DUBLIN - Trinity Biotech Plc. (NASDAQ: TRIB), a developer and marketer of diagnostic systems, has announced a change in the ratio of its American depositary shares (ADSs) to Class A ordinary shares. The adjustment will alter the current ratio from one ADS representing four Class A ordinary shares to one ADS representing twenty Class A ordinary shares. This change is set to take effect at the opening of trading on the Nasdaq Global Market on February 21, 2024.
The revision in the ADS ratio is effectively a one-for-five reverse ADS split, aimed at helping the company regain compliance with Nasdaq's minimum bid price requirement of $1.00. Additionally, the company believes this change will open the doors for investment from a broader pool of potential investors. Some investors may have been previously deterred due to the ADSs trading below the $1.00 threshold.
There will be no change to Trinity Biotech's Class A ordinary shares. However, ADS holders will be required to exchange every five old ADSs for one new ADS on a mandatory basis through The Bank of New York Mellon (NYSE:BK), the depositary bank. No fractional new ADSs will be issued. Instead, fractional entitlements will be aggregated and sold, with net cash proceeds, after fees, taxes, and expenses, being distributed to the relevant ADS holders.
While the company expects the ADS price to increase proportionally following the ratio change, there is no assurance that the post-change ADS price will be equal to or greater than five times the pre-change ADS price.
Trinity Biotech's product portfolio is utilized for the detection of infectious diseases and the quantification of Haemoglobin A1c and other chemistry parameters. The company operates directly in the United States, Germany, France, and the U.K. and has a network of international distributors and strategic partners across over 75 countries.
This announcement is based on a press release statement from Trinity Biotech plc.
InvestingPro Insights
As Trinity Biotech Plc. (NASDAQ: TRIB) seeks to enhance its market position through a reverse ADS split, current and potential investors may benefit from a deeper analysis of the company's financial health and market performance. According to InvestingPro data, Trinity Biotech has a market capitalization of 26.44 million USD, which reflects the company's current value in the market. Despite challenging market conditions, the company has shown a strong return over the last month with a 16.67% increase and an even more significant return over the last three months, at 33.33%. This could indicate a growing confidence among investors in the company's potential for a turnaround.
Investors should be aware of the company's significant debt burden and the fact that analysts do not anticipate Trinity Biotech will be profitable this year. Additionally, the company is quickly burning through cash, which could impact its ability to invest in growth opportunities or weather further market downturns. However, it's noteworthy that Trinity Biotech's liquid assets exceed its short-term obligations, suggesting a degree of financial flexibility in the near term.
For those considering a deeper dive into Trinity Biotech's financial metrics and strategic outlook, InvestingPro offers additional insights. There are 9 more InvestingPro Tips available that could help investors make more informed decisions. To access these tips and benefit from comprehensive analysis tools, interested readers can visit the InvestingPro platform and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
It is also important to note that the company's recent price was 0.56 USD, with a 1 Month Price Total Return of 16.67%, which could be a reflection of market sentiment following the announcement of the ADS ratio change. The next earnings date is set for March 7, 2024, which will provide further insight into Trinity Biotech's financial performance and strategic direction.
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