HONG KONG, Nov. 20, 2023 (GLOBE NEWSWIRE) — Prenetics Global Limited (NASDAQ: PRE) (“Prenetics” or the “Company”), a leading genomics-driven health sciences company, today announced financial results for the third quarter ended September 30, 2023, along with recent business updates.
Third Quarter 2023 Financial Highlights
Revenue from continuing operations of US$4.9 millionAdjusted EBITDA from continuing operations of US$(6.4) millionCash and other short-term assets1 of US$105.2 million as of September 30, 2023; with an additional $79.1 million of cash with Insighta, our 50/50 joint venture in early cancer detection with Professor Dennis Lo
“During the third quarter, we made further progress on our transformation. The recent completion of the reverse stock split also addressed any uncertainty regarding our listing status. We believe there are significant opportunities with our consumer health and clinical oncology business units, and are making investments to address these significant opportunities. With the strong cash position and a strong team, we are confident in our pathway to deliver growth and value,” said Danny Yeung, Chief Executive Officer and Co-Founder of Prenetics.
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1 Represents current assets, including cash and cash equivalents totaling US$71.3 million, financial assets at fair value through profit or loss of US$13.6 million, and trade receivables of US$4.5 million, amongst other accounting line items under current assets. Insighta is accounted for using equity method and is not consolidated in the results of Prenetics.
Recent Highlights
Completion of reverse stock split at a ratio of 1-for-15 on November 14, 2023, to bring the Company into compliance with the minimum US$1.00 per share requirement for continued listing on NASDAQACT Genomics launched ACTLiquid, a 500-gene comprehensive genomic profile “liquid” biopsy testCost reduction and restructuring progressed as planned, with business units CircleDNA and ACT Genomics expected to achieve EBITDA breakeven by the end of the year, which will be the first time in company history.Insighta’s 500-participants clinical trial for early cancer detection is in progress, and is expected to have full results for publication in the first half of 2024
About Prenetics
Prenetics (NASDAQ:PRE), a leading genomics-driven health sciences company, is revolutionizing prevention, early detection, and treatment. Our prevention arm, CircleDNA, uses whole exome sequencing to offer the world’s most comprehensive consumer DNA test. Insighta, our US$200 million joint venture with renowned scientist Prof. Dennis Lo, underscores our unwavering commitment to saving lives through pioneering multi-cancer early detection technologies. Insighta plans to introduce Presight for lung and liver cancers in 2025, and to expand with Presight One for 10+ cancers in 2027. Lastly, ACT Genomics, our treatment unit, is the first Asia-based company to achieve FDA clearance for comprehensive genomic profiling of solid tumors via ACTOnco. Each of Prenetics’ units synergistically enhances our global impact on health, truly embodying our commitment to ‘enhancing life through science’. To learn more about Prenetics, please visit www.prenetics.com
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Forward-Looking Statements
This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s goals, targets, projections, outlooks, beliefs, expectations, strategy, plans, objectives of management for future operations of the Company, and growth opportunities are forward-looking statements. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of the Company, which involve inherent risks and uncertainties, therefore they should not be relied upon as being necessarily indicative of future results. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to: the Company’s ability to further develop and grow its business, including new products and services; its ability to execute on its new business strategy in genomics, precision oncology, and specifically, early detection for cancer; the results of case control studies and/or clinical trials; and its ability to identify and execute on M&A opportunities, especially in precision oncology. In addition to the foregoing factors, you should also carefully consider the other risks and uncertainties described in the “Risk Factors” section of the Company’s most recent registration statement and the prospectus therein, and the other documents filed by the Company from time to time with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.
Basis of Presentation
Unaudited Financial Information and Non-IFRS Financial Measures has been provided in the financial statements tables included at the end of this press release. An explanation of these measures is also included below under the heading “Unaudited Financial Information and Non-IFRS Financial Measures.”
Unaudited Financial Information and Non-IFRS Financial Measures
To supplement Prenetics’ consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), the Company is providing non-IFRS measures, adjusted EBITDA from continuing operations, adjusted gross profit from continuing operations and adjusted (loss)/profit attributable to equity shareholders of Prenetics. These non-IFRS financial measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-IFRS financial measures are useful to investors in evaluating the Company’s ongoing operating results and trends.
Management is excluding from some or all of its non-IFRS results (1) Employee equity-settled share-based payment expenses, (2) depreciation and amortization, (3) finance income and exchange gain or loss, net, and (4) certain items that may not be indicative of our business, results of operations, or outlook, including but not limited to non-cash and/ or non-recurring items. These non-IFRS financial measures are limited in value because they exclude certain items that may have a material impact on the reported financial results. Management accounts for this limitation by analyzing results on an IFRS basis as well as a non-IFRS basis and also by providing IFRS measures in the Company’s public disclosures.
In addition, other companies, including companies in the same industry, may not use the same non-IFRS measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-IFRS measures as comparative measures. Because of these limitations, the Company’s non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with IFRS. Investors are encouraged to review the non-IFRS reconciliations provided in the tables captioned “Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS)”, “Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS)” and “Reconciliation of (loss)/profit attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)” set forth at the end of this document.
PRENETICS GLOBAL LIMITEDUnaudited consolidated statements of financial position(Expressed in United States dollars unless otherwise indicated) September 30, June 30, December 31, 2023 2023 2022 $ $ $Assets Property, plant and equipment8,546,350 10,031,570 13,102,546Intangible assets13,674,683 14,101,566 14,785,875Goodwill33,800,276 33,800,276 33,800,276Interests in equity-accounted investees99,139,788 559,193 788,472Financial assets at fair value through profit or loss10,002,442 – -Deferred tax assets27,715 7,631 243,449Deferred expenses5,335,829 7,097,641 6,307,834Other non-current assets700,710 741,816 1,292,462Non-current assets171,227,793 66,339,693 70,320,914 Deferred expenses8,283,981 8,588,431 4,577,255Inventories3,290,184 3,768,880 4,534,072Trade receivables4,476,843 5,636,969 41,691,913Deposits, prepayments and other receivables4,145,935 5,594,273 6,889,114Amount due from a related company7,662 – -Amount due from an equity-accounted investee137,161 138,781 -Financial assets at fair value through profit or loss13,593,201 13,593,201 17,537,608Short-term deposits16,000,000 – 19,920,160Cash and cash equivalents55,251,807 177,179,297 146,660,195Current assets105,186,774 214,499,832 241,810,317Total assets276,414,567 280,839,525 312,131,231 Liabilities Deferred tax liabilities2,614,699 2,694,720 3,185,440Warrant liabilities895,400 1,822,139 3,574,885Lease liabilities3,062,803 3,255,461 3,763,230Other non-current liabilities717,461 823,082 949,701Non-current liabilities7,290,363 8,595,402 11,473,256 Trade payables3,513,463 4,226,392 7,291,133Accrued expenses and other current liabilities8,347,371 19,349,105 15,611,421Contract liabilities4,504,343 3,703,874 5,674,290Lease liabilities2,194,574 2,779,193 2,882,933Liabilities for puttable financial instrument213,230,021 13,435,228 17,138,905Tax payable8,550,228 8,534,527 8,596,433Current liabilities40,340,000 52,028,319 57,195,115Total liabilities47,630,363 60,623,721 68,668,371 Equity Share capital318,027 15,791 13,698Reserves224,417,177 215,291,050 237,050,429Total equity attributable to equity shareholders of the Company224,435,204 215,306,841 237,064,127Non-controlling interests4,349,000 4,908,963 6,398,733Total equity228,784,204 220,215,804 243,462,860Total equity and liabilities276,414,567 280,839,525 312,131,231 PRENETICS GLOBAL LIMITEDUnaudited consolidated statements of profit or loss and other comprehensive income(Expressed in United States dollars unless otherwise indicated) For the nine months ended September 30, September 30, 2023 2022 $ $ (Restated)Continuing operations Revenue16,465,841 12,586,661 Direct costs(10,230,937) (7,892,047)Gross profit6,234,904 4,694,614 Other income and other net gain/(losses)3,725,604 (744,886)Selling and distribution expenses4(6,334,964) (3,774,284)Research and development expenses4(10,158,212) (4,738,151)Restructuring costs5- (1,429,429)Administrative and other operating expenses4(33,910,726) (51,848,708)Loss from operations(40,443,394) (57,840,844)Fair value loss on financial assets at fair value through profit or loss(3,944,407) (1,674,184)Share-based payments on listing6- (89,546,601)Fair value loss on preference shares liabilities- (60,091,353)Fair value gain/(loss) on warrant liabilities2,679,485 (3,301,827)Share of loss of equity-accounted investees(170,717) – Other finance costs(151,272) (3,993,550)Loss before taxation(42,030,305) (216,448,359)Income tax credit280,037 3,355,516 Loss from continuing operations(41,750,268) (213,092,843)Discontinued operation (Loss)/profit from discontinued operation, net of tax7(5,511,375) 21,031,513 Loss for the period(47,261,643) (192,061,330) Other comprehensive income for the period Item that may be reclassified subsequently to profit or loss: Exchange difference on translation of foreign operations677,474 (7,602,604)Total comprehensive income for the period(46,584,169) (199,663,934) Loss attributable to: Equity shareholders of Prenetics(45,776,458) (192,061,275)Non-controlling interests(1,485,185) (55) (47,261,643) (192,061,330) Total comprehensive income attributable to: Equity shareholders of Prenetics(44,534,436) (199,663,879)Non-controlling interests(2,049,733) (55) (46,584,169) (199,663,934) Loss per share: Basic(0.28) (2.73)Diluted(0.28) (2.73) Loss per share – Continuing operations: Basic(0.24) (3.03)Diluted(0.24) (3.03) Weighted average number of common shares: Basic164,465,165 70,371,679 Diluted164,465,165 70,371,679 PRENETICS GLOBAL LIMITEDUnaudited consolidated statements of profit or loss and other comprehensive income(Expressed in United States dollars unless otherwise indicated) For the three months ended September 30, June 30, September 30, 2023 2023 2022 $ $ $ (Restated)Continuing operations Revenue4,865,522 5,695,579 4,295,343 Direct costs(3,241,996) (3,559,119) (2,367,460)Gross profit1,623,526 2,136,460 1,927,883 Other income and other net gain/(losses)1,096,199 1,406,281 (159,424)Selling and distribution expenses4(1,662,011) (2,171,640) (1,319,305)Research and development expenses4(3,980,620) (2,703,038) (796,688)Restructuring costs5- – (1,429,429)Administrative and other operating expenses4(10,752,382) (10,834,043) (15,240,243)Loss from operations(13,675,288) (12,165,980) (17,017,206)Fair value loss on financial assets at fair value through profit or loss- (3,944,407) (14,841)Fair value gain/(loss) on warrant liabilities926,739 492,470 (1,762,250)Share of gain/(loss) of equity-accounted investees54,567 (112,533) – Other finance costs(42,914) (51,464) (110,548)Loss before taxation(12,736,896) (15,781,914) (18,904,845)Income tax credit11,210 245,877 1,384,285 Loss from continuing operations(12,725,686) (15,536,037) (17,520,560)Discontinued operation (Loss)/profit from discontinued operation, net of tax7(1,354,767) (6,671,413) 2,622,321 Loss for the period(14,080,453) (22,207,450) (14,898,239) Other comprehensive income for the period Item that may be reclassified subsequently to profit or loss: Exchange difference on translation of foreign
operations(480,209) 1,794,185 (2,826,668)Total comprehensive income for the period(14,560,662) (20,413,265) (17,724,907) Loss attributable to: Equity shareholders of Prenetics(13,570,455) (21,807,573) (14,898,231)Non-controlling interests(509,998) (399,877) (8) (14,080,453) (22,207,450) (14,898,239) Total comprehensive income attributable to: Equity shareholders of Prenetics(14,000,699) (20,037,819) (17,724,899)Non-controlling interests(559,963) (375,446) (8) (14,560,662) (20,413,265) (17,724,907) Loss per share: Basic(0.08) (0.14) (0.21)Diluted(0.08) (0.14) (0.21) Loss per share – Continuing operations: Basic(0.07) (0.10) (0.25)Diluted(0.07) (0.10) (0.25) Weighted average number of common shares: Basic176,151,516 158,963,468 70,371,679 Diluted176,151,516 158,963,468 70,371,679 PRENETICS GLOBAL LIMITEDUnaudited Financial Information and Non-IFRS Financial Measures(Expressed in United States dollars unless otherwise indicated) Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS) For the nine months ended September 30, September 30, 2023 2022 $ $ (Restated)Loss from operations from continuing operations under IFRS(40,443,394) (57,840,844)Employee equity-settled share-based payment expenses10,632,797 22,597,827 Depreciation and amortization5,820,321 1,488,992 Other strategic financing, transactional expense and non-recurring expenses6,064,443 11,447,263 Finance income, exchange gain or loss, net(3,573,445) 967,707 Adjusted EBITDA from continuing operations (Non-IFRS)(21,499,278) (21,339,055) Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS) For the nine months ended September 30, September 30, 2023 2022 $ $ (Restated)Gross profit from continuing operations under IFRS6,234,904 4,694,614 Depreciation and amortization1,125,897 85,309 Adjusted gross profit from continuing operations (Non-IFRS)7,360,801 4,779,923 Reconciliation of loss attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS) For the nine months ended September 30, September 30, 2023 2022 $ $ Loss attributable to equity shareholders of Prenetics under IFRS(45,776,458) (192,061,275)Employee equity-settled share-based payment expenses10,632,797 28,338,511 Other strategic financing, transactional expense and non-recurring expenses11,978,883 10,941,228 Share-based payment on listing- 89,546,601 Fair value loss on preference shares liabilities- 60,091,353 Fair value (gain)/loss on warrant liabilities(2,679,485) 3,301,827 Fair value loss on financial assets at fair value through profit or loss3,944,407 1,674,184 Restructuring costs- 27,669,598 Adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)(21,899,856) 29,502,027 PRENETICS GLOBAL LIMITEDUnaudited Financial Information and Non-IFRS Financial Measures(Expressed in United States dollars unless otherwise indicated) Reconciliation of loss from operations from continuing operations under IFRS and adjusted EBITDA from continuing operations (Non-IFRS) For the three months ended September 30, June 30, September 30, 2023 2023 2022 $ $ $ (Restated)Loss from operations from continuing operations under IFRS(13,675,288) (12,165,980) (17,017,207)Employee equity-settled share-based payment
expenses4,394,952 3,296,861 4,637,222 Depreciation and amortization1,885,127 1,863,626 564,942 Other strategic financing, transactional expense and non-recurring expenses2,062,142 3,077,902 2,244,351 Finance income, exchange gain or loss, net(1,103,499) (1,323,782) 264,339 Adjusted EBITDA from continuing operations (Non-IFRS)(6,436,566) (5,251,373) (9,306,353) Reconciliation of gross profit from continuing operations under IFRS and adjusted gross profit from continuing operations (Non-IFRS) For the three months ended September 30, June 30, September 30, 2023 2023 2022 $ $ $ (Restated)Gross profit from continuing operations under IFRS1,623,526 2,136,460 1,927,883 Depreciation and amortization405,923 335,648 33,523 Adjusted gross profit from continuing operations (Non-IFRS)2,029,449 2,472,108 1,961,406 Reconciliation of loss attributable to equity shareholders of Prenetics under IFRS and adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS) For the three months ended September 30, June 30, September 30, 2023 2023 2022 $ $ $ Loss attributable to equity shareholders of Prenetics under IFRS(13,570,455) (21,807,573) (14,898,231)Employee equity-settled share-based payment expenses4,394,952 3,113,656 5,994,430 Other strategic financing, transactional expense and
non-recurring expenses2,061,178 7,678,799 391,354 Fair value (gain)/loss on warrant liabilities(926,739) (492,470) 1,762,250 Fair value loss on financial assets at fair value through profit or loss- 3,944,407 14,841 Restructuring costs- – 27,669,598 Adjusted (loss)/profit attributable to equity shareholders of Prenetics (Non-IFRS)(8,041,064) (7,563,181) 20,934,242
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2 In connection with the acquisition of ACT Genomics, the remaining shareholders of ACT Genomics – representing 25.61% of the fully diluted shareholding of ACT Genomics that Prenetics does not own – were granted put options which allow these remaining shareholders to put their remaining shares to Prenetics under certain conditions. The liabilities arising from such put option are recorded as liabilities for puttable financial instrument, and are valued at the present value of the exercise price of the put option.
3 Represents number of authorized and issued shares as follows:
September 30, June 30, December 31, 2023 2023 2022 Number of authorized shares of $0.0001 each500,000,000 500,000,000 500,000,000 Number of issued shares180,271,908 157,905,434 136,983,110
4 Includes equity-settled share-based payment expenses (excluding share-based payment on listing) from continuing operations as follows:
For the nine months ended September 30, September 30, 2023 2022 $ $ (Restated)Selling and distribution expenses100,561 79,653Research and development expenses2,891,754 1,658,775Administrative and other operating expenses7,576,865 20,657,876Total equity-settled share-based payment expenses (excluding share-based
payment on listing)10,569,180 22,396,304 For the three months ended September 30, June 30, September 30, 2023 2023 2022 $ $ $ (Restated)Selling and distribution expenses(3,307) 58,613 48,229Research and development expenses1,530,858 874,389 412,928Administrative and other operating expenses2,845,319 2,340,502 4,168,498Total equity-settled share-based payment expenses
(excluding share-based payment on listing)4,372,870 3,273,504 4,629,655
5 Includes restructuring costs from continuing operations as follows:
For the nine months ended September 30, September 30, 2023 2022 $ $ (Restated)Impairment of intangible assets- 725,895Impairment of goodwill- 703,534Total restructuring costs from continuing operations- 1,429,429 For the three months ended September 30, June 30, September 30, 2023 2023 2022 $ $ $ (Restated)Impairment of intangible assets- – 725,895Impairment of goodwill- – 703,534Total restructuring costs from continuing operations- – 1,429,429
6 The acquisition of the net assets of Artisan Acquisition Corp. (“Artisan”) on May 18, 2022 does not meet the definition of a business under IFRS and has therefore been accounted for as a share-based payment. The excess of fair value of Prenetics shares issued over the fair value of Artisan’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.
7 We ceased our COVID-19 testing business entirely in 2023 Q2. As a result, COVID-19 testing business is reported as a discontinued operation under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. In accordance with IFRS 5, the results of the discontinued operation have been presented separately from the continuing operations in the consolidated statements of profit or loss and other comprehensive income. The comparative information in the consolidated statements of profit or loss and other comprehensive income has also been re-presented to show the results of discontinued operation separately.
