PHILADELPHIA, May 31, 2022 (GLOBE NEWSWIRE) -- AnPac Bio-Medical Science Co., Ltd. ("AnPac Bio," the "Company" or "we") (NASDAQ:ANPC), a biotechnology company with operations in China and the United States, announced today its unaudited financial results for the first quarter ended March 31, 2022. The Company's financial statements and related financial information for the quarter ended March 31, 2022 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 the First Quarter 2022
(1) Non-GAAP net loss is defined as net loss excluding change in fair value of convertible debts and stock-based compensation. For more information, refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Results" at the end of this press release.
Business Highlights for the First Quarter of 2022
Dr. Chris Yu, Co-CEO and Co-Chairman of AnPac Bio commented: "We are pleased with our overall performance in the first quarter of 2022. Our financial performance was improved in a number of important areas. We have significantly reduced our net loss by 49.1% and our short debt was reduced by 66.1% in Q1 2022, compared with the same period last year. In product development and commercialization area, following successfully passing Class III medical device tests at our National Medical Product Administration (NMPA) designated testing laboratory in December 2021, we have begun developing plans for our Class III medical device clinical trials and selecting suited hospitals for the trials. While we are still experiencing negative effects of COVID-19, we intend to work very hard to make progress in a number of critical areas, including fund raising, cost cutting, product commercialization, including Class III medical device certification, and market penetration."
Key Items of Financial Results for the First Quarter of 2022
Revenues
Total revenues decreased by 9.9% to approximately RMB2.0 million (US$309,000) for the first quarter of 2022 from approximately RMB2.2 million for the first quarter of 2021, primarily due to a significant decrease in our revenue from cancer screening and detection tests.
Cost of Revenues
Cost of revenues decreased by 3.3% to approximately RMB878,000 (US$139,000) for the first quarter of 2022 from approximately RMB908,000 for the first quarter of 2021, primarily due to the decrease of approximately RMB 300,000 cost of revenue from cancer screening and detection tests, which was in line with the decrease in our revenue from sales of cancer screening and detection tests. Offset by the increased cost of revenues from technology services and retail products was approximately RMB270,000, no such cost incurred for the same period of 2021.
Gross Profit and Gross Margin
Gross margin was 55.4% for the first quarter of 2022, representing a slight decrease from 58.4% for the first quarter of 2021, primarily due to lower selling prices we charged for CDA-based tests.
Selling and Marketing Expenses
Selling and marketing expenses decreased by 24.1% to approximately RMB2.9 million (US$463,000) for the first quarter of 2022 from approximately RMB3.9 million for the same period of 2021, primarily due to less marketing activity.
Research and Development Expenses
Research and development expenses decreased by 28.3% to approximately RMB2.4 million (US$380,000) for the first quarter of 2022 from approximately RMB3.4 million for the first quarter of 2021, primarily due to less research and development activities for the first quarter of 2022 compared to the same period of 2021.
General and Administrative Expenses
General and administrative expenses decreased by 46.5% to approximately RMB10.3 million (US$1.6 million) for the first quarter of 2022 from approximately RMB19.2 million for the same period of 2021, primarily due to the decreased share-based compensation.
Change in fair value of convertible debt
The Company recognized the convertible debt at fair value. For the first quarter of 2022 and 2021, the Company recognized an aggregated unrealized loss of approximately RMB85,000 (US$13,000) and approximately RMB3.2 million, respectively, due to changes in fair value of convertible debt.
Net Loss
Net loss decreased to approximately RMB14.9 million (US$2.4 million) for the first quarter of 2022, compared to approximately RMB29.2 million for the first quarter of 2021. Basic and diluted loss per share was RMB0.85 (US$0.13) for the first quarter of 2022, compared to that of RMB2.43 for the first quarter of 2021.
The Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2022. The guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. The Company recognized right of use assets and lease liabilities of approximately $1.30 million and $1.32 million as of March 31, 2022.
Balance Sheet
As of March 31, 2022, the Company had cash and cash equivalents of approximately RMB462,000 (US$73,000), compared to approximately RMB9.3 million as of December 31, 2021.
About AnPac Bio
AnPac Bio is a biotechnology company focused on early cancer screening and detection, with 155 issued patents as of March 31, 2022. With two certified clinical laboratories in China and one CLIA and CAP accredited clinical laboratory in the United States, AnPac Bio performs a suite of cancer screening and detection tests, including CDA (Cancer Differentiation Analysis), bio-chemical, immunological, and genomics tests. According to a report by Frost & Sullivan, AnPac Bio ranked first globally in multi-cancer screening and detection test sample volume (accumulative to January 2021). AnPac Bio's CDA technology platform has been shown in retrospective validation studies to be able to detect the risk of over 20 different cancer types with high sensitivity and specificity.
For more information, please visit: https://www.Anpacbio.com.
For investor and media inquiries, please contact:
Company:
Phil Case, Marketing and Investor Relations
Phone: +1-267-810-6776 (US)
Email: phil_case@AnPacbio.com
Investor Relations:
Ascent Investor Relations LLC
Tina Xiao, President
Phone: +1-917-609-0333 (US)
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, 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. Additionally, all forward-looking statements are subject to the "Risk Factors" detailed from time to time in the Company's most recent Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission. 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.
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)
| December 31, 2021 | March 31, 2022 | March 31, 2022 | ||||||||||||||||||
| RMB | RMB | US$ | ||||||||||||||||||
| ASSETS | (Unaudited) | (Unaudited) | ||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | 9,251 | 462 | 73 | |||||||||||||||||
| Advances to suppliers | 4,704 | 7,030 | 1,109 | |||||||||||||||||
| Accounts receivable, net | 5,554 | 3,730 | 588 | |||||||||||||||||
| Amounts due from related parties, net | 200 | 843 | 133 | |||||||||||||||||
| Inventories, net | 490 | 424 | 67 | |||||||||||||||||
| Other current assets, net | 3,350 | 4,489 | 708 | |||||||||||||||||
| Total current assets | 23,549 | 16,978 | 2,678 | |||||||||||||||||
| Property and equipment, net | 20,264 | 19,656 | 3,101 | |||||||||||||||||
| Land use rights, net | 1,138 | 1,132 | 179 | |||||||||||||||||
| Intangible assets, net | 8,857 | 8,434 | 1,330 | |||||||||||||||||
| Goodwill | 12,758 | 12,758 | 2,013 | |||||||||||||||||
| Right of use assets | - | 8,269 | 1,304 | |||||||||||||||||
| Long-term investments | 923 | 742 | 117 | |||||||||||||||||
| TOTAL ASSETS. | 67,489 | 67,969 | 10,722 | |||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' DEFICIT | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Short-term debts | 33,759 | 11,452 | 1,807 | |||||||||||||||||
| Accounts payable | 2,732 | 3,717 | 586 | |||||||||||||||||
| Advance from customers | 4,174 | 4,168 | 657 | |||||||||||||||||
| Amounts due to related parties | 2,471 | 1,907 | 301 | |||||||||||||||||
| Lease liability-current | - | 975 | 154 | |||||||||||||||||
| Accrued expenses and other current liabilities | 19,770 | 21,469 | 3,387 | |||||||||||||||||
| Total current liabilities | 62,906 | 43,688 | 6,892 | |||||||||||||||||
| Deferred tax liabilities | 2,158 | 2,068 | 326 | |||||||||||||||||
| Lease liability-non-current | - | 7,379 | 1,164 | |||||||||||||||||
| Other long-term liabilities | 1,107 | 1,100 | 174 | |||||||||||||||||
| TOTAL LIABILITIES. | 66,171 | 54,235 | 8,556 | |||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Shareholders' deficit: | ||||||||||||||||||||
| Class A Ordinary shares (US$0.01 par value per share; 70,000,000 shares authorized, 16,604,402 and 23,769,917 shares issued and outstanding as of December 31, 2021 and March 31, 2022, respectively) | 1,096 | 1,551 | 245 | |||||||||||||||||
| Class B Ordinary shares (US$0.01 par value per share; 30,000,000 authorized, 2,773,100 and 2,773,100 shares issued and outstanding as of December 31, 2021 and March 31, 2022) | 185 | 185 | 29 | |||||||||||||||||
| Additional paid-in capital | 465,334 | 491,819 | 77,583 | |||||||||||||||||
| Accumulated deficit | (475,646 | ) | (490,285 | ) | (77,341 | ) | ||||||||||||||
| Accumulated other comprehensive income | 4,532 | 4,908 | 774 | |||||||||||||||||
| Total AnPac Bio-Medical Science Co., Ltd. shareholders' equity (deficit) | (4,499 | ) | 8,178 | 1,290 | ||||||||||||||||
| Non-controlling interests | 5,817 | 5,556 | 876 | |||||||||||||||||
| Total shareholders' equity | 1,318 | 13,734 | 2,166 | |||||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 67,489 | 67,969 | 10,722 | |||||||||||||||||
ANPAC BIO-MEDICAL SCIENCE CO., LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"), except for number of shares and per share data)
| Three Months Ended March 31, | ||||||||||||
| 2021 | 2022 | 2022 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenues: | ||||||||||||
| Cancer screening and detection tests | 2,182 | 1,137 | 178 | |||||||||
| Physical checkup packages | 3 | 5 | 1 | |||||||||
| Technology service | - | 620 | 98 | |||||||||
| Retail revenue | - | 206 | 32 | |||||||||
| Total revenues | 2,185 | 1,968 | 309 | |||||||||
| Cost of revenues | (908 | ) | (878 | ) | (139 | ) | ||||||
| Gross Profit | 1,277 | 1,090 | 170 | |||||||||
| Operating expenses: | ||||||||||||
| Selling and marketing expenses | (3,863 | ) | (2,932 | ) | (463 | ) | ||||||
| Research and development expenses | (3,356 | ) | (2,407 | ) | (380 | ) | ||||||
| General and administrative expenses | (19,226 | ) | (10,287 | ) | (1,623 | ) | ||||||
| Loss from operations | (25,168 | ) | (14,536 | ) | (2,296 | ) | ||||||
| Non-operating income and expenses: | ||||||||||||
| Interest expense, net | (624 | ) | (93 | ) | (15 | ) | ||||||
| Foreign exchange gain (loss), net | (139 | ) | 2 | - | ||||||||
| Share of net loss in equity method investments | (77 | ) | (181 | ) | (29 | ) | ||||||
| Other income (expense), net | (45 | ) | (97 | ) | (15 | ) | ||||||
| Change in fair value of convertible debt | (3,215 | ) | (85 | ) | (13 | ) | ||||||
| Loss before income taxes | (29,268 | ) | (14,990 | ) | (2,368 | ) | ||||||
| Income tax benefit | 22 | 90 | 14 | |||||||||
| Net loss | (29,246 | ) | (14,900 | ) | (2,354 | ) | ||||||
| Net loss attributable to non-controlling interests | (217 | ) | (261 | ) | (41 | ) | ||||||
| Net loss attributable to ordinary shareholders | (29,029 | ) | (14,639 | ) | (2,313 | ) | ||||||
| Loss per share: | ||||||||||||
| Class A and B Ordinary shares - basic and diluted | (2.43 | ) | (0.85 | ) | (0.13 | ) | ||||||
| Weighted average shares outstanding used in calculating basic and diluted loss per share | ||||||||||||
| Ordinary shares - basic and diluted | 11,958,033 | 17,301,503 | 17,301,503 | |||||||||
| Other comprehensive income, net of tax: | ||||||||||||
| Foreign currency translation differences | (1,604 | ) | 376 | 59 | ||||||||
| Total comprehensive loss | (30,850 | ) | (14,524 | ) | (2,295 | ) | ||||||
| Total comprehensive loss attributable to non-controlling interests | (217 | ) | (261 | ) | (41 | ) | ||||||
| Total comprehensive loss attributable to ordinary shareholders | (30,633 | ) | (14,263 | ) | (2,254 | ) | ||||||
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, | ||||||||||
| 2021 | 2022 | 2022 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Net loss | (29,246 | ) | (14,900 | ) | (2,354 | ) | ||||||
| Less: | ||||||||||||
| Change in fair value of convertible debts | 3,215 | 85 | 13 | |||||||||
| Stock based compensation expense | 11,080 | 2,703 | 426 | |||||||||
| Non-GAAP net loss | (14,951 | ) | (12,112 | ) | (1,915 | ) | ||||||
