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 annual financial results for the year
ended December 31, 2022.
Financial Highlights for Fiscal Year 2022
- Total revenues were RMB12.0
million (US$1.7 million) in
the year ended December 31, 2022, a
decrease of 33.0% from RMB18.0
million in the year ended December
31, 2021.
- Gross margin was 69.2% in the year ended December 31, 2022, an increase of 1.1 percentage
point from 68.1% in the year ended December
31, 2021.
- The average selling price ("ASP") of CDA-based tests was
RMB266 (US$39) in the year ended December 31, 2022, a decrease of RMB121, or 31.3% from RMB387 in the year ended December 31, 2021, primarily due to that more
customers only performed basic CDA test with lower pricing instead
of comprehensive combined CDA test.
- Net loss decreased to RMB103.6
million (US$15.0 million) in
the year ended December 31, 2022 from
RMB120.1 million in the year ended
December 31, 2021, mainly
attributable to the decrease of
approximately RMB9.3 million in
selling and marketing expenses, the
decrease of approximately RMB6.7
million in research and development expenses, and the decrease of approximately RMB9.9 million in general and administrative
expenses, offset by approximately $14.7
million decrease in impairment of intangible assets and
goodwill.
- Non-GAAP net loss(1) was approximately
RMB88.8 million (US$12.9 million) in the year ended December 31, 2022, an increase from a non-GAAP
net loss of approximately RMB76.8
million in the year ended December
31, 2021. Non-GAAP net loss increased by 15.6% from the year
ended December 31, 2021.
- Short-term debt decreased significantly (a decrease of
approximately 85.1%) compared to December
31, 2021, because the conversion
of Convertible Debentures into
ordinary shares.
(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 Fiscal Year 2022
- The Company continued to receive validation on the efficacy of
CDA testing through clinical study follow-ups. As of December 31, 2022, the Company had contacted
30,526 individuals tested using CDA packages in China and received substantive feedback
regarding health conditions and disease development from 17,824
individuals.
- As of December 31, 2022, the
Company filed 260 patent applications globally, among 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 280,095 samples as of
December 31, 2022, including
approximately 239759 samples from commercial CDA-based tests and
approximately 44,653 samples from research studies.
Mr. Haohan Xu, the Co-CEO of the
Company, commented "Despite facing tremendous challenges in the
market, we have made progress in several areas during the year
ended December 31, 2022. For
instance, we achieved an increase in our gross margin, reflecting
our focus on cost management and operational efficiency. While
acknowledging the challenges in our existing biotech business, we
have been actively exploring new business opportunities targeting restaurants and supermarkets, as
mentioned in our recent press releases. Specifically, we acquired
Fresh2 Ecommerce Inc, a business-to-business e-commerce platform
focused on connecting Asian food suppliers and supermarkets in the
U.S. to enter into the U.S. food market by initiating and
developing a new e-commerce platform. We also acquired certain
fixed assets of Easy Hundred Inc., a U.S.-based e-commerce company
in the foodservice industry, and its intellectual property to
optimize our industry supply chain and supplement the acquired
Fresh2 Ecommerce Inc.'s business-to-business e-commerce platform.
In addition, we acquired GISN (HK) LIMITED, a technical solution
and outsourcing consulting services provider focused on the
digital, internet and Web 3 business transformation for start-ups
and traditional enterprises to improve the efficiency of our
e-commerce operations. We believe that these acquisitions
will diversify our revenue streams, help to fill financial gaps,
drive growth for the Company, and ultimately create long term value
for our shareholders."
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; 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.)
|
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,
|
|
|
2021
|
|
2022
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
9,251
|
|
1,870
|
|
271
|
Advances to
suppliers
|
|
4,704
|
|
3,742
|
|
543
|
Accounts receivable,
net
|
|
5,554
|
|
2,235
|
|
324
|
Amounts due from
related parties, net
|
|
200
|
|
2,194
|
|
318
|
Inventories,
net
|
|
490
|
|
210
|
|
30
|
Other current assets,
net
|
|
3,350
|
|
3,448
|
|
500
|
Total current
assets
|
|
23,549
|
|
13,699
|
|
1,986
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
20,264
|
|
17,182
|
|
2,491
|
Land use rights,
net
|
|
1,138
|
|
1,111
|
|
161
|
Intangible assets,
net
|
|
8,857
|
|
185
|
|
27
|
Goodwill
|
|
12,758
|
|
—
|
|
—
|
Right of use
assets
|
|
—
|
|
7,213
|
|
1,046
|
Long-term investments,
net
|
|
923
|
|
1,079
|
|
156
|
TOTAL
ASSETS.
|
|
67,489
|
|
40,469
|
|
5,867
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
debts
|
|
33,759
|
|
5,015
|
|
727
|
Accounts
payable
|
|
2,732
|
|
2,108
|
|
303
|
Advance from
customers
|
|
4,174
|
|
4,956
|
|
719
|
Amounts due to related
parties
|
|
2,471
|
|
3,494
|
|
507
|
Lease
liability-current
|
|
—
|
|
784
|
|
114
|
Accrued expenses and
other current liabilities
|
|
19,770
|
|
25,921
|
|
3,758
|
Total current
liabilities
|
|
62,906
|
|
42,278
|
|
6,128
|
Deferred tax
liabilities
|
|
2,158
|
|
—
|
|
—
|
Lease
liability-non-current
|
|
—
|
|
6,515
|
|
945
|
Other long-term
liabilities
|
|
1,107
|
|
1,080
|
|
157
|
TOTAL
LIABILITIES.
|
|
66,171
|
|
49,873
|
|
7,230
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
(deficit)::
|
|
|
|
|
|
|
Class A Ordinary shares
((US$0.01 par value per share; 2,400,000,000 shares authorized,
16,604,402 and 79,536,589 shares issued and 16,604,402
and 67,044,306 outstanding as of
December 31, 2021 and 2022, respectively)
|
|
1,096
|
|
5,494
|
|
797
|
Class B Ordinary shares
((US$0.01 par value per share; 30,000,000 authorized, 2,773,100
and
3,573,100 shares issued and outstanding as of December
31, 2021 and 2022)
|
|
185
|
|
240
|
|
35
|
Treasure
stocks(1)
|
|
—
|
|
(11,003)
|
|
(1,595)
|
Additional paid-in
capital
|
|
465,334
|
|
564,869
|
|
81,898
|
Accumulated
deficit
|
|
(475,646)
|
|
(577,539)
|
|
(83,735)
|
Accumulated other
comprehensive income
|
|
4,532
|
|
4,263
|
|
618
|
Total Fresh2 Group
Limited shareholders' deficit
|
|
(4,499)
|
|
(13,676)
|
|
(1,982)
|
Non-controlling
interest
|
|
5,817
|
|
4,272
|
|
619
|
Total shareholders'
equity (deficit)
|
|
1,318
|
|
(9,404)
|
|
(1,363)
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY (DEFICIT)
|
|
67,489
|
|
40,469
|
|
5,867
|
|
|
|
|
|
|
|
(1):
12,492,283 shares Class A Ordinary shares were held as treasury
stock.
|
FRESH2 GROUP
LIMITED
|
(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO.,
LTD.)
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
(Amounts in
thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
except for number of shares and per
share data)
|
|
|
|
For the years ended
December 31,
|
|
|
|
2021
|
|
|
2022
|
|
|
2022
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancer screening and detection tests
|
|
|
14,947
|
|
|
|
8,078
|
|
|
|
1,171
|
|
Physical checkup packages
|
|
|
1,654
|
|
|
|
1,574
|
|
|
|
228
|
|
Technology service
|
|
|
1,284
|
|
|
|
2,186
|
|
|
|
317
|
|
Retail revenue
|
|
|
101
|
|
|
|
206
|
|
|
|
30
|
|
Total
revenues
|
|
|
17,986
|
|
|
|
12,044
|
|
|
|
1,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
(5,732)
|
|
|
|
(3,708)
|
|
|
|
(538)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
12,254
|
|
|
|
8,336
|
|
|
|
1,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses
|
|
|
(21,420)
|
|
|
|
(12,154)
|
|
|
|
(1,762)
|
|
Research and development expenses
|
|
|
(16,204)
|
|
|
|
(9,532)
|
|
|
|
(1,381)
|
|
General and administrative expenses
|
|
|
(80,676)
|
|
|
|
(70,788)
|
|
|
|
(10,263)
|
|
Impairment intangible assets
|
|
|
(3,828)
|
|
|
|
(7,911)
|
|
|
|
(1,147)
|
|
Impairment of goodwill
|
|
|
(2,223)
|
|
|
|
(12,758)
|
|
|
|
(1,850)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(112,097)
|
|
|
|
(104,807)
|
|
|
|
(15,195)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income
and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(4,257)
|
|
|
|
(373)
|
|
|
|
(54)
|
|
Foreign exchange loss, net
|
|
|
(202)
|
|
|
|
(787)
|
|
|
|
(114)
|
|
Share of net gain in equity method investments
|
|
|
132
|
|
|
|
156
|
|
|
|
23
|
|
Other income, net
|
|
|
990
|
|
|
|
(61)
|
|
|
|
(9)
|
|
Change in fair value of convertible debt
|
|
|
(9,073)
|
|
|
|
144
|
|
|
|
21
|
|
Gain from fair value change in equity investment
|
|
|
3,240
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(121,267)
|
|
|
|
(105,728)
|
|
|
|
(15,328)
|
|
Income tax
benefit
|
|
|
1,180
|
|
|
|
2,130
|
|
|
|
309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(120,087)
|
|
|
|
(103,598)
|
|
|
|
(15,019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to non-controlling interests
|
|
|
(1,392)
|
|
|
|
(1,705)
|
|
|
|
(247)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to ordinary shareholders
|
|
|
(118,695)
|
|
|
|
(101,893)
|
|
|
|
(14,772)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A and B
Ordinary shares – basic and diluted
|
|
|
(8.72)
|
|
|
|
(2.66)
|
|
|
|
(0.39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used in
calculating basic and
diluted loss per share
|
|
|
13,605,515
|
|
|
|
38,242,073
|
|
|
|
38,242,073
|
|
Ordinary shares - basic
and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation differences
|
|
|
(263)
|
|
|
|
(269)
|
|
|
|
(39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss
|
|
|
(120,350)
|
|
|
|
(103,867)
|
|
|
|
(15,058)
|
|
Total comprehensive
loss attributable to non-controlling interests
|
|
|
(1,392)
|
|
|
|
(1,705)
|
|
|
|
(247)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss attributable to ordinary shareholders
|
|
|
(118,958)
|
|
|
|
(102,162)
|
|
|
|
(14,811)
|
|
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)
|
|
|
|
For the years ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2022
|
|
|
2022
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
Net loss
|
|
|
(120,087)
|
|
|
|
(103,598)
|
|
|
|
(15,019)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of convertible debts
|
|
|
9,073
|
|
|
|
(144)
|
|
|
|
(21)
|
|
Stock based
compensation expense
|
|
|
34,167
|
|
|
|
14,924
|
|
|
|
2,164
|
|
Non-GAAP net loss
|
|
|
(76,847)
|
|
|
|
(88,818)
|
|
|
|
(12,876)
|
|
View original
content:https://www.prnewswire.com/news-releases/fresh2-reports-fiscal-year-2022-annual-financial-results-301826240.html
SOURCE Fresh2 Group Limited