Trinity Biotech to acquire assets from Waveform for $12.5M, 9M ADSs

Trinity Biotech has entered into a definitive agreement to acquire the biosensor and Continuous Glucose Monitoring assets of privately held Waveform Technologies for $12.5 million in cash, 9 million American Depositary Shares of the Company and additional contingent consideration. Waveform, a developer of novel and proprietary new technologies for diabetes care, received a CE Mark for its Cascade CGM in 2019, which has since been commercially available in Europe. Waveform will no longer sell the Cascade device and the Company will not sell that device in its current form. The Company intends to design a next generation CGM sensor using Waveform’s platform technology and has secured additional funding from Perceptive Advisors for the next stage of the product’s development, further details of which are set out below. The Waveform CGM technology contains innovative and proprietary aspects with important user benefits that include needle-free insertion, which reduces pain and trauma at the injection site, and a reusable applicator and transmitter, which reduces the biological waste concerns associated with the currently marketed single-use disposable systems. Notably, the reusable nature of the applicator and transmitter should allow for a lower cost of production of the redesigned CGM product compared to the principal CGM market players, enabling the Company to target additional markets where the existing CGM products are financially prohibitive, which prevents broader adoption of this critical technology. Additionally, this innovative platform technology should allow the Company to develop a broader suite of wearable biosensors to measure and analyse important health and wellness information, and the Company expects to further evolve its biosensor to target other analytes and data points that represent markers of health and function and make these devices available more broadly around the globe. The CGM technology acquired from Waveform has been developed over many years and Waveform has granted a perpetual, worldwide, non-exclusive license to DexCom, Inc. and its affiliates, for some of the patents now being acquired by the Company, but to which the Company retains the right to use and exploit. To fund the acquisition, the Company has entered into an amended credit agreement with its existing main lender, Perceptive, an investment manager with healthcare expertise. Under the Amended Term Loan, an additional $22 million of funding has been made available to the Company, with $12.5 million being used to acquire the Waveform assets. The remaining $9.5 million is available for general corporate purposes including for the further development of the CGM and biosensor technologies. In addition, the Amended Term Loan provides for additional liquidity of up to $6.5 million, that may be drawn down by the Company between April and December 2024, and can be used for general corporate purposes, thereby providing further liquidity to fund the development of the CGM and biosensor technologies. The Amended Term Loan also immediately reduces the annual rate of interest on the loan by 2.5% to 8.75% plus the greater of (a) Term Secured Overnight Financing Rate or 4.0% per annum, and allows for a further 2.5% reduction in the Base Rate to 6.25% once the outstanding principal under the Amended Term Loan falls below $35 million. Additionally, the Amended Term Loan reduces the early repayment penalty from a range of 8% to 7% to 4.0% to 3.5%, dependent on timing of early repayment, and also reduces the revenue covenants. The Amended Term Loan matures in January 2026. Waveform is part of a portfolio company of Perceptive and the 9 million ADS being issued by the Company as partial consideration for the acquisition of the Waveform assets will be issued to Perceptive. In addition, in connection with the Amended Term Loan, Perceptive will receive new warrants to purchase an additional 2.5 million ADSs and the Company has agreed to price these additional warrants and reprice the existing warrants to purchase 2.5 million ADSs that were issued to Perceptive under the original term loan, with an exercise price of $0.44 per ADS. As a result of these transactions, Perceptive will be the largest investor in the Company, now with an additional significant equity investment. Additional contingent consideration of up to $20 million may be payable upon the occurrence of certain events/