Predictive Oncology (NASDAQ: POAI), a knowledge-driven company
focused on applying artificial intelligence (“AI”) to personalized
medicine and drug discovery, today reported financial results for
the quarter ended September 30, 2020 and provided a business
update.
Business
Highlights
- Helomics Magee study completing early in Q4; Helomics presents
viable model to Pharma
- Soluble Biotech moves into new office/lab space tripling
capacity; new lab equipment installed
- Signed first contract with a pharmaceutical company for protein
expression and solubility studies
- Licensed an additional 71 unique ovarian cancer cell lines from
Ximbio, the world’s largest non-profit dedicated to life science
reagents of all kinds, bringing its total number of unique patient
derived cells to 96
- Completed the asset purchase of Quantitative Medicine
(“QM”), a biomedical analytics and computational biology company,
in an all-stock transaction valued at approximately $1.8
million
- Sold 15 STREAMWAY® systems, including eight to a large
university hospital organization in Virginia
“During the third quarter, we continued our work
of laying a foundation for our precision medicine business,”
commented Dr. Carl Schwartz, Predictive Oncology CEO. “We are
making steady progress in our Helomics division with the launch of
a restructured clinical test offering to clinicians for ovarian
cancer. Our project with UPMC-Magee Womens Hospital, analyzing the
genomic and drug response profiles of women with ovarian cancer to
build predictive models’ terms of therapy response, is close to
completion. We are also in discussions with several pharmaceutical
companies about partnerships that will monetize our efforts.
“At our Soluble Biotech division, which provides
optimized FDA-approved formulations for vaccines, antibodies and
other protein therapeutics faster and at a lower cost basis to its
customers, we signed our first contract with a pharmaceutical
company for protein expression and solubility studies,” continued
Dr. Schwartz. “Importantly, this win validates our investment in
state-of-the-art lab equipment and expanded facilities. We are
working judiciously to secure additional contracts with other
biotechnology and pharmaceutical companies.”
Dr. Schwartz continued, “In our TumorGenesis
division, we introduced our Ovarian Cell Line Media at the
BIO-Europe Digital Conference where numerous researchers learned
from us how they can isolate and successfully culture ovarian
cancer cells that previously could not be cultured. Cornell
University (Weill) Medical School and TumorGenesis are
collaborating to help identify the best culture media for the
studying of mutations that increase the risk of ovarian, breast and
other types of cancers.
“The Skyline Medical division continues to be
self-sustaining, from an operating cash perspective, as sales of
new waste fluid management systems and recurring sales of
disposables to support those systems more than cover the operating
expenses and capital needs of this segment of our business,” noted
Dr. Schwartz. “Importantly, sustaining and even modestly growing
this division provides us with cash we need as we accelerate the
precision medicine components of our business. During the third
quarter, we sold 15 STREAMWAY® Systems, including eight to a large
university hospital organization in the state of Virginia.
“Our operating cash improved over the first nine
months of 2020 as a result of an improvement in operating expenses,
if the non-cash expense for goodwill impairment is excluded,
continued new sales of our STREAMWAY Systems, which provide an
annuity-like revenue stream from ongoing sales of disposables, and
proceeds from equity offerings, indicating investor confidence in
our emerging precision medicine business,” concluded Dr. Schwartz.
“Concurrently, we are taking the necessary steps to manage our
balance sheet, including reducing our accounts payable and reducing
our derivative liability by amending a settlement provision for
certain outstanding warrants.
“Management continues to focus the majority of
its resources on the Company’s primary mission of applying
artificial intelligence to precision medicine and to drug
discovery. Our approach and the mediums used to replace rats and
mice in preliminary cancer studies are working in three of our
operating subsidiaries, Helomics, TumorGenesis and Soluble
Biotech.”
Third Quarter 2020
Financial Results
Revenues of $0.5 million were level with the
third quarter of last year, primarily driven through the sale of
Predictive Oncology’s proprietary STREAMWAY product line, of which
15 and 19 units were sold in the three months ended September 30,
2020 and 2019, respectively.
Gross margin was 64% in the third quarter of
2020 compared with 60% in the 2019 period. The increase in gross
margin was driven by lower manufacturing costs. General &
administrative expenses declined 15% to $2.2 million in the third
quarter of 2020, primarily as a result of a decrease in penalties
related to short-term notes issued in 2019, lower audit fees and
share-based compensation expenses. This was partially offset by
increases in salary and related expenses, investor relations costs
and depreciation. Operations expenses slightly decreased in the
third quarter of 2020 primarily due to lower costs related to
staff, including share-based compensation.
Operating loss was $5.6 million in the third
quarter of 2020 compared with $3.4 million in the 2019 period.
General and administrative, operations and sales and marketing
expenses were lower across all categories; a non-cash goodwill
impairment charge of $3.0 million drove the 2020 operating loss
above the 2019 third quarter period.
Net loss attributable to common shareholders was
$6.9 million, or $(0.46) per diluted share in the third quarter of
2020, compared with a loss of $4.1 million, or $(1.31) per diluted
share for the 2019 period. The loss in the third quarter of 2020
includes other expense of $2.1 million. This includes higher net
interest expense, payment penalties, amortization of original issue
discounts and a loss on debt extinguishment related to the
Company’s notes payable. Additionally, a $0.6 million non-cash
deemed dividend (to account for a warrant exercise price adjustment
for warrants issued in June 2020) was recognized. These were
partially offset by a non-cash gain of $1.4 million related to the
revaluation of equity method investments.
About Predictive Oncology Inc.
Predictive Oncology (NASDAQ: POAI) operates through three
segments (Skyline, Helomics and Soluble Biotech), which contain
four subsidiaries: Helomics, TumorGenesis, Skyline Medical and
Soluble Biotech.
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. TumorGenesis
Inc. specializes in media that help cancer cells grow and
retain their DNA/RNA and proteomic signatures, providing
researchers with a tool to expand and study cancer cell types found
in tumors of the blood and organ systems of all mammals, including
humans. Skyline Medical 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. Soluble Biotech is a provider of soluble
and stable formulations for proteins including vaccines,
antibodies, large and small proteins and protein complexes.
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, 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.
Investor Relations Contact:
Hayden IRJames
Carbonara(646)-755-7412james@haydenir.com
-- Tables Follow
–
PREDICTIVE ONCOLOGY
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
September 30, 2020 |
|
December 31, 2019 |
|
|
(unaudited) |
|
(audited) |
ASSETS |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash |
|
$ |
2,474,312 |
|
|
$ |
150,831 |
|
Accounts Receivable |
|
|
508,265 |
|
|
|
297,055 |
|
Inventories |
|
|
205,908 |
|
|
|
190,156 |
|
Prepaid Expense and Other
Assets |
|
|
269,282 |
|
|
|
160,222 |
|
Total Current Assets |
|
|
3,457,767 |
|
|
|
798,264 |
|
|
|
|
|
|
|
|
Fixed Assets, net |
|
|
3,755,464 |
|
|
|
1,507,799 |
|
Intangibles, net |
|
|
3,464,327 |
|
|
|
3,649,412 |
|
Lease Right-of-Use Assets |
|
|
1,790,130 |
|
|
|
729,745 |
|
Goodwill |
|
|
12,693,290 |
|
|
|
15,690,290 |
|
Total Assets |
|
$ |
25,160,978 |
|
|
$ |
22,375,510 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
Accounts Payable |
|
$ |
1,628,944 |
|
|
$ |
3,155,641 |
|
Notes Payable – Net of
Discounts of $495,100 and $350,426 |
|
|
5,751,876 |
|
|
|
4,795,800 |
|
Accrued Expenses |
|
|
2,530,385 |
|
|
|
2,371,633 |
|
Derivative Liability |
|
|
1,052,494 |
|
|
|
50,989 |
|
Deferred Revenue |
|
|
66,123 |
|
|
|
40,384 |
|
Lease Liability |
|
|
577,505 |
|
|
|
459,481 |
|
Total Current Liabilities |
|
|
11,607,327 |
|
|
|
10,873,928 |
|
|
|
|
|
|
|
|
Lease Liability – Net of
current portion |
|
|
1,221,806 |
|
|
|
270,264 |
|
Other long-term
liabilities |
|
|
95,079 |
|
|
|
- |
|
Total Liabilities |
|
|
12,924,212 |
|
|
|
11,144,192 |
|
|
|
|
|
|
|
|
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 and
79,246 shares outstanding |
|
|
792 |
|
|
|
792 |
|
Series D Convertible Preferred
Stock, $.01 par value, 3,500,000 shares authorized, 0 and 3,500,000
outstanding |
|
|
- |
|
|
|
35,000 |
|
Series E Convertible Preferred
Stock, $.01 par value, 350 shares authorized, 0 and 258
outstanding |
|
|
- |
|
|
|
3 |
|
Common Stock, $.01 par value,
100,000,000 shares authorized, 16,593,283 and 4,056,652
outstanding |
|
|
165,932 |
|
|
|
40,567 |
|
Additional paid-in
capital |
|
|
108,983,174 |
|
|
|
93,653,667 |
|
Accumulated Deficit |
|
|
(96,913,132 |
) |
|
|
(82,498,711 |
) |
|
|
|
|
|
|
|
Total Stockholders'
Equity |
|
|
12,236,766 |
|
|
|
11,231,318 |
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity |
|
$ |
25,160,978 |
|
|
$ |
22,375,510 |
|
PREDICTIVE ONCOLOGY
INC.CONDENSED CONSOLIDATED STATEMENTS OF NET
LOSS(Unaudited)
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
$ |
480,757 |
|
|
$ |
522,696 |
|
|
$ |
958,484 |
|
|
$ |
1,064,088 |
|
Cost of goods sold |
|
175,206 |
|
|
|
208,096 |
|
|
|
353,124 |
|
|
|
400,202 |
|
Gross margin |
|
305,551 |
|
|
|
314,600 |
|
|
|
605,360 |
|
|
|
663,886 |
|
|
|
|
|
|
|
|
|
General and administrative
expense |
|
2,226,634 |
|
|
|
2,616,991 |
|
|
|
8,266,927 |
|
|
|
7,425,305 |
|
Operations expense |
|
568,766 |
|
|
|
707,414 |
|
|
|
1,638,635 |
|
|
|
2,445,238 |
|
Sales and marketing expense |
|
121,514 |
|
|
|
434,955 |
|
|
|
518,938 |
|
|
|
1,674,200 |
|
Loss on goodwill impairment |
|
2,997,000 |
|
|
|
- |
|
|
|
2,997,000 |
|
|
|
- |
|
Total operating loss |
|
(5,608,363 |
) |
|
|
(3,444,760 |
) |
|
|
( 12,816,140 |
) |
|
|
(10,880,857 |
) |
|
|
|
|
|
|
|
|
Gain on revaluation of cash
advances to Helomics |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,222,244 |
|
Other income |
|
44,926 |
|
|
|
15,084 |
|
|
|
97,894 |
|
|
|
65,293 |
|
Other expense |
|
(2,147,057 |
) |
|
|
(894,811 |
) |
|
|
(3,993,969 |
) |
|
|
(2,052,522 |
) |
|
|
|
|
|
|
|
|
Gain (loss) on derivative
instruments |
|
1,402,768 |
|
|
|
315,975 |
|
|
|
1,007,794 |
|
|
|
84,627 |
|
Gain on notes receivables
associated with asset purchase |
|
- |
|
|
|
- |
|
|
|
1,290,000 |
|
|
|
- |
|
Loss on equity method
investment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
439,637 |
|
Gain on revaluation of equity
method in investment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,164,260 |
|
Net (loss) |
$ |
(6,307,726 |
) |
|
$ |
(4,008,512 |
) |
|
$ |
(14,414,421 |
) |
|
$ |
(5,836,592 |
) |
Deemed dividend |
|
554,287 |
|
|
|
125,801 |
|
|
|
554,287 |
|
|
|
146,199 |
|
Net income (loss) attributable to
common shareholders per common shares-basic and diluted |
$ |
(6,862,013 |
) |
|
$ |
(4,134,313 |
) |
|
$ |
(14,968,708 |
) |
|
$ |
(5,982,791 |
) |
Gain (loss) per common share
basic and diluted |
$ |
(0.46 |
) |
|
$ |
(1.31 |
) |
|
$ |
(1.51 |
) |
|
$ |
(2.32 |
) |
Weighted average shared used in
computation – basic and diluted |
|
15,026,789 |
|
|
|
3,146,609 |
|
|
|
9,935,738 |
|
|
|
2,581,014 |
|
|
|
|
|
|
|
|
|
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