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.
Validated results of subsidiary Helomics’ Discovery 21 proof of concept of its PeDAL® platform, demonstrated the ability to make high-confidence predictions in ovarian samples.Added new revenue stream, synergistic customer base and disruptive technology through acquisition of zPREDICTA, Inc., a company pioneering tumor-specific in vitro 3D cell culture models for drug discovery and development.Expanded strategic sales and business development by hiring Pamela Bush, Ph.D., MBA, to lead monetization transition from research and development to commercial viability.Raised approximately $55 M from at-the-market and private investment, as well as warrant exercises executed during 2021.Predictive deals Swedish TumorGenesis partners with firm Cellevate AB, a collaboration designed to help give researchers next-generation tools to build treatments for difficult diseases.Subsidiary Soluble Biotech announces building qualification of GMP (Good Manufacturing Practice) facilities, allow ing an expansion of their unique services to better meet the needs of their growing customer base.Launches a website highlighting AI-powered cancer research advancements.Introduced Raymond F. Vennare, senior executive, board director and biotechnology entrepreneur, and Christina Jenkins, MD, A strategic advisor and venture investor with expertise in clinical medicine, health systems, and health plans, as members of the Board of Directors.
“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 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:
Reinforced balance sheet with equity offerings and issuance of common stock for net proceeds of $50.5 million and warrant exercises of $4.5M; repaid, in full, outstanding debt obtained in 2019 and 2020.Concluded FY 2021 with $28.2 million in cash and equivalents compared to $.68 million in the prior year period, and $40.3 million in Stockholder’s Equity compared to $2.6 million in 2020.Loss per common share in year ended 2021 dropped to $0.36 from $2.21 for 2020.
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 profit margin was 66% in 2021, a 2% increase over 2020. Our margins increased 2021 gross 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 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 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 in 2021 were $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 therapies. 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.
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 significant 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 obligations to update these forward-looking statements.
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