Trinity Biotech plc (TRIB) Q3 2021 Earnings Report, Transcript and Summary

Good day, and welcome to the Trinity Biotech Third Quarter 2021 Financial Results Call. [Operator Instructions] Please note, this event is being recorded. I would now 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 of 2021, which ended on September 30, 2021. 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, all of which are subject to certain conditions received. Joining us on today's call is Ronan O'Caoimh, 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. 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. 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. 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 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 will be followed by Chairman and CEO, Ronan O'Caoimh, for an update on sales, marketing, and revenue. John, please proceed.

Thank you, Joe. Good morning, everyone. Thank you for joining. 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. As Joe pointed out and is our typical approach, Ronan will discuss revenues and further detail on the call. As such, I will move on to discuss other aspects of the income statement. 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 greater supply from other manufacturers. As ever, our gross margin remains susceptible to product mix changes, geographic spread, currency fluctuations and product level variation. Other operating income increased from $3,000 in Q3 2020 to $1 million in Q3 2021. This income relates to a paycheck protection program loan received by the company 2021 totaling $1 million. That was forgiven during Q3 2021 and has therefore been recognized as income this quarter. This loan was treated as a short-term liability at June 30, 2021. Subsequent to the quarter-end, the final remaining Paycheck Protection Program loan for $700,000 was also forgiven, and we expect it will be recognized as income in Q4 2021. Moving on to R&D expenditure. This decreased to $1.1 million compared to $1.3 million in Q3 2020. Meanwhile, SG&A costs have decreased from $6.3 million in Q3 2020 to $5.9 million in Q3 2021. The company continues to focus on operating efficiency and cost control and have continued to reduce headcount as it pursues greater automation and simplification of processes. 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. Moving on to financial expenses. This includes the quarterly cash interest cost for exchangeable notes of $1 million. $200,000 relates to notional finance charges associated with lease premises. 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 $31,000, which has made up of $193 million -- sorry, 193,000 fair value adjustment to the derivatives embedded in the exchangeable notes as required by the relevant accounting standards less accretion interest of $162,000 and the accounting carrying value of the exchange of notes. As you will have seen from the press release, on the 15th of December 2021, the company entered into exchange agreements with holders of over 99% of the convertible notes that provide for the early repurchase of the convertible notes, subject to a number of conditions precedent. 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. As in prior quarters, and as set out in the press release, we quote earnings per ADS, effectively our equivalent of EPS on a standard basis and also before the impacts of impairments, one-off charges, and noncash financial items. Using the basic measure, earnings per ADS have decreased from $0.35 to $0.063 in Q3 2021. I will now move on to talk about the significant balance sheet movements since June 30, 2021. 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. Moving on to inventories. These have decreased by $2.6 million and now stands at $32.1 million. 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 inventory this quarter. Meanwhile, trade and other receivables have increased by $1.5 million to $16.8 million, reflecting lower cash collections. 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 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 $500,000. Nonoperating cash inflows during the quarter included income taxes we funded of $1.1 million. Nonoperating cash outflows during the quarter included capital leases -- capital expenditures, excuse me, of $2 million payments for property leases of $0.7 million. Overall, this resulted in a cash balance of $27.5 million at the end of quarter 3 2021. 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, after extensive process, the company and certain of its subsidiaries have entered into an $81.25 million senior secured term loan credit facility with Perceptive Advisors. The company is excited to be partnering with a specialist life science investor such as Perceptive. The loan is a 4-year term and accrues an interest rate of 11.25% plus a higher of 1% or 1-month LIBOR. 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 to Perceptive. The per ADS exercise price for the warrants is equal to the lower of 1, the 10-day volume weighted average price of VWAP for the company's ADSs for the 10 business days prior to 15 December 2021, or 2, the 10-day of VWAP of the company's ADSs for the 10 business days prior to the drawdown of the funding under the loan. In addition, the company has entered into exchange agreements with 5 institutional investors that hold approximately $99.7 million of the $99.9 million in outstanding notes. While the notes have maturity of 2045, they had a number of put and call options, one of which would allow the holders to put the note to the company at par in April 2022. Under the exchange agreements, each note holder should receive $0.87 for each U.S. dollar of notes they have plus $0.08 of stock in the form of newly issued ADSs at a price of $1.4955 per ADS, which is a 13% discount to the 5-day trailing VWAP of the company's ADSs on NASDAQ on December 9, 2021. Overall, this equates to an approximate discount of 4% on the early repurchase of the notes. These transactions should help the company repaid 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. The company believes that this stability should add to investor confidence and provide a strong foundation from which the company can grow. 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 ADS warrants, the term loan has no other convertible features, thus reducing the potential dilution impact of another convertible debt instrument if loan was available. In addition, these transactions, if approved by shareholders should mean the company would have no material debt maturities for 4 years. The term loan allows the company greater optionality in choosing its capital structure going forward compared to the convertibles by allowing for partial or full early repayment, albeit at a premium. The transaction will also result in a reduction of gross debt of approximately $19 million, somewhat offsetting the additional interest rate. Based upon current prevailing rates, the annual interest cost is expected to be approximately $10 million. The company intends to primarily service the additional interest costs through cash on hand growing earnings through the near-term launch of key pipeline products, including TrinScreen HIV and our rapid COVID antigen test, thus 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. Both the term loan and exchange agreements are subject to shareholder approval with 75% approval from vote cast required for the transaction to proceed. And the company expects to hold a general meeting in December 2020 to seek for shareholder approval -- sorry, in January 2022 to seek for shareholder approval, my apologies. Thank you. I will now hand over to Ronan , who will bring you to our revenues. Ronan O?Caoimh: Thanks, John. 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%. And Point-of-Care revenues in quarter 3 were $4.1 million compared with $2.1 million in quarter 3, which is an increase of 99%. This increase is attributable to higher HIV revenues from Africa related sales. Revenues in quarter 3 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. In March 2021, we announced that we had submitted our TrinScreen HIV product to the World's 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 twofold bigger market by value and the confirmatory test market, where Trinity Biotech has for many years had a dominant market share with Uni-Gold. In late September 2021, the WHO requested additional information on the submission. And this information has been provided, allowing the assessment to be finalized. Typically, this process would take another 30 to 60 days. But because of COVID-19, the WHO review processes are taking longer. Despite 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, our reputation for excellence with Uni-Gold 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. Moving on to Clinical Laboratory. Our revenues for quarter 3 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. In quarter 3 2020, demand for our PCR Viral Transport Media product was exceptional. But as the pandemic has persisted, manufacturing capacity in the market has ramped up significantly with a consequent negative impact on demand. While the situation rate of the 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 on lower volumes. 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 our COVID-19 antigen -- rapid antigen test, which has demonstrated really impressive performance characteristics in its evaluations. We are confident of launching the products in the European market during quarter 2, having achieved European approval or CE mark. While we do expect to launch the product in the U.S.A., the regulated path for such products remains fluid, and thus we'll 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 on to our high-volume automated production line in Ireland. As the COVID-19 pandemic continues and with new variants emerging, it has now become apparent that widespread -- sorry, that despite widespread vaccine availability an antigen rapid testing will 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. And now moving back to our core business, our Clinical Laboratory business and COVID-19 products were excluded increased 5% compared -- when compared with the corresponding quarter in 2020. With our -- within our haemoglobin 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 replacement levels. 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, haemoglobin 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. Meanwhile, our autoimmune business generated revenues approximately 8% lower than in the pre-pandemic environment with reference laboratory testing volumes down approximately 10% and product revenues marginally down. We believe this is also entirely due to the pandemic as many patients deferred doctor visits unless absolutely necessary. And we are confident these revenues will fully recover post pandemic. And I now open the call to our question-and-answer session and pass it back to Jason.

[Operator Instructions] Our first question comes from Paul Nouri from Noble Equity.

As it relates to the refinancing, can you talk about the financial covenants on the new loan? I saw that there's a minimum cash balance required and revenue requirements. But is there anything other than that?

So they are the main financial covenants. There's operational covenants in terms of would there be standards within those types of loan agreements. But yes, it's basically the trailing revenue covenants a minimum cash covenant, Paul.

And what's the process if you fall below the required amount of revenue?

So there is a net interest rate of 3%, default interest rate. And then it would be a default -- technical default under the loan and as will be the case, I suppose, with other loan agreements, and 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.

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?

We certainly would -- 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 last shareholder vote in terms of how close it was or not and what your plan is over the next, I guess, 30 days or so to get enough votes to get this passed? Ronan O?Caoimh: Paul, Ronan here. Yes. So what happened in the last call was that -- at the AGM was that we actually had a particular resolution that requires one resolution, which was a resolution which under Irish Companies Act, which would is not kind of a condition for U.S. shareholders -- U.S. -- that's basically present for U.S. shareholders in -- under U.S. rules. But basically under Irish rules, the shareholders have to vote once every 5 years to basically allow preemption to be bypassed. So basically, you need to get consent from your shareholders in 75% -- by 75% resolution to bypass preemption rights. And what actually happened in this instance was that we have 2 quant funds who are making impossible to speak to quant funds who just basically -- who basically votes in the base of ISS recommendation or Glassdoor, and ISS actually recommended a vote against it. I think we really without necessarily understanding it and as a consequence, we didn't get 75%. We were like in the 60s or something like that. 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 vote against this would be a little bit like a turkey voting for Thanksgiving or Christmas, right? Doesn't make a lot of sense. Having said that, we basically are talking with ISS. And are also endeavoring to talk to confounders actually quite difficult to do. But I think the other thing that happened on the last situation was that the vote was very low. So only had literally 30% of shareholders voting and therefore, that kind of magnified the importance of the quant funds position, right? So we'll work on it. And I think it's unthinkable this wouldn't carry the 75%. I mean the alternative is very unpleasant, clearly. So I just let people with the analogy of the turkey, basically get out there and vote it. It's really the only show in town. But we are absolutely confident of actually getting that support. And it is unthinkable that ISS could recommend against this. I mean, basically, it's like advising in receivers and bankruptcy Chapter 11, it's all that. It's just it's insane. So -- but we're absolutely confident of achieving it. And we work diligently at and we've already commenced that. We called a meeting before Christmas, and we should have meeting some time 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.

Okay. Great. And then turning to the business, can you tell us how much COVID revenue you had in the quarter?

This quarter, Paul, was $3 million.

Okay. And you're already selling the long-haul COVID test out of your lab, right? Ronan O?Caoimh: What do you mean by long haul?

The long-haul COVID that tests for different, I guess, immunocompromised conditions.

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... Ronan O?Caoimh: Sorry, we talked about [indiscernible] lab. Yes, we are, yes. But in most of the volume, that's something that's growing. So it's not in volume at 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 performing well for us. Ronan O?Caoimh: I mean in terms of COVID, what we have at this time is we have a Viral Transport media, which is beginning to pick up again. We mentioned that in our prepared remarks. So we're back manufacturing again. We have our antibody test, which is setting a modest enough volume. We have the long COVID test that you just referred to, which is selling a modest volume. And we have -- I think what we're really excited -- I'm sorry -- for our Fitzgerald monoclonal antibodies. And I think what we're really excited about though is the antibody test -- excuse me, the antigen test, the rapid antigen test, sorry, which is now complete. And really what we're doing is we just have to buy in various pieces of equipment to ramp up our production. So we can basically manufacture this test now in the series of millions and we are confident of having approval for that test to sell initially in Europe and very quickly thereafter in the U.S.A. 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 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 various -- with the variance that we've seen that antigen testing is going to be with us in the longer term. So yes, so we're very excited about that. I think that's one of the single most exciting things we did right now, and that doesn't in any way mean to detract from TrinScreen, which again, we said we have an approval literally imminent. Just had some -- we had some interaction with WHO even just in the last few hours, it makes us believe that very reasonably -- very quickly, imminently that would be into the market.

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 releases for? Ronan O?Caoimh: Yes. We assure you with both of those scenarios we'll have a -- so we will press release TrinScreen, Premier Resolution and/or the antigen rapid test.

Okay. Great. And then last question. Any update on the timing of the IFA instrument, the ScopeSmart?

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 manufacturer for that. So there are other parties in the industry that we believe can use that technology. And if we can increase the level of 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 of adoption. So rather than launch a very -- at a higher price point. We're looking, as I said, to partner with one of the other industry players and use that basically as a technology platform 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.

[Operator Instructions] Our next question comes from Jim Sidoti from Sidoti & Company.

Can you hear me? Ronan O?Caoimh: Yes. Jim.

Great. So I just wanted to follow up some questions on the antigen test. Just first of all, where do you anticipate that test being used? Do you think that's a test for in the home or airports or doctors? offices? Where do you think the market for that will be?

Firstly, it will be approved from both home use and for professional use. So it can be used in either scenario. And so I mean, the kind of things that can be used in the airports and in the home. So for example, all the supermarkets in Ireland moved selling the test. As an example, I'm advisory to a weeding on Saturday, and everybody has been asked to do an antigen test before they go to the wedding, for example. I'm sure we're seeing that kind of saying a lot around the world. So I mean most homes now have antigen tests basically in the kitchen, basically they're being used so often. So it's probably something that's going to be with us. I think in the longer term, we have been positioned service both in the professional and the home market, either one. Sometimes and then, for example, for traveling, obviously, people have been traveling around Europe in most instances now, with in many instances, looking out to either do an antigen test 48 hours before departure or a PCR test 72 hours and people tend to pick the antigen test, it's cheaper. It only takes 1 swab in both the 2. So it's less uncomfortable. And so it's really becoming a feature. I know that in banks -- a lot of banks and employers are testing their employees 3 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. And so really, at this time, I mean, I think the CE Mark -- I mean, the CE Mark is in effect, there is a form of -- it's a form of self-regulation, it's automatic. So the real challenge for us now for the next several months is in terms of ramping up our production capability and that we're fully concentrated on at this moment. The test is ready.

And what does a patient need to use the test? Is it a nasal swab? Or is it a saliva test? Ronan O?Caoimh: Swab, swab, yes. So to say a dental swab, the 1 you use basically when you get a PCR test. The only thing is you basically only got -- you only got 1 nostril. You don't -- the PCR only gone to either 1 or both nostrils, you're going to 1 nostril and then 1 in the throat whereas in with the antigen test is just the 1 dip.

All right. And then assuming you get this test approved in early 2022, and you get the TrinScreen approved around the same time. When you look at the ongoing business, 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?

Yes. So that's the benefit, I suppose, in terms of both of these near-term projects coming to fruition, right? 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, right? They're 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 volumes for production, which is very important, obviously. And then, yes, the other side is you reduced down your investments in R&D because you've done the work. And one of the benefits of these lateral flow type test is it typically 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 who has been making lateral flow tests for many, many years. And we know how to do it, we know how to do it well.

And then can you give us a little more color 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?

Yes, we are absolutely but 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 variance are changing like somewhat. And we are seeing increased demand. As I mentioned in my -- 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, but a decent opportunity for us going forward. And as Ronan had mentioned, we retain the capability to ramp up production even further if demand so warranted. 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.

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 $30 million or so you did in September of 2020?

Yes. Yes, I think that's fair. I think it's probably more towards the -- probably more towards what we did in quarter 3 rather than closer to what we -- quarter 3 2021, rather than quarter 3 2020. Just given that pricing and like quarter 3 2020 was really exceptional, right? In terms of that product. So not as high. But then you look at the pandemic is changing on a weekly basis. We're seeing the market change very, very quickly. With traction over the last while has all been for more demand and slightly better pricing, right? So we'd expect that to continue. Our role is to make sure that we're ready and ready and willing and able to execute on that opportunity as it arises though we've kept the manufacturing of all the manufacturing equipment that we had when we were at maximum capacity. We had to use a significant amount of temporary labor 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.

And is that the thinking that went into the decision to refinance with the term loan? Are you assuming that the VTM business is kind of stable, you start to add revenue from the antigen test from TrinScreen and then you see the R&D and SG&A expense starts to come down a little? So are you thinking you have enough operating income to service the debt -- service the interest because obviously, the interest will be substantial, it will be on the order of $10 million annually? So do you think the additional revenue combined with that lower expense will be enough to service that interest? Ronan O?Caoimh: I mean, Jim, obviously, our interest as a consequence of what we're just doing here is increasing to $4 million per annum up to $10 million per annum approximately. And I mean, I think we're confident of -- I mean during 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 have 2 very big catalysts for growth in the antigen testing and in TrinScreen, right? And I think that one of the -- 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. The penalty, by the way, just to share it with you is, in year 1 is 10%; in year 2, 9%; year 3 is 8%; and year 4 is 7%. So basically, we have a lot of optionality there in terms of dealing the structure of our balance sheet, which I mean it's unfairly obvious to say that we're -- it's a bit imbalanced in terms of debt at the moment. So we have -- we will have the opportunity to either excess cash flows or indeed from choosing to take advantage of a strong share price of actually basically to correct that imbalance and to basically reduce our debt. 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 -- what we might have done was if we had reached a final agreement with the bondholders, we could have basically done an amending extent. So we probably would have paid an interest rate of 6% or 7% or something like that, got a 3-year extension. But the point is that the conversion price would have been around today's price. So it would have been -- today, it was $1.50. And of course, that would have given rise to issuance of maybe 16 million shares, which in essence will give 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, the $8 million worth of equity that we're issuing to the bondholders besides dividing 5.3 million shares. And in addition to saying you've got 2.5 million shares, which is the warrant basically, but you remember aren't free shares, we do get to pay the money for them. And so the total dilution there is 7.8 million shares, which is 35%, 38% something. So very different than kind of 16 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 of shareholder. So we regard this as a very good day's work.

Understood. All right. Ronan O?Caoimh: I don't think we have any more questions. Nobody else there so. So let me take this opportunity of saying, thank you very much. Thank you for your support and 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.