||
|
US$’000
|
US$’000
|
US$’000
|
|||||||||
Selling, general & administration expenses
|
||||||||||||
Impairment of PP&E (Note 13)
|
6,349
|
6,112
|
10,437
|
|||||||||
Impairment of goodwill and other intangible assets (Note 14)
|
16,570
|
19,212
|
29,667
|
|||||||||
Impairment of prepayments (Note 18)
|
1,376
|
1,608
|
1,651
|
|||||||||
|
||||||||||||
Total impairment loss
|
24,295
|
26,932
|
41,755
|
|||||||||
|
(
|
|||||||||||
Income tax impact of impairment loss
|
148
|
(1,752
|
)
|
(517
|
)
|
|||||||
|
||||||||||||
Total impairment loss after tax
|
24,443
|
25,180
|
41,238
|
8. |
FINANCIAL INCOME AND EXPENSES
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Financial income:
|
||||||||||||
Non-cash financial income
|
233
|
1,388
|
2,390
|
|||||||||
Interest income
|
464
|
736
|
808
|
|||||||||
|
||||||||||||
|
697
|
2,124
|
3,198
|
|||||||||
|
||||||||||||
Financial expense:
|
||||||||||||
Interest on leases
|
(947
|
)
|
(39
|
)
|
(42
|
)
|
||||||
Interest on tax audit settlement (Note 6)
|
(1,000
|
)
|
-
|
-
|
||||||||
Cash interest on exchangeable notes
|
(3,996
|
)
|
(4,352
|
)
|
(4,600
|
)
|
||||||
Non-cash interest on exchangeable notes (Note 25)
|
(639
|
)
|
(689
|
)
|
(723
|
)
|
||||||
Interest on deferred consideration and licence fee
|
-
|
-
|
(40
|
)
|
||||||||
|
||||||||||||
|
(6,582
|
)
|
(5,080
|
)
|
(5,405
|
)
|
||||||
Net Financing Expense
|
(5,885
|
)
|
(2,956
|
)
|
(2,207
|
)
|
9. |
INCOME TAX CREDIT
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Current tax (credit)/expense
|
||||||||||||
Irish Corporation tax
|
(312
|
)
|
(258
|
)
|
(51
|
)
|
||||||
Foreign taxes (a)
|
197
|
195
|
358
|
|||||||||
Adjustment in respect of prior years
|
(50
|
)
|
(56
|
)
|
150
|
|||||||
|
||||||||||||
Total current tax (credit)/expense
|
(165
|
)
|
(119
|
)
|
457
|
|||||||
|
||||||||||||
Deferred tax credit (b)
|
||||||||||||
Origination and reversal of temporary differences (see Note 15)
|
(841
|
)
|
(2,031
|
)
|
(5,969
|
)
|
||||||
Origination and reversal of net operating losses (see Note 15)
|
-
|
1,625
|
4,298
|
|||||||||
|
||||||||||||
Total deferred tax credit
|
(841
|
)
|
(406
|
)
|
(1,671
|
)
|
||||||
|
||||||||||||
Total income tax credit on continuing operations in statement of operations
|
(1,006
|
)
|
(525
|
)
|
(1,214
|
)
|
||||||
|
||||||||||||
Tax (credit)/charge on discontinued operations (see Note 10)
|
-
|
(590
|
)
|
323
|
||||||||
|
00
|
|||||||||||
Total tax credit
|
(1,006
|
)
|
(1,115
|
)
|
(891
|
)
|
(a) |
In 2019, the foreign taxes relate primarily to Canada.
|
(b) |
In 2019, there was a deferred tax credit of US$444,000 (2018: charge of US$369,000; 2017: credit of US$170,000) recognised in respect of Ireland and a deferred tax credit of US$397,000 (2018: credit of US$775,000; 2017: credit of
US$1,501,000) recognised in respect of overseas tax jurisdictions.
|
Effective tax rate
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Loss before taxation
|
(29,997
|
)
|
(23,183
|
)
|
(39,875
|
)
|
||||||
As a percentage of loss before tax:
|
||||||||||||
Current tax
|
(0.55
|
)%
|
(0.51
|
)%
|
1.14
|
%
|
||||||
Total (current and deferred)
|
(3.36
|
)%
|
(2.26
|
)%
|
(3.05
|
)%
|
|
December 31, 2019
|
December 31, 2018
|
December 31, 2017
|
|||||||||
Irish corporation tax
|
(12.5
|
)%
|
(12.5
|
)%
|
(12.5
|
)%
|
||||||
Effect of current year net operating losses and temporary differences for which no deferred tax asset was recognised (a)
|
13.21
|
%
|
15.76
|
%
|
12.05
|
%
|
||||||
Effect of tax rates on overseas earnings
|
(3.05
|
)%
|
(6.10
|
)%
|
(2.09
|
)%
|
||||||
Effect of Irish income taxable at higher tax rate
|
0.04
|
%
|
0.05
|
%
|
-
|
|||||||
Adjustments in respect of prior years
|
(0.17
|
)%
|
0.94
|
%
|
0.38
|
%
|
||||||
Effect of changes in US tax code (b)
|
-
|
-
|
(1.89
|
)%
|
||||||||
R&D tax credits
|
(2.69
|
)%
|
(1.70
|
)%
|
(0.17
|
)%
|
||||||
Other items (c)
|
1.80
|
%
|
1.29
|
%
|
1.17
|
%
|
||||||
|
||||||||||||
Effective tax rate
|
(3.36
|
)%
|
(2.26
|
)%
|
(3.05
|
)%
|
9. |
INCOME TAX (CREDIT)/EXPENSE (CONTINUED)
|
(a) |
The effect of current year net operating losses and temporary differences for which no deferred tax asset was recognised is analyzed further in the table below (see also Note 15). No deferred tax asset was recognised because
there was no reversing deferred tax liability in the same jurisdiction reversing in the same period and no future taxable income in the same jurisdiction.
|
(b) |
In 2017, a number of changes were made to the USA tax code, the most significant of which was the reduction in the federal corporation tax rate to 21%. This resulted in a once-off tax credit in 2017 of US$753,000 arising from the
reduction in deferred tax balances due to the tax rate change, partially offset by the effect of mandatory deemed repatriation of certain deferred foreign earnings. The other changes to the USA tax code did not have a material
impact on the Group.
|
(c) |
Other items comprise items not chargeable to tax/expenses not deductible for tax purposes. In 2019, other items mainly comprise the tax audit settlement recorded in Selling, General and Administrative expenses (see also Note
6), which is not deductible for tax. Additionally, the movement in the exchangeable notes’ embedded derivatives value and the accretion of notional interest on the Loan Note’s host contract, both of which are exempt from deferred
taxation recognition under IAS 12, Income Taxes.
|
Unrecognised deferred tax assets – continuing operations
|
Effect in
2019
US$’000
|
Percentage
effect in
2019
|
Effect in
2018
US$’000
|
Percentage
effect in
2018
|
||||||||||||
Increase in net operating losses arising in US
|
1,117
|
3.72
|
%
|
2,174
|
9.38
|
%
|
||||||||||
Temporary differences arising in US
|
129
|
0.43
|
%
|
19
|
0.08
|
%
|
||||||||||
Decrease in net operating losses arising in Brazil
|
608
|
2.03
|
%
|
(20
|
)
|
(0.09
|
)%
|
|||||||||
Increase in net operating losses arising in Ireland
|
2,110
|
7.03
|
%
|
1,482
|
6.39
|
%
|
||||||||||
|
||||||||||||||||
|
3,964
|
13.21
|
%
|
3,655
|
15.76
|
%
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Rest of World – Ireland
|
(20,318
|
)
|
(9,590
|
)
|
(35,821
|
)
|
||||||
Rest of World – Other
|
4,760
|
4,809
|
4,809
|
|||||||||
Americas
|
(14,439
|
)
|
(18,402
|
)
|
(8,863
|
)
|
||||||
|
||||||||||||
|
(29,997
|
)
|
(23,183
|
)
|
(39,875
|
)
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
USA
|
1,034
|
2,382
|
7,737
|
|||||||||
Ireland
|
73,754
|
60,629
|
57,206
|
|||||||||
Brazil
|
5,789
|
4,001
|
4,060
|
|||||||||
|
||||||||||||
|
80,577
|
67,012
|
69,003
|
9. |
INCOME TAX (CREDIT)/EXPENSE (CONTINUED)
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Ireland – unused tax losses
|
12,062
|
9,953
|
8,471
|
|||||||||
US – unused tax losses
|
3,291
|
2,174
|
-
|
|||||||||
US – unused tax credits
|
493
|
364
|
345
|
|||||||||
Brazil – unused tax losses
|
1,968
|
1,360
|
1,380
|
|||||||||
|
||||||||||||
Unrecognised deferred tax asset
|
17,814
|
13,851
|
10,196
|
10. |
PROFIT/(LOSS) FOR THE YEAR ON DISCONTINUED OPERATION
|
10. |
PROFIT/(LOSS) FOR THE YEAR ON DISCONTINUED OPERATION (CONTINUED)
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Revenues
|
—
|
—
|
—
|
|||||||||
Operating loss
|
—
|
—
|
—
|
|||||||||
|
||||||||||||
Loss for the year
|
—
|
—
|
—
|
|||||||||
Profit/(Loss) on re-measurement of assets and liabilities:
|
||||||||||||
Closure costs
|
(8
|
)
|
(22
|
)
|
1,794
|
|||||||
Foreign currency translation reserve
|
85
|
—
|
(3,080
|
)
|
||||||||
Tax credit/(expense)
|
—
|
590
|
(323
|
)
|
||||||||
|
||||||||||||
Total profit/(loss)
|
77
|
568
|
(1,609
|
)
|
||||||||
Profit/(Loss) for the year from discontinued operations
|
77
|
568
|
(1,609
|
)
|
10. | PROFIT/(LOSS) FOR THE YEAR ON DISCONTINUED OPERATION (CONTINUED) |
|
December 31,
2019 |
December 31,
2018 |
December 31,
2017 |
|||||||||
Basic earnings/(loss) per ADS (US Dollars) – discontinued operations
|
0.00
|
0.03
|
(0.07
|
)
|
||||||||
Diluted earnings/(loss per ADS (US Dollars) – discontinued operations
|
0.00
|
0.02
|
(0.07
|
)
|
||||||||
Basic earnings/(loss) per ‘A’ share (US Dollars) – discontinued operations
|
0.00
|
0.01
|
(0.02
|
)
|
||||||||
Diluted earnings/(loss) per ‘A’ share (US Dollars) – discontinued operations
|
0.00
|
0.01
|
(0.02
|
)
|
|
December 31,
2019 |
December 31,
2018 |
December 31,
2017 |
|||||||||
US$000
|
US$000
|
US$000
|
||||||||||
Cash flows from operating activities
|
(5
|
)
|
527
|
(2,847
|
)
|
|||||||
Cash flows from investing activities
|
-
|
-
|
-
|
11. |
LOSS BEFORE TAX
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Directors’ emoluments (including non- executive directors):
|
||||||||||||
Remuneration
|
1,238
|
1,261
|
1,800
|
|||||||||
Pension
|
42
|
44
|
44
|
|||||||||
Share based payments
|
624
|
1,204
|
727
|
|||||||||
Auditor’s remuneration
|
||||||||||||
Audit fees
|
523
|
506
|
568
|
|||||||||
Tax fees
|
172
|
15
|
73
|
|||||||||
Other non-audit fees
|
-
|
-
|
-
|
|||||||||
Depreciation*
|
2,526
|
1,296
|
1,896
|
|||||||||
Amortisation
|
2,368
|
2,825
|
3,303
|
|||||||||
Loss on the disposal of property, plant and equipment
|
17
|
15
|
3
|
|||||||||
Net foreign exchange differences**
|
(179
|
)
|
344
|
(17
|
)
|
* |
Note that US$4,000 (2018: US$79,000) (2017: US$528,000) of depreciation was capitalised to research and development projects during 2019 in line with the Group’s capitalisation policy for Intangible projects.
|
** |
The net foreign exchange differences in 2017 do not include US$440,000 which were included in the operating expenses that were stated in Note 10 in respect of the discontinued operations in Fiomi.
|
12. |
LOSS PER SHARE
|
|
December 31,
2019 |
December 31,
2018 |
December 31,
2017 |
|||||||||
‘A’ ordinary shares
|
83,606,810
|
83,612,908
|
86,486,409
|
|||||||||
|
||||||||||||
Basic earnings per share denominator
|
83,606,810
|
83,612,908
|
86,486,409
|
|||||||||
|
||||||||||||
Reconciliation to weighted average earnings per share denominator:
|
||||||||||||
Number of ‘A’ ordinary shares at January 1 (Note 21)
|
96,162,410
|
96,162,410
|
96,162,410
|
|||||||||
Weighted average number of shares issued during the year*
|
-
|
-
|
||||||||||
Weighted average number of treasury shares
|
(12,555,600
|
)
|
(12,549,502
|
)
|
(9,676,001
|
)
|
||||||
|
||||||||||||
Basic earnings per share denominator
|
83,606,810
|
83,612,908
|
86,486,409
|
|
December 31,
2019
|
December 31,
2018
|
December 31,
2017
|
|||||||||
Basic earnings per share denominator (see above)
|
83,606,810
|
83,612,908
|
86,486,409
|
|||||||||
Issuable on exercise of options and warrants
|
-
|
22,359
|
-
|
|||||||||
Issuable on conversion of exchangeable notes
|
18,263,254
|
19,873,553
|
21,023,770
|
|||||||||
|
||||||||||||
Diluted earnings per share denominator
|
101,870,064
|
103,508,820
|
107,510,179
|
12. |
LOSS PER SHARE (CONTINUED)
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
December 31, 2017
US$‘000
|
|||||||||
Loss after tax for the year
|
(28,914
|
)
|
(22,090
|
)
|
(40,270
|
)
|
||||||
Non-cash financial income (Note 8)
|
(233
|
)
|
(1,388
|
)
|
(2,390
|
)
|
||||||
Cash interest expense (Note 8)
|
3,996
|
4,352
|
4,600
|
|||||||||
Non-cash interest on exchangeable notes (Note 8)
|
639
|
689
|
723
|
|||||||||
|
||||||||||||
Adjusted loss after tax
|
(24,512
|
)
|
(18,437
|
)
|
(37,337
|
)
|
|
December 31,
2019
|
December 31,
2018
|
December 31,
2017
|
|||||||||
ADS
|
20,901,703
|
20,903,227
|
21,621,602
|
|||||||||
|
||||||||||||
Basic earnings per share denominator
|
20,901,703
|
20,903,227
|
21,621,602
|
|||||||||
|
||||||||||||
Reconciliation to weighted average earnings per share denominator:
|
||||||||||||
Number of ADS at January 1 (Note 21)
|
24,040,602
|
24,040,602
|
24,040,602
|
|||||||||
Weighted average number of shares issued during the year*
|
-
|
-
|
-
|
|||||||||
Weighted average number of treasury shares
|
(3,138,899
|
)
|
(3,137,375
|
)
|
(2,419,000
|
)
|
||||||
|
||||||||||||
Basic earnings per share denominator
|
20,901,703
|
20,903,227
|
21,621,602
|
|
December 31,
2019
|
December 31,
2018
|
December 31,
2017
|
|||||||||
Basic earnings per share denominator (see above)
|
20,901,703
|
20,903,227
|
21,621,602
|
|||||||||
Issuable on exercise of options and warrants
|
-
|
5,590
|
-
|
|||||||||
Issuable on conversion of exchangeable notes
|
4,565,814
|
4,968,388
|
5,255,942
|
|||||||||
|
||||||||||||
Diluted earnings per share denominator
|
25,467,517
|
25,877,205
|
26,877,544
|
13. |
PROPERTY, PLANT AND EQUIPMENT
|
|
Land
and buildings
US$‘000
|
Leasehold
improvements
US$‘000
|
Computers,
fixtures and
fittings
US$‘000
|
Plant and
equipment
US$‘000
|
Total
US$‘000
|
|||||||||||||||
Cost
|
||||||||||||||||||||
At January 1, 2018
|
2,624
|
3,004
|
5,894
|
37,895
|
49,417
|
|||||||||||||||
Additions
|
19
|
1,609
|
829
|
5,068
|
7,525
|
|||||||||||||||
Disposals or retirements
|
—
|
(1
|
)
|
(131
|
)
|
(1,804
|
)
|
(1,936
|
)
|
|||||||||||
Exchange adjustments
|
(38
|
)
|
(52
|
)
|
(7
|
)
|
(1,095
|
)
|
(1,192
|
)
|
||||||||||
|
||||||||||||||||||||
At December 31, 2018
|
2,605
|
4,560
|
6,585
|
40,064
|
53,814
|
|||||||||||||||
|
||||||||||||||||||||
At January 1, 2019
|
2,605
|
4,560
|
6,585
|
40,064
|
53,814
|
|||||||||||||||
Adjustment on transition to IFRS 16
|
20,961
|
—
|
149
|
75
|
21,185
|
|||||||||||||||
Additions
|
681
|
71
|
168
|
1,905
|
2,825
|
|||||||||||||||
Disposals or retirements
|
—
|
(1,626
|
)
|
(2,610
|
)
|
(3,314
|
)
|
(7,550
|
)
|
|||||||||||
Exchange adjustments
|
22
|
—
|
—
|
(54
|
)
|
(32
|
)
|
|||||||||||||
|
||||||||||||||||||||
At December 31, 2019
|
24,269
|
3,005
|
4,292
|
38,676
|
70,242
|
|||||||||||||||
|
||||||||||||||||||||
Accumulated depreciation and impairment losses
|
||||||||||||||||||||
At January 1, 2018
|
(1,283
|
)
|
(2,659
|
)
|
(5,308
|
)
|
(34,367
|
)
|
(43,617
|
)
|
||||||||||
Charge for the year
|
(80
|
)
|
(47
|
)
|
(185
|
)
|
(1,063
|
)
|
(1,375
|
)
|
||||||||||
Impairment loss
|
(578
|
)
|
(543
|
)
|
(423
|
)
|
(4,568
|
)
|
(6,112
|
)
|
||||||||||
Disposals or retirements
|
—
|
—
|
130
|
1,679
|
1,809
|
|||||||||||||||
Exchange adjustments
|
7
|
6
|
3
|
827
|
843
|
|||||||||||||||
|
||||||||||||||||||||
At December 31, 2018
|
(1,934
|
)
|
(3,243
|
)
|
(5,783
|
)
|
(37,492
|
)
|
(48,452
|
)
|
||||||||||
|
||||||||||||||||||||
At January 1, 2019
|
(1,934
|
)
|
(3,243
|
)
|
(5,783
|
)
|
(37,492
|
)
|
(48,452
|
)
|
||||||||||
Charge for the year
|
(1,545
|
)
|
(105
|
)
|
(200
|
)
|
(680
|
)
|
(2,530
|
)
|
||||||||||
Adjustment on transition to IFRS 16
|
(10,984
|
)
|
—
|
(40
|
)
|
(75
|
)
|
(11,099
|
)
|
|||||||||||
Impairment loss as at December 31, 2019
|
(4,024
|
)
|
(233
|
)
|
(276
|
)
|
(1,816
|
)
|
(6,349
|
)
|
||||||||||
Disposals or retirements
|
—
|
1,544
|
2,618
|
3,331
|
7,493
|
|||||||||||||||
Reallocations / reclassifications
|
—
|
—
|
—
|
(5
|
)
|
(5
|
)
|
|||||||||||||
Exchange adjustments
|
(6
|
)
|
—
|
(1
|
)
|
(3
|
)
|
(10
|
)
|
|||||||||||
|
||||||||||||||||||||
At December 31, 2019
|
(18,493
|
)
|
(2,037
|
)
|
(3,682
|
)
|
(36,740
|
)
|
(60,952
|
)
|
||||||||||
|
||||||||||||||||||||
Carrying amounts
|
||||||||||||||||||||
At December 31, 2019
|
5,776
|
968
|
610
|
1,936
|
9,290
|
|||||||||||||||
|
||||||||||||||||||||
At December 31, 2018
|
671
|
1,317
|
802
|
2,572
|
5,362
|
13. |
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
|
US$000
|
||||
Right-of-use assets cost at transition before impairment
|
21,185
|
|||
Impairment adjustment on transition
|
(11,099
|
)
|
||
Right-of-use assets value at transition after impairment
|
10,086
|
Carrying amount at December 31, 2018
|
Remeasurement
|
Impairment
|
IFRS 16 carrying amount at January 1, 2019
|
|||||||||||||
US$000
|
US$000
|
US$000
|
US$000
|
|||||||||||||
Property, plant & equipment
|
5,362
|
21,185
|
(11,099
|
)
|
15,448
|
|||||||||||
Lease liabilities
|
(962
|
)
|
(21,185
|
)
|
-
|
(22,147
|
)
|
|||||||||
Retaining earnings
|
(55,319
|
)
|
-
|
11,099
|
(44,220
|
)
|
||||||||||
Total
|
(50,919
|
)
|
-
|
-
|
(50,919
|
)
|
Carrying amount
|
Depreciation
|
Impairment
|
||||||||||
At December 31, 2019
|
Year ended December 31, 2019
|
Year ended December 31, 2019
|
||||||||||
US$000
|
US$000
|
US$000
|
||||||||||
Buildings
|
5,220
|
(1,523
|
)
|
(3,913
|
)
|
|||||||
Computer equipment
|
7
|
(39
|
)
|
(63
|
)
|
|||||||
5,227
|
(1,562
|
)
|
(3,976
|
)
|
13. |
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
|
Right-of-Use assets
|
No. of Right-of-Use leased assets
|
Range of remaining term in years
|
Average remaining lease term (years)
|
No. of Leases with extension options
|
No. of Leases with options to purchase
|
No. of leases with variable payments linked to index
|
No. of leases with termination options
|
||||||||||||||||||
Building
|
13
|
1 to 14
|
5
|
1
|
-
|
2
|
4
|
||||||||||||||||||
Vehicle
|
9
|
1 to 2
|
1
|
-
|
9 |
-
|
9
|
||||||||||||||||||
I.T. and office equipment
|
11
|
1 to 2
|
2
|
-
|
-
|
-
|
1
|
14. |
GOODWILL AND INTANGIBLE ASSETS
|
|
Goodwill
US$‘000
|
Development
costs
US$‘000
|
Patents and
licences
US$‘000
|
Other
US$‘000
|
Total
US$‘000
|
|||||||||||||||
Cost
|
||||||||||||||||||||
At January 1, 2018
|
81,689
|
136,918
|
9,947
|
33,818
|
262,372
|
|||||||||||||||
Additions
|
—
|
9,871
|
—
|
410
|
10,281
|
|||||||||||||||
Disposals
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Exchange adjustments
|
—
|
(17
|
)
|
—
|
—
|
(17
|
)
|
|||||||||||||
At December 31, 2018
|
81,689
|
146,772
|
9,947
|
34,228
|
272,636
|
|||||||||||||||
|
||||||||||||||||||||
At January 1, 2019
|
81,689
|
146,772
|
9,947
|
34,228
|
272,636
|
|||||||||||||||
Additions
|
—
|
9,569
|
4
|
38
|
9,611
|
|||||||||||||||
Disposals
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Reclassification
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Exchange adjustments
|
—
|
36
|
—
|
—
|
36
|
|||||||||||||||
|
||||||||||||||||||||
At December 31, 2019
|
81,689
|
156,377
|
9,951
|
34,266
|
282,283
|
|||||||||||||||
|
||||||||||||||||||||
Accumulated amortisation and Impairment losses
|
||||||||||||||||||||
At January 1, 2018
|
(63,791
|
)
|
(102,140
|
)
|
(9,728
|
)
|
(21,959
|
)
|
(197,618
|
)
|
||||||||||
Charge for the year
|
—
|
(1,564
|
)
|
—
|
(1,261
|
)
|
(2,825
|
)
|
||||||||||||
Disposals
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Impairment losses
|
(1,757
|
)
|
(16,773
|
)
|
(86
|
)
|
(596
|
)
|
(19,212
|
)
|
||||||||||
Exchange adjustments
|
—
|
(30
|
)
|
—
|
—
|
(30
|
)
|
|||||||||||||
|
||||||||||||||||||||
At December 31, 2018
|
(65,548
|
)
|
(120,507
|
)
|
(9,814
|
)
|
(23,816
|
)
|
(219,685
|
)
|
||||||||||
|
||||||||||||||||||||
At January 1, 2019
|
(65,548
|
)
|
(120,507
|
)
|
(9,814
|
)
|
(23,816
|
)
|
(219,685
|
)
|
||||||||||
Charge for the year
|
—
|
(1,182
|
)
|
(2
|
)
|
(1,184
|
)
|
(2,368
|
)
|
|||||||||||
Disposals
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Impairment losses
|
(3,550
|
)
|
(11,904
|
)
|
(3
|
)
|
(1,113
|
)
|
(16,570
|
)
|
||||||||||
Exchange adjustments
|
—
|
(6
|
)
|
—
|
—
|
(6
|
)
|
|||||||||||||
|
||||||||||||||||||||
At December 31, 2019
|
(69,098
|
)
|
(133,599
|
)
|
(9,819
|
)
|
(26,113
|
)
|
(238,629
|
)
|
||||||||||
|
||||||||||||||||||||
Carrying amounts
|
||||||||||||||||||||
At December 31, 2019
|
12,591
|
22,778
|
132
|
8,153
|
43,654
|
|||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
At December 31, 2018
|
16,141
|
26,265
|
133
|
10,412
|
52,951
|
14. |
GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
|
Product Name |
|
2019
US$’000 |
|
2018
US$’000 |
||||
HIV screening rapid test
|
2,587
|
1,657
|
||||||
Premier Instrument for Haemoglobin A1c testing
|
1,930
|
2,653
|
||||||
Autoimmune Smart Reader
|
1,325
|
746
|
||||||
Syphilis point-of-care test
|
870
|
454
|
||||||
Uni-Gold antigen improvement
|
691
|
453
|
||||||
G-6-PDH test
|
582
|
850
|
||||||
Uni-gold test
|
376
|
796
|
||||||
Tri-stat Point-of-Care instrument
|
361
|
727
|
||||||
Ultra Genesys
|
237
|
263
|
||||||
Column enhancement
|
236
|
292
|
||||||
Sjogrens tests
|
135
|
414
|
||||||
Other projects
|
239
|
566
|
||||||
Total capitalised development costs
|
9,569
|
9,871
|
(a) |
The Group only develops products within its field of expertise. The R&D team is experienced in developing new products in this field and this experience means that only products which have a high probability of technical
success are put forward for consideration as potential new products.
|
(b) |
A technical feasibility study is undertaken in advance of every project. The feasibility study for each project is reviewed by the R&D team leader, and by other senior management depending on the size of the project. The
feasibility study occurs in the initial research phase of the project and costs in this phase are not capitalised.
|
(c) |
Nearly all of our new product developments involve the transfer of our existing product know-how to a new application. The Group does not engage in pure research. Every development project is undertaken with the intention of
bringing a particular new product to market for which there is a known demand.
|
(d) |
The commercial feasibility of each new product is established prior to commencement of a project by ensuring it is projected to achieve an acceptable income after applying appropriate discount rates.
|
14. |
GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
|
• |
the Company’s market capitalisation at the end of the year, which was lower when compared to the end of 2018,
|
• |
the inclusion of the latest cash flow projections and net asset values for each cash generating unit; and
|
• |
increased volatility in the Company’s share price and higher market interest rates which resulted in a higher discount factor being applied to the Company’s expected future cash flows.
|
14. |
GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
|
December 31, 2019
|
December 31, 2018
|
|||||||
US$’000
|
US$’000
|
|||||||
Trinity Biotech Manufacturing Limited
|
9,732
|
7 ,837
|
||||||
Immco Diagnostics Inc
|
6,332
|
-
|
||||||
Primus Corp
|
5,321
|
12,424
|
||||||
Trinity Biotech Do Brasil
|
1,253
|
2,785
|
||||||
Clark Laboratories Inc.
|
727
|
3,377
|
||||||
Mardx Diagnostics Inc.
|
720
|
-
|
||||||
Biopool US Inc.
|
210
|
509
|
||||||
Total impairment loss
|
24,295
|
26,932
|
|
December 31, 2019
|
December 31, 2018
|
||||||
US$’000
|
US$’000
|
|||||||
Goodwill and other intangible assets (see Note 14)
|
16,570
|
19,212
|
||||||
Property, plant and equipment (see Note 13)
|
6,349
|
6,112
|
||||||
Prepayments (see Note 18)
|
1,376
|
1,608
|
||||||
Total impairment loss
|
24,295
|
26,932
|
• |
In the event that there was a variation of 10% in the assumed level of future growth in revenue growth rate, which would represent a reasonably likely range of outcomes, there would be an additional impairment loss of
US$743,000 at December 31, 2019.
|
• |
In the event there was a 10% variation in the discount rate used to calculate the potential impairment of the carrying values, which would represent a reasonably likely range of outcomes, there would be an additional
impairment loss of US$5,420,000 at December 31, 2019.
|
14. |
GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
|
Fitzgerald Industries
|
December 31,
2019 |
December 31,
2018 |
||||||
Carrying amount of goodwill (US$’000)
|
12,592
|
12,592
|
||||||
Discount rate applied (real pre-tax)
|
20.42
|
%
|
19.80
|
%
|
||||
Excess value-in-use over carrying amount (US$’000)
|
2,385
|
8,847
|
||||||
% EBITDA would need to decrease for an impairment to arise
|
12.11
|
%
|
32.6
|
%
|
||||
Long-term growth rate
|
2.0
|
%
|
2.0
|
%
|
Intangible Assets with Indefinite Useful lives
(included in other intangibles)
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
||||||
Fitzgerald Industries International CGU
|
||||||||
Fitzgerald trade name
|
970
|
970
|
||||||
RDI trade name
|
560
|
560
|
||||||
Primus Corporation CGU
|
||||||||
Primus trade name
|
500 |
547
|
||||||
Immco Diagnostic CGU
|
||||||||
Immco Diagnostic trade name
|
2,938
|
3,393
|
||||||
Total
|
4,968
|
5,470
|
15.
|
DEFERRED TAX ASSETS AND LIABILITIES
|
|
Assets
|
Liabilities
|
Net
|
|||||||||||||||||||||
|
|
2019
US$000 |
|
2018
US$’000 |
|
2019
US$’000 |
|
2018
US$’000 |
|
2019
US$’000 |
|
2018
US$’000 |
||||||||||||
Property, plant and equipment
|
1,027
|
815
|
(9
|
)
|
(37
|
)
|
1,018
|
778
|
||||||||||||||||
Intangible assets
|
—
|
—
|
(6,099
|
)
|
(7,189
|
)
|
(6,099
|
)
|
(7,189
|
)
|
||||||||||||||
Inventories
|
642
|
668
|
—
|
—
|
642
|
668
|
||||||||||||||||||
Provisions
|
3,838
|
4,311
|
—
|
—
|
3,838
|
4,311
|
||||||||||||||||||
Other items
|
745
|
333
|
(1,031
|
)
|
(629
|
)
|
(286
|
)
|
(296
|
)
|
||||||||||||||
|
||||||||||||||||||||||||
Deferred tax assets/(liabilities)
|
6,252
|
6,127
|
(7,139
|
)
|
(7,855
|
)
|
(887
|
)
|
(1,728
|
)
|
|
December 31,
2019 |
December 31,
2018 |
||||||
|
US$’000
|
US$’000
|
||||||
Capital losses
|
8,293
|
8,293
|
||||||
Net operating losses
|
80,577
|
67,012
|
||||||
US alternative minimum tax credits
|
1,928
|
1,674
|
||||||
Other temporary timing differences
|
7,399
|
3,880
|
||||||
US state credit carryforwards
|
493
|
364
|
||||||
|
||||||||
|
98,690
|
81,223
|
15. |
DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
|
Movement in unrecognised deferred tax assets
|
Increase /
(decrease) US$’000
|
Applicable
tax rate
%
|
Tax
effect US$’000
|
|||||||||
Net operating losses in US
|
(1,348
|
)
|
21
|
%
|
(283
|
)
|
||||||
Alternative minimum tax credit in US
|
254
|
n/a
|
254
|
|||||||||
Net operating losses in Brazil
|
1,788
|
34
|
%
|
608
|
||||||||
Net operating losses in Ireland
|
13,125
|
12.5% -25
|
%
|
2,353
|
||||||||
Other deferred tax assets in Ireland
|
(1,938
|
)
|
12.5
|
%
|
(243
|
)
|
||||||
Other deferred tax assets in US
|
5,457
|
21
|
%
|
1,146
|
||||||||
US state credit carryforwards
|
129
|
n/a
|
129
|
|||||||||
|
||||||||||||
Total – continuing operations
|
17,467
|
3,964
|
15. |
DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
|
|
Balance
January, 1
2019 |
Recognised
in income |
Balance
December 31,
2019 |
|||||||||
|
US$’000
|
US$’000
|
US$’000
|
|||||||||
Property, plant and equipment
|
778
|
240
|
1,018
|
|||||||||
Intangible assets
|
(7,189
|
)
|
1,090
|
(6,099
|
)
|
|||||||
Inventories
|
668
|
(26
|
)
|
642
|
||||||||
Provisions
|
4,311
|
(473
|
)
|
3,838
|
||||||||
Other items
|
(296
|
)
|
10
|
(286
|
)
|
|||||||
|
(887
|
|||||||||||
|
(1,728
|
)
|
841
|
(887
|
)
|
|
Balance
January, 1
2018 |
Recognised
in income |
Balance
December 31,
2018 |
|||||||||
|
US$’000
|
US$’000
|
US$’000
|
|||||||||
Property, plant and equipment
|
350
|
428
|
778
|
|||||||||
Intangible assets
|
(9,443
|
)
|
2,254
|
(7,189
|
)
|
|||||||
Inventories
|
1,006
|
(338
|
)
|
668
|
||||||||
Provisions
|
3,510
|
801
|
4,311
|
|||||||||
Other items
|
818
|
(1,114
|
)
|
(296
|
)
|
|||||||
Tax value of loss carryforwards recognised
|
1,625
|
(1,625
|
)
|
—
|
||||||||
|
||||||||||||
|
(2,134
|
)
|
406
|
(1,728
|
)
|
16. |
OTHER ASSETS
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
||||||
Finance lease receivables (see Note 18)
|
403
|
476
|
||||||
Other assets
|
82
|
82
|
||||||
|
||||||||
|
485
|
558
|
17. |
INVENTORIES
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
||||||
Raw materials and consumables
|
12,654
|
10,556
|
||||||
Work-in-progress
|
6,940
|
8,239
|
||||||
Finished goods
|
12,427
|
11,564
|
||||||
|
||||||||
|
32,021
|
30,359
|
|
December 31,
2019
US$‘000
|
December 31,
2018
US$‘000
|
December 31,
2017
US$‘000
|
|||||||||
Opening provision at January 1
|
6,299
|
7,543
|
10,017
|
|||||||||
Charged during the year
|
1,567
|
480
|
2,561
|
|||||||||
Utilised during the year
|
(1,150
|
)
|
(1,544
|
)
|
(4,749
|
)
|
||||||
Released during the year
|
-
|
(180
|
)
|
(286
|
)
|
|||||||
|
||||||||||||
Closing provision at December 31
|
6,716
|
6,299
|
7,543
|
18. |
TRADE AND OTHER RECEIVABLES
|
|
December 31,
2019
US$‘000
|
December 31,
2018
US$‘000
|
||||||
Trade receivables, net of impairment losses
|
17,754
|
21,318
|
||||||
Prepayments
|
576
|
807
|
||||||
Contract assets
|
2,317
|
1,894
|
||||||
Value added tax
|
59
|
63
|
||||||
Finance lease receivables
|
281
|
359
|
||||||
|
||||||||
|
20,987
|
24,441
|
18. |
TRADE AND OTHER RECEIVABLES (CONTINUED)
|
|
December 31, 2019
US$‘000
|
|||||||||||
|
Gross
investment |
Unearned
income |
Minimum
payments receivable |
|||||||||
Less than one year
|
523
|
242
|
281
|
|||||||||
Between one and five years (Note 16)
|
805
|
402
|
403
|
|||||||||
|
||||||||||||
|
1,328
|
644
|
684
|
|
December 31, 2018
US$‘000
|
|||||||||||
|
Gross
investment |
Unearned
income |
Minimum
payments receivable |
|||||||||
Less than one year
|
617
|
258
|
359
|
|||||||||
Between one and five years (Note 16)
|
888
|
412
|
476
|
|||||||||
|
||||||||||||
|
1,505
|
670
|
835
|
December 31, 2019
US$‘000
|
||||||||
|
Instruments
|
Total
|
||||||
Less than one year
|
3,528
|
3,528
|
||||||
Between one and five years
|
27
|
27
|
||||||
|
||||||||
|
3,555
|
3,555
|
|
December 31, 2018
US$‘000
|
|||||||
|
Instruments
|
Total
|
||||||
Less than one year
|
3,498
|
3,498
|
||||||
Between one and five years
|
32
|
32
|
||||||
|
||||||||
|
3,530
|
3,530
|
19. |
CASH AND CASH EQUIVALENTS
|
|
December 31, 2019
US$’000
|
December 31, 2018
US$’000
|
||||||
Cash at bank and in hand
|
6,275
|
6,854
|
||||||
Short-term deposits
|
8,956
|
23,423
|
||||||
|
||||||||
Cash and cash equivalents
|
15,231
|
30,277
|
20. |
SHORT-TERM INVESTMENTS
|
|
December 31, 2019
US$’000
|
December 31, 2018
US$’000
|
||||||
Investments (deposits)
|
1,169
|
-
|
||||||
|
||||||||
1,169
|
-
|
21. |
CAPITAL AND RESERVES
|
|
Class ‘A’
Ordinary shares |
Class ‘A’
Ordinary shares |
||||||
In thousands of shares
|
2019
|
2018
|
||||||
In issue at January 1
|
96,162
|
96,162
|
||||||
Issued for cash
|
-
|
-
|
||||||
|
||||||||
In issue at December 31
|
96,162
|
96,162
|
|
ADS
|
ADS
|
||||||
In thousands of ADSs
|
2019
|
2018
|
||||||
Balance at January 1
|
24,041
|
24,041
|
||||||
Issued for cash
|
-
|
-
|
||||||
|
||||||||
Balance at December 31
|
24,041
|
24,041
|
|
Class ‘A’
Treasury shares |
Class ‘A’
Treasury shares |
||||||
In thousands of shares
|
2019
|
2018
|
||||||
Balance at January 1
|
12,556
|
12,448
|
||||||
Purchased during the year
|
-
|
108
|
||||||
|
||||||||
Balance at December 31
|
12,556
|
12,556
|
|
ADS
Treasury shares
|
ADS
Treasury shares |
||||||
In thousands of ADSs
|
2019
|
2018
|
||||||
Balance at January 1
|
3,139
|
3,112
|
||||||
Purchased during the year
|
-
|
27
|
||||||
|
||||||||
Balance at December 31
|
3,139
|
3,139
|
21. |
CAPITAL AND RESERVES (CONTINUED)
|
(a) |
During 2019, the Group did not issue any shares from the exercise of employee options (2018: nil). At December 31, 2019, there were no amounts receivable on issuance share capital (2018: US$nil) relating to the exercise of share
options.
|
(b) |
During 2019, the Group did not repurchase any ‘A’ ordinary shares under its share buyback program. (2018: 107,740 ‘A’ ordinary shares or 26,935 ADS’s).
|
(c) |
There were no dividends paid during 2019 in respect of the 2018 financial year, (nil in respect of the 2017 financial year), (nil in respect of the 2016 financial year). As provided in the Articles of Association of the Company,
dividends or other distributions are declared and paid in US Dollars.
|
22. |
SHARE OPTIONS AND SHARE WARRANTS
|
22. |
SHARE OPTIONS AND SHARE WARRANTS (CONTINUED)
|
|
Options and
warrants |
Weighted-
average exercise price US$
|
Range
US$
|
|||||||||
|
‘A’ Ordinary
Shares |
Per ‘A’ Ordinary
Share
|
Per ‘A’ Ordinary
Share |
|||||||||
Outstanding January 1, 2017
|
9,830,183
|
3.19
|
0.66 –4.47
|
|||||||||
Granted
|
5,630,000
|
1.31
|
1.24 –1.44
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Forfeited
|
(4,732,807
|
)
|
3.86
|
0.75 –4.47
|
||||||||
|
||||||||||||
Outstanding at end of year
|
10,727,376
|
1.92
|
1.24 –4.36
|
|||||||||
|
||||||||||||
Exercisable at end of year
|
3,268,707
|
2.57
|
1.66 –4.36
|
|||||||||
|
||||||||||||
Outstanding January 1, 2018
|
10,727,376
|
1.92
|
1.24 –4.36
|
|||||||||
Granted
|
720,000
|
1.07
|
0.67 –1.37
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Forfeited
|
(539,176
|
)
|
2.50
|
1.34 –4.23
|
||||||||
|
||||||||||||
Outstanding at end of year
|
10,908,200
|
1.83
|
0.67 –4.36
|
|||||||||
|
||||||||||||
Exercisable at end of year
|
6,091,864
|
2.09
|
1.24 –4.36
|
|||||||||
|
||||||||||||
Outstanding January 1, 2019
|
10,908,200
|
1.83
|
0.67 –4.36
|
|||||||||
Granted
|
4,370,000
|
0.68
|
0.46 –0.78
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Expired / Forfeited
|
(2,974,210
|
)
|
2.25
|
0.66 –4.23
|
||||||||
|
||||||||||||
Outstanding at end of year
|
12,303,990
|
1.31
|
0.46 –4.36
|
|||||||||
|
||||||||||||
Exercisable at end of year
|
6,622,667
|
1.73
|
1.24 –4.36
|
22. |
SHARE OPTIONS AND SHARE WARRANTS (CONTINUED)
|
|
Options and
warrants ‘ADS’ |
Weighted-
average exercise price US$ |
Range US$
|
|||||||||
|
Equivalent
|
Per ‘ADS’
|
Per ‘ADS’
|
|||||||||
Outstanding January 1, 2017
|
2,457,546
|
12.76
|
2.64 - 17.88
|
|||||||||
Granted
|
1,407,500
|
5.25
|
4.95 – 5.75
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Forfeited
|
(1,183,202
|
)
|
10.26
|
3.00 –17.88
|
||||||||
|
||||||||||||
Outstanding at end of year
|
2,681,844
|
7.69
|
4.96–17.44
|
|||||||||
|
||||||||||||
Exercisable at end of year
|
817,179
|
10.29
|
6.64 –17.45
|
|||||||||
|
||||||||||||
Outstanding January 1, 2018
|
2,681,844
|
7.69
|
4.96 - 17.44
|
|||||||||
Granted
|
180,000
|
4.28
|
2.68 – 5.48
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Expired / Forfeited
|
(134,794
|
)
|
10.00
|
5.36 – 16.92
|
||||||||
|
||||||||||||
Outstanding at end of year
|
2,727,050
|
7.32
|
2.68–17.44
|
|||||||||
|
||||||||||||
Exercisable at end of year
|
1,522,966
|
8.36
|
4.96 –17.44
|
|||||||||
|
||||||||||||
Outstanding January 1, 2019
|
2,727,050
|
7.32
|
2.68–17.44
|
|||||||||
Granted
|
1,092,500
|
2.72
|
1.83 - 3.10
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Expired / Forfeited
|
(743,552
|
)
|
8.99
|
2.64 – 16.92
|
||||||||
|
||||||||||||
Outstanding at end of year
|
3,075,998
|
5.24
|
1.83 – 17.45
|
|||||||||
|
||||||||||||
Exercisable at end of year
|
1,655,667
|
6.92
|
4.95 –17.45
|
Outstanding
|
Exercisable
|
||||||||||||||||||||||||
Exercise price range
|
No. of
options ‘A’ ordinary shares |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
No. of
options ‘A’ ordinary shares |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
|||||||||||||||||||
US$0.46-US$0.99
|
4,600,000
|
0.69
|
6.42
|
-
|
-
|
-
|
|||||||||||||||||||
US$1.00-US$2.05
|
5,613,990
|
1.35
|
4.69
|
4,542,667
|
1.34
|
4.68
|
|||||||||||||||||||
US$2.06- US$2.99
|
1,980,000
|
2.48
|
3.13
|
1,970,000
|
2.48
|
3.13
|
|||||||||||||||||||
US$3.00 -US$4.36
|
110,000
|
4.19
|
2.07
|
110,000
|
4.19
|
2.07
|
|||||||||||||||||||
12,303,990
|
6,622,667
|
22. |
SHARE OPTIONS AND SHARE WARRANTS (CONTINUED)
|
Outstanding
|
Exercisable
|
||||||||||||||||||||||||
Exercise price range
|
No. of
options ‘ADS equivalent’ |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
No. of
options ‘ADS equivalent’ |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
|||||||||||||||||||
US$1.84-US$3.96
|
1,150,000
|
2.75
|
6.42
|
- | - | - | |||||||||||||||||||
US$4.00-US$8.20
|
1,403,498
|
5.40
|
4.69
|
1,135,667
|
5.38
|
4.68
|
|||||||||||||||||||
US$8.24- US$11.96
|
495,000
|
9.92
|
3.13
|
492,500
|
9.91
|
3.13
|
|||||||||||||||||||
US$12.00 -US$17.45
|
27,500
|
16.75
|
2.07
|
27,500
|
16.75
|
2.07
|
|||||||||||||||||||
3,075,998
|
1,655,667
|
Outstanding
|
Exercisable
|
||||||||||||||||||||||||
Exercise price range
|
No. of
options ‘A’ ordinary shares |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
No. of
options ‘A’ ordinary shares |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
|||||||||||||||||||
US$0.66-US$0.99
|
430,000
|
0.88
|
6.79
|
-
|
-
|
-
|
|||||||||||||||||||
US$1.00-US$2.05
|
6,111,800
|
1.35
|
5.64
|
2,476,133
|
1.35
|
5.57
|
|||||||||||||||||||
US$2.06- US$2.99
|
4,168,400
|
2.51
|
2.23
|
3,437,731
|
2.51
|
1.83
|
|||||||||||||||||||
US$3.00 -US$4.47
|
198,000
|
4.20
|
2.97
|
178,000
|
4.20
|
2.93
|
|||||||||||||||||||
10,908,200
|
6,091,864
|
Outstanding
|
Exercisable
|
||||||||||||||||||||||||
Exercise price range
|
No. of
options ‘ADS equivalent’ |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
No. of
options ‘ADS equivalent’ |
Weighted–
average exercise price |
Weighted-
average contractual life remaining (years) |
|||||||||||||||||||
US$2.64-US$3.96
|
107,500
|
3.52
|
6.79
|
-
|
-
|
-
|
|||||||||||||||||||
US$4.00-US$8.20
|
1,527,950
|
5.40
|
5.64
|
619,033
|
5.40
|
5.57
|
|||||||||||||||||||
US$8.24- US$11.96
|
1,042,100
|
10.04
|
2.23
|
859,433
|
10.04
|
1.83
|
|||||||||||||||||||
US$12.00 -US$17.88
|
49,500
|
16.80
|
2.97
|
44,500
|
16.80
|
2.93
|
|||||||||||||||||||
2,727,050
|
1,522,966
|
22. |
SHARE OPTIONS AND SHARE WARRANTS (CONTINUED)
|
|
December 31,
2019
US$‘000
|
December 31,
2018
US$‘000
|
December 31,
2017
US$‘000
|
|||||||||
Share-based payments – cost of sales
|
26
|
34
|
35
|
|||||||||
Share-based payments – selling, general and administrative
|
732
|
1,335
|
893
|
|||||||||
|
||||||||||||
Total – continuing operations
|
758
|
1,369
|
928
|
|||||||||
Share-based payments – discontinued operations
|
-
|
-
|
-
|
|||||||||
|
||||||||||||
Total
|
758
|
1,369
|
928
|
|
Key
management personnel |
Other
employees |
Key
management personnel |
Other
employees |
Key
management personnel |
Other
employees |
||||||||||||||||||
|
2019
|
2019
|
2018
|
2018
|
2017
|
2017
|
||||||||||||||||||
Weighted average fair value at measurement date per ‘A’ share / (per ADS)
|
|
US$0.14 /
(US$0.56
|
)
|
|
US$0.25 /
(US$1.02
|
)
|
-
|
|
US$0.41 /
(US$1.64
|
)
|
|
US$0.43 /
(US$1.72
|
)
|
|
US$0.44 /
(US$1.76
|
)
|
||||||||
Total ‘A’ share options granted / (ADS’s equivalent)
|
4,060,000 /
(1,015,000
|
)
|
310,000 /
(77,500
|
)
|
-
|
720,000 /
(180,000
|
)
|
5,150,000/
(1,287,500
|
)
|
480,000 /
(120,000
|
)
|
|||||||||||||
Weighted average share price per ‘A’ share / (per ADS)
|
|
US$0.46 /
(US$1.84
|
)
|
|
US$0.64 /
(US$2.53
|
)
|
-
|
|
US$1.07 /
(US$4.28
|
)
|
|
US$1.34 /
(US$5.36 |
)
|
|
US$1.31 /
(US$5.24
|
)
|
||||||||
Weighted average exercise price per ‘A’ share / (per ADS)
|
|
US$0.69 /
(US$2.74
|
)
|
|
US$0.64 /
(US$2.53
|
)
|
-
|
|
US$1.07 /
(US$4.28
|
)
|
|
US$1.34 /
(US$5.36
|
)
|
|
US$1.31 /
(US$5.24
|
)
|
||||||||
Weighted average expected volatility
|
51.18
|
%
|
47.31
|
%
|
-
|
42.69
|
%
|
40.62
|
%
|
40.48
|
%
|
|||||||||||||
Weighted average expected life
|
4.15
|
4.42
|
-
|
4.55
|
4.45
|
4.69
|
||||||||||||||||||
Weighted average risk free interest rate
|
1.84
|
%
|
2.23
|
%
|
-
|
2.72
|
%
|
1.59
|
%
|
1.91
|
%
|
|||||||||||||
Expected dividend yield
|
-
|
-
|
-
|
-
|
0.81
|
%
|
0.81
|
%
|
22. |
SHARE OPTIONS AND SHARE WARRANTS (CONTINUED)
|
23. |
TRADE AND OTHER PAYABLES
|
|
December 31, 2019
US$’000
|
December 31, 2018
US$’000
|
||||||
Trade payables
|
7,833
|
8,116
|
||||||
Payroll taxes
|
519
|
448
|
||||||
Employee related social insurance
|
170
|
154
|
||||||
Accrued liabilities
|
8,133
|
7,878
|
||||||
Deferred income
|
292 |
312
|
||||||
|
||||||||
|
16,947
|
16,908
|
24. |
PROVISIONS
|
|
December 31, 2019
US$’000
|
December 31, 2017
US$’000
|
||||||
Provisions
|
50
|
50
|
25. |
EXCHANGEABLE NOTES
|
25. |
EXCHANGEABLE NOTES (CONTINUED)
|
|
December 31,
2019 US$’000
|
December 31,
2018 US$’000
|
||||||
Non-current assets
|
||||||||
Exchangeable note bond call option
|
-
|
-
|
||||||
|
||||||||
Non-current liabilities
|
||||||||
Exchangeable note equity conversion option
|
4
|
238
|
||||||
Exchangeable note bond put option
|
-
|
-
|
||||||
|
||||||||
|
4
|
238
|
||||||
|
||||||||
Total value of embedded derivatives – net liability
|
4
|
238
|
|
December 31,
2019 US$’000
|
December 31,
2018 US$’000
|
||||||
Balance at 1 January
|
81,382
|
92,955
|
||||||
Accretion interest
|
639
|
689
|
||||||
Less: purchased during the year at fair value
|
-
|
(12,262
|
)
|
|||||
|
||||||||
|
82,021
|
81,382
|
|
December 31,
2019 US$’000
|
December 31,
2018 US$’000
|
||||||
Exchangeable senior notes
|
82,021
|
81,382
|
||||||
Total value of embedded derivatives – liability
|
4
|
238
|
||||||
|
||||||||
Total non-current liabilities
|
82,025
|
81,620
|
26. |
LEASE LIABILITIES
|
|
US$000
|
|||
Operating Lease commitments at December, 31, 2018 (Note 27)
|
27,342
|
|||
Relief option for short term leases
|
(130
|
)
|
||
Relief option for low value assets
|
-
|
|||
Effect of assumed probable lease extension in adoption of IFRS 16
|
573
|
|||
Other
|
(149
|
)
|
||
Gross lease liabilities at January 1, 2019
|
27,636
|
|||
Discounting
|
(6,451
|
)
|
||
Additional Lease liabilities as a result of the initial application of IFRS 16 at January 1, 2019
|
21,185
|
December 31, 2019
US$’000
|
December 31, 2018
US$’000
|
|||||||
Current liabilities
|
||||||||
Lease liabilities related to Right of Use assets
|
2,156
|
-
|
||||||
Sale and leaseback liabilities
|
248
|
436
|
||||||
|
||||||||
|
2,404
|
436
|
||||||
|
||||||||
Non-Current liabilities
|
||||||||
Lease liabilities related to Right of Use assets
|
17,474
|
-
|
||||||
Sale and leaseback liabilities
|
271
|
526
|
||||||
17,745
|
526
|
26. |
LEASE LIABILITIES
|
|
December 31, 2019
US$’000
|
December 31, 2019
US$’000
|
||||||||||||||||||||||
Lease liabilities related to
Right of Use assets
|
Sale and leaseback
liabilities
|
|||||||||||||||||||||||
|
Minimum
lease
payments
|
Interest
|
Principal
|
Minimum
lease
payments
|
Interest
|
Principal
|
||||||||||||||||||
Less than one year
|
3,017
|
861
|
2,156
|
267
|
19
|
248
|
||||||||||||||||||
In more than one year, but not more than two
|
2,787
|
775
|
2,012
|
107
|
12
|
95
|
||||||||||||||||||
In more than two years but not more than five
|
6,700
|
1,861
|
4,840
|
185
|
9
|
176
|
||||||||||||||||||
more than five years
|
12,748
|
2,126
|
10,622
|
-
|
-
|
-
|
||||||||||||||||||
|
||||||||||||||||||||||||
|
25,252
|
5,263
|
19,630
|
559
|
40
|
519
|
|
December 31,
2018
|
December 31, 2018
US$’000
|
||||||||||||||
Operating
Leases
|
Sale and leaseback
liabilities
|
|||||||||||||||
|
Minimum
lease
payments
|
Minimum
lease
payments
|
Interest
|
Principal
|
||||||||||||
Less than one year
|
3,083
|
473
|
37
|
436
|
||||||||||||
In more than one year, but not more than two
|
2,783
|
271
|
19
|
252
|
||||||||||||
In more than two years but not more than five
|
6,777
|
294
|
20
|
274
|
||||||||||||
more than five years
|
14,699
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
|
27,342
|
1,038
|
76
|
962
|
December 31, 2019
|
||||
US$000
|
||||
Short term leases
|
130
|
|||
Leases of low value assets
|
-
|
|||
Variable lease payments
|
-
|
|||
130
|
26. |
LEASE LIABILITIES (CONTINUED)
|
Facility
|
Currency
|
Nominal
interest
rate |
Year of
maturity
|
Fair
Value
|
Carrying
Value
|
||||||||||||
Sale and leaseback liabilities
|
Euro
|
4.53
|
%
|
2023
|
286
|
286
|
|||||||||||
Sale and leaseback liabilities
|
USD
|
5.51
|
%
|
2023
|
233
|
233
|
|||||||||||
|
|
||||||||||||||||
Total interest-bearing loans and borrowings
|
|
519
|
519
|
Facility
|
Currency
|
Nominal
interest
rate |
Year of
maturity
|
Fair
Value
|
Carrying
Value
|
||||||||||||
Sale and leaseback liabilities
|
Euro
|
4.53
|
%
|
2023
|
648
|
648
|
|||||||||||
Sale and leaseback liabilities
|
USD
|
5.51
|
%
|
2023
|
314
|
314
|
|||||||||||
|
|
||||||||||||||||
Total interest-bearing loans and borrowings
|
|
962
|
962
|
27. |
COMMITMENTS AND CONTINGENCIES
|
(a) |
Capital Commitments
|
(b) |
Leasing Commitments
|
|
Year ended
|
|||
|
2018
|
|||
|
Operating leases
|
|||
|
US$’000
|
|||
2019
|
3,083
|
|||
2020
|
2,783
|
|||
2021
|
2,512
|
|||
2022
|
2,255
|
|||
2023
|
2,010
|
|||
Later years
|
14,699
|
|||
|
||||
Total lease obligations
|
27,342
|
27. |
COMMITMENTS AND CONTINGENCIES (CONTINUED)
|
(c) |
Bank Security
|
(d) |
Group Company Guarantees
|
(e) |
Contingent asset
|
(f) |
Government Grant Contingencies
|
(g) |
Litigation
|
28. |
RELATED PARTY TRANSACTIONS
|
28. |
RELATED PARTY TRANSACTIONS (CONTINUED)
|
|
December 31, 2019
|
December 31, 2018
|
||||||
|
US$’000
|
US$’000
|
||||||
Short-term employee benefits
|
800
|
863
|
||||||
Performance related bonus
|
213
|
210
|
||||||
Post-employment benefits
|
42
|
44
|
||||||
Share-based compensation benefits
|
542
|
1,041
|
||||||
|
||||||||
|
1,597
|
2,158
|
|
‘A’ Ordinary Shares
|
Share options
|
||||||
At January 1, 2019
|
9,139,706
|
8,655,004
|
||||||
Shares of retired director
|
(30,000
|
)
|
—
|
|||||
Options of retired director
|
—
|
(215,000
|
)
|
|||||
Shares purchased during the year
|
—
|
—
|
||||||
Shares sold during the year
|
(32,000
|
)
|
—
|
|||||
Granted
|
—
|
4,060,000
|
||||||
Expired / forfeited
|
—
|
(2,086,000
|
)
|
|||||
|
||||||||
At December 31, 2019
|
9,077,706
|
10,414,004
|
28. |
RELATED PARTY TRANSACTIONS (CONTINUED)
|
|
‘A’ Ordinary Shares
|
Share options
|
||||||
At January 1, 2018
|
5,719,706
|
8,770,004
|
||||||
Shares purchased during the year
|
3,420,000
|
—
|
||||||
Expired
|
—
|
(115,000
|
)
|
|||||
|
||||||||
At December 31, 2018
|
9,139,706
|
8,655,004
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
As at December 31, 2019
|
Note
|
Effective
interest
rate |
Total
US$’000
|
6 mths or less
US$’000
|
6 –12 mths
US$’000
|
1-2 years
US$’000
|
2-5 years
US$’000
|
> 5 years
US$’000
|
||||||||||||||||||||||||
Cash and cash equivalents
|
19
|
1.1
|
%
|
15,231
|
15,231
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Short-term investments
|
20
|
1.3
|
%
|
1,169
|
—
|
1,169
|
—
|
—
|
—
|
|||||||||||||||||||||||
Lease receivable
|
16,18
|
4.0
|
%
|
684
|
157
|
124
|
202
|
201
|
—
|
|||||||||||||||||||||||
Licence payments
|
23
|
8.1
|
%
|
(1,307
|
)
|
(1,307
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Exchangeable note
|
25
|
4.8
|
%
|
(82,021
|
)
|
—
|
—
|
—
|
—
|
(82,021
|
)
|
|||||||||||||||||||||
Lease payable on Right of Use assets
|
26
|
5.0
|
%
|
(19,630
|
)
|
(1,136
|
)
|
(1,020
|
)
|
(2,012
|
)
|
(4,840
|
)
|
(10,622
|
)
|
|||||||||||||||||
Lease payable on sale & leaseback transactions
|
26
|
5.0
|
%
|
(519
|
)
|
(122
|
)
|
(125
|
)
|
(95
|
)
|
(177
|
)
|
—
|
||||||||||||||||||
Total
|
(86,393
|
)
|
12,823
|
148
|
(1,905
|
)
|
(4,816
|
)
|
(92,643
|
)
|
As at December 31, 2018
|
Note
|
Effective
interest
rate |
Total
US$’000
|
6 mths or less
US$’000
|
6 –12 mths
US$’000
|
1-2 years
US$’000
|
2-5 years
US$’000
|
> 5 years
US$’000
|
||||||||||||||||||||||||
Cash and cash equivalents
|
19
|
1.8
|
%
|
30,277
|
30,277
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||
Short-term investments
|
20
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Lease receivable
|
18
|
4.0
|
%
|
835
|
191
|
168
|
238
|
238
|
—
|
|||||||||||||||||||||||
Licence payments
|
23
|
3.0
|
%
|
(1,207
|
)
|
(1,207
|
)
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Finance lease payable
|
26
|
4.8
|
%
|
(962
|
)
|
(217
|
)
|
(219
|
)
|
(252
|
)
|
(274
|
)
|
—
|
||||||||||||||||||
Exchangeable note
|
25
|
4.8
|
%
|
(81,382
|
)
|
—
|
—
|
—
|
—
|
(81,382
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total
|
(52,439
|
)
|
29,044
|
(51
|
)
|
(14
|
)
|
(36
|
)
|
(81,382
|
)
|
|
December 31, 2019
US$‘000
|
December 31, 2018
US$‘000
|
||||||
Fixed rate instruments
|
||||||||
Fixed rate financial liabilities (licence fees)
|
(1,307
|
)
|
(1,207
|
)
|
||||
Fixed rate financial liabilities (exchangeable note)
|
(82,021
|
)
|
(81,382
|
)
|
||||
Fixed rate financial liabilities (lease payables)
|
(20,149
|
)
|
(962
|
)
|
||||
Financial assets (short-term deposits and short-term investments)
|
10,125
|
23,423
|
||||||
Financial assets (lease receivables)
|
684
|
835
|
||||||
|
||||||||
|
(92,668
|
)
|
(59,293
|
)
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
As at December 31, 2019
US$’000
|
Carrying
amount US$’000
|
Contractual
cash flows US$’000
|
6 mths or
less US$’000
|
6 mths –
12 mths
US$’000
|
1-2 years
US$’000
|
2-5 years
US$’000
|
>5 years
US$’000
|
|||||||||||||||||||||
Financial liabilities
|
||||||||||||||||||||||||||||
Trade & other payables
|
16,947
|
16,947
|
16,947
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Lease payable on Right of Use assets
|
19,630
|
19,630
|
1,136
|
1,020
|
2,012
|
4,840
|
10,622
|
|||||||||||||||||||||
Lease payable on sale & leaseback transactions
|
519
|
519
|
122
|
125
|
95
|
177
|
—
|
|||||||||||||||||||||
Exchangeable notes
|
82,021
|
99,900
|
—
|
—
|
—
|
—
|
99,900
|
|||||||||||||||||||||
Exchangeable note interest
|
999
|
101,898
|
1,998
|
1,998
|
3,996
|
11,988
|
81,918
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
120,116
|
238,894
|
20,203
|
3,143
|
6,103
|
17,005
|
192,440
|
As at December 31, 2018
US$’000
|
Carrying
amount US$’000
|
Contractual
cash flows US$’000
|
6 mths or
less US$’000
|
6 mths –
12 mths
US$’000
|
1-2 years
US$’000
|
2-5 years
US$’000
|
>5 years
US$’000
|
|||||||||||||||||||||
Financial liabilities
|
||||||||||||||||||||||||||||
Trade & other payables
|
16,908
|
16,908
|
16,908
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Exchangeable notes
|
81,382
|
99,900
|
—
|
—
|
—
|
—
|
99,900
|
|||||||||||||||||||||
Exchangeable note interest
|
999
|
105,894
|
1,998
|
1,998
|
3,996
|
11,988
|
85,914
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
99,289
|
222,702
|
18,906
|
1,998
|
3,996
|
11,988
|
185,814
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
As at December 31, 2019
|
EUR
|
GBP
|
SEK
|
CAD
|
BRL
|
Other
|
||||||||||||||||||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|||||||||||||||||||
Cash
|
394
|
138
|
10
|
3,265
|
238
|
—
|
||||||||||||||||||
Trade and other receivable
|
1,247
|
71
|
—
|
337
|
1,871
|
—
|
||||||||||||||||||
Trade and other payables
|
(2,350
|
)
|
(27
|
)
|
(142
|
)
|
(47
|
)
|
(796
|
)
|
—
|
|||||||||||||
|
||||||||||||||||||||||||
Total exposure
|
(709
|
)
|
182
|
(132
|
)
|
3,555
|
1,313
|
—
|
As at December 31, 2018
|
EUR
|
GBP
|
SEK
|
CAD
|
BRL
|
Other
|
||||||||||||||||||
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
US$‘000
|
|||||||||||||||||||
Cash
|
81
|
122
|
9
|
2,512
|
322
|
6
|
||||||||||||||||||
Trade and other receivable
|
894
|
113
|
38
|
430
|
2,065
|
6
|
||||||||||||||||||
Trade and other payables
|
(1,995
|
)
|
(51
|
)
|
(146
|
)
|
(103
|
)
|
(1,621
|
)
|
(2
|
)
|
||||||||||||
|
||||||||||||||||||||||||
Total exposure
|
(1,020
|
)
|
184
|
(99
|
)
|
2,839
|
766
|
10
|
|
Profit or loss
US$’000
|
|||
December 31, 2019
|
||||
Euro
|
2,282
|
|||
December 31, 2018
|
||||
Euro
|
1,818
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
Profit or Loss
US$000
|
||||
December 31, 2019
|
||||
Euro
|
(2,790
|
)
|
||
December 31, 2018
|
||||
Euro
|
(2,222
|
)
|
|
Carrying Value
December 31, 2019 US$’000 |
Carrying Value
December 31, 2018 US$’000 |
||||||
Third party trade receivables (Note 18)
|
17,754
|
21,318
|
||||||
Finance lease income receivable (Note 18)
|
684
|
835
|
||||||
Cash & cash equivalents (Note 19)
|
15,231
|
30,277
|
||||||
Short-term investments (Note 20)
|
1,169
|
—
|
||||||
|
||||||||
|
34,838
|
52,430
|
|
Carrying Value
December 31, 2019 US$’000 |
Carrying Value
December 31, 2018 US$’000 |
||||||
United States
|
8,647
|
9,472
|
||||||
Euro-zone countries
|
786
|
1,502
|
||||||
United Kingdom
|
121
|
132
|
||||||
Other European countries
|
7
|
84
|
||||||
Other regions
|
8,877
|
10,963
|
||||||
|
||||||||
|
18,438
|
22,153
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
|
Carrying Value
December 31, 2019 US$’000 |
Carrying Value
December 31, 2018 US$’000 |
||||||
End-user customers
|
9,453
|
9,253
|
||||||
Distributors
|
7,199
|
11,860
|
||||||
Non-governmental organisations
|
1,786
|
1,040
|
||||||
|
||||||||
|
18,438
|
22,153
|
|
Gross
|
Impairment
|
Expected Credit Loss Rate
|
Gross
|
Impairment
|
Expected Credit Loss Rate
|
||||||||||||||||||
|
2019
|
2019
|
2019
|
2018
|
2018
|
2018
|
||||||||||||||||||
|
US$’000
|
US$’000
|
%
|
US$’000
|
US$’000
|
%
|
||||||||||||||||||
Not past due
|
10,924
|
8
|
0.1
|
%
|
13,917
|
4
|
—
|
|||||||||||||||||
Past due 0-30 days
|
3,743
|
6
|
0.2
|
%
|
3,761
|
17
|
0.5
|
%
|
||||||||||||||||
Past due 31-120 days
|
2,115
|
27
|
1.3
|
%
|
3,438
|
36
|
1.0
|
%
|
||||||||||||||||
Greater than 120 days
|
6,415
|
5,402
|
84.2
|
%
|
4,404
|
4,145
|
94.1
|
%
|
||||||||||||||||
|
||||||||||||||||||||||||
|
23,197
|
5,443
|
—
|
25,520
|
4,202
|
—
|
|
2019
|
2018
|
2017
|
|||||||||
|
US$’000
|
US$’000
|
US$’000
|
|||||||||
Balance at January 1
|
4,202
|
3,590
|
3,171
|
|||||||||
Charged to costs and expenses
|
1,276
|
682
|
662
|
|||||||||
Amounts written off during the year
|
(35
|
)
|
(70
|
)
|
(243
|
)
|
||||||
|
||||||||||||
Balance at December 31
|
5,443
|
4,202
|
3,590
|
• |
the aggregate nominal value of the shares authorised to be acquired shall not exceed 10% of the aggregate nominal value of the issued share capital of the Company at the close of business on the date of the passing of the
resolution:
|
• |
the minimum price (exclusive of taxes and expenses) which may be paid for a share shall be the nominal value of that share:
|
• |
the maximum price (exclusive of taxes and expenses) which may be paid for a share shall not be more than the average of the closing bid price on NASDAQ in respect of the ten business days immediately
preceding the day on which the share is purchased.
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
|
Level 1
|
Level 2
|
Total
carrying
amount
|
Fair
Value
|
||||||||||||||||
|
Note
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|||||||||||||||
December 31, 2019
|
||||||||||||||||||||
Loans and receivables at amortised cost
|
||||||||||||||||||||
Trade receivables
|
18
|
17,754
|
—
|
17,754
|
17,754
|
|||||||||||||||
Cash and cash equivalents
|
19
|
15,231
|
—
|
15,231
|
15,231
|
|||||||||||||||
Investments (deposits)
|
20
|
1,169
|
—
|
1,169
|
1,169
|
|||||||||||||||
Finance lease receivable
|
16,18
|
684
|
—
|
684
|
684
|
|||||||||||||||
|
||||||||||||||||||||
|
34,838
|
—
|
34,838
|
34,838
|
||||||||||||||||
|
||||||||||||||||||||
Liabilities at amortised cost
|
||||||||||||||||||||
Exchangeable note
|
25
|
—
|
(82,021
|
)
|
(82,021
|
)
|
(82,021
|
)
|
||||||||||||
Lease liabilities
|
26
|
(20,149
|
)
|
—
|
(20,149
|
)
|
(20,149
|
)
|
||||||||||||
Trade and other payables (excluding deferred income)
|
23
|
(16,655
|
)
|
—
|
(16,655
|
)
|
(16,655
|
)
|
||||||||||||
Provisions
|
24
|
(50
|
)
|
—
|
(50
|
)
|
(50
|
)
|
||||||||||||
|
||||||||||||||||||||
|
(36,854
|
)
|
(82,021
|
)
|
(118,875
|
)
|
(118,875
|
)
|
||||||||||||
|
||||||||||||||||||||
Fair value through profit and loss (FVPL)
|
||||||||||||||||||||
Exchangeable note bond call option
|
25
|
—
|
—
|
—
|
—
|
|||||||||||||||
Exchangeable note equity conversion option
|
25
|
—
|
(4
|
)
|
(4
|
)
|
(4
|
)
|
||||||||||||
Exchangeable note bond put option
|
25
|
—
|
—
|
—
|
—
|
|||||||||||||||
|
||||||||||||||||||||
|
—
|
(4
|
)
|
(4
|
)
|
(4
|
)
|
|||||||||||||
|
||||||||||||||||||||
|
(2,016
|
)
|
(82,025
|
)
|
(84,041
|
)
|
(84,041
|
)
|
29. |
DERIVATIVES AND FINANCIAL INSTRUMENTS (CONTINUED)
|
|
Level 1
|
Level 2
|
Total
carrying
amount
|
Fair
Value
|
||||||||||||||||
|
Note
|
US$’000
|
US$’000
|
US$’000
|
US$’000
|
|||||||||||||||
December 31, 2018
|
||||||||||||||||||||
Loans and receivables at amortised cost
|
||||||||||||||||||||
Trade receivables
|
18
|
21,318
|
—
|
21,318
|
21,318
|
|||||||||||||||
Cash and cash equivalents
|
19
|
30,277
|
—
|
30,277
|
30,277
|
|||||||||||||||
Finance lease receivable
|
16,18
|
835
|
—
|
835
|
835
|
|||||||||||||||
|
||||||||||||||||||||
|
52,430
|
—
|
52,430
|
52,430
|
||||||||||||||||
|
||||||||||||||||||||
Liabilities at amortised cost
|
||||||||||||||||||||
Exchangeable note
|
25
|
—
|
(81,382
|
)
|
(81,382
|
)
|
(81,382
|
)
|
||||||||||||
Finance lease payable
|
26
|
(962
|
)
|
—
|
(962
|
)
|
(962
|
)
|
||||||||||||
Trade and other payables (excluding deferred income)
|
23
|
(16,596
|
)
|
—
|
(16,596
|
)
|
(16,596
|
)
|
||||||||||||
Provisions
|
24
|
(50
|
)
|
—
|
(50
|
)
|
(50
|
)
|
||||||||||||
|
||||||||||||||||||||
|
(17,608
|
)
|
(81,382
|
)
|
(98,990
|
)
|
(98,990
|
)
|
||||||||||||
|
||||||||||||||||||||
Fair value through profit and loss (FVPL)
|
||||||||||||||||||||
Exchangeable note bond call option
|
25
|
—
|
—
|
—
|
—
|
|||||||||||||||
Exchangeable note equity conversion option
|
25
|
—
|
(238
|
)
|
(238
|
)
|
(238
|
)
|
||||||||||||
Exchangeable note bond put option
|
25
|
—
|
—
|
—
|
—
|
|||||||||||||||
|
||||||||||||||||||||
|
—
|
(238
|
)
|
(238
|
)
|
(238
|
)
|
|||||||||||||
|
||||||||||||||||||||
|
34,822
|
(81,620
|
)
|
(46,798
|
)
|
(46,798
|
)
|
30. |
RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
|
|
Note
|
Borrowings & derivative financial instruments
US$’000 |
Lease liabilities
US$’000 |
|||||||||
Balance at 1 January 2019
|
25,26
|
81,620
|
962
|
|||||||||
Cash-flows:
|
||||||||||||
Interest paid
|
(3,996
|
)
|
—
|
|||||||||
Repayment
|
—
|
(3,533
|
)
|
|||||||||
Non-cash:
|
||||||||||||
Interest charged
|
3,996
|
—
|
||||||||||
Adoption of IFRS 16 (Note 13)
|
—
|
21,185
|
||||||||||
Additions (related to Right of Use assets)
|
—
|
679
|
||||||||||
Exchange adjustment
|
—
|
(91
|
)
|
|||||||||
Accretion interest
|
639
|
947
|
||||||||||
Fair value
|
(234
|
)
|
—
|
|||||||||
Balance at 31 December 2019
|
25,26
|
82,025
|
20,149
|
|
Note
|
Borrowings & derivative financial instruments
US$’000 |
Lease liabilities
US$’000 |
|||||||||
Balance at 1 January 2018
|
25,26
|
95,185
|
886
|
|||||||||
Cash-flows:
|
||||||||||||
Interest paid
|
(4,503
|
)
|
—
|
|||||||||
Repurchase
|
(12,042
|
)
|
—
|
|||||||||
Repayment.
|
—
|
(374
|
)
|
|||||||||
Proceeds
|
—
|
481
|
||||||||||
Non-cash:
|
||||||||||||
Interest charged
|
4,352
|
—
|
||||||||||
Reduction in accrued interest payable
|
150
|
—
|
||||||||||
Exchange adjustment
|
—
|
(31
|
)
|
|||||||||
Accretion interest
|
689
|
—
|
||||||||||
Fair value
|
(2,211
|
)
|
—
|
|||||||||
|
||||||||||||
Balance at 31 December 2018
|
25,26
|
81,620
|
962
|
31. |
POST BALANCE SHEET EVENTS
|
• |
Haemoglobins revenues – including both instrument and consumables revenues with the impact being greater on diabetes (A1c) rather than on haemoglobin variant revenues.
|
• |
Autoimmune revenues – testing volumes were particularly impacted at our reference laboratory in Buffalo, New York but there were also lower product sales in all major markets.
|
• |
HIV, Infectious Diseases and Clinical chemistry product sales.
|
|
However, there were increases in sales of our transport medium product (used to transport Covid-19 patient samples in a stable environment),
respiratory tests for Legionnaire’s Disease and Strep Pneumoniae and of coronavirus-related antibodies sold by our life sciences supply business, Fitzgerald.
Covid-19 Expenditure Reduction Measures
All of the company’s operations have remained open during the pandemic though at reduced levels of output in line with expected demand. However, in response to the expected
reduction in revenues, the company undertook a number cost cutting measures which included the following:
|
• |
The company furloughed a large percentage of its work forces in the USA, Ireland and Canada in April, 2020. Meanwhile, in Brazil and other locations, staff costs were also significantly reduced by
means of pay cuts.
|
• |
The elimination of virtually all travel costs and significant reductions in discretionary sales and marketing expenditure.
|
• |
Availing of governmental supports. This included the receipt of US$4.5 million of loans under the U.S. government’s Paycheck Protection Program (“PPP”). Under the provisions of the PPP, these loans
will be partially or totally forgiven, based on the extent to which a borrower’s workforce returns to normal levels in the eight-week period immediately following the loans being granted. Upon receipt of these loans, the Company
ended the furloughing of all staff in the USA and therefore expects that a large percentage of these loans will be forgiven later in 2020, once the necessary verification has taken place. In Ireland, the company also availed of
economic support mechanisms being provided by the Irish Government though a significant level of furloughing continued into June, 2020, mainly due to the expected lower demand for HIV products for the African market.
|
31.
|
POST BALANCE SHEET EVENTS (CONTINUED)
|
32. |
ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
|
• |
Significant underperformance relative to expected historical or projected future operating results;
|
• |
Significant changes in the manner of our use of the acquired assets or the strategy for our overall business;
|
• |
Obsolescence of products;
|
• |
Significant decline in our stock price for a sustained period; and
|
• |
Our market capitalisation relative to net book value.
|
32. |
ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
|
•
|
Determining whether or not a contract contains a lease. Company assessed if the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration
|
•
|
Significant judgement is also required in establishing whether or not it is reasonably certain that an extension option will be exercised, considering whether or not it is reasonably certain that a
termination option will not be exercised. In making this decision, management considered the facts and circumstances that create a significant economic incentive. Factors specific to the asset, the entity and the wider market were
also considered.
|
•
|
Further, critical judgement is involved in determining whether or not variable lease payments are truly variable, or in-substance fixed. In-substance variable lease payments are
treated as fixed lease payments.
|
33. |
GROUP UNDERTAKINGS
|
Name and registered office
|
Principal activity
|
Principal Country of
incorporation and operation |
Group % holding
|
|||
Trinity Biotech plc
IDA Business Park, Bray
Co. Wicklow, Ireland
|
Investment and holding
company |
Ireland
|
Holding
company |
|||
Trinity Biotech Manufacturing Limited
IDA Business Park, Bray
Co. Wicklow, Ireland
|
Manufacture and sale
of diagnostic test kits |
Ireland
|
100%
|
|||
Trinity Research Limited
IDA Business Park, Bray
Co. Wicklow, Ireland
|
Research and
development |
Ireland
|
100%
|
|||
Benen Trading Limited
IDA Business Park, Bray
Co. Wicklow, Ireland
|
Trading
|
Ireland
|
100%
|
|||
Trinity Biotech Manufacturing Services Limited
IDA Business Park, Bray
Co. Wicklow, Ireland
|
Dormant
|
Ireland
|
100%
|
|||
Trinity Biotech Luxembourg Sarl
1, rue Bender,
L-1229 Luxembourg
|
Investment and
provision of financial services |
Luxembourg
|
100%
|
|||
Trinity Biotech Inc
Girts Road,
Jamestown,
NY 14702, USA
|
Holding Company
|
U.S.A.
|
100%
|
|||
Clark Laboratories Inc
Trading as Trinity Biotech (USA)
Girts Road, Jamestown
NY14702, USA
|
Manufacture and sale
of diagnostic test kits |
U.S.A.
|
100%
|
|||
Mardx Diagnostics Inc
5919 Farnsworth Court
Carlsbad
CA 92008, USA
|
Manufacture and sale
of diagnostic test kits |
U.S.A.
|
100%
|
|||
Fitzgerald Industries International, Inc
2711 Centerville Road, Suite 400
Wilmington, New Castle
Delaware, 19808, USA
|
Management services
company |
U.S.A.
|
100%
|
|||
Biopool US Inc (trading as Trinity Biotech Distribution)
Girts Road, Jamestown
NY14702, USA
|
Sale of diagnostic test
kits |
U.S.A.
|
100%
|
|||
Primus Corporation
4231 E 75th Terrace
Kansas City,
MO 64132, USA
|
Manufacture and sale
of diagnostic test kits and instrumentation |
U.S.A.
|
100%
|
32. |
GROUP UNDERTAKINGS (CONTINUED)
|
Name and registered office
|
Principal activity
|
Principal Country of
incorporation and operation |
Group % holding
|
|||
Phoenix Bio-tech Corp.
1166 South Service Road West
Oakville, ON L6L 5T7
Canada.
|
Manufacture and sale of
diagnostic test kits |
Canada
|
100%
|
|||
Fiomi Diagnostics Holding AB
Dag Hammarskjöldsv 52A
SE-752 37 Uppsala
Sweden
|
Holding Company
|
Sweden
|
100%
|
|||
Fiomi Diagnostics AB
Dag Hammarskjöldsv 52A
SE-752 37 Uppsala
Sweden
|
Discontinued operation
|
Sweden
|
100%
|
|||
Trinity Biotech Do Brasil
Comercio e Importacao Ltda
Rua Silva Bueno
1.660 – Cj. 101/102
Ipiranga
Sao Paulo
Brazil
|
Sale of diagnostic test
kits |
Brazil
|
100%
|
|||
Trinity Biotech (UK) Ltd
Mills and Reeve LLP
Botanic House
100 Hills Road
Cambridge, CB2 1PH
United Kingdom
|
Sales & marketing
activties |
UK
|
100%
|
|||
Immco Diagnostics Inc
60 Pineview Drive
Buffalo
NY 14228, USA
|
Manufacture and sale of
autoimmune products and laboratory services |
U.S.A.
|
100%
|
|||
Nova Century Scientific Inc
5022 South Service Road
Burlington
Ontario
Canada
|
Manufacture and sale of
autoimmune products |
Canada
|
100%
|
|||
Trinity Biotech Investment Ltd
PO Box 309
Ugland House
Grand Cayman
KY1-1104
Cayman Islands
|
Investment and
provision of financial services |
Cayman Islands
|
100%
|
33. |
AUTHORISATION FOR ISSUE
|
TRINITY BIOTECH PLC
|
|
By:
|
/s/ RONAN O’CAOIMH
|
|
Mr Ronan O’Caoimh
|
|
Director/
|
|
Chief Executive Officer
|
|
Date: June 15, 2020
|
By:
|
/s/ KEVIN TANSLEY
|
|
Mr Kevin Tansley
|
|
Company secretary/
|
|
Chief Financial Officer
|
|
Date: June 15, 2020
|
Item 19 |
Exhibits
|
Exhibit No.
|
Description of Exhibit
|