NEW
YORK, May 16, 2023 /PRNewswire/ -- Fresh2 Group
Limited (Formerly AnPac Bio-Medical Science Co., Ltd., "Fresh2,"
the "Company" or "we") (NASDAQ: ANPC), a company with operations in
the United States and China focused on early cancer screening and
detection and entering into the operation of a business-to-business
e-commerce food platform focused on the sale of Asian sourced food
products, announced today its unaudited financial results for the
first quarter ended March 31, 2023.
The Company's financial statements and related financial
information for the quarter ended March 31,
2023 are unaudited and have not been reviewed by the
Company's independent registered accountant. These financial
results could differ materially if they were reviewed by the
Company's independent registered accountant.
Financial Highlights for First Quarter 2023
- Total revenue was approximately RMB593,000 (US$87,000) for the first quarter of 2023, a
decrease of 69.9% from approximately RMB2.0
million for the same period of 2022.
- Gross profit margin was 25.0% for the first quarter of 2023,
representing a decrease of 30.4 percentage point from 55.4% for the
same period of 2022.
- The average selling price ("ASP") of CDA-based tests was
RMB330 (US$48.1) for the first quarter of 2023, an
increase of RMB97.0, or 41.6% from
RMB233 for the same period of
2022.
- Net loss was approximately RMB23.3
million (US$3.4 million) for
the first quarter of 2023, compared to a net loss of approximately
RMB14.9 million for the same period
of 2022, a 56.6% increase from the same period in 2022. The net
loss for the first quarter of 2023 was mainly attributable to
approximately RMB2.4 million
(US$354,000) of selling and marketing
expenses, approximately RMB1.6
million (US$228,000) of
research and development expenses and approximately RMB19.5 million (US$2.8
million) of general and administrative expenses.
- Non-GAAP net loss[1] was approximately RMB22.3 million (US$3.2
million) for the first quarter of 2023, an increase from a
non-GAAP net loss of approximately RMB12.1
million for the same period of 2022. Non-GAAP net loss was
increased by 84.2% compared with the same period of 2022
[1] Non-GAAP
net loss is defined as net loss excluding change in fair value of
convertible debts and share-based compensation. For more
information, refer to "Use of Non-GAAP Financial Measures" and
"Reconciliations of Non-GAAP Results" at the end of this
report.
|
Business Highlights First Quarter 2023
- The Company continued to receive
validation on the efficacy of CDA testing through clinical study
follow-ups. As of March 31, 2023, the
Company had contacted 31,367 individuals tested using CDA packages
in China and received substantive
feedback regarding health conditions and disease development from
18,306 individuals.
- As of March 31,
2023, the Company filed 260 patent applications globally, of
which 155 patents had been granted, including 22 patents granted in
the United States, 68 in greater
China (including eight in
Taiwan), and 65 in other countries
and regions.
- The Company continued to build a
cancer risk assessment database, which totaled approximately
286,472 samples as of March 31, 2023,
including approximately 241,541 samples from commercial CDA-based
tests and approximately 44,931 samples from research
studies.
-
As of March 31,
2023, the Company has entered a new business segment, the
operation of a business-to-business e-commerce food platform
focused on the sale of Asian sourced food products, in line with
our strategic growth plan.
During the quarter ended March 31, 2023, the Company closed three
acquisitions aimed at enhancing our operational efficiency in the
new business segment, expanding our product/service offerings, and
strengthening our competitive position in the e-commerce
industry.
Mr. Haohan Xu, the Co-CEO of the
Company, commented, "We have been actively exploring new business
opportunities to diversify our revenue stream, despite the
unfavorable macro environment for our existing biotech business.
Currently, we are striving to build a leading e-commerce platform
in the U.S. that offers online wholesale food supplies for
restaurants and supermarkets. We are committed to helping
restaurants and supermarkets reduce
procurement costs and increase efficiency by utilizing an
intelligent supply chain management system. We will allow our
customers to directly connect with reliable suppliers, ensuring
that the food purchased is consistent in quality with competitive
prices, and the source of the food can be determined. We have
opened our platform to multiple categories of suppliers, while also
providing a comprehensive supply chain service. By leveraging
digital technology and innovative business models, we intend to
drive the online transformation of the food supply industry. We
believe our growth strategy positions us well to develop a customer
base, generate a steady revenue stream, and improve our
profitability in the long run. Looking forward, we will continue to
focus on implementing our growth strategies and invest in our
business to capture the massive opportunities we see in the U.S.
market."
Financial Results for First Quarter 2023
Revenue
Total revenues decreased by 69.9% to approximately RMB593,000 (US$87,000) for the first quarter of 2023 from
approximately RMB2.0 million for the
first quarter of 2022, primarily due to a significant decrease in
our revenue from cancer screening and detection tests.
Cost of Revenues
Cost of revenues decreased by 49.3% to approximately
RMB445,000 (US$65,000) for the first quarter of 2023 from
approximately RMB878,000 for the
first quarter of 2023, which was in line with the decrease in our
revenue.
Gross Profit and Gross Margin
Gross margin was 25.0% for the first quarter of 2023,
representing a decrease from 55.4% for the first quarter of 2022,
primarily due to fixed costs which
did not change in line with the decrease in our revenue.
Selling and Marketing Expenses
Selling and marketing expenses decreased by 17.0% to
approximately RMB2.4 million
(US$354,000) for the first quarter of
2023 from approximately RMB2.9
million for the same period of 2022, primarily due to less
marketing activity.
Research and Development Expenses
Research and development expenses decreased by 34.8% to
approximately RMB1.6 million
(US$228,000) for the first quarter of
2023 from approximately RMB2.4
million for the first quarter of 2022, primarily due to less
research and development activities for the first quarter of 2023
compared to the same period of 2022.
General and Administrative Expenses
General and administrative expenses increased by 89.4% to
approximately RMB19.5 million
(US$2.8 million) for the first
quarter of 2023 from approximately RMB10.3
million for the same period of 2022, primarily due to
increase expenses related to our
new business.
Net Loss
Net loss decreased to approximately RMB23.3 million (US$3.4
million) for the first quarter of 2023, compared to
approximately RMB14.9 million for the
first quarter of 2022. Basic and diluted loss per share was
RMB0.31 (US$0.04) for the first quarter of 2023 compared to that of RMB0.85 for the first quarter of 2022.
About Fresh2 Group Limited
Fresh2 Group Limited is a biotechnology
company focused on early cancer screening and detection, with 155
issued patents as of March 31, 2023.
With two certified clinical laboratories in China and one CLIA and CAP accredited clinical
laboratory in the United States,
Fresh2 performs a suite of cancer screening and detection tests,
including CDA (Cancer Differentiation Analysis), bio-chemical,
immunological, and genomics tests. The Company is entering the
business-to-business e-commerce food business with the formation of
its wholly-owned subsidiary Fresh2 Technology Inc and the
acquisition of Fresh2 Ecommerce Inc.
For more information, please
visit: https://fresh2.co/investors.
For investor and media inquiries, please contact:
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-917-609-0333 (U.S.)
Email: tina.xiao@ascent-ir.com
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These forward-looking
statements are made under the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995 and are relating
to the Company's future financial and operating performance. The
Company has attempted to identify forward-looking statements by
terminologies including "believes," "estimates," "anticipates,"
"expects," "plans," "projects," "intends," "potential," "target,"
"aim," "predict," "outlook," "seek," "goal" "objective," "assume,"
"contemplate," "continue," "positioned," "forecast," "likely,"
"may," "could," "might," "will," "should," "approximately" or other
words that convey uncertainty of future events or outcomes to
identify these forward-looking statements. These statements are
based on current expectations, assumptions and uncertainties
involving judgments about, among other things, future economic,
competitive and market conditions and future business decisions,
all of which are difficult or impossible to predict accurately and
many of which are beyond the Company's control. These statements
also involve known and unknown risks, uncertainties and other
factors that may cause the Company's actual results to be
materially different from those expressed or implied by any
forward-looking statement. Known and unknown risks, uncertainties
and other factors include, but are not limited to, our ability to
comply with Nasdaq Listing Rules including maintain our listing on
the Nasdaq Capital Market, the implementation of our business model
and growth strategies including our operation of a
business-to-business e-commerce food platform focused on the sale
of Asian sourced food products; trends and competition in the
cancer screening and detection market; our expectations regarding
demand for and market acceptance of our cancer screening and
detection tests and our ability to expand our customer base; our
ability to obtain and maintain intellectual property protections
for our CDA technology and our continued research and development
to keep pace with technology developments; our ability to obtain
and maintain regulatory approvals from the NMPA, the FDA and the
relevant U.S. states and have our laboratories certified or
accredited by authorities including the CLIA; our future business
development, financial condition and results of operations and our
ability to obtain financing cost-effectively; potential changes of
government regulations; general economic and business conditions in
China and elsewhere; our ability
to hire and maintain key personnel; our relationship with our major
business partners and customers; and the duration of the
coronavirus outbreaks and their potential adverse impact on the
economic conditions and financial markets and our business and
financial performance, such as resulting from reduced commercial
activities due to quarantines and travel restrictions instituted by
China, the U.S. and many other
countries around the world to contain the spread of the virus. A
number of these risks along with additional discussion of
forward-looking statements, are set forth in the Company's Annual
Report on Form 20-F and other reports filed with the Securities and
Exchange Commission. In addition, there is uncertainty about the
spread of the COVID19 virus and the impact it will have on the
Company's operations, global supply chains and economic activity in
general. Because of these and other risks, uncertainties and
assumptions, undue reliance should not be placed on these
forward-looking statements. In addition, these statements speak
only as of the date of this press release and, except as may be
required by law, the Company undertakes no obligation to revise or
update publicly any forward-looking statements for any
reason.
FRESH2 GROUP
LIMITED
|
(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO.,
LTD.)
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Amounts in
thousands of Renminbi ("RMB") and
U.S. dollars ("US$"), except for number of shares and
per
share data)
|
|
|
|
As of December
31,
|
|
As of March
31,
|
|
|
2022
|
|
2023
|
|
2023
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,870
|
|
2,521
|
|
367
|
Prepayment
|
|
3,742
|
|
12,760
|
|
1,858
|
Accounts receivable,
net
|
|
2,235
|
|
3,215
|
|
468
|
Amounts due from
related parties, net
|
|
2,194
|
|
13,122
|
|
1,911
|
Inventories,
net
|
|
210
|
|
197
|
|
29
|
Other current assets,
net
|
|
3,448
|
|
6,240
|
|
909
|
Total current
assets
|
|
13,699
|
|
38,055
|
|
5,542
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
17,182
|
|
19,395
|
|
2,824
|
Land use rights,
net
|
|
1,111
|
|
1,104
|
|
161
|
Intangible assets,
net
|
|
185
|
|
68,574
|
|
9,985
|
Goodwill
|
|
—
|
|
17,299
|
|
2,519
|
Right of use
assets
|
|
7,213
|
|
7,233
|
|
1,053
|
Long-term investments,
net
|
|
1,079
|
|
1,068
|
|
156
|
TOTAL
ASSETS.
|
|
40,469
|
|
152,728
|
|
22,240
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
debts
|
|
5,015
|
|
5,015
|
|
730
|
Accounts
payable
|
|
2,108
|
|
14,569
|
|
2,122
|
Advance from
customers
|
|
4,956
|
|
5,633
|
|
820
|
Amounts due to related
parties
|
|
3,494
|
|
7,090
|
|
1,032
|
Lease
liability-current
|
|
784
|
|
795
|
|
116
|
Accrued expenses and
other current liabilities
|
|
25,921
|
|
30,793
|
|
4,484
|
Total current
liabilities
|
|
42,278
|
|
63,895
|
|
9,304
|
Deferred tax
liabilities
|
|
—
|
|
2,813
|
|
410
|
Lease
liability-non-current
|
|
6,515
|
|
6,523
|
|
950
|
Other long-term
liabilities
|
|
1,080
|
|
1,073
|
|
156
|
TOTAL
LIABILITIES.
|
|
49,873
|
|
74,304
|
|
10,820
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
(deficit):
|
|
|
|
|
|
|
Class A Ordinary shares
((US$0.01 par value per share; 2,400,000,000 shares authorized,
79,536,589 and 136,625,576 shares issued and
outstanding as of December 31, 2022 and
March 31, 2023, respectively)
|
|
5,494
|
|
8,466
|
|
1,233
|
Class B Ordinary shares
((US$0.01 par value per share; 30,000,000 authorized, 3,573,100
and 3,573,100 shares issued and outstanding as of
December 31, 2022 and March 31,
2023)
|
|
240
|
|
240
|
|
35
|
Treasury stocks
(12,492,283 shares Class A Ordinary shares)
|
|
(11,003)
|
|
—
|
|
—
|
Additional paid-in
capital
|
|
564,869
|
|
660,559
|
|
96,185
|
Accumulated
deficit
|
|
(577,539)
|
|
(600,536)
|
|
(87,445)
|
Accumulated other
comprehensive income
|
|
4,263
|
|
5,756
|
|
838
|
Total Fresh2 Group
Limited shareholders' equity (deficit)
|
|
(13,676)
|
|
74,485
|
|
10,846
|
Non-controlling
interest
|
|
4,272
|
|
3,939
|
|
574
|
Total shareholders'
equity (deficit)
|
|
(9,404)
|
|
78,424
|
|
11,420
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
40,469
|
|
152,728
|
|
22,240
|
FRESH2 GROUP
LIMITED
|
|
(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO.,
LTD.)
|
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
except for number of shares and per
share data)
|
|
|
|
|
|
Three Months Ended March
31,
|
|
|
|
2022
|
|
|
2023
|
|
|
2023
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Cancer screening and
detection tests
|
|
|
1,137
|
|
|
|
588
|
|
|
|
86
|
|
Physical checkup
packages
|
|
|
5
|
|
|
|
5
|
|
|
|
1
|
|
Technology
service
|
|
|
620
|
|
|
|
—
|
|
|
|
—
|
|
Retail
revenue
|
|
|
206
|
|
|
|
—
|
|
|
|
—
|
|
Total
revenues
|
|
|
1,968
|
|
|
|
593
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
(878)
|
|
|
|
(445)
|
|
|
|
(65)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
1,090
|
|
|
|
148
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
|
(2,932)
|
|
|
|
(2,434)
|
|
|
|
(354)
|
|
Research and
development expenses
|
|
|
(2,407)
|
|
|
|
(1,570)
|
|
|
|
(228)
|
|
General and
administrative expenses
|
|
|
(10,287)
|
|
|
|
(19,483)
|
|
|
|
(2,837)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(14,536)
|
|
|
|
(23,339)
|
|
|
|
(3,397)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income
and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(93)
|
|
|
|
(34)
|
|
|
|
(5)
|
|
Foreign exchange gain
(loss), net
|
|
|
2
|
|
|
|
(6)
|
|
|
|
(1)
|
|
Share of net loss in
equity method investments
|
|
|
(181)
|
|
|
|
(11)
|
|
|
|
(2)
|
|
Other income (expense),
net
|
|
|
(97)
|
|
|
|
12
|
|
|
|
2
|
|
Change in fair value of
convertible debt
|
|
|
(85)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(14,990)
|
|
|
|
(23,378)
|
|
|
|
(3,403)
|
|
Income tax
benefit
|
|
|
90
|
|
|
|
48
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(14,900)
|
|
|
|
(23,330)
|
|
|
|
(3,396)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to non-controlling interests
|
|
|
(261)
|
|
|
|
(333)
|
|
|
|
(48)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to ordinary shareholders
|
|
|
(14,639)
|
|
|
|
(22,997)
|
|
|
|
(3,348)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A and B Ordinary
shares - basic and diluted
|
|
|
(0.85)
|
|
|
|
(0.31)
|
|
|
|
(0.04)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in calculating basic and
diluted loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares - basic
and diluted
|
|
|
17,301,503
|
|
|
|
74,452,222
|
|
|
|
74,452,222
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of tax:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation differences
|
|
|
376
|
|
|
|
1,493
|
|
|
|
217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss
|
|
|
(14,524)
|
|
|
|
(21,837)
|
|
|
|
(3,179)
|
|
Total comprehensive
loss attributable to non-controlling interests
|
|
|
(261)
|
|
|
|
(333)
|
|
|
|
(48)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss attributable to ordinary shareholders
|
|
|
(14,263)
|
|
|
|
(21,504)
|
|
|
|
(3,131)
|
|
Use of Non-GAAP Financial Measures
Non-GAAP net loss is calculated as net income adjusted for
change in fair value of convertible debts and stock-based
compensation expense. The non-GAAP financial measures are presented
to enhance investors' overall understanding of the Company's
financial performance and should not be considered a substitute
for, or superior to, the financial information prepared and
presented in accordance with U.S. GAAP. Investors are encouraged to
review the reconciliation of the historical non-GAAP financial
measures to its most directly comparable GAAP financial measures.
As non-GAAP financial measures have material limitations as
analytical metrics and may not be calculated in the same manner by
all companies, they may not be comparable to other similarly titled
measures used by other companies. In light of the foregoing
limitations, you should not consider non-GAAP financial measures as
a substitute for, or superior to, such metrics in accordance with
US GAAP.
Reconciliations of Non-GAAP Results
Reconciliations of Non-GAAP net loss
(All amounts in thousands, except share and per share data or
otherwise stated)
|
|
Three Months Ended
March 31,
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2022
|
|
|
2023
|
|
|
2023
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
Net
loss
|
|
|
(14,900)
|
|
|
|
(23,330)
|
|
|
|
(3,396)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of
convertible debts
|
|
|
85
|
|
|
|
—
|
|
|
|
—
|
|
Stock based
compensation expense
|
|
|
2,703
|
|
|
|
1,018
|
|
|
|
148
|
|
Non-GAAP net
loss
|
|
|
(12,112)
|
|
|
|
(22,312)
|
|
|
|
(3,248)
|
|
View original
content:https://www.prnewswire.com/news-releases/fresh2-reports-first-quarter-of-fiscal-year-2023-financial-results-301826249.html
SOURCE Fresh2 Group Limited