SCHEDULE: Perceptive Proposes Trinity Biotech Debt-to-Equity Conversion

Perceptive entities propose converting significant debt and contingent obligations of Trinity Biotech plc into equity, aiming to reduce cash outflows for the issuer.

Summary

• Perceptive entities plan to submit a non-binding proposal to Trinity Biotech plc to convert outstanding debt and contingent obligations into the Issuer's American Depositary Shares (ADSs).
• The proposal includes converting a portion of term loans and accrued interest under the Sixth Amended and Restated Credit Agreement (dated August 7, 2025) into ADSs via convertible promissory notes.
• The conversion price for these notes would be based on the volume-weighted average price (VWAP) of ADSs at the time of conversion, with a minimum conversion price.
• Additionally, the proposal suggests allowing Credit Fund II to convert a $5,000,000 Milestone Payment Obligation from TRIB Biosensors Inc. (a Trinity subsidiary) into ADSs, also based on VWAP.
• The Contingent Partner Obligation of TRIB B, up to a cumulative maximum payment of $15,000,000, would be terminated in exchange for a $10,000,000 payment from TRIB B to Credit Fund II, which may also be satisfied through the issuance of ADSs at Credit Fund II's election, valued at VWAP.
• A registration rights agreement would be included, requiring Trinity Biotech to register the resale of any ADSs issued from these conversions.
• Perceptive believes this proposal offers an efficient way for Trinity Biotech and its subsidiaries to reduce cash obligations.
• The exercise of these conversion rights is expected to result in the issuance of a substantial number of ADSs.

Sentiment

Score: 5

Explanation: The proposal offers a path for Trinity Biotech to reduce cash obligations and deleverage, which is positive. However, it also signals significant potential dilution for existing shareholders, which is negative. The non-binding nature adds uncertainty. Overall, it's a mixed bag, leaning neutral as a proposal.

Positives

• Provides Trinity Biotech plc with an efficient method to reduce significant cash obligations, including secured debt, without requiring cash payments.
• Offers a potential pathway to deleveraging for the Issuer.
• Eliminates the Contingent Partner Obligation of up to $15,000,000 for TRIB B.

Negatives

• The conversion of debt and obligations into ADSs is expected to result in the issuance of a substantial number of new shares, leading to significant dilution for existing shareholders.
• The proposal is non-binding and may not lead to a definitive agreement.
• The conversion price is based on VWAP at the time of conversion, which could be unfavorable to existing shareholders if the stock price is low.

Risks

• Significant shareholder dilution if the proposed debt-to-equity conversions are executed, as a substantial number of ADSs are expected to be issued.
• Uncertainty regarding the final terms and whether a definitive agreement will be reached, as the proposal is non-binding.
• Potential for Perceptive entities to engage in short sales and other derivative transactions with the newly issued ADSs, which could exert downward pressure on the stock price.
• The existing warrants held by Perceptive entities have a limitation that they may not be exercised if beneficial ownership exceeds 9.99% of outstanding shares, though the debt conversion proposal could alter this dynamic.

Future Outlook

Perceptive entities intend to review their investment in Trinity Biotech plc on an ongoing basis and may take further actions depending on various factors, including the outcome of the proposed transaction, the Issuer's financial position, strategic direction, and market conditions. They do not plan further announcements until a definitive agreement is reached or required by law.

Management Comments

• The Reporting Persons believe that the Anticipated Proposal would provide an efficient method for the Issuer and its subsidiaries to reduce their obligations to Perceptive, including the secured obligations under the Sixth Amended and Restated Credit Agreement, without the need for cash.
• If the parties enter into the transactions contemplated by the Anticipated Proposal, the Reporting Persons would expect to engage in transaction with respect to ADSs issuable upon conversion of the Milestone Payment Obligation, Contingent Partner Obligation and the Outstanding Obligations into ADSs, including short sales and other derivative transactions.

Industry Context

This proposal reflects a common strategy in the biotechnology and diagnostics sectors where companies, particularly those with significant debt or contingent liabilities, may seek to restructure their balance sheets by converting debt into equity. This approach can alleviate immediate cash flow pressures but often comes at the cost of shareholder dilution, a frequent consideration for growth-stage or capital-intensive companies in the industry.

Comparison to Industry Standards

• NA

Related Party Transactions

• The proposal involves Perceptive Credit Holdings III, L.P. (a reporting person) converting its outstanding obligations under the Sixth Amended and Restated Credit Agreement with Trinity Biotech plc into ADSs.
• Perceptive Credit Holdings II, L.P. (a reporting person) would equitize a $5,000,000 Milestone Payment Obligation from TRIB B and receive a $10,000,000 payment (potentially in ADSs) for terminating a contingent obligation.
• These transactions are between the Issuer/its subsidiary and entities controlled by the Reporting Persons, who are significant beneficial owners.

Stakeholder Impact

• Shareholders: Potential for significant dilution due to the issuance of a substantial number of new ADSs upon conversion of debt and obligations.
• Creditors (Perceptive entities): Would convert a portion of their debt and contingent receivables into equity, shifting their investment risk profile from creditor to equity holder.
• Company (Trinity Biotech plc): Benefits from reduced cash obligations and a potentially stronger balance sheet by converting debt to equity.

Next Steps

• Perceptive entities plan to submit the non-binding 'Anticipated Proposal' to Trinity Biotech plc.
• If the parties agree, they would enter into definitive documentation for the proposed transactions.
• Trinity Biotech would be required to register the resale of any ADSs issued upon conversion.
• Perceptive entities will continue to review their investment and may engage in transactions with ADSs from conversion, including short sales and derivatives.

Key Dates

Keywords

Trinity Biotech, Perceptive Advisors, SEC Filing, Schedule 13D, Debt Conversion, Equity Conversion, ADSs, Warrants, Shareholder Dilution, Credit Agreement, Financial Restructuring, Biotech, Diagnostics