Fresh2 Reports First Quarter of Fiscal Year 2023 Financial Results
PR Newswire
NEW YORK, May 16, 2023
NEW YORK, May 16, 2023 /PRNewswire/ -- Fresh2 Group Limited (Formerly AnPac Bio-Medical Science Co., Ltd., "Fresh2," the "Company" or "we") $(ANPC)$, 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.
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
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