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Predictive Oncology Reports Second Quarter 2022 Financial Results

·9-min read
Predictive Oncology Inc.
Predictive Oncology Inc.

EAGAN, Minn., Aug. 11, 2022 (GLOBE NEWSWIRE) -- Predictive Oncology Inc. (NASDAQ: POAI) today announced the financial results for its second quarter ended June 30, 2022, which shows a strong balance sheet with a solid cash balance, commensurate equity and no debt. Highlights from the quarter include:

  • Commercialization launch of PeDAL, our innovative AI product, and presence at BIO International that included one-on-one partnering meetings with pharmaceutical and biotech companies

  • The appointment of Julia Kirshner, Ph.D., as Chief Scientific Officer

  • The consolidation and expansion of the research and development arm in Pittsburgh with the move of TumorGenesis to that location

  • An increase of cash and equivalents from $25 million on March 31, 2022, to $28 million at quarter end, which represents a positive change of 12%

Q2 2022 financial results
Predictive Oncology’s recognized net sales revenue of $0.4 million for the quarter was an increase of 6% from the comparative three-month period in 2021. The positive change was mainly due to zPREDICTA recognizing sales of $0.1 million.

The gross profit margin grew from 59% in the second quarter of 2021 to 64% for the comparable quarter of 2022. The increase is directly attributable to zPREDICTA with strong margins.

Net cash used in operating activities was $6.4 million and $5.5 million for the six months ended June 30, 2022, and June 30, 2021, respectively, primarily because of the increase in operating costs associated with zPREDICTA and POAI’s PeDAL commercial strategy.

General and administrative expenses increased from $2.1 million in the quarter ended June 30, 2021, to $2.4 million for the corresponding quarter in 2022. Operations expenses increased from $0.6 million in the quarter ended June 30, 2021 to $0.9 million in the quarter ended June 30, 2022, primarily due to higher staffing at zPREDICTA. This was partially offset by the timing of research and development expenses and lower consulting expenses.

Quarterly sales and marketing expenses of the company increased by $0.1 million for the quarter ended June 30, 2022, to $0.3 million, as compared to the corresponding period in 2021, due to staff-related expenses and the implementation of advertising and marketing initiatives.

Current market conditions, coupled with POAI’s lower quantitative valuation of zPREDICTA, resulted in a $7.2 million (non-cash) goodwill impairment in the quarter. zPREDICTA is anticipating stronger business growth in the second half of the year with current and potential customers of its validated models for multiple myeloma (existing), breast cancer (new) and pancreatic cancer (new), as well as the development of new therapies in immuno-oncology.

Other developments
First is the strategic move POAI made to further strengthen the company’s scientific and product offerings with the appointment of Dr. Julia Kirshner as Chief Scientific Officer. Dr. Kirshner was elevated from her role as Senior Vice President of Predictive Oncology and President of zPREDICTA (the company she founded and POAI acquired in Q4 2021). Dr. Kirshner will focus on the integration of POAI’s product lines and future development of its scientific programs. She will also be working closely with Dr. Pamela Bush, Senior Vice President of Strategic Sales and Business Development, to identify and meet customer needs and provide expanded solutions along the AI and drug development continuum.

Second is POAI’s decision to streamline the company’s research and development operations, which Dr. Kirshner will oversee. POAI will consolidate its TumorGenesis division by moving this business from Massachusetts to the flagship location in Pittsburgh, PA. By doing this, POAI can better focus on growth opportunities with its artificial intelligence technology and lab functions, while reducing overhead and centralizing scientific operations. This also provides the potential to bring in greater revenue levels as the company explores more expanded offerings for clients in the pharmaceutical and biotech industries.

Additionally, POAI attended the BIO International conference in June, specifically presenting PeDAL and Soluble Biotech. POAI launched the PeDAL platform as part of a comprehensive business development and marketing plan aimed to establish key relationships with targeted pharmaceutical and biotech companies. Soluble Biotech also looked to expand its customer base at the conference with parallel initiatives.

Shareholder earnings call
POAI will conduct a 2Q 2022 shareholder earnings call to take place on Friday, August 12, at 12:00 PM ET. The links to register for the webcast will be available at the links below:
To register and view the webcast, please go to this link: https://edge.media-server.com/mmc/p/it32fi7n.
For Q&A’s, please register here: https://register.vevent.com/register/BI2e83830dc64a4a8c8a33753ecde1ac52

About Predictive Oncology Inc.
Predictive Oncology (NASDAQ: POAI) is a knowledge-driven company, applying artificial intelligence to develop personalized cancer therapies that improve patient outcomes. The company, which offers a suite of solutions for oncology drug development, operates through four segments (Skyline, Helomics, zPREDICTA and Soluble), which covers five subsidiaries: Helomics, zPREDICTA, Soluble Biotech, TumorGenesis and Skyline Medical.

Helomics Holding Corporation is involved in applying artificial intelligence (“AI”) in the Company’s precision medicine business, to offer AI-driven predictive models of tumor drug response to enhance clinical results for patients and to aid diagnostic, biotech and pharmaceutical companies in new personalized diagnostic and drug development. Skyline Medical Inc. (“Skyline Medical”) sells the STREAMWAY System®, a fully automated wall-mounted product, which is utilized to dispose of an unlimited quantity of suction fluid in an operating room setting. It offers continuous performance for medical practitioners by effectively eradicating the healthcare professional’s exposure to potentially infectious liquids gathered during surgical and other medical operations. Soluble Biotech Inc. is involved in research and commercialization focused on protein production, stability studies and solubility improvements. zPREDICTA, Inc. does tumor-specific research using in vitro models for oncology and drug development. TumorGenesis serves as the company’s arm for research and development for zPREDICTA, Soluble and Helomics. This subsidiary is also involved in cellular media kit production which aids cancer cells to grow outside the body of patients while preserving their proteomic and RNA/DNA signatures.

Forward-Looking Statements
Certain matters discussed in this release contain forward-looking statements. These forward-looking statements reflect our current expectations and projections about future events and are subject to substantial risks, uncertainties and assumptions about our operations and the investments we make. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue and financial performance, projected costs, prospects, changes in management, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “would,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors including, among other things, factors discussed under the heading “Risk Factors” in our filings with the SEC. Except as expressly required by law, the Company disclaims any intent or obligation to update these forward-looking statements.

PREDICTIVE ONCOLOGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

June 30, 2022

 

December 31, 2021

 

 

 

(unaudited)

 

(audited)

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

28,249,452

 

 

$

28,202,615

 

Accounts Receivable

 

 

336,397

 

 

 

354,196

 

Inventories

 

 

474,616

 

 

 

387,684

 

Prepaid Expense and Other Assets

 

 

763,053

 

 

 

513,778

 

Total Current Assets

 

 

29,823,518

 

 

 

29,458,273

 

 

 

 

 

 

 

 

 

Fixed Assets, net

 

 

2,300,327

 

 

 

2,511,571

 

Intangibles, net

 

 

3,790,637

 

 

 

3,962,118

 

Lease Right-of-Use Assets

 

 

505,667

 

 

 

814,454

 

Other Long-Term Assets

 

 

75,618

 

 

 

167,065

 

Goodwill

 

 

-

 

 

 

6,857,790

 

Total Assets

 

$

36,495,767

 

 

 

43,771,271

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Accounts Payable

 

$

983,672

 

 

$

1,021,774

 

Accrued Expenses and other liabilities

 

 

856,654

 

 

 

1,262,641

 

Derivative Liability

 

 

32,318

 

 

 

129,480

 

Deferred Revenue

 

 

530,797

 

 

 

186,951

 

Lease Liability

 

 

421,736

 

 

 

639,662

 

Total Current Liabilities

 

 

2,825,177

 

 

 

3,240,508

 

 

 

 

 

 

 

 

 

Lease Liability – Net of current portion

 

 

113,462

 

 

 

239,664

 

Other long-term liabilities

 

 

21,731

 

 

 

25,415

 

Total Liabilities

 

 

2,960,370

 

 

 

3,505,587

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

Preferred Stock, 20,000,000 authorized inclusive of designated below

 

 

 

 

 

 

 

Series B Convertible Preferred Stock, $.01 par value, 2,300,000 shares authorized, 79,246 shares outstanding

 

 

792

 

 

 

792

 

Common Stock, $.01 par value, 200,000,000 shares authorized, 78,155,127 and 65,614,597 outstanding

 

 

781,551

 

 

 

656,146

 

Additional paid-in capital

 

 

174,555,375

 

 

 

167,649,028

 

Accumulated Deficit

 

 

(141,802,321

)

 

 

(128,040,282

)

Total Stockholders’ Equity

 

 

33,535,397

 

 

 

40,265,684

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

36,495,767

 

 

$

43,771,271

 

 

 

 

 

 

 

 

 

 

PREDICTIVE ONCOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS
(Unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

$

371,591

 

 

$

350,207

 

 

$

686,159

 

 

$

630,524

 

Cost of goods sold

 

134,075

 

 

 

142,877

 

 

 

243,518

 

 

 

240,635

 

Gross profit

 

237,516

 

 

 

207,330

 

 

 

442,641

 

 

 

389,889

 

 

 

 

 

 

 

 

 

General and administrative expense

 

2,351,696

 

 

 

2,077,973

 

 

 

4,775,347

 

 

 

5,348,750

 

Operations expense

 

909,113

 

 

 

567,796

 

 

 

1,800,184

 

 

 

1,142,608

 

Sales and marketing expense

 

271,022

 

 

 

159,788

 

 

 

575,489

 

 

 

274,429

 

Loss on impairment of goodwill

 

7,231,093

 

 

 

-

 

 

 

7,231,093

 

 

 

-

 

Total operating loss

 

(10,525,408

)

 

 

(2,598,227

)

 

 

(13,939,472

)

 

 

(6,375,898

)

Other income

 

41,047

 

 

 

57,033

 

 

 

83,477

 

 

 

85,292

 

Other expense

 

(2,217

)

 

 

(1,829

)

 

 

(3,206

)

 

 

(236,801

)

Gain (loss) on derivative instruments

 

95,254

 

 

 

(30,909

)

 

 

97,162

 

 

 

64,762

 

Net loss

$

(10,391,324

)

 

$

(2,573,932

)

 

$

(13,762,039

)

 

$

(6,462,645

)

Net loss attributable to common shareholders per common shares-basic and diluted

$

(10,391,324

)

 

$

(2,573,932

)

 

$

(13,762,039

)

 

$

(6,462,645

)

 

 

 

 

 

 

 

 

Loss per common share basic

$

(0.15

)

 

$

(0.05

)

 

$

(0.20

)

 

$

(0.15

)

Loss per common share diluted

$

(0.15

)

 

$

(0.05

)

 

$

(0.20

)

 

$

(0.15

)

 

 

 

 

 

 

 

 

Weighted average shared used in computation - basic

 

68,896,506

 

 

 

51,581,762

 

 

 

67,374,250

 

 

 

44,089,157

 

Weighted average shared used in computation - diluted

 

68,896,506

 

 

 

51,581,762

 

 

 

67,374,250

 

 

 

44,089,157

 

 

 

 

 

 

 

 

 

Media relations contact:
Predictive Oncology
Theresa Ferguson
630-566-2003
tferguson@predictive-oncology.com

Investor relations contact:
Landon Capital
Keith Pinder
(404) 995-6671
kpinder@landoncapital.net