Form 8-K
0001446159 False 0001446159 2022-03-31 2022-03-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  March 31, 2022

_______________________________

Predictive Oncology Inc.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware001-3679033-1007393
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

2915 Commers Drive, Suite 900

Eagan, Minnesota 55121

(Address of Principal Executive Offices) (Zip Code)

(651) 389-4800

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valuePOAINasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

On March 31, 2022, Predictive Oncology Inc. issued a press release attached hereto as Exhibit 99.1 announcing its financial results for the year ended December 31, 2021.

Item 9.01. Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits

Exhibit No. Description
   
99.1 Press Release dated March 31, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Predictive Oncology Inc.
   
  
Date: March 31, 2022By: /s/ Bob Myers        
  Bob Myers
  Chief Financial Officer
  

 

EdgarFiling

EXHIBIT 99.1

Predictive Oncology Reports Year End 2021 Financial Results and Provides Business Update

EAGAN, Minn., March 31, 2022 (GLOBE NEWSWIRE) -- 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 year ended December 31, 2021, a period defined by growth, expansion and maturity, and provided an update on business activities.

2021 Highlights:

“We are pleased to report that the conclusion of FY 2021 saw a strengthened balance sheet and we believe even greater value for our shareholders,” said J. Melville Engle, Chief Executive Officer and Chairman of Predictive Oncology. “This value was augmented by the Helomics Discovery 21 Patient-centric Drug Discovery Active Learning (PeDAL) proof-of-concept, and a strategic corporate acquisition in November, in line with our ongoing efforts to commercialize the products and services in our four reportable business segments.”

Mr. Engle continued, “M&A activity in 2021 was highlighted by the acquisition of zPREDICTA, Inc., whose established business model and integration of organ-specific cellular and extracellular elements into 3D culture models for in vitro cancer drug testing is believed to be accretive on a short as well as long term basis, and immediately made it a reportable business segment for Predictive. We believe this acquisition and the valuable IP that came with it will provide even more competitive advantages in helping identify, develop, and expedite new cancer therapies as it complements our Company purpose of treating specific cancers through predicted cancer treatment outcomes and optimal drug formulations. This is expected to be achieved by applying Predictive’s machine learning algorithms and unique, extensive database to zPREDICTA’s technology to make even more accurate predictions of targeted treatment outcomes in certain patients.

“Soluble Biotech, one of our other valuable business segments, which centers on contract services and research focused on solubility improvements, stability studies, and protein production, also saw exciting advancements this year toward completion of a new GMP facility. We believe the new GMP facility is expected to better meet the needs of the subsidiary’s customer base.

“We were excited to welcome Pamela Bush, Ph.D., MBA as our new SVP of Strategic Sales and Business Development, and new Board Members Raymond F. Vennare (accomplished senior executive, board director and biotechnology entrepreneur) and Christina Jenkins, MD, (strategic advisor and venture investor with expertise in clinical medicine, health systems, and health plans) to the Predictive Oncology family this year,” concluded Mr. Engle. “We believe they will all make significant contributions to help guide the Company as Predictive Oncology harnesses the power of artificial intelligence (AI) to develop personalized cancer therapies to improve patient outcomes.”

2021 Financial Highlights:

FY 2021 Financial results

The Company recorded revenue of $1,420,680 in 2021, compared to $1,252,272 in 2020. Skyline division was responsible for the majority of the revenue, but Soluble showed significant growth, generating $233,293 and $2,870 in the years ended December 31, 2021 and 2020, respectively. Our gross profit margin was 66% in 2021, a 2% increase over 2020. Our margins increased 2021 primarily due to decreased cost of sales related to sales in the Skyline Medical business.

Operations expense increased by $346,856 to $2,698,565 in 2021 compared to $2,351,709 in 2020. The increase in operations expense in 2021 was primarily due to higher payroll costs and higher costs associated with cloud computing, offset by decreased costs associated with consulting. Sales and marketing expenses increased as well, growing to $774,530 in 2021 compared to $584,937 in 2020.

During the year ended December 31, 2021 we recorded an impairment of goodwill completing the full impairment of the goodwill acquired at the acquisition of Helomics in 2019. We incurred a loss on impairment of goodwill of $2,813,792 and $12,876,498 during 2021 and 2020, respectively. Our goodwill, related to Helomics, following the impairment was $0 and $2,813,792 at December 31, 2021 and December 31, 2020, respectively. We recorded a full impairment of $4,143,275 for Helomics acquired intangible assets and acquired software. On November 24, 2021, we recorded $6,857,790 in goodwill and $3,780,000 of intangible assets as a part of our acquisition of zPREDICTA.

Net cash used in operating activities was $12,208,929 in 2021, a slight decrease to net cash used of $12,257,732 in 2020, primarily due to reduced operating losses as well as decreased outflows related to payments on accounts payables and prepaid expenses, offset by increased payments for accrued expenses and other liabilities. Cash flows used in investing activities was $10,607,536 in 2021, and $167,456 in 2020. Cash flows used in investing activities in 2021 were primarily related to the acquisition of our zPREDICTA subsidiary and purchases of fixed assets.

Net cash provided by financing activities was $50,340,748 in 2021 compared to net cash provided of $12,952,689 in 2020. Cash flows provided by financing activities in 2021 were primarily due from proceeds from the issuance of common stock and warrants of $50,523,527 and proceeds from the exercise of warrants into common stock of $4,513,871, offset by repayment of debt and payment penalties of $5,236,214.

COVID-19 has continued to impact the Company’s capital and financial resources, including our overall liquidity position and outlook. For instance, our accounts receivable has slowed while our suppliers continue to ask for pre-delivery deposits. We incurred net losses of $19,657,174 and $25,884,397 for the years ended December 31, 2021, and December 31, 2020 respectively. As of December 31, 2021, and December 31, 2020, we had an accumulated deficit of $128,040,282 and $108,383,108, respectively.

About Predictive Oncology Inc.
Predictive Oncology Inc. (NASDAQ: POAI) is a knowledge-driven company focused on applying artificial intelligence (AI) to develop personalized cancer therapies, which can lead to more effective treatments and improved patient outcomes. Using artificial intelligence, Predictive Oncology utilizes a database of 150,000+ cancer tumors, categorized by patient type, against drug compounds to determine optimal therapies to be used to ultimately eliminate cancer.

As the drug discovery community realizes, a genomics-based approach to cancer research and drug development is insufficient to achieve the promise of personalized therapeutics. Predictive Oncology instead takes a multiomic approach, which considers the vast multitude of factors that make each cancer unique. Rather than operating based on the equivalent of a birds’ eye view, Predictive Oncology makes possible a more personalized and effective approach to cancer research and treatment.

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

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.



PREDICTIVE ONCOLOGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

 December 31,
2021
 December 31,
2020
ASSETS       
Current Assets:       
Cash and cash equivalents$28,202,615  $678,332 
Accounts Receivable 354,196   256,878 
Inventories 387,684   289,535 
Prepaid Expense and Other Assets 513,778   289,490 
Total Current Assets 29,458,273   1,514,235 
        
Fixed Assets, net 2,511,571   3,822,700 
Intangibles, net 3,962,118   3,398,101 
Lease Right-of-Use Assets 814,454   1,395,351 
Other Long-Term Assets 167,065   116,257 
Goodwill 6,857,790   2,813,792 
Total Assets$43,771,271  $13,060,436 
        
LIABILITIES AND STOCKHOLDERS' EQUITY       
Current Liabilities:       
Accounts Payable$1,021,774  $1,372,070 
Notes Payable – Net of Discounts of $0 and $244,830 -   4,431,925 
Accrued Expenses and other liabilities 1,262,641   2,588,047 
Derivative Liability 129,480   294,382 
Deferred Revenue 186,951   53,028 
Lease Liability – Net of Long-Term Portion 639,662   597,469 
Total Current Liabilities 3,240,508   9,336,921 
        
Other Long Term Liabilities 25,415   235,705 
Lease Liability, long-term portion 239,664   845,129 
Total Liabilities 3,505,587   10,417,755 
Stockholders’ Equity:       
Preferred Stock, 20,000,000 authorized inclusive of designated below -   - 
Series B Convertible Preferred Stock, $.01 par value, 2,300,000 authorized, 79,246 and 79,246 shares outstanding 792   792 
Common Stock, $.01 par value, 200,000,000 and 100,000,000 authorized, 65,614,597 and 19,804,787 outstanding 656,146   198,048 
Additional Paid-in Capital 167,649,028   110,826,949 
Accumulated Deficit (128,040,282)  (108,383,108)
Total Stockholders' Equity 40,265,684   2,642,681 
        
Total Liabilities and Stockholders' Equity$43,771,271  $13,060,436 



PREDICTIVE ONCOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS
(Unaudited) 

 Year Ended December 31,
  
 2021 2020 
Revenue$1,420,680  $1,252,272 
Cost of goods sold 487,024   447,192 
Gross profit 933,656   805,080 
General and administrative expense 10,932,125   10,351,973 
Operations expense 2,698,565   2,351,709 
Sales and marketing expense 774,530   584,937 
Loss on goodwill impairment 2,813,792   12,876,498 
Loss on impairment intangibles 2,893,548     - 
Loss on impairment of software acquired 1,249,727   - 
Total operating loss (20,428,631  (25,360,037)
Other income 184,528   843,440 
Other expense (239,631)  (2,427,026)
Loss on early extinguishment of debt -   (1,996,681)
Gain on derivative instruments 164,902   1,765,907 
Gain on notes receivables associated with asset purchase -   1,290,000 
Net loss before income tax benefit $(20,318,832)  (25,884,397)
Income tax benefit (661,658)  - 
Net loss (19,657,174)  $(25,884,397)
Deemed dividend -   554,287 
Net loss attributable to common shareholders $(19,657,174)  $(26,438,684)
        
Loss per common share - basic and diluted$(0.36) $(2.21)
        
Weighted average shares used in computation - basic and diluted 54,876,044   11,950,154