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Predictive Oncology Reports Third Quarter 2024 Financial Results and Provides Strategic Update

PITTSBURGH, Nov. 13, 2024 (GLOBE NEWSWIRE) -- Predictive Oncology (Nasdaq: POAI), a science driven company leveraging its proprietary artificial intelligence and machine learning capabilities, extensive biorepository of tumor samples, and CLIA laboratory, to accelerate oncologic drug discovery and enable drug development, today reported financial and operating results for the quarter ended September 30, 2024, and provided a corporate update. The Company reported a loss from continuing operations of approximately $2.3 million on total revenue of $345,686 for the quarter.

Predictive Oncology also announced today that the company’s Board of Directors, working with a strategic advisor, has initiated a process to evaluate a broad range of strategic alternatives intended to maximize shareholder value. Possible alternatives can include, but are not limited to, a sale of the company, a sale of an asset or assets of the company, or a licensing transaction. There can be no assurance that a transaction will occur. Management plans to provide additional updates on this process as developments warrant.

Q3 2024 and Recent Highlights:

  • Announced the results of an additional study that successfully demonstrated the long-term stability and viability of the more than 150,000 cryopreserved patient tumor samples stored within the Company’s proprietary biobank.
    • The samples stored in the biobank had originally been tested and cryopreserved between 2008 and 2016.
    • The samples continue to produce drug response data that is consistent with their original clinical testing results.
    • Concordance of drug response results between the original fresh patient sample testing and long-term cryogenically stored tumor material from the same patient was 100%.
    • Predictive Oncology released a new white paper that discusses this study, and the importance of tumor sample viability, which can be found here.
  • Entered the $51.5 billion biomarker discovery market following compelling results from retrospective ovarian cancer study with UPMC Magee-Womens Hospital:
    • Predictive Oncology published a white paper on the biomarker discovery opportunity, which can be found here.
  • Implemented a cost savings initiative intended to further streamline Predictive Oncology’s operations, extend its cash runway, and support its new focus on novel biomarker discovery. The initiative reduced the Company’s run rate for cash used in operating activities by approximately 20% on an annualized basis.
  • Raised additional funding of $1.3 million in July through a warrant inducement transaction.

“The strategic repositioning of the company that I initiated upon assuming the role of CEO in October 2022 has led to significant opportunities, both as a partner to leading global drug developers as well as for our own platform,” said Raymond F. Vennare, Chief Executive Officer and Chairman of Predictive Oncology. “This is highlighted by our announcement last quarter that, as a result of our successful work with UPMC Magee-Womens Hospital, we expanded our AI/ML offering to pursue the discovery of novel biomarkers capable of predicting patient outcomes and drug responses, beginning with ovarian cancer. The implication here is notable in that, with our unique portfolio of assets that include our proprietary biobank of primary tumor samples and decades of drug response data, we are uniquely positioned to play a meaningful role in the early discovery of new cancer therapeutics as well as their ongoing development.”

“Notwithstanding our progress, we believe the opportunities in front of us are underappreciated by the capital markets, and in an effort to create sustained shareholder value, we have initiated a process to evaluate a broad range of strategic alternatives. Together with the cost savings initiative that we implemented last quarter that will reduce our cash burn by around 20% annually, we believe these actions have the potential to unlock significant value.”

“In parallel, we are engaged in ongoing discussions with several prospective partners that have the potential to generate revenue for our company should we be successful in executing one or more collaborations. We are well positioned to be a leader in the rapidly evolving field of AI-driven drug discovery and development,” Mr. Vennare concluded.

Considering Predictive Oncology’s ongoing process to evaluate strategic alternatives, the Company has elected not to host an investor conference call this quarter. Predictive plans to host a corporate update call in the near future as developments warrant.

Q3 2024 Financial Summary:

  • Concluded the third quarter of 2024 with $3.1 million of cash and cash equivalents, compared to $8.7 million as of December 31, 2023, and $2.0 million in stockholders’ equity as of September 30, 2024, compared to $8.3 million as of December 31, 2023. During the quarter, the Company raised $1.3 million in gross proceeds through the exercise of 958,117 warrants.
  • Basic and diluted loss from continuing operations per common share for the quarter ended September 30, 2024, was $(0.36), compared to $(0.68) for the quarter ended September 30, 2023.

Q3 2024 Financial Results:

  • The Company recorded revenue of $345,686 for the third quarter of 2024, compared to $676,626 for the comparable period in 2023. Revenue for the three months ended September 30, 2024, was primarily derived from the Eagan operating segment, while revenue for the three months ended September 30, 2023, was primarily derived from the Pittsburgh operating segment. The decrease in revenue from the comparative period was primarily due to decreased sales of tumor-specific 3D cell culture models from the Pittsburgh operating segment, offset by increased sales of STREAMWAY systems during the third quarter of 2024 from the Eagan operating segment.
  • General and administrative expenses decreased by $761,949 to $1,582,671 for the three months ended September 30, 2024, compared to $2,344,620 for the comparable period in 2023. The decrease was primarily due to decreased employee compensation related to lower headcount related expenses and severance for former employees.
  • Operations expenses decreased by $5,274 to $633,422 for the three months ended September 30, 2024, compared to $638,696 for the comparable period in 2023. The minor decrease was primarily due to decreased cloud computing expenses resulting from cost saving efforts, offset by increased costs associated with our Pittsburgh laboratory including supplies and maintenance.
  • Sales and marketing expenses decreased by $87,789 to $246,650 for the three months ended September 30, 2024, compared to $334,439 for the comparable period in 2023. The decrease was primarily due to lower employee compensation including sales commissions.
  • Net cash used in operating activities of continuing operations was $8,913,589 and $9,060,285 for the nine months ended September 30, 2024, and 2023, respectively. Cash used in operating activities decreased in the 2024 period primarily because of changes in working capital.

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, the risks related to the success of our collaboration arrangements, commercialization activities and product sales levels by our collaboration partners, and other 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:
Tim McCarthy, CFA
LifeSci Advisors, LLC
tim@lifesciadvisors.com

    
PREDICTIVE ONCOLOGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
    
 September 30,
2024
 December 31,
2023
ASSETS       
Current assets:       
Cash and cash equivalents$3,078,955  $8,728,660 
Accounts receivable 463,834   277,641 
Inventories 504,380   480,803 
Prepaid expense and other assets 442,513   512,078 
Current assets of discontinued operations 77,726   79,249 
Total current assets 4,567,408   10,078,431 
        
Property and equipment, net 402,909   491,214 
Intangibles, net 221,473   241,339 
Lease right-of-use assets 2,203,935   2,598,091 
Other long-term assets 102,509   105,509 
Non-current assets of discontinued operations -   902,665 
Total assets$7,498,234  $14,417,249 
        
LIABILITIES AND STOCKHOLDERS’ EQUITY       
Current liabilities:       
Accounts payable$1,141,922  $1,334,064 
Note payable 195,776   150,408 
Accrued expenses and other liabilities 1,517,242   1,542,948 
Derivative liability 1   1,376 
Contract liabilities 257,393   302,499 
Lease liability 496,788   444,897 
Current liabilities of discontinued operations 207,644   174,839 
Total current liabilities 3,816,766   3,951,031 
        
Other long-term liabilities 10,046   5,459 
Lease liability – net of current portion 1,704,453   2,130,977 
Non-current liabilities of discontinued operations -   58,002 
Total liabilities 5,531,265   6,145,469 
        
Stockholders’ equity:       
Preferred stock, 20,000,000 shares authorized inclusive of designated below       
Series B Convertible Preferred Stock, $.01 par value, 2,300,000 shares authorized, 79,246 shares outstanding as of September 30, 2024, and December 31, 2023 792   792 
Common stock, $.01 par value, 200,000,000 shares authorized, 6,666,993 and 4,062,853 shares outstanding as of September 30, 2024, and December 31, 2023, respectively 66,670   40,629 
Additional paid-in capital 180,156,184   175,992,242 
Accumulated deficit (178,256,677)  (167,761,883)
Total stockholders’ equity 1,966,969   8,271,780 
        
Total liabilities and stockholders’ equity$7,498,234  $14,417,249 
        
        


    
PREDICTIVE ONCOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS
(Unaudited)
    
 Three Months Ended
September 30,

 Nine Months Ended
September 30,

  2024   2023   2024   2023 
Revenue$345,686  $676,626  $1,012,232  $1,308,102 
Cost of sales 196,919   97,868   535,511   367,461 
Gross profit 148,767   578,758   476,721   940,641 
                
Operating expenses:               
General and administrative expense 1,582,671   2,344,620   5,834,783   6,823,324 
Operations expense 633,422   638,696   2,188,936   2,099,974 
Sales and marketing expense 246,650   334,439   1,268,824   1,112,412 
Total operating expenses 2,462,743   3,317,755   9,292,543   10,035,710 
Total operating (loss) (2,313,976)  (2,738,997)  (8,815,822)  (9,095,069)
Other income 36,378   47,838   64,497   118,618 
Other expense (5,822)  (60,671)  (9,393)  (60,671)
Gain on derivative instruments 7   3,463   1,375   11,724 
Loss from continuing operations (2,283,413)  (2,748,367)  (8,759,343)  (9,025,398)
Loss from discontinued operations (811,277)  (415,083)  (1,735,451)  (1,483,222)
Net (loss)$(3,094,690) $(3,163,450) $(10,494,794) $(10,508,620)
                
Loss per common share, basic and diluted:               
Loss from continuing operations (0.36)  (0.68)  (1.74)  (2.26)
Loss from discontinued operations (0.13)  (0.10)  (0.34)  (0.37)
Net (loss) per common share, basic and diluted$(0.48) $(0.78) $(2.08) $(2.63)
                
Weighted average shares used in computation – basic and diluted 6,396,221   4,031,356   5,046,227   3,998,887 

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