Alba by Quotient: Revenues exceeded guidance; Achieved year-over year growth in Q2 FY 2022 of 15.9%Financial Position: Available cash & short-term investments of $141.8 millionBusiness Update: Communication issued on November 9, 2021; providing a progress update on development and upcoming commercialization JERSEY, Channel Islands, Nov. 15, 2021 (GLOBE NEWSWIRE) — Quotient Limited (NASDAQ:QTNT), a commercial-stage diagnostics company (Quotient or the Company), headquartered in Eysins, Switzerland, today reported its financial results for the second quarter of fiscal year 2022 and filed the quarterly report on Form 10-Q. Alba by Quotient – Revenues exceeded guidance and continued to drive double digit growth. Generated $9.2 million product sales in the second quarter, growing 15.9% over Q2 of FY 2021. Alba’s sales to OEM customers grew 18.6% versus a decline of -5.3% in the first quarter year-over-year. Financial Position: The Company reports a solid cash position with a total of cash and short-term investments of $141.8 that will allow the company to continue to develop the MosaiQ pipeline and execute on the European launch of the MosaiQ platform as soon as the Immunohematology CE mark is obtained. During the Quarter, a total payout of $11.2 million related to the Credit Suisse Supply Chain Finance funds was received. Subsequent to the end of the second quarter of FY 2022, the Company successfully amended the Senior Notes Indenture, postponing principal payments by 18 months and reducing the Company’s near-term cash obligations by approximately $60 million over the next two years. Form 10-K/A and Form 10-Q/A restatements On November 15, the Company filed an amended Form 10-K for the fiscal year ended March 31, 2021 and an amended Form 10-Q’s for the quarter ended June 30, 2021, which reflected restated financial statements in connection with the previously announced non-cash adjustment in connection to its Senior Secured Notes and related royalty rights agreements. The adjustment amounted to approximately $0.2 million in FY2019, $3.0 million in FY 2020, $3.9 million in FY 2021 and $2.4 million in the first quarter of FY 2022 in non-cash interest expenses and increase in long term liabilities. Fiscal Second Quarter Financial Results The Alba by Quotient reagent business exceeded guidance and generated product sales of $9.2 million in the second quarter of FY 2022, up 15.9% from the quarter ended September 30, 2020. OEM sales increased by 18.6% and sales to direct customers and distributors were up 11.5% vs. Q2 FY 2021. In the quarter ended September 30, 2021, gross margin on product sales was at 47.5% compared to the gross margin of 47.3% reported in the quarter ended September 30, 2020. Key revenue and profit results are summarized below (expressed in thousands, except percentages). Quarter ended Six months ended September 30, September 30, 2021 2020 2021 2020 Revenue: Product sales —OEM customers $5,969 $5,034 $11,825 $11,218 Product sales — direct customers and distributors 3,279 2,942 6,424 5,571 Product sales – MosaiQ 36 567 76 678 Other revenues 183 7,523 231 7,523 Total revenue $9,467 $16,066 $18,556 $24,990 Product sales from standing orders (%) 67% 67% 67% 68% Gross profit $4,592 $11,567 $8,904 $15,077 Gross profit as a % of total revenue 48.5% 72.0% 48.0% 60.3%Gross margin on product sales (%) 47.5% 47.3% 47.3% 43.2%Operating (loss) $(23,824) $(12,963) $(45,712) $(32,649) Total Operating expenses for the quarter increased by $3.9 million or 15.8% compared to the second quarter of the prior fiscal year. This increase is primarily driven by higher R&D spend related to the ongoing MosaiQ Field Trials. Capital expenditures totaled $0.3 million in the quarter ended September 30, 2021, compared with $1.3 million in the quarter ended September 30, 2020. Interest expense for the quarter increased by $3.1 million compared to Q2 of FY 2021. The increase in interest expense is primarily due to higher interest cost related to the convertible debt. As at September 30, 2021 Quotient had $141.8 million in cash and other short-term investments and $232 million of debt and $8.3 million in an offsetting long-term cash reserve account. Outlook for the Fiscal Year Ending March 31, 2022, remains unchanged Total product sales of Alba by Quotient reagents continue to be expected in the range of $35.5 to $36.5 million compared to product sales in FY 2021 of $34.5 million. No other revenues are expected.Capital expenditures in the range of $5 to $10 million.Average monthly cash use for operations in the range of $6.5 to $7 million (excluding debt service cost and capital expenditures) Alba by Quotient product sales in the third quarter of FY 2022 are expected to be within the range of $9.1 to $9.7 million, compared with $8.4 million for the second quarter of FY 2021. The Company is not providing guidance on the operating loss. Quarterly product sales can fluctuate depending upon the shipment cycles for red blood cell-based products, which account for approximately two-thirds of current product sales. These products typically experience 13 shipment cycles per year, equating to three shipments of each product per quarter, except for one quarter per year when four shipments occur. The timing of shipment of bulk antisera products to OEM customers may also move revenues from quarter to quarter. Some seasonality in demand is also experienced around holiday periods in both Europe and the United States. As a result of these factors, Quotient expects to continue to see seasonality and quarter-to-quarter variations in product sales. About Quotient Limited Building on over 30 years of experience in transfusion diagnostics, Quotient is a commercial-stage diagnostics company committed to delivering solutions that reshape the way diagnostics is practiced. MosaiQ, Quotient’s proprietary multiplex microarray technology, offers the world’s first fully automated, consolidated testing platform, allowing for multiple tests across different modalities. MosaiQ is designed to be a game-changing solution, which Quotient believes will increase efficiencies, improve clinical practice, deliver significant workflow improvements, and create operational cost savings to laboratories around the world. Quotient’s operations are based in Eysins, Switzerland, and Edinburgh, Scotland, and Newtown, Pennsylvania. Forward-Looking Statements This news release 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 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements regarding our expectations of continued growth, the development, regulatory approval, commercialization and impact of MosaiQ and other new products (including the potential for using the Company’s MosaiQ technology to infectious disease diagnostics), current estimates of third quarter and full year fiscal 2022 operating results and expectations regarding our future funding sources. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include delays or denials of regulatory approvals or clearances for products or applications; market acceptance of our products; the impact of competition; the impact of facility expansions and expanded product development, clinical, sales and marketing activities on operating expenses; delays or other unforeseen problems with respect to manufacturing, product development or field trial studies; adverse results in connection with any ongoing or future legal proceedings; continued or worsening adverse conditions in the general domestic and global economic markets, including as a result of the global COVID-19 pandemic; as well as the other risks set forth in the Company’s filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Quotient disclaims any obligation to update these forward-looking statements. The Quotient logo, Quotient MosaiQ and MosaiQ are registered trademarks or trademarks of Quotient Limited and its subsidiaries in various jurisdictions. CONTACT: Ali Kiboro, Chief Financial Officer – ir@quotientbd.com; +41 22 545 52 26 Quotient LimitedCondensed Consolidated Statements of Comprehensive Loss(in thousands, except share and per share amounts)(Unaudited) Quarter endedSeptember 30, Six months endedSeptember 30, 2021 2020 2021 2020 Revenue: Product sales $9,284 $8,543 $18,325 $17,467 Other revenues 183 7,523 231 7,523 Total revenue 9,467 16,066 18,556 24,990 Cost of revenue (4,875) (4,499) (9,652) (9,913)Gross profit 4,592 11,567 8,904 15,077 Operating expenses: Sales and marketing (2,640) (2,231) (5,133) (4,474)Research and development, net of government grants (15,754) (12,743) (29,285) (24,158)General and administrative expense: Compensation expense in respect of share options and management equity incentives (1,404) (1,324) (3,227) (2,284)Other general and administrative expenses (8,618) (8,232) (16,971) (16,810)Total general and administrative expense (10,022) (9,556) (20,198) (19,094)Total operating expense (28,416) (24,530) (54,616) (47,726)Operating loss (23,824) (12,963) (45,712) (32,649)Other income (expense): Interest expense, net (9,352) (6,297) (12,354) (13,228)Other, net 5,916 5,354 4,184 5,562 Other income (expense), net (3,436) (943) (8,170) (7,666)Loss before income taxes (27,260) (13,906) (53,882) (40,315)Provision for income taxes 155 151 (515) 304 Net loss $(27,105) $(13,755) $(54,397) $(40,011)Other comprehensive income (loss): Change in fair value of effective portion of foreign currency cash flow hedges $(231) $279 $(343) $276 Unrealized gain (loss) on short-term investments (72) (79) (193) (483)Foreign currency gain (loss) 1,852 (3,803) 2,010 (3,632)Provision for pension benefit obligation 14 14 29 (148)Other comprehensive income (loss), net 1,563 (3,589) 1,503 (3,987)Comprehensive loss $(25,542) $(17,344) $(52,894) $(43,998)Net loss available to ordinary shareholders – basic $(27,105) $(13,755) $(54,397) $(40,011)Net loss available to ordinary shareholders – diluted $(33,858) $(13,755) $(54,397) $(40,011)Loss per share – basic $(0.27) $(0.16) $(0.54) $(0.49)Loss per share – diluted $(0.28) $(0.16) $(0.54) $(0.49)Weighted-average shares outstanding – basic 101,567,664 83,949,195 101,479,690 82,227,052 Weighted-average shares outstanding – diluted 120,086,178 83,949,195 101,479,690 82,227,052 Quotient LimitedCondensed Consolidated Balance Sheets(In thousands)(Unaudited) September 30,2021 March 31,2021ASSETS Current assets: Cash and cash equivalents $120,978 $45,673 Short-term investments 20,792 65,999 Trade accounts receivable, net 5,000 5,323 Inventories 25,014 22,011 Prepaid expenses and other current assets 7,332 4,870 Total current assets 179,116 143,876 Restricted cash 8,302 9,024 Property and equipment, net 35,802 39,071 Operating lease right-of-use assets 20,720 22,011 Intangible assets, net 568 619 Deferred income taxes 240 255 Other non-current assets 4,845 4,956 Total assets $249,593 $219,812 LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $5,488 $4,659 Accrued compensation and benefits 6,367 12,343 Accrued expenses and other current liabilities 14,946 14,009 Current portion of long-term debt — 24,167 Current portion of operating lease liability 3,192 3,446 Current portion of finance lease obligation 661 835 Total current liabilities 30,654 59,459 Long-term debt, less current portion 231,964 145,059 Convertible loan derivatives 20,632 — Operating lease liability, less current portion 20,160 20,907 Finance lease obligation, less current portion 519 445 Deferred income taxes 1,706 1,152 Defined benefit pension plan obligation 7,286 6,896 7% Cumulative redeemable preference shares 22,000 21,475 Total liabilities 334,921 255,393 Commitments and contingencies Shareholders’ equity (deficit): Ordinary shares (nil par value) 101,591,632 and 101,264,412 issued and outstanding at September 30, 2021 and March 31, 2021 respectively 540,733 540,813 Additional paid in capital 41,343 38,116 Accumulated other comprehensive loss (13,095) (14,598)Accumulated deficit (654,309) (599,912)Total shareholders’ equity (deficit) (85,328) (35,581)Total liabilities and shareholders’ equity (deficit) $249,593 $219,812 Quotient LimitedCondensed Consolidated Statements of Cash Flows(In thousands)(Unaudited) Six months endedSeptember 30, 2021 2020 OPERATING ACTIVITIES: Net loss $(54,397) $(40,011) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation, amortization and loss on disposal of fixed assets 3,850 4,131 Share-based compensation 3,227 2,284 Increase in deferred lease rentals 347 346 Swiss pension obligation 354 516 Amortization of deferred debt issue costs and discount 2,233 4,830 Change in fair value of convertible loan derivatives (7,270) — Accrued preference share dividends 525 525 Income taxes 605 (304) Net change in assets and liabilities: Trade accounts receivable, net 252 1,093 Inventories (3,091) (1,411)Accounts payable and accrued liabilities 3,558 1,390 Accrued compensation and benefits (5,953) (2,215)Other assets (2,934) (1,807) Net cash used in operating activities (58,694) (30,633) INVESTING ACTIVITIES: Increase in short-term investments (4,500) (72,247)Realization of short-term investments 49,232 44,016 Purchase of property and equipment (1,716) (2,069) Net cash from (used in) investing activities 43,016 (30,300) FINANCING ACTIVITIES: Repayment of finance leases (341) (356)Proceeds from issuance of long-term debt 104,222 — Debt issuance costs (3,732) — Repayment of long-term debt (12,083) — (Cost of) proceeds from issuance of ordinary shares and warrants (80) 80,838 Net cash generated from financing activities 87,986 80,482 Effect of exchange rate fluctuations on cash and cash equivalents 2,275 (5,333)Change in cash and cash equivalents 74,583 14,216 Beginning cash and cash equivalents 54,697 12,940 Ending cash and cash equivalents $129,280 $27,156 Supplemental cash flow disclosures: Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $120,978 $18,125 Restricted cash $8,302 9,031 Total cash, cash equivalents and restricted cash $129,280 $27,156