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Predictive Oncology Reports Second Quarter 2020 Financial Results, Provides Business Update
Increases Readiness for Commercialization with Expanded Portfolio of Solutions for Precision Medicine
Financial and Business Highlights of Q2 and Recent Developments
- Secured first commercial sale of its novel ovarian cancer cell media for cancer cells collected from patient derived samples through its TumorGenesis division
- Completed the acquisition of Quantitative Medicine (“QM”), a biomedical analytics and computational biology company (
July 2020 ), in an all-stock transaction valued at approximately$1.8 million - Completed an asset purchase agreement to acquire Soluble Therapeutics and its HSC™ Technology along with
BioDtech Inc. - Refreshed Board of Directors with appointment of three new independent directors
- Strengthened balance sheet with recent equity offerings.
- Management anticipates a need to raise additional capital to support operations and near-term debt repayments
“During the second quarter we reached a major milestone in our journey towards full commercialization with the first sale of our novel ovarian cancer cell media to a top-rated medical university in New England,” commented Dr.
“Our acquisitions of Soluble Therapeutics and BioDtech position us with next level capabilities that we believe will materially advance our progress towards developing new targeted therapies in collaborations with pharmaceutical companies and enable meaningful expansion of revenue opportunities,” added
“Our Helomics business continues to make solid progress with our CancerQuest 2020 initiative and our collaboration with
Second Quarter 2020 Financial Results
Revenues were
Gross margin was 53% in the second quarter of 2020 compared with 59% in the 2019 period. The decrease was due to higher costs on lower revenue in the current period compared to the prior year period. General & administrative expenses decreased 3% to
Net loss was
Outlook
Management continues to focus its resources on the
About
Forward-Looking Statements
Portions of the narrative set for this document that are not statements of historical or current facts are forward-looking statements, in particular, the commercial outlook provided above. Our actual future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors.
These factors include, in addition to those mentioned elsewhere herein:
- We may not be able to continue operating without additional financing;
- Current negative operating cash flows;
- The terms of any further financing, which may be highly dilutive and may include onerous terms;
- Risks related to the 2019 merger with
Helomics including; 1) significant goodwill could result in further impairment; 2) possible failure to realize anticipated benefits of the merger; 3) costs associated with the merger may be higher than expected; 4) the merger may result in the disruption of our existing businesses; and 5) distraction of management and diversion of resources; - 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;
- Risks related to the transaction with Quantitative Medicine including: 1) possible failure to realize anticipated benefits of the transaction; 2) costs associated with the acquisition may be higher than expected; 3) the transaction may result in the disruption of our existing businesses; and 4) distraction of management and diversion of resources;
- Risk that we will be unable to protect our intellectual property or claims that we are infringing on others’ intellectual property;
- The impact of competition;
- Acquisition and maintenance of any necessary regulatory clearances applicable to applications of our technology;
- Inability to attract or retain qualified senior management personnel, including sales and marketing personnel;
- Risk that we never become profitable if our product is not accepted by potential customers;
- Possible impact of government regulation and scrutiny;
- Unexpected costs and operating deficits, and lower than expected sales and revenues, if any;
- Adverse results of any legal proceedings;
- The volatility of our operating results and financial condition;
- Management of growth;
- Material and adverse effects of the COVD-19 pandemic, including impact on a significant supplier; a reduction in on-site staff at several of our facilities, resulting in delayed production and less efficiency; impact on sales efforts; impact on accounts receivable and terms demanded by suppliers; and possible impact on financing transactions; and,
- Other specific risks 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.
Investor Relations Contact:
Hayden IR
James Carbonara
(646)-755-7412
james@haydenir.com
-- Tables Follow –
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) | (audited) | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 3,394,078 | $ | 150,831 | |||
Accounts Receivable | 272,493 | 297,055 | |||||
Inventories | 235,368 | 190,156 | |||||
Prepaid Expense and Other Assets | 426,704 | 160,222 | |||||
Total Current Assets | 4,328,643 | 798,264 | |||||
Fixed Assets, net | 2,409,721 | 1,507,799 | |||||
Intangibles, net | 3,539,597 | 3,649,412 | |||||
Lease Right-of-Use Assets | 1,528,150 | 729,745 | |||||
15,690,290 | 15,690,290 | ||||||
Total Assets | $ | 27,496,401 | 22,375,510 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Accounts Payable | $ | 2,449,046 | $ | 3,155,641 | |||
Notes Payable – Net of Discounts of |
4,412,377 | 4,795,800 | |||||
Accrued Expenses | 2,649,160 | 2,371,633 | |||||
Derivative Liability | 4,629,570 | 50,989 | |||||
Deferred Revenue | 38,582 | 40,384 | |||||
Lease Liability | 473,043 | 459,481 | |||||
Total Current Liabilities | 14,651,778 | 10,873,928 | |||||
Lease Liability – Net of current portion | 1,055,107 | 270,264 | |||||
Other long-term liabilities | 98,358 | - | |||||
Total Liabilities | 15,805,243 | 11,144,192 | |||||
Stockholders’ Equity: | |||||||
Preferred Stock, 20,000,000 authorized inclusive of designated below | |||||||
Series B Convertible Preferred Stock, |
792 | 792 | |||||
Series D Convertible Preferred Stock, |
- | 35,000 | |||||
Series E Convertible Preferred Stock, |
- | 3 | |||||
Common Stock, |
131,908 | 40,567 | |||||
Additional paid-in capital | 102,163,864 | 93,653,667 | |||||
Accumulated Deficit | (90,605,406 | ) | (82,498,711 | ) | |||
Total Stockholders' Equity | 11,691,158 | 11,231,318 | |||||
Total Liabilities and Stockholders' Equity | $ | 27,496,401 | $ | 22,375,510 |
CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS
(Unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | $ | 182,784 | $ | 286,151 | $ | 477,727 | $ | 541,392 | |||||||
Cost of goods sold | 85,261 | 118,390 | 177,918 | 192,106 | |||||||||||
Gross margin | 97,523 | 167,761 | 299,809 | 349,286 | |||||||||||
General and administrative expense | 3,211,817 | 3,310,368 | 6,040,293 | 4,808,314 | |||||||||||
Operations expense | 521,116 | 1,271,258 | 1,069,869 | 1,737,824 | |||||||||||
Sales and marketing expense | 133,015 | 685,029 | 397,424 | 1,239,245 | |||||||||||
Total operating loss | (3,768,425 | ) | (5,098,894 | ) | (7,207,777 | ) | (7,436,097 | ) | |||||||
Gain on revaluation of cash advances to |
- | 1,222,244 | - | 1,222,244 | |||||||||||
Other income | 52,965 | (3,223 | ) | 52,968 | 50,209 | ||||||||||
Other expense | (729,837 | ) | (607,343 | ) | (1,846,912 | ) | (1,157,711 | ) | |||||||
Gain (loss) on derivative instruments | (422,081 | ) | (211,940 | ) | (394,974 | ) | (231,348 | ) | |||||||
Gain on notes receivables associated with asset purchase | 1,290,000 | - | 1,290,000 | - | |||||||||||
Loss on equity method investment | - | - | - | 439,637 | |||||||||||
Gain on revaluation of equity method in investment | - | 6,164,260 | - | 6,164,260 | |||||||||||
Net income (loss) | $ | (3,577,378 | ) | $ | 1,465,104 | $ | (8,106,695 | ) | $ | (1,828,080 | ) | ||||
Deemed dividend on Series E Convertible Preferred Stock | - | 20,398 | - | 20,398 | |||||||||||
Net income (loss) attributable to common shareholders per common shares-basic and diluted | $ | (3,577,378 | ) | $ | 1,444,706 | $ | (8,106,695 | ) | $ | (1,848,478 | ) | ||||
Gain (loss) per common share basic | $ | (0.36 | ) | $ | 0.49 | $ | (1.10 | ) | $ | (0.81 | ) | ||||
Gain (loss) per common share diluted | (0.36 | ) | 0.24 | (1.10 | ) | (0.81 | ) | ||||||||
Weighted average shared used in computation - basic | 9,838,152 | 2,960,937 | 7,362,240 | 2,274,754 | |||||||||||
Weighted average shared used in computation - diluted | 9,838,152 | 6,007,078 | 7,362,240 | 2,274,754 | |||||||||||
Source: Predictive Oncology Inc.