Full Press Release Details
Fresh2 Reports Fiscal Year 2022 Annual Financial
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
Business Highlights Fiscal Year 2022
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
For more information, please visit: https://fresh2.co/investors.
For investor and media inquiries, please contact:
Ascent Investor Relations LLC
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$0.01 par value per share; 30,000,000 authorized, 2,773,100 and 3,573,100 shares issued and outstanding as of December 31, 2021 and 2022) | 185 | 240 | 35 | |||||||||
| Treasury stock (1) | - | (11,003 | ) | (1,595 | ) | |||||||
| Additional paid-in capital | 465,334 | 564,869 | 81,898 | |||||||||
| Accumulated deficit | (475,646 | ) | (577,539 | ) | (83,735 | ) | ||||||
| Accumulated other comprehensive income | 4,532 | 4,263 | 618 | |||||||||
| Total Fresh2 Group Limited shareholders' deficit | (4,499 | ) | (13,676 | ) | (1,982 | ) | ||||||
| Non-controlling interest | 5,817 | 4,272 | 619 | |||||||||
| Total shareholders' equity (deficit) | 1,318 | (9,404 | ) | (1,363 | ) | |||||||
| TOTAL LIABILITIES AND EQUITY (DEFICIT) | 67,489 | 40,469 | 5,867 |
(1): 12,492,283 shares Class A Ordinary shares were held
FRESH2 GROUP LIMITED
(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO., LTD.)
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS
(Amounts in thousands of Renminbi ("RMB")
and U.S. dollars ("US$"), 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 | ) |