This comes on the back of total income declining by 84.4% y-o-y to US$2.5 million from US$16.1 million a year ago, due mainly to a US$2.5 million loss from change in fair value of investments in portfolio companies, compared to a gain of US$9.2 million the same period a year ago.

The group attributed this to the US$7.9 million write-off of the group’s portfolio company Stimatix G.I. and adjustment of the contingent consideration fair value of the ApiFix exit.

In FY2022, there was an increase of US$13.6 million in the fair value of the group’s various portfolio companies, based on factors such as the favourable terms on which each portfolio company completed its fundraising exercises and each portfolio company’s commercial or technological progress.

In general, favourable terms for fund raising exercises/exits and higher commercial or technological progress would lead to higher fair values.

<a href="https://www.theedgesingapore.com/news/company-news/trendlines-urges-investors-focus-long-term-growth-not-lumpy-earnings">In a previous interview with The Edge Singapore</a>, chair and CEO of Trendlines Todd Dollinger explained that the nature of the group’s business results in lumpy recognition of revenue and earnings. Earnings will only be recognise upon the group’s exit of investment, of which Dollinger says is usually about three time more than the initial invested capital.

See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='/capital/results/vicplas-reports-521-lower-profit-after-tax-42-mil-fy2023?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>Vicplas reports 52.1% lower profit after tax of $4.2 mil for FY2023</a>

Total expenses however have increased by 46.1% y-o-y to US$19.7 million, due to higher operating, general and administrative expenses, R&D expenses and financial expenses.

This brings FY2022 net loss to $15.0 million from a net income of $6.0 million last year.

Steve Rhodes, Chair and CEO says, “2022 was a challenging year in the public markets. Our portfolio companies continued to mature with increased funding and strategic investments and new partnerships. In November 2022, we announced a strategic shift to focus on our existing portfolio and suspend investment in new companies. This allows us to focus our energies and resources to support our portfolio companies and maximise value.”

See also: <a class='gtm_see_also_2_inread' style='text-decoration: underline;' href='/capital/results/isdn-posts-113-lower-revenue-438-lower-net-profit-1hfy2023?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>ISDN posts 11.3% lower revenue, 43.8% lower net profit for 1HFY2023</a>

Dollinger added, “In FY2022, we saw a decrease in our cash flow compared to FY2021 where we recorded a large exit. We are experiencing great traction for our portfolio companies and aiming for more and larger exits going forward. While we made six new investments in FY2022, we have, as previously announced, suspended new investment activity from 2023 to focus our efforts on our more mature companies to realise their potential.”

“Trendlines Innovation Labs brought on new leadership and entered into important strategic collaborations and partnerships during the year. We remain committed to investing in medtech and agrifood technologies in support of our mission to improve the human condition and deliver value for our shareholders,” adds Dollinger.

Shares in Trendlines closed 9.9 cents on Feb 22.

Photo: Albert Chua/ The Edge Singapore

Trendlines sinks into the red in FY2022 with a loss of US$14.5 mil

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