Precision Therapeutics Reports First Quarter 2019 Financial Results and Provides Corporate Update
May 15 2019 - 4:05PM
Precision Therapeutics Inc. (Nasdaq: AIPT) (“Precision” or “the
Company”), a company focused on applying artificial intelligence to
personalized medicine and drug discovery, today announced financial
results for the quarter ended March 31, 2019 and provided a
business update.
Business highlights of the first quarter of 2019 through recent
weeks include:
- Helomics, Inc. and National Alopecia Areata Foundation signed a
services agreement to provide next-generation patient registry for
Alopecia Areata Research
- TumorGenesis and partner 48Hour Discovery received Alberta
Innovates grant for development of novel cancer treatments
- Helomics contracted to provide CRO and Artificial Intelligence
drug development services to SpeciCare for a precision medicine
trial
- Helomics initiated a collaboration with Viome to determine role
of gut microbiome in ovarian cancer
- Helomics merger completed on April 4, 2019
- Completed public offerings of $1.2 and $1.1 million
- Skyline Medical division completed sales in Saudi Arabia and
Australia
- TumorGenesis identified key biomarkers that may be potential
treatment approaches for thyroid cancer
- Skyline Medical division signed Taiwanese distribution
agreement
- CEO Carl Schwartz invested $1.62 million into the company since
November 2018
Dr. Carl Schwartz, Precision’s Chief Executive Officer
commented, “2019 began as a very strong and highly productive year
for Precision Therapeutics, with key execution across all aspects
of our business. With the Helomics merger now complete, we have
already begun seeing numerous collaborations take place, including
an exciting and potentially rewarding partnership with Viome to
study the link between the gut biome and ovarian cancer. In
addition, we have entered into an alliance with the National
Alopecia Areata Foundation to provide next generation patient
registry for Alopecia Areata research and entered into an exciting
alliance with SpeciCare to study innovative personalized medicine
opportunities for cancer patients. These exciting relationships
represent strong opportunities to potentially monetize our
proprietary AI and data-driven precision medicine offerings
along with our CRO services. Our TumorGenesis business continues to
be at the forefront of new discovery in oncology and we were
thrilled to announce that TumorGenesis participated with 48Hour
Discovery (48HD), a Canadian partner, in receiving a $300,000 CAD
grant through the Alberta Innovates Product Demonstration Program
to commercialize TumorGenesis’ Oncology Discovery Platform Kits, in
collaboration with 48HD’s to inform personalized treatment
decisions in cancer treatments. Interest in our Skyline Medical
division’s STREAMWAY system division continues to increase across
the globe and we anticipate growth of that business as we expand
our sales and marketing efforts globally.”
Financial Results
Revenue for the quarter ended March 31, 2019 was $255,000,
compared with $412,000 for the same period of 2018, a 38 percent
decrease year over year. Revenue included the sale of seven
STREAMWAY systems and disposable supplies, three domestically and
four internationally, compared to 16 sales of the system in the
comparable period of 2018. Cost of sales was $74,000 in the
first quarter of 2019, compared to $117,000 in Q1 2018. Gross
profit margin remained steady at 71 percent both in the first
quarters of 2019 and 2018. Operating expenses for the quarter
ended March 31, 2019 increased by $179,000 compared with the
comparable quarter of 2018. General and accounting expenses
were approximately $1.5 million, compared to approximately $1.2
million during the same period of the previous year. Sales
and marketing expenses remained relatively consistent at $554,216,
compared to 550,538 during Q1 2018.
Cash balance as of March 31, 2019 was $1.1 million.
Conference CallThe company will host a
conference call at 4:30 today to review these results.
Participants are asked to preregister for the call through the
following link http://dpregister.com/10131658. Please note
that registered participants will receive their dial in number upon
registration and will dial directly into the call without delay.
Those without internet access or who are unable to pre-register may
dial in by calling: 1-866-777-2509 (domestic), 1-412-317-5413
(international). All callers should dial in approximately 10
minutes prior to the scheduled start time and ask to be joined into
the Precision Therapeutics Inc., call. Following management’s
formal remarks, there will be a question and answer session with
equity analysts.
The conference call will also be available through a live
webcast, which can be accessed via the following
link: https://services.choruscall.com/links/aipt190515.html,
which will also be available through the company’s website
at: http://investors.skylinemedical.com/events-and-presentations.
A replay of the call will be available approximately one hour
after the end of the call through June 15, 2019. The replay
can be accessed via Precision’s website or by dialing
1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The
replay conference playback code is 10131658.
A webcast replay of the call will also be available
approximately one hour after the end of the call
through August 15, 2019. The replay can be accessed through
the above links.
About Precision Therapeutics Inc.Precision
Therapeutics (Nasdaq: AIPT) operates through its three wholly
owned subsidiaries, Helomics, TumorGenesis and Skyline Medical.
Helomics applies artificial intelligence to its rich data gathered
from patient tumors to both personalize cancer therapies for
patients and drive the development of new targeted therapies in
collaborations with pharmaceutical companies. Helomics’
CLIA-certified lab provides clinical testing that assists
oncologists in individualizing patient treatment decisions, by
providing an evidence-based roadmap for therapy. In addition to its
proprietary precision oncology platform, Helomics offers boutique
CRO services that leverage its TruTumor™, patient-derived tumor
models coupled to a wide range of multi-omics assays (genomics,
proteomics and biochemical), and an AI-powered proprietary
bioinformatics platform (D-CHIP) to provide a tailored solution to
its clients’ specific needs. Precision’s TumorGenesis subsidiary is
developing a new rapid approach to growing tumors in the
laboratory, which essentially “fools” cancer cells into thinking
they are still growing inside a patient. Its proprietary Oncology
Discovery Technology Platform kits will assist researchers and
clinicians to identify which cancer cells bind to specific
biomarkers. Once the biomarkers are identified they can be used in
TumorGenesis’ Oncology Capture Technology Platforms which isolate
and help categorize an individual patient’s heterogeneous tumor
samples to enable the development of patient specific treatment
options. Helomics and TumorGenesis are focused on ovarian cancer.
Precision’s Skyline Medical subsidiary markets its patented
and FDA cleared STREAMWAY System which automates the
collection, measurement and disposal of waste fluid, including
blood, irrigation fluid and others, within a medical facility,
through both domestic and international divisions. The company has
achieved sales in five of the seven continents through both direct
sales and distributor partners. For more information, please
visit www.precisiontherapeutics.com.
Forward-looking Statements Certain of the
matters discussed in the press release contain forward-looking
statements that involve material risks to and uncertainties in the
Company’s business that may cause actual results to differ
materially from those anticipated by the statements made herein.
Such risks and uncertainties include (i) risks related to the
recent merger with Helomics, including the fact that the combined
company will not be able to continue operating without additional
financing; possible failure to realize anticipated benefits of the
merger; costs associated with the merger may be higher than
expected; the merger may result in disruption of the Company’s and
Helomics’ existing businesses, distraction of management and
diversion of resources; and the market price of the Company’s
common stock may decline as a result of the merger; (ii) risks
related to our partnerships with other companies, including the
need to negotiate the definitive agreements; possible failure to
realize anticipated benefits of these partnerships; and costs of
providing funding to our partner companies, which may never be
repaid or provide anticipated returns; and (iii) other risks and
uncertainties relating to the Company that include, among other
things, current negative operating cash flows and a need for
additional funding to finance our operating plan; the terms of any
further financing, which may be highly dilutive and may include
onerous terms; unexpected costs and operating deficits, and lower
than expected sales and revenues; sales cycles that can be longer
than expected, resulting in delays in projected sales or failure to
make such sales; uncertain willingness and ability of customers to
adopt new technologies and other factors that may affect further
market acceptance, if our product is not accepted by our potential
customers, it is unlikely that we will ever become profitable;
adverse economic conditions; adverse results of any legal
proceedings; the volatility of our operating results and financial
condition; inability to attract or retain qualified senior
management personnel, including sales and marketing personnel; our
ability to establish and maintain the proprietary nature of our
technology through the patent process, as well as our ability to
possibly license from others patents and patent applications
necessary to develop products; Precision’s ability to implement its
long range business plan for various applications of its
technology; Precision’s ability to enter into agreements with any
necessary marketing and/or distribution partners and with any
strategic or joint venture partners; the impact of competition, the
obtaining and maintenance of any necessary regulatory clearances
applicable to applications of Precision’s technology; and
management of growth and other risks and uncertainties that may be
detailed from time to time in the Company’s reports filed with the
SEC, which are available for review at www.sec.gov. This is not a
solicitation to buy or sell securities and does not purport to be
an analysis of Precision’s financial position. See Precision’s most
recent Annual Report on Form 10-K, and subsequent reports and other
filings at www.sec.gov.
Contacts: Investor Relations CORE IR Bret
Shapiro (212) 896-1203 brets@coreir.com
MediaJules Abraham CORE IRjulesa@coreir.com917-885-7378
PRECISION THERAPEUTICS
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)
|
March 31,2019 |
|
December 31,2018 |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
1,124,730 |
|
|
$ |
162,152 |
|
Accounts Receivable |
|
173,443 |
|
|
|
232,602 |
|
Notes Receivable (inclusive of
$738,138 and $452,775 in advances to Helomics) |
|
1,801,479 |
|
|
|
497,276 |
|
Inventories |
|
289,023 |
|
|
|
241,066 |
|
Prepaid Expense and other
assets |
|
265,584 |
|
|
|
318,431 |
|
Total Current Assets |
|
3,654,259 |
|
|
|
1,451,527 |
|
|
|
|
|
|
|
|
|
Notes Receivable |
|
- |
|
|
|
1,112,524 |
|
Fixed Assets, net |
|
148,709 |
|
|
|
180,453 |
|
Intangibles, net |
|
950,049 |
|
|
|
964,495 |
|
Lease Right-of-Use Assets |
|
333,944 |
|
|
|
- |
|
Total Assets |
$ |
5,086,961 |
|
|
$ |
3,708,999 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
Accounts Payable |
$ |
432,198 |
|
|
$ |
445,689 |
|
Note Payable – Bridge Loan Net
of Discount of $646,524 and $969,786 |
|
1,812,037 |
|
|
|
1,327,942 |
|
Notes Payable – Net of
Discount of $352,961 and $63,028 |
|
1,267,039 |
|
|
|
306,972 |
|
Accrued Expenses |
|
797,599 |
|
|
|
1,279,114 |
|
Derivative Liability |
|
353,210 |
|
|
|
272,745 |
|
Deferred Revenue |
|
20,929 |
|
|
|
23,065 |
|
Current Lease Liability |
|
78,819 |
|
|
|
- |
|
Total Current Liabilities |
|
4,761,831 |
|
|
|
3,655,527 |
|
|
|
|
|
|
|
|
|
Lease Liability |
|
225,125 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
5,016,956 |
|
|
|
3,655,527 |
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
Series B Convertible Preferred
Stock, $.01 par value, 20,000,000 authorized, 79,246 and 79,246
outstanding |
|
792 |
|
|
|
792 |
|
Common Stock, $.01 par value,
100,000,000 authorized, 17,360,144 and 14,091,748 outstanding |
|
173,601 |
|
|
|
140,917 |
|
Additional paid-in
capital |
|
66,296,741 |
|
|
|
63,019,708 |
|
Accumulated Deficit |
|
(66,401,129 |
) |
|
|
(63,107,945 |
) |
|
|
|
|
|
|
|
|
Total Stockholders'
Equity |
|
70,005 |
|
|
|
53,472 |
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity |
$ |
5,086,961 |
|
|
$ |
3,708,999 |
|
|
|
|
|
|
|
|
|
PRECISION THERAPEUTICS
INC.CONDENSED CONSOLIDATED STATEMENTS OF NET
LOSS(Unaudited)
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Revenue |
$ |
255,241 |
|
|
$ |
411,593 |
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
73,717 |
|
|
|
117,343 |
|
|
|
|
|
|
|
|
|
Gross margin |
|
181,524 |
|
|
|
294,250 |
|
|
|
|
|
|
|
|
|
General and administrative
expense |
|
1,497,945 |
|
|
|
1,241,961 |
|
|
|
|
|
|
|
|
|
Operations expense |
|
466,566 |
|
|
|
287,590 |
|
|
|
|
|
|
|
|
|
Sales and marketing
expense |
|
554,216 |
|
|
|
550,538 |
|
|
|
|
|
|
|
|
|
Total operating loss |
|
2,337,203 |
|
|
|
1,785,839 |
|
|
|
|
|
|
|
|
|
Other income |
|
53,432 |
|
|
|
27,655 |
|
|
|
|
|
|
|
|
|
Other expense |
|
569,776 |
|
|
|
1,838 |
|
|
|
|
|
|
|
|
|
Loss on equity method
investment |
|
439,637 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Net loss attributable to
common shareholders |
$ |
(3,293,184 |
) |
|
$ |
(1,760,022 |
) |
|
|
|
|
|
|
|
|
Loss per common share - basic
and diluted |
$ |
(0.21 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
Weighted average shares used
in computation - basic and diluted |
|
15,731,517 |
|
|
|
11,383,217 |
|
|
|
|
|
|
|
|
|
PRECISION THERAPEUTICS
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
Three Months Ended March 31, |
|
2019 |
|
2018 |
Cash flow from operating activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(3,293,184 |
) |
|
$ |
(1,760,022 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
Loss on equity method
investment |
|
439,637 |
|
|
|
- |
|
Depreciation and
amortization |
|
39,526 |
|
|
|
18,167 |
|
Vesting expense for stock
options |
|
263,600 |
|
|
|
226,387 |
|
Amortization of debt
discount |
|
468,564 |
|
|
|
- |
|
Loss on valuation of
equity-linked instruments |
|
19,408 |
|
|
|
- |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
59,159 |
|
|
|
(104,265 |
) |
Inventories |
|
(47,957 |
) |
|
|
(7,511 |
) |
Prepaid expense and other
assets |
|
(3,273 |
) |
|
|
81,661 |
|
Accounts payable |
|
(13,491 |
) |
|
|
45,847 |
|
Accrued expenses |
|
21,494 |
|
|
|
(226,775 |
) |
Deferred revenue |
|
(2,136 |
) |
|
|
32,193 |
|
Net cash used in operating
activities: |
|
(2,048,653 |
) |
|
|
(1,694,318 |
) |
Cash flow from investing
activities: |
|
|
|
|
|
|
|
Redemption of certificates of
deposit |
|
- |
|
|
|
244,971 |
|
Advance on notes
receivable |
|
(631,316 |
) |
|
|
(42,524 |
) |
Purchase of fixed assets |
|
- |
|
|
|
(32,789 |
) |
Transfer of fixed assets to
inventory |
|
9,863 |
|
|
|
- |
|
Acquisition of
intangibles |
|
(3,198 |
) |
|
|
(24,029 |
) |
Net cash (used in) provided by
investing activities: |
|
(624,651 |
) |
|
|
145,629 |
|
|
|
|
|
|
|
|
|
Cash flow from financing
activities: |
|
|
|
|
|
|
|
Extinguishment of convertible
debt |
|
(93,827 |
) |
|
|
- |
|
Proceeds from debt
issuance |
|
1,250,000 |
|
|
|
- |
|
Proceeds from exercise of
warrants into common stock |
|
- |
|
|
|
55,794 |
|
Issuance of common stock |
|
2,479,709 |
|
|
|
2,959,509 |
|
Net cash provided by financing
activities |
|
3,635,882 |
|
|
|
3,015,303 |
|
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents |
|
962,578 |
|
|
|
1,466,614 |
|
Cash at beginning of
period |
|
162,152 |
|
|
|
766,189 |
|
Cash at end of period |
$ |
1,124,730 |
|
|
$ |
2,232,803 |
|
Non-cash transactions: |
|
|
|
|
|
|
|
Bridge loan conversion into
common stock |
$ |
90,000 |
|
|
$ |
- |
|
Forbearance settlement bridge
loan |
$ |
503,009 |
|
|
$ |
- |
|
Additional warrants issued
pursuant to CEO note payable |
$ |
8,665 |
|
|
$ |
- |
|
Conversion of preferred stock
to common stock |
$ |
- |
|
|
$ |
6,479 |
|
Equity method investment -
Helomics |
$ |
- |
|
|
$ |
1,542,250 |
|
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