Q3 2021 Trinity Biotech PLC Earnings Call
[music].
Good day and welcome to the Trinity Biotech third quarter, 2021 financial results call.
Speaker 1: Good day and welcome to the Trinity Biotech 3rd Quarter 2021 Financial Results Call.
All participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation there'll be an opportunity to ask questions. Please note. This event is being recorded and now I'd like to turn the conference over to Joe Diaz with Lytham partners. Please go ahead.
Speaker 1: All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. And I'd like to turn the conference over to Joe Diaz with Lytham Partners. Please go ahead.
Thank you operator, and thanks to all of you for joining us today to review the financial results of Trinity biotech for the third quarter.
Speaker 2: Thank you, operator. And thanks to all of you for joining us today to review the financial results of Trinity Biotech for the third quarter of 2021, which ended on September 30, 2021.
20, <unk>, one which ended on September 32021.
Management will also discuss the entry into an 81 point to $25 million loan facility to refinance substantially all of the existing 99.9.
Speaker 2: Management will also discuss the entry into an $81.25 million loan facility to refinance substantially all of the existing $99.9 million of exchangeable senior notes issued by the company's subsidiary, Trinity Biotech Investment Limited, and exchange agreements for over 99% of the outstanding convertible notes.
$9 million of exchangeable senior notes issued by the company subsidiary.
He biotech conversion limited and exchange agreements for over 99% of the outstanding convertible notes all of which are subject to certain conditions precedent.
Speaker 2: all of which are subject to certain conditions, precede.
Joining us on today's call is Bruno <unk>, Chairman and Chief Executive Officer, and John Gaylord Chief Financial Officer.
Speaker 2: Joining us on today's call is Rona O'Keefe, Chairman and Chief Executive Officer, and John Gillard, Chief Financial Officer.
At the conclusion of today's prepared remarks, we will open the call for a question and answer session.
Speaker 2: At the conclusion of today's prepared remarks, we will open the call for a question and answer session.
Before we begin I must inform you that statements made in this conference call maybe deemed forward looking statements within the meaning of federal Securities laws.
Speaker 2: Before we begin, I must inform you that statements made in this conference call may be deemed forward-looking statements within the meaning of federal securities laws.
These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements.
Speaker 2: These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements.
These risks include but are not limited to those set forth in the risk factors section of our annual report on form 20-F filed with the Securities and Exchange Commission.
Speaker 2: These risks include, but are not limited to, those set forth in the risk factors section of our annual report on Form 20-F, followed the Securities and Exchange Commission.
We undertake no obligation to publicly update or revise these forward looking statements to reflect events or circumstances after today or the occurrences of unanticipated events.
Speaker 2: We undertake no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrences of unanticipated events.
With that said I will now turn the call over to John <unk> CFO of Trinity Biotech for review.
Speaker 2: With that said, I will now turn the call over to John Gillard, CFO of Trinity Biotech, for a review of the results of the quarter and provide some comments on the planned capital structure transactions. He'll be followed by Chairman and CEO , Ronan O'Keefe, for an update on sales, marketing, and revenue. John , please proceed.
Are you of the results of the quarter and provide some comments on the planned capital structure transactions, you'll be followed by chairman and CEO wrote on a query for an update on sales marketing and revenue John. Please proceed.
Yeah.
Thank you Joe Good morning, everyone. Thank you for joining.
Speaker 3: Thank you, Joe. Good morning, everyone. Thank you for joining.
As Joe mentioned I will now take you through the results for Q3 2021.
Speaker 3: As Joe mentioned, I will now take you through the results for Q3 2021.
Starting with revenues total revenues for the quarter were $22 million compared with $32 million in Q3 2020.
Speaker 3: Starting with revenues, total revenues for the quarter were $22 million compared with $32 million in Q3 2020.
As Joel pointed out and as our typical approach.
Speaker 3: As Joe pointed out, and is our typical approach, Ronan will discuss revenues in further detail on the call.
Alan will discuss revenues in further detail on the call.
As such I wouldn't move on to discuss other aspects of the income statement.
Speaker 3: As such, I will move on to discuss other aspects of the income statement.
Margin for the quarter was 44% compared to 52, 4% achieved in Q3 2020.
Speaker 3: Gross margin for the quarter was 40.4%, compared to 52.4% achieved in Q3 2020.
The reduction in gross margin is mainly due to the exceptionally strong sales and margins recorded in Q3 2020 within our COVID-19 related portfolio of products with the pricing for such products falling over the course of 2021 as a result of lower demand as the pandemic somewhat subsided in North America and the availability of.
Speaker 3: The reduction in gross margin is mainly due to the exceptionally strong sales and margins recorded in Q3 2020 within our COVID-19 related portfolio of products, with the pricing for such products falling over the course of 2021 as a result of lower demand as the pandemic somewhat subsided in North America and the availability of greater supply from other manufacturers.
Greater supply from other manufacturers.
As ever our gross margin remains susceptible to product mix changes geographic spread currency fluctuations and product level of variation.
Speaker 3: As ever, our gross margin remains susceptible to product exchanges, geographic spread, currency fluctuations, and product level variations.
Other operating income increased from $3000 in Q3, 2000 $21 million in Q3 2021.
Speaker 3: Other operating income increased from $3,000 in Q3 2020 to $1,000,000 in Q3 2021.
This income relates to a paycheck protection program loan received by the company in 2021 totaling $1 million.
Speaker 3: This income relates to a Paycheck Protection Programme loan received by the company in 2021, totalling $1 million.
Forgiven during Q3 2021 and has therefore been recognized as income this quarter.
Speaker 3: was forgiven during Q3 2021 and has therefore been recognized as income discord.
This loan was treated as a short term liability.
Speaker 3: This loan was treated as a short-term liability on June 30, 2021.
June 30 of 2021.
Subsequent to the quarter end the final remaining paycheck protection program loan for.
Speaker 3: Subsequent to the quarter end, the final remaining Paycheck Protection Program loan.
$700000 was also forgiven and we expect it would be recognized as income in Q4 2021.
Speaker 3: for $700,000 was also forgiven. And we expect it would be recognized as income in Q4, 2021. Moving on.
Moving on to R&D expenditure this decreased.
Two $1.1 million compared to $1 $3 million in Q3 2020.
Speaker 3: to $1.1 million compared to $1.3 million in Q3 2020.
Meanwhile, SG&A costs have decreased from $6 3 million in Q3, $2025 9 million in Q3 2021.
Speaker 3: Meanwhile, SG&A costs have decreased from $6.3 million in Q3 2020 to $5.9 million in Q3 2021.
The company company continues to focus on operating efficiency and cost control and has continued to reduce head count as it pursues greater automation and simplification of processes.
Speaker 3: The company continues to focus on operating efficiency and cost control, and it continues to reduce headcount as it pursues greater automation and simplification of process.
These resulted in an operating profit for Q3 2021 of $2 $7 million compared to $9 1 million reported in Q3 2020 with the aforementioned reduction in revenue and margin contribution from our Covid related portfolio of products in the main driver of that reduction in operating profit.
Speaker 3: These resulted in an operating profit for Q3 2021 of $2.7 million, compared to $9.1 million reported in Q3 2020, with the aforementioned reduction in revenue and margin contribution from our COVID-related portfolio of products being the main driver of that reduction in operating profit being somewhat offset by lower R&D and SG&A expenses.
And so much offset by lower R&D and SG&A expenses.
Moving onto financial expenses.
This includes the quarterly cash interest cost for exchangeable notes of $1 million.
Speaker 3: This includes the quarterly cash interest costs for exchangeable notes of $1 million.
$200000 relates to notional finance charges associated with these premises.
Speaker 3: $200,000 relates to notional finance charges associated with lease premises.
These notes will finance charges are required by the relevant accounting standard <unk> 16.
Speaker 3: These notional finance charges are required by the relevant accounting standard IFRS 16.
You will note that there is also a noncash financial net income of $31000.
Speaker 3: You will note that there is also non-cash financial net income of $31,000.
Which is made up of a one 193 million sorry 193000.
Speaker 3: which is made up of 193,000 fair value adjustments to derivatives embedded in the exchangeable notes as required by the relevant accounting standards.
Fair value adjustments to the derivatives embedded in the exchangeable notes as required by the relevant accounting standards.
Less accretion interest of $162000.
And the accounting carrying value of the exchangeable notes.
As you would have seen from the press release.
Speaker 3: As you will have seen from the press release, on the 15th of December 2021, the company had entered into exchange agreements with holders of over 99% of the convertible notes.
The 15th of December 2021, the company had entered into exchange agreements with holders of over 99% of the convertible notes.
It provides for the early repurchase of the convertible notes subject to a number of conditions precedent.
Speaker 3: that provide for the early repurchase of the convertible notes, subject to a number of conditions precedent. And I'll speak about...
And I'll speak about that a little bit later.
Profit after tax before impairments, one off items and noncash financial expense was $1 3 million in Q3 2021 compared to $7 5 million in Q3 2020.
Speaker 3: Profit after tax before impairments, one-off items and non-cash financial expense was $1.3 million in Q3 2021 compared to $7.5 million in Q3 2020.
As in prior quarters.
Speaker 3: As in prior quarters, and as set out in the press release, we quote earnings per ADS effectively are equivalent of EPS on a standard basis and also before the impacts of impairments, one-off charges and non-cash financial outlays.
And I said I was in the press release, we quote earnings for a D. S effectively our equivalent of EPS on a standard basis.
Relative before the impacts of impairments, one off charges and noncash financial items.
Using the basic measure earnings for <unk> decreased from 35.
Speaker 3: Using the basic measure, earnings for ADS have decreased from $0.35 to $0.063 in Q3
To $6 <unk> in Q3 2021.
I will now move on to talk about the significant balance sheet movements since June 2021.
Speaker 3: I will now move on to talk about the significant balance sheet movements since June 30th, 2021.
It was an increase in intangible assets of $1 5 million, which was made up of additions of $1 7 million.
Speaker 3: There was an increase in intangible assets of 1.5 million which was made up of additions of 1.7 million offset by an amortization charge of 0.2 million.
Offset by an amortization charge of <unk> 2 million.
Moving onto inventories have decreased by $2 6 million and now stands at $32 1 million.
Speaker 3: Moving on to inventories, these have decreased by 2.6 million and now stand at 32.1 million.
Earlier in 2021, we reduced the level of production of our PCR viral transport media V. T M in line with projected demand.
Speaker 3: Earlier in 2021, we reduced the level of production of our PCR viral transport media, VTM, in line with projected demand. And this was the main reason for the reduction in...
This was the main reason for the reduction in inventory this quarter.
Meanwhile, trade and other receivables have increased by $1 5 million to $16 8 million, reflecting lower cash collections.
Speaker 3: Meanwhile, trade and other receivables have increased by 1.5 million to 16.8 million reflecting lower cash collection.
Our trade and other payables reduced by <unk> 3 million compared to June 2021.
Speaker 3: Our trade and other payables reduced by £3 million compared to June 2021, of which £1 million relates to the release of the Paycheck Protection Programme loan liability to the income statement in the quarter.
Which 1 million relates to the release of the Paycheck protection program loan liability to the income statement in the quarter.
Finally, I will discuss our cash flows for the quarter.
Cash generated from operations during the quarter was approximately $500000.
Speaker 3: Cash generated from operations during the quarter was approximately $500,000.
Nonoperating cash inflows during the quarter included income taxes, we funded a one 1 million.
Speaker 3: Non-operating cash inflows during the quarter included income taxes refunded at 1.1 million.
Non operating cash outflows during the quarter include the capital leases capital expenditures excuse me of 2 million payments for property leases of <unk> 7 million.
Speaker 3: Non-operating cash outflows during the quarter included capital expenditures of $2 million and payments for property leases of $0.7 million.
Overall this resulted in a cash balance of $27 5 million at the end of quarter three 2021.
Speaker 3: Overall, this resulted in a cash balance of $27.5 million at the end of Q3 2021.
You will have noted from Yesterdays press release, we have entered into agreements related to our capital structure and I would take you through these now.
Speaker 3: You will have noted from yesterday's press release that we have entered into agreements related to our capital structure, and I will take you through these now. As already mentioned,
As already mentioned after extensive process.
Company and certain of its subsidiaries have entered into an $81 million to $5 million senior secured terminal credit facility with perceptive advisors.
Speaker 3: company and certain of its subsidiaries have entered into an $81.25 million senior secure terminal and credit facility with perceptive advisors.
The company is excited to be partnering with especially if lines at life Sciences investor such as protective.
Speaker 3: company is excited to be partnering with a specialist life sciences investor such as Perceptic.
Hello, and has a four year term and carries an interest rate of $11, two 5% plus the higher of 1% or one month LIBOR.
Speaker 3: The loan is a four year term in period interest rate of 11.25% plus a higher of 1% per one month library.
Under the terms of the loan and drawdown of the funding the company will issue warrants exercisable for $2 $5 million of the company's Ads's two perceptive.
Speaker 3: Under the terms of the loan, on drawdown of the funding, the company will issue warrants exercisable for 2.5 million of the company's ADSes to preceptors.
The <unk> exercise price for the warrants is equal to the lower of one the 10 day volume weighted average price our view for the company's <unk> for the 10 business days prior to 15 December 2021.
Speaker 3: The per ADS exercise price for the warrants is equal to the lower of 1, the 10-day volume weighted average price, or VUAP, for the company's ADSs for the 10 business days prior to 15 December 2021.
Or two they tend to view of the company's <unk> for the 10 business days prior to the drawdown of the funding under the law.
Speaker 3: or two, the 10-day view app of the company's ADFs for the 10 business days prior to the drawdown of the funding under the law.
In addition, the company has entered into exchange agreements with five institutional investors that hold approximately $99 seven of the $99 9 million outstanding notes.
Speaker 3: In addition, the company has entered into exchange agreements with five institutional investors that hold approximately 99.7% of the 99.9% in outstanding notes.
Well the notes have a maturity of 2045, it had a number of put and call options, one of which would allow the holders to flip the north of the company.
Speaker 3: While the notes have a maturity of 2045, they had a number of put-and-call acts.
Speaker 3: one of which would allow the holders to put the note to the company at Carr in April 2022.
In April 2022.
When did the exchange agreement each noteholder should receive 87 cents for each U S dollar of nodes and that eats into stock in the form of newly issued <unk>.
Speaker 3: Under the exchange agreement each note holder should receive 87 cents for each US dollar of notes they hand, thus 8 cents of stock in the form of newly issued ADS.
At a price of 1.4 dollars 95, $5 per <unk>, which.
Speaker 3: at a price of $1.4955 per ADS.
Which is a 13% discount to the five day trading view of the company's Ads's on NASDAQ on December 19 2021.
Speaker 3: which is a 13% discount to the 5-day trading view app of the company's ADSes on NASDAQ on December 9th, 2021.
Overall this equates to an approximate this kind of a 4% on the year you repurchase of the notes.
Speaker 3: Overall, this equates to an approximate discount of 4% on the area you repurchase of the new.
These transactions should have the company repaid the convertible notes in advance of the April 2020 to put base.
Speaker 3: These transactions should allow the company to repay the convertible notes in advance of the April 2022 put date, thus extinguishing uncertainty regarding the company's near-term capital structure and access to funding.
Extinguishing uncertainty regarding the company's near term capital structure and access to funding.
The company believes that disability should add for investor confidence and provide a strong foundation for which the company can grow.
Speaker 3: The company believes that this stability should add to investor confidence and provide a strong foundation for which the company can grow. While the interest rate is
While the interest rate is higher than the rate on the convertible notes. It is important to note that apart from the $2 5 million <unk> warrants.
Speaker 3: It is important to note that apart from the 2.5 million ADS warrants, the term loan has no other convertible features, thus reducing the potential
Term loan has no or their convertible features thus reducing the potential dilution impact.
And of another convertible debt instruments, if wound was available.
Speaker 3: of another convertible dash instrument if one was available.
In addition, these transactions if approved by shareholders should mean, the company would have no material debt maturities for four years.
Speaker 3: In addition, these transactions, if approved by shareholders, should mean the company would have no material debt maturities for four years.
The term loan allows the company greater optionality in choosing its capital structure going forward.
Speaker 3: The term loan allows the company greater optionality in choosing its capital structure going forward.
Compared to the convertible notes.
By allowing for partial or full early repayments, albeit at a premium.
Speaker 3: by allowing for partial or full early repayment, albeit at a premium.
The.
We will also result in a reduction of gross debt of approximately $19 million.
Somewhat offsetting the additional interest range.
Based upon current prevailing rates the annual interest cost is expected to be approximately $10 million.
Speaker 3: Based upon current pervading rates, the annual interest cost is expected to be approximately $10 million.
The company intends to primarily serve as the additional interest costs through cash on hand.
Speaker 3: The company intends to primarily service the additional interest cost through cash on hand
Growing earnings through the near term launch of key pipeline products, including principally to HIV on a rapid COVID-19 antigen test.
Speaker 3: growing earnings to the near term launch of key pipeline products, including print screen HIV and our rapid COVID-19 anti.
Continuing to focus on cost control and disciplined R&D investments.
Speaker 3: So it's continuing to focus on cost control and disciplined R&D investment.
The company's board and management team intends to keep the company's capital structure under review.
Speaker 3: The company's board and management team intends to keep the company's capital structure under review.
Yeah.
Both the term loan and exchange agreements are subject to shareholder approval with <unk>.
Speaker 3: Both the term loan and exchange agreements are subject to shareholder approval.
95% approval from both cost required for the transaction to proceed.
Speaker 3: 75% approval from both cast required for the transactions to proceed.
The company expects to hold a general meeting in December 2020 to seek a shareholder approval.
Speaker 3: The company expects to hold a general meeting in December 2020 to seek the chair owner approval.
Sorry, Yeah, sorry in January 2020 to seek shareholder approval my apologies.
Speaker 3: Sorry, sorry, in January 2022, to seek the shareholder approval, I apologize.
Thank you I will now hand over to Ronan will bring you to our revenues.
Speaker 3: Thank you. I will now hand over to Ronan who will bring you to our revenues.
Thanks, John.
I'm now going to review the revenues for quarter, three and for the corresponding quarter in 2020 before opening the call to a question and answer session.
Speaker 4: I'm now going to review the revenues for quarter 3 and for the corresponding quarter in 2020 before opening the call to a question and answer session. Our revenues for quarter 3 were $22 million compared with $32 million in quarter 3 2020 which is a reduction of 31.3%.
Our revenues for quarter, three was $22 million compared with $32 million in quarter, three 2020, which is a reduction of 31, 3%.
Point of care revenues in quarter, three were $4 $1 million compared with $2.1 million a quarter three and.
Speaker 4: point-of-care revenues in Q3 were $4.1 million, compared to $2.1 million in Q3, which is an increase of 99%. This increase is attributable to higher HIV revenues from Africa-related sales.
And which is an increase of 99%.
This increase is attributable to higher HIV revenues from Africa related sales.
Revenues in quarter three 2000.
However had been negatively impacted by logistical constraints caused by the pandemic.
Speaker 4: Revenues in Q3 2020, however, had been negatively impacted by logistical constraints caused by the pandemic.
While the situation has improved during 2021 COVID-19 continues to have the potential to cause disruption to HIV testing in Africa.
Speaker 4: While the situation has improved during 2021, COVID-19 continues to have the potential to cause disruption to HIV testing in Africa.
At March 21, we announced that we had submitted doctrine screen HIV product towards hats off to the organization for approval is probably once approved will allow the published you entered for the first time, the HIV screening market in Africa, which at 117 million tests annually is a 12 fold bigger market by value and the confirmatory test market.
Speaker 4: In March 2021, we announced that we had submitted our TrinScreen HIV product to the World Health Organization for approval. This product, once approved, will allow the company to enter for the first time the HIV screening market in Africa, which at 170 million tests annually, is a 12-fold bigger market by value than the confirmatory test market, where Trinity Biotech has for many years had a dominant market share with Unigold.
Our Trinity biotech has for many years had a dominant market share with unit growth.
Late September 2021.
Speaker 4: Late September 2021, the WHO requested additional information on submission, and this information has been provided, allowing the assessment to be finalized. Typically, this process would take another 30-60 days, but because of COVID-19, the WHO review processes are taking longer. Despite this, we are confident that an approval is imminent.
Hi, Joe requested additional information on the submission and this information has been provided along the assessment to be finalized typically this process would take another 30 60 days because of COVID-19. It W. H O review processes are taking longer.
This we are confident that an approval is imminent.
Following approval, we are confident of quickly leveraging the quality of this product given its advantages over the competition also given our experienced sales and marketing team on the ground in Africa I reputation for excellence with unit goes.
Speaker 4: Following approval, we are confident of quickly leveraging the quality of this product, given its advantages over the competition, also given our experience as a marketing team on the ground in Africa, our reputation for excellence with Unigold.
And our high volume automated production capability in Ireland.
Speaker 4: and our high-volume automated production capability in Ireland. And we believe that all of these factors will enable us to quickly take market share in the African HIV screening market.
Believe that all of these factors will enable us to quickly take market share and the African HIV screening market.
Moving onto clinical laboratory, our revenues for quarter, three were $17 $9 million compared with $29 9 million in the corresponding quarter, which is a decrease of 40%.
Speaker 4: Moving on to clinical laboratory, our revenues for quarter three were $17.9 million, compared with $29.9 million in the corresponding quarter, which is a decrease of 40%.
The decrease is largely due to lower revenues from within our COVID-19 related product portfolio.
Speaker 4: decreases largely due to lower revenues from within our COVID-19 related product portfolio.
In quarter, three 2020 demand for our PCR viral transport media product for its exceptional.
Speaker 4: In Q3 2020, demand for our PCR viral transport media products was exceptional, but as the pandemic has persisted, manufacturing capacity in the market has ramped up significantly, with a consequent negative impact on demand.
As the pandemic has persisted manufacturing capacity in the market has ramped up significantly with a consequent negative impact on demand.
While the situation related to COVID-19 products remains fluid.
Speaker 4: While the situation related to COVID-19 products remains fluid, with the evolving impact of the new variants, the company has seen increased cost of demand for VTM products over recent months and we have resumed manufacturing VTM products albeit in lower volumes.
With the evolving impact of the new variants.
We have seen increased customer demand and VPN for PGM products over recent months and.
And we have resumed manufacturing btn products audition lower volumes.
We have retained the capability to increase manufacturing volumes should market conditions warrant.
Speaker 4: We have retained the capability to increase manufacturing volumes should market conditions warrant.
Meanwhile, we are pleased to report that we have completed the development of a COVID-19 antigen knockdown should test, which has demonstrated really impressive performance characteristics and its evaluations.
Speaker 4: Meanwhile, we are pleased to report that we have completed the development of our COVID-19 rapid antigen test, which has demonstrated really impressive performance characteristics in its evaluations.
We are confident of launching the product in the European market during the quarter to having achieved European approval, our CE Mark.
Speaker 4: We are confident of launching the product in the European market during Q2, having achieved European approval or CE mark.
We do expect to launch the product in the USA the.
Speaker 4: While we do expect to launch the product in the USA, the regulatory path for such products remains fluid and thus we will continue to assess the most appropriate regulatory approval pathway. But in reality, it may well be that a standard EUA will suffice and that we'll actually enter that market almost immediately after the European market. Our principal focus at this time is on transferring the product onto our high volume automated production line in Ireland.
The regulatory path for such products remains fluid industrial with potentially assess the most appropriate regulatory approval pathway.
In reality, it may well be that a standard EUA will suffice and that we'd actually enter that market almost immediately after the European market. A principal focus at this time is on transferring the product onto our high volume automated production line in Ireland.
As the COVID-19, pandemic continues and with new variants emerging it has now become a parent that widespread.
Speaker 4: As the COVID-19 pandemic continues, and with new variants emerging, it has now become apparent that despite widespread vaccine availability, that antigen rapid testing will be a key tool in day-to-day COVID-19 management for the foreseeable future.
Alright that despite widespread vaccine available.
Antigen rapid testing would be a key tool in day to day, COVID-19 management for the foreseeable future.
We therefore expect our high quality antigen test, which we can manufacture in high volume to be a very significant growth driver for the business into the future.
Speaker 4: We therefore expect our high-quality antigen test, which we can manufacture in high volume, to be a very significant growth driver for the business into the future.
And now I'm moving back to our core business, our clinical laboratory business and COVID-19 products were excluded.
Speaker 4: And now moving back to our core business, our clinical laboratory business, when COVID-19 products were excluded, increased 5% when compared with the corresponding quarter in 2020. Within our hemoglobin A1c business, we continue to have lower instrument placements, with just over 40 instruments placed during the quarter, which is just over 50% of normal placement levels.
<unk>, 5% compared when compared with the corresponding quarter in 2020 was that in our whole human within our hemoglobin they own fee business. We continue to have lower instrument placements with just over 40 instruments placed during the quarter, which is just over 50% of normal placement levels.
This was expected as hospitals and clinics are less likely to purchase new capital equipment joined the pandemic. However, we are confident these placements will fully recover in a post pandemic environment.
Speaker 4: This was expected, as hospitals and clinics are less likely to purchase new capital equipment during the pandemic. However, we are confident these placements will fully recover in a post-pandemic environment.
Meanwhile, hemoglobin reagent revenues and by this I mean.
Speaker 4: Meanwhile, hemoglobin reagent revenues, and by this I mean the number of tests being run in our diabetes business, are running at about 90% of normal. Again, due to the fact that patients are less likely to perform discretionary tests during the pandemic.
Both tests being run in our diabetes business are running at about 90% of normal again due to the fact that patients are less likely to perform discretionary tests during the pandemic.
Meanwhile, our autoimmune business generated revenues approximately 8% lower than in the pre pandemic environment with reference laboratory testing volumes down approximately 10% of product revenues marginally down.
Speaker 4: Meanwhile, our autoimmune business generated revenues approximately 8% lower than in the pre-pandemic environment, with reference laboratories testing volumes down approximately 10% and product revenues marginally down. We believe this is also entirely due to the pandemic, as many patients defer doctor visits when that's absolutely necessary. And we are confident these revenues will fully recover post-pandemic.
We believe this is also entirely due to the pandemic as many patients the fair Doctor visits and that's absolutely necessary and we are confident that these revenues will fully recover post pandemic.
Could I now open the call to a question and answer session and pass it back to Jason.
Speaker 4: I wonder, could I now open the call to a question and answer session and pass back to Jason?
Thank you.
We'll now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker 1: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch tone phone.
If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Speaker 1: If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Paul Nori from Noble equity. Please go ahead.
Speaker 1: Our first question comes from Paul Norrie from Noble Equity. Please go ahead. Hi, good morning.
Hi, good morning.
Hum.
As it relates to the refinancing can.
Can you talk about the financial covenants on the new loan I saw that there is a minimum cash balance.
Speaker 5: Can you talk about the financial covenants on the new loan? I saw that there's a minimum cash balance.
Required and.
Speaker 5: required and uh... revenue requirements but is there anything other
Revenue requirements, but is there anything other than that.
So they're there that they are the main.
Speaker 3: So they're the main financial covenants. There's operational covenants in terms of a standard within those types of loan agreements. But yeah, it's basically the trailing revenue covenants and minimum cash.
Financial covenants, there's operational covenants in terms of.
You'll be standard isn't those types of within those types of loan agreements, but it's basically the trailing in trading revenue covenant, our minimum cash covenant Cogs.
And what's the process.
Speaker 5: And what's the process if you fall below the required amount of revenue?
You fall below the required amount of revenue.
So there is a penalty interest rates of 3% default interest rates.
Speaker 3: So there is a penalty interest rate of 3%, default interest rate, and it would be a technical default under the loan, as would be the case I suppose with other loan agreements.
And then was it would be it would be a default technically fall under the loan and as will be the case I suppose with the other.
With other loan agreements.
And that would be that that will be the position, but we believe that there is significant headroom within those revenue covenants.
Speaker 3: that would be the position. But we believe that there is significant headroom within those revenue covenants for us to be able to relatively comfortably meet those requirements.
For us to be able to you know.
Relatively comfortably meet those meet those requirements.
Okay.
And going forward with this new loan will you have to get lender approval. If you want to sell a segment of the business or the entire company.
Speaker 5: And going forward with this new loan, will you have to get lender approval if you want to sell a segment of the business or the entire company?
And we certainly would.
Speaker 3: And we certainly would, for significant transactions, we would need to work with the lender in terms of that.
For significant transactions, we would need to work with the lender in terms of that.
Okay, and then considering you need shareholder approval for this maybe you can talk about the.
Speaker 5: Okay, and then considering you need shareholder approval for this, maybe you can talk about the last shareholder vote in terms of, you know, how close it was or not, and what your plan is over the next, you know, I guess, 30 days or so to, you know, to get approval.
The last shareholder vote in terms of.
How close it was or not and what your plan is over the next 30 days or so to.
You know get enough votes to get this past.
Paul that Ronan here, yes, so what happened on the last call was loved that.
Speaker 4: Paul, Ronan here, yeah, so what happened on the last call was that at the AGM was that they actually had a particular resolution that required seven, one resolution which was basically.
At the AGM.
We actually had a particular resolution of acquired 71 resolution which was paid.
The resolution under Irish companies Act, which would.
Speaker 4: resolution which under Irish companies action which wouldn't it would be kind of a condition for
Kind of a condition.
U S shareholders are U S.
Speaker 4: U.S. shareholders, U.S. basically present for U.S. shareholders and in the U.S. rules basically under Irish rules and the shareholders get to vote once every five years to basically allow and preemption to be over to be old to be bypassed so basically you need to get consent for your shareholders in 75% by 75% resolution to bypass preemption rights and what actually happened in this instance was was that we
It hasn't for U S shareholders.
Under U S rules, but basically on the Irish rules.
Shareholders that's it.
Once every five years to basically allow them.
Preemption to be over to be old bypassed so basically you need to get consent from your shareholders and 75%.
<unk> resolution.
To bypass preemption rights.
What actually happened in this instance, what was that.
We have two quant funds, who are facing possible distinctive quant funds, who just basically.
Speaker 4: who are making it possible to speak to the conference, who basically vote on the basis of ISS recommendation or a blast door.
Basically votes in debates of ISS recommendation on Glassdoor.
And ISS actually recommended a vote against it.
Speaker 4: and ISF actually recommended a vote against it, I think really without necessarily understanding it, and as a consequence we didn't get 75%, we were like in the 60s or something like that.
I think for me without necessarily understanding as well as a consequence, we didn't get 75% we were like in the sixties or something like that.
And that's why we now have to actually put this whole thing to the members.
Speaker 4: And that's why we now have to actually put this whole thing to the members.
I mean, I would I kind of make an analogy to devote against this would be a little bit like a turkey voting for Thanksgiving and Christmas.
Speaker 4: And I mean, I would I kind of make an analogy that for to vote against this would be a little bit like a turkey voting for Thanksgiving or Christmas, right?
Unlike a lot of sense, having said that we basically are basically are talking with ISS.
Speaker 4: doesn't make a lot of sense. Having said that we basically are, we basically are talking with ISL.
I'll also endeavoring to talk the Quant funds was actually quite difficult to do but I think the other thing that happened in the last the last situation or was it the volt with very low so when you have literally 30% of shareholders voting.
Speaker 4: and are also endeavouring to talk to quant funders, which is actually quite difficult to do. But I think the other thing that happened in the last situation was that the vote was very low. So it only had literally 30% of shareholders voting, and therefore that kind of magnified the importance of the quant funds position.
But I kind of magnified the importance of the fund's position.
So we will work with work on this and I think its adult it's unthinkable, okay. She wouldn't carry the 75% of music.
Speaker 4: So we'll work on it, and I think it's unthinkable that this wouldn't carry.
The alternative is.
Speaker 4: 75%. I mean the alternative is very unpleasant clearly. So I just left people with...
Is that some clarity so I just let people would.
Allergy of the Turkey Hill, basically get out there and it's really the only show in town.
Speaker 4: the analogy of the turkey, you know, basically get out there and vote. It's really the only show in town.
But we are absolutely confident I'm actually getting that getting that support them.
Speaker 4: But we are absolutely confident of actually getting that support and it's unthinkable that ISS could recommend against this. I mean basically it's like inviting in receivers in Bankruptcy Chapter 11, it's all that, it's insane.
And <unk>.
Think about that ISS.
Recommend against this I mean, basically a slight advising and.
Receivers of bankruptcy chapter 11, Thats all that is it's just it's insane, so, but we're absolutely confident of achieving it and we'll work diligently Catherine we've already commenced as we call it.
Speaker 4: So we're absolutely confident of achieving it and we work diligently at it. We've already commenced that. We call the meeting before Christmas and we should have a meeting sometime sort of in the last 10 days of January and then the deal should close. Everything is signed up and we should close at that point.
Called meeting before Christmas and we should have some time sort of in.
In the last 10 days of January.
The.
The deal should close have you seen you signed up and we should close at that point.
Okay, Great and then turning to the business can you tell us how much COVID-19 revenue you had in the quarter.
Speaker 6: Okay, great. And then turning to the business, can you tell us how much COVID revenue you had in the quarter?
It's quarter, Paul was <unk> 3 million.
Okay.
Uh huh.
And.
You you're already selling the long haul Covid test out of your lab right.
Speaker 5: You're already selling the long-haul COVID test out of your lab, right?
But what do you mean by long haul.
The long haul COVID-19 that tests for.
Speaker 5: The long-haul COVID that tests for, you know, different, I guess, immunities.
I guess immuno compromised conditions.
And I think some of those tests are active and then some of them are continued through validation.
Speaker 4: I think some of those tests are active and then some of them are continued through validation. They're really focused around, I think, this is the autoimmune impact of the covers. Yeah, yeah. Yeah, sorry. We're talking about a variable lab. Yes, we are. Yeah, yeah. But in, you know, a modest amount of volume, that's something that's growing, a modest amount of volume.
Theyre really focused around I think this is the autoimmune impact of.
Yeah, Yeah, that's right, we talked about the item called up yet, yes, we all right yeah yeah.
Modest and a volume that's something that's growing.
It's modest enough volume.
At this time.
We are where we are continuing to see strong growth in the lab.
Speaker 3: this time. Where we are, Paul, continuing to see strong growth in the lab driven by COVID is our Sjogren's test, that's our proprietary test for dry eye and we're seeing a correlation there between the level of COVID and the referrals for that test in terms of some of the symptoms. So that product is
By Covid as Theyre Sjogren tests, that's our proprietary tests for dry eye.
And we're seeing a correlation there between the level of Covid.
And the referrals for that test and in terms of some of the symptoms that backed product is performing well for us in terms of Covid. What we have at this time, because we have a we have a viral transport media, which is beginning to pick up again, we mentioned that in our prepared remarks, as we went back manufacturing again and we.
Speaker 4: I mean, in terms of COVID, what we have at this time is we have our we have a viral transport media, which is beginning to pick up again. We mentioned that in our prepared remarks.
Speaker 4: And so we're back manufacturing again. We have our antibody test, which is setting a modest enough volume.
Have our antibody tests, which are setting a modest enough volume.
We have the lung COVID-19 tests that you just referred to which is setting a modest volume and.
Speaker 4: We have the long COVID tests that you just referred to which is selling in modest volume.
We have a.
Speaker 4: and we have I think what we're really excited I'm talking about for sterile monoclonal antibodies and I think what we're really excited about though is the antibody test.
I think what we're really excited I'm excited with my Fitzgerald monoclonal antibodies.
And I think what we're really excited about though is the antibody test excuse me, that's dancing test Dropdowns and test site and which is now complete and then what we're doing instead of just have to buy in various pieces of equipment and to ramp up our production. So we can basically manufacture this test now.
Speaker 4: rapid antigen test site, which is now complete. And really what we're doing is we've just had to buy various pieces of equipment to ramp up our production. So we can basically manufacture this test now in the serious millions.
Considering the serious millions and.
And we are confident of having approval for that test.
Speaker 4: and we are confident of having approval for that test.
And the challenge they are new and in Europe, and very quickly thereafter in the USA and <unk>.
Speaker 4: to sell initially in Europe and very quickly thereafter in the USA. In actual reality, I think we're more excited about the opportunity in Europe , where we think we can sell in very high volumes. An excellent, high-quality product.
Realogy I think we're more excited about the opportunity in Europe.
Where we think we can tell at very high volumes and excellent high quality product better than we believe them.
Speaker 4: better than we believe than the tests we're using at the moment, which are mostly Chinese, a lot better. And we're very confident of achieving big volumes there. I think it's become apparent to us all with the variants that we've seen that, you know, antigen testing is going to be with us in the longer term.
The tests, we're using at the moment, which are mostly Chinese a lot better.
We're very confident of achieving big volumes, there I think it's become apparent to us all.
With the various and.
The variance that we've seen that.
Testing is going to be with us in the longer term.
So so.
So we're very excited about that but I think that's probably the single most exciting right now and that doesn't in any way need to detract from print screen.
Speaker 4: So, yeah, so we're very excited about that. I think that's probably the single most exciting thing we've done right now. And that doesn't in any way mean to detract from print screen, which again, where we said we have an approval literally imminent, just had some, we had some interaction with WHO even just in the last few hours, makes us believe that very reasonably, very quickly, imminently that we'll be into the market.
Which again, we said we have an approval literally imminent.
Had some.
Some interaction with Dougherty Hi, Joe even just in the last few hours.
It makes us believe that.
Alright, reasonably very quickly imminently that would be into the market.
Okay and.
For W. H O approval of that test and then if you get.
Speaker 5: Okay, and for the WHO approval of that test, and then if you get FDA clearance for the premier resolution, are these things you'll put out press?
FDA clearance for the Premier resolution of these things you'll put out press releases for.
We show you with.
Both of those areas.
Speaker 4: I reassure you, both of those scenarios will have it. So we will press release trim screen, primary resolution, and or the antigen rapid test. OK, great.
We will press release trends Glenn.
Primary resolution and are the antigen rapid test.
Okay, Great and then last question.
Any update on the timing of the IFA instrument the scope smart.
Speaker 5: Any update on the timing of the IFA instrument, the scope?
Not really I think what we are doing with that Paul is we're talking to a number of potential partners.
Speaker 3: Not really. I think what we are doing with that, Paul, is we're talking to a number of potential partners that we can link with in terms of scaling up the manufacture for that. So there are other parties in the industry that we believe can use that technology.
We can link with in terms of scaling up the manufacturer for Nash. So there are other parties in the industry that we believe can use that technology.
And if we can increase the level of.
Speaker 3: And if we can increase the level of, you know, the manufacturing runs in terms of the instrument, we can significantly reduce down the price point at which we can sell that instrument. And that should allow for a much greater level.
The manufacturing runs in terms of the instrument, we can significantly reduce down the price point at which we can send that instrument.
And that should allow for a much greater level of adoption.
So rather than launch a very.
Speaker 3: So rather than launch a very, you know, at a higher price point.
At a higher price points, we're looking as I said Parker.
Speaker 3: We're looking, as I said, to partner with one of the other industry players and use that basically as a technology platform.
The other industry players and use that basically is a technology platform.
And that more than more than just Trinity can use and that should allow us to.
Speaker 3: that more than just Trinity can use and that should allow us to have a much larger scale of sale of instruments but also a lower price point in terms of getting into more labs and making it more cost effective for a number of different settings. It's more of a strategic play at this stage.
A much larger scale of sale of instruments, but also.
A lower price point in terms of getting into more labs, and making it more cost effective for a number of different settings.
More of a strategic play a distinction.
Alright, thank you.
Again, if you have a question I'm sorry, again, if you have a question. Please press Star then one.
Speaker 1: Again, if you have a question, please press star, then 1. Our next question comes from Jim Sudutti from Sudutti and Company. Please go ahead.
Our next question comes from Jim Suva duty from Sidoti and company. Please go ahead.
Hi, Good afternoon can you hear me.
Yes, Hi, Jim Hi, Jim.
Alright, so I just wanted to follow up some questions on the antigen test.
Speaker 7: Right. So I just wanted to follow up some questions on the antigen test. Just, you know, first of all, where do you anticipate that test being used? Do you think that's a test for in the home or, you know, at airports or doctor's offices? You know, what do you think the market for that will be?
Just first of all where do you anticipate that tests being use do you think that's it.
Tests for in the Homer.
Airports are.
Dr Ros doctors' offices what.
What do you think the market pick out a booth.
Well, firstly, firstly it would be approved for both home use and for professional use.
Speaker 4: Firstly, it will be approved for both home use and for professional use, so it can be used in either scenario, so the kind of things it can be used in is airports, in the home, so for example all the supermarkets in Ireland are mobile selling the test.
It can be used in either scenario.
And so the kinds of things it'll be that can be used in the airports.
<unk>.
And.
So for example, all the supermarkets in Irons is mobile deciding the test.
As an example, and adviser to a wedding on Saturday and everybody's been asked to do a <unk> test before they go to the wedding for example, I'm sure we're seeing that kind of hanging around the world.
Speaker 4: As an example, I'm invited to a wedding on Saturday and everybody's been asked to do a natural test before they go to the wedding, for example, and I'm sure we're seeing that kind of thing a lot around the world. So I mean, you know, most homes now have antigen tests, you know, basically.
So I mean.
Most homes now have antigen tests basically yeah.
And in the kitchen basically at the being used so often so I was hoping somebody is going to be with us I think in the long term and we have made positioning service both the professional and the whole market either one.
Speaker 4: in the kitchen, basically, if they're being used so often. So it's something that's going to be with us, I think, in the longer term. And we will be in a position to service both the professional and the home market, either one.
Sometimes and then for example, you know for traveling obviously people are traveling around Europe in most instances now where in many instances.
Speaker 4: sometimes. And then, for example, you know, for traveling, obviously, people have been traveling around Europe and most instances now, within many instances, you're being asked to, you know, either do an action test 48 hours before.
As to either do imagine tests 48 hours before before departure or a PCR test for 72 hours of people tend to pick Johnson Paas is cheaper.
Speaker 4: before departure or a PCR test for 72 hours. People tend to pick the oxygen test, it's cheaper.
The only the only take one swab is supposed to too.
Speaker 4: And you only, you know, you only take one swab as opposed to two.
So that's it's just uncomfortable.
Speaker 4: So it's less uncomfortable and so it's really becoming a feature. I know that in banks, you know, a lot of banks and employers now are testing their employees three times a week.
And so it's really becoming a feature I know that in banks, you know a lot of banks in our testing there in place three times a week. So we think that the test has got huge potential and we're confident of getting into the market immediately upon approval.
Speaker 4: So we think that the test has got huge potential and we're confident of getting into the market immediately upon approval. And so really at this time, I mean, I think the CE mark, I mean, the CE mark is in effect is a form of self-regulation it's automatic. So the real challenge for us now over the next number of months is in terms of ramping up our production capability and that's what we're fully concentrated on at this moment.
And so really at this time.
The CE Mark the CE Mark.
And the fact that there is a.
If all of that.
That said, it's a form of self regulation.
It's automatic so the real real challenge for US now are in X number of months is is in terms of ramping up our production capability and Thats. What we are fully concentrated on at this moment.
The test is ready.
And what does a patient need to use the test is that a nasal swab or is it a saliva test.
Speaker 7: And what does a patient need to to use the test? Is it a nasal swab or is it a saliva?
You know swab fabia.
Speaker 4: you know swab, swab yeah so to say a dental swab the one you use basically when you get a PCR test the only thing is you know you basically only go you only go to one nostril you don't you know the PCR you're going to either one or both nostrils you're going to go one nostril and then once in the throat whereas in the the ant test
I'd like to swap GBP, one you use basically and when you get a PCR test.
The only thing as you know.
You may feel when you go and you only got two one in Australia.
The pizza, you're always going to either one or both nostril sequences, one nostril and then once in the church, whereas in the with the acid test just loved it.
Alright, and then.
Assuming you get this test approved.
Speaker 7: All right, and then assuming you get this test approved in early 2022 and you get the trim screen approved, you know, around the same time, you know, when you look at the ongoing business, you know, what are you thinking about for your R&D and SG&A expenses? Will those start to come down once development of these tests is finally complete? Yeah.
In early 2022.
You get the train screen improved you know around the same time when you look at the ongoing business. What are you thinking about for your R&D and SG&A expenses.
Those start to come down once development of these tests is finally complete.
Yeah, so I suppose that.
That's the benefit.
I suppose in terms of both of these near term projects come into fruition right you get a double benefit in terms of your cash flow. So obviously, Jim wed expect as Ronan suggested significant revenues from both of these products right. They're high volume there in our sweet spot of lateral flow we have the equipment, we have the manufacturing.
Speaker 3: I suppose in terms of both of these near-term projects coming to fruition, you get a double benefit in terms of your cash flow. So obviously, Jim, we'd expect, as Ronan suggested, significant revenues from both of these products. They're a high volume, they're in our sweet spot of lateral flow, we have the equipment, we have the manufacturing facility, so there's not a significant cash burn in order for us to get up to significant cash burn.
<unk> facility.
So there's it there's not a significant cash burn in order for us to get up to significant volumes of oil production.
Am which is very important obviously.
Speaker 3: and which is very important obviously and then yeah the other side is you reduce down your investments in R&D because you've done the work.
And then the other side as you reduce down your investments in R&D.
Cause you've done the work I'm one of the benefits of these lateral flow type taxes.
Speaker 3: And one of the benefits of these lateral flow type tests is they typically don't take a huge amount of ongoing R&D to keep them up to date, so therefore, you know, it provides a good, solid, long-term investment.
If they don't take a huge amount of ongoing R&D to keep them up to date.
So therefore.
It provides a good solid long term investment, especially for a company like Trinity does he making lateral flow test for many many years and we know how to do it we know how to do it well.
Speaker 3: especially for a company like Trinity, who's been making lateral floor cuts for many, many years. And we know how to do it, and we know how to do it well.
And then can you just give us a little more color on.
Speaker 7: Then, can you give us a little more power on where you are with the VTM, the COVID supply business? I mean, I understand that it was down pretty considerably in the September quarter as customers started to burn through some of the inventory out in the field, but with Omicron, with the resurgence of COVID, are you seeing demand for those materials picking up?
You know where you are with the Davita.
The V T M.
No.
Covid supply business.
I understand that it was down pretty considerably in the September quarter as customers started to burn through some of the inventory out in the field, but.
With omicron with the resurgence of Covid are you seeing.
Demand for for those materials picking up.
Yes, we are absolutely not to the same extent as we saw this time last year. It is becoming somewhat apparent that this is a somewhat of a seasonal and a seasonal disease.
Speaker 3: Yes we are, absolutely. Not to the same extent as we saw this time last year. It is becoming somewhat apparent that this is somewhat of a seasonal disease. Obviously the variants are changing that somewhat.
The variance or changing that so much.
We are seeing increased demand.
Speaker 3: We are seeing increased demand, as I mentioned previously, pricing is not as strong as it was because there is more supply into the market, however, we still think that there is a place for us within that market, a decent opportunity for us going forward and as Ronan had mentioned.
As I mentioned in my as I've mentioned previously pricing is not as strong as it was because there is more supply into the market.
However, we still think that there is a place for us within that market.
Decent opportunity for us going forward.
And as Roni mentioned, we retained the capability to ramp up production, even further if demand warrants. It. So it's something that we're keeping very very close eye on.
Speaker 3: We retain the capability to ramp up production even further if demand so warrants it. So it's something that we're keeping a very, very close eye on and do expect it to be a feature of the business for quite some time.
And do you expect it to be a feature of the business for quite some time.
So so is it reasonable for us to assume that you know revenue from Covid related products will fall somewhere between the $3 million you did in September and the $13 million or so you did in September of 2020.
Speaker 7: So is it reasonable for us to assume that revenue from the COVID-related products will fall somewhere between the $3 million you did in September and the $13 million or so you did in September of 2020?
Yeah Yeah.
I think I think I think that's fair I think it's probably more towards the probably more towards what we did in quarter three rather than closer to what we in quarter three 2021, rather than quarter three 2020.
Speaker 3: Yeah, I think I think I think that's fair. I think it's probably more towards the probably more towards what we did in quarter three rather than closer to what we did in quarter three. 2021 rather than quarter three. Twenty twenty. Just given that pricing and like quarter three. Twenty twenty was really exceptional in terms of that product.
Given that pricing in quarter, three 2020 was really exception right in terms of that product.
So not as high but then look at.
Speaker 3: So not as high, but then look at the pandemic is changing, you know, on a weekly basis, we're seeing the market change very, very quickly, but, you know, traction over the last little while has all been towards more demand.
The pandemic is changing on a weekly basis, we're seeing the market change very very quickly.
Traction over the last little while ago has been towards more demand.
And and slightly better pricing right. So we'd expect that to continue.
Speaker 3: and slightly better pricing, right? So we'd expect that to continue.
Our role is to make sure that we're ready and have it ready and willing and able.
Speaker 3: Our role is to make sure that we're ready and willing and able to execute on that opportunity as it arises.
To execute on that opportunity as it arises.
We've kept the manufacturing.
All of the manufacturing equipment that we had when we were at Max capacity, we had to use.
Speaker 3: of all the manufacturing equipment that we had when we were at max capacity, we had used a significant amount of temporary labour for that peak production capacity and we've maintained relationships with those providers. So really within this part we think the key focus is just making sure that we have optionality with regards to being able to ramp up production and capture the market as it improves.
A significant amount of temporary labor for peak production capacity and we've maintained relationships with those providers. So really within this product. We think the key focus is just making sure that we have optionality with their guidance to being able to ramp up production.
Capture the markets as it improves.
And is that the thinking that went into the decision to two two.
Speaker 7: Is that the thinking that went into the decision to refinance with the term loan?
To refinance with a term loan or are you assuming that.
The VPN business is kind of stable you start to add revenue from.
Speaker 7: The VTM business is kind of stable, you start to add revenue from the antigen test, from trend screen, and then you see the R&D and SG&A expense start to come down a little, so you're thinking you have enough operating income to service the debt, or service the interest, because obviously the interest will be substantial, it'll be on the order of $10 million annual.
The antigen test from touring the screen.
And then you see the R&D and SG&A expense start to come down a little so you're thinking you have enough operating income to service the debt servicing interest group.
So the interest will be substantial it'll be on the order of $10 million annually. So do you think.
The additional revenue combined with the lower expense will be enough to service that interest.
Speaker 7: So do you think the additional revenue combined with that lower expense will be enough to service that interest?
Yes, Jim.
Actually our interest.
Speaker 4: Yeah, I mean, Jim, obviously, our interest, at the consequence of what we're just doing here is increasing from 4 million per annum up to 10 million per annum, approximately. And, I mean, I think we're confident of
As a consequence of what we're doing here is increasing from $4 million.
Round them up to $10 million per annum.
Approximately.
<unk>.
I mean, I think we're confident of joined the Covid during the whole Covid Trinity as a company has slimmed down significantly.
Speaker 4: I mean, during the COVID, during the whole COVID, Trinity as a company has slimmed down significantly and I think continues to do so. In addition to that, we've two very big catalysts for growth in the antigen test and in trim screen.
But then you should do so in addition to that we've two very big catalyst for girls in the antigen test have been trimmed screen.
Right.
And I think that one of them as John mentioned one of the advantages.
Speaker 4: And I think that, as John mentioned, one of the advantages of this particular instrument is that we can pay it back at any time we wish. So to the extent that we generate excess cash flows or to the extent, for example, that we had a stronger share price, we could choose at any moment to basically rebalance our balance sheet and eliminate some of this debt.
This particular instrument is that we can pay it back at any time, we wish so to the extent that we generate excess cash flows or to the extent for example that we had a stronger share price we could choose at any moment to basically rebalance our balance sheet and eliminate some of those tests.
The penalty by the way you just did.
Speaker 4: and the penalty by the way just to just to share it with you is in year one is ten percent, in year two nine, year three is eight and year four is seven percent.
To share with you is in your one is 10% near to nine three its age and year four and 7%.
So it basically.
Speaker 4: So, basically, we have a lot of optionality there in terms of dealing with the structure of our balance sheet, which it's fairly obvious to say that it's a bit imbalanced in terms of debt at the moment, but so we will have the opportunity from either excess cash flows or indeed from choosing to take advantage of a strong share price to correct that imbalance and to reduce our debt.
We have a lot of optionality there in terms of dealing with the structure of our balance sheet, which is.
And fairly obvious to say that you know what.
It's a bit in balance in terms of paas at the moment.
But so we have we will have the opportunity to meet their excess cash flows are indeed from choosing to take advantage of a strong share price of actually basically two to correct that imbalance and to reduce our debt. We just take maybe this opportunity just mentioned in general terms that we had and we had another alternative I suppose in terms of how.
Speaker 4: We'll just take maybe this opportunity just to mention in general terms that we had another alternative, I suppose, in terms of how we would have dealt with this, and that was to do an amend and extend. So what we could have done is we might have done was if we had reached a final agreement with the bondholders, we could have basically.
We would have dealt with this and that had to do an amend and extend what we could've done as we might have done with it.
If we had reached a final agreement with the bondholders, we could've basically.
I've done an amend and extend so we probably would've paid at an interest rate of six or 7% or something like that.
Speaker 4: done an amended extent so we probably would have paid it an interest rate of six or seven percent or something like that and got you know a three-year extension but the point is that the conversion price would have been around today's price there would have been one day it was one dollar fifty
Got a three year extension, but the point is that the conversion price would it be in around today's price. So it would've been one <unk> was $1 50.
Of course that would have given rise to issuance of maybe 60 million shares which in essence, what it gives them the bondholders, 75% of the company right. So I mean, we retired.
Speaker 4: and of course that would have given rise to issuance of maybe 60 million shares, which in essence would have given the bondholders 75% of the company, right? So, I mean, we regard what the deal we have done as an excellent deal that basically avoids any significant dilution of the shareholders, so put it in context.
We have done is an excellent team that basically avoids any significant dilution of the shareholders. So put it in context.
The $8 million worth of equity that we're showing to the bondholders because what I've said I think $5 3 million shares.
Speaker 4: the the eight million dollars worth of equity that we're issuing through the bondholders because i think five point three million shares
And in addition to that then you've got $2 5 million pairs.
Speaker 4: And in addition to that, then you've got 2.5 million shares, which is the warrants, which you remember aren't free shares. We do get paid money for them.
Which is the March 18, which remember it aren't free shares we do get paid money for them.
So the total dilution there is.
Speaker 4: And so the total valuation there is 7.8 million shares, which is 35, 38% something.
It's $7 8 million shares which is.
35, 38% so they sell at so very different.
Speaker 4: So very different than the 16 million shares that you would have otherwise issued. So it's just an entirely different scenario, and I think a much preferable one from the point of view of shareholders.
60 million shares that you would otherwise issue. So it's just an entirely different scenario and I think a much preferable one from the point of view shareholders. So they said.
That's a very good days work.
Speaker 4: So we regard this as a very good day's work.
Understood Alright, thanks for taking the questions.
Speaker 7: Understood. All right. Thank you for taking the question.
Thanks, Jim. Thanks, So much I don't think we have any more more questions nobody else. There. So so have you taken the opportunity of saying. Thank you very much. Thank you for your support and look forward to speaking to you in the new year.
Speaker 4: Thanks, Jim. Thanks so much. I don't think we've any more more questions. Nobody else there. So so if you take this opportunity of saying thank you very much. Thank you for your support. I look forward to speaking to you in the new year.
Good afternoon.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
[music].
Speaker 8: ??? ??? ??? ???
Okay.
Okay.
[music].
Speaker 8: Good-bye.