poai20220930

poai20220930_10q.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________________ to _________________________

Commission File Number: 001-36790

Predictive Oncology Inc.

(Exact name of registrant as specified in its charter)

Delaware		33-1007393
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		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)


(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	POAI	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

As of November 4, 2022, the registrant had 78,753,475 shares of common stock, par value $0.01 per share outstanding.

PREDICTIVE ONCOLOGY INC.

TABLE OF CONTENTS

	Page No.

PART I. FINANCIAL INFORMATION	4

Item 1. Unaudited Condensed Consolidated Financial Statements	4

Condensed Consolidated Balance Sheets as of September 30, 2022, and December 31, 2021	4

Condensed Consolidated Statements of Net Loss for the three and nine months ended September 30, 2022, and September 30, 2021	5

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022, and September 30, 2021	6

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022, and September 30, 2021	8

Notes to Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3. Quantitative and Qualitative Disclosures About Market Risk	31

Item 4. Controls and Procedures	31

PART II. OTHER INFORMATION	31

Item 1. Legal Proceedings	32

Item 1A. Risk Factors	32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3. Defaults Upon Senior Securities	32

Item 4. Mine Safety Disclosures	32

Item 5. Other Information	32

Item 6. Exhibits	32

Signatures	33

Exhibit Index	34

PART 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

PREDICTIVE ONCOLOGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2022			December 31, 2021
	(unaudited)			(audited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	25,393,738		$	28,202,615
Accounts Receivable		324,708			354,196
Inventories		493,722			387,684
Prepaid Expense and Other Assets		645,153			513,778
Total Current Assets		26,857,321			29,458,273

Fixed Assets, net		2,202,102			2,511,571
Intangibles, net		3,701,603			3,962,118
Lease Right-of-Use Assets		329,565			814,454
Other Long-Term Assets		75,618			167,065
Goodwill		-			6,857,790
Total Assets	$	33,166,209			43,771,271

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$	917,271		$	1,021,774
Accrued Expenses and other liabilities		1,813,580			1,262,641
Derivative Liability		22,099			129,480
Contract Liabilities		495,365			186,951
Lease Liability		219,763			639,662
Total Current Liabilities		3,468,078			3,240,508

Lease Liability – Net of current portion		5,483			239,664
Other long-term liabilities		99,770			25,415
Total Liabilities		3,573,331			3,505,587

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 shares outstanding		792			792
Common Stock, $.01 par value, 200,000,000 shares authorized, 78,407,473 and 65,614,597 outstanding		784,074			656,146
Additional paid-in capital		174,669,817			167,649,028
Accumulated Deficit		(145,861,805	)		(128,040,282	)
Total Stockholders’ Equity		29,592,878			40,265,684

Total Liabilities and Stockholders’ Equity	$	33,166,209		$	43,771,271

See Notes to Condensed Consolidated Financial Statements

PREDICTIVE ONCOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue	$	455,827		$	313,663		$	1,141,986		$	944,187
Cost of goods sold		108,151			110,165			351,669			350,800
Gross profit		347,676			203,498			790,317			593,387

General and administrative expense		3,287,918			2,061,458			8,063,265			7,410,208
Operations expense		857,130			648,935			2,657,314			1,791,543
Sales and marketing expense		333,377			172,869			908,867			447,298
Loss on goodwill impairment		-			2,813,792			7,231,093			2,813,792
Total operating loss		(4,130,749	)		(5,493,556	)		(18,070,222	)		(11,869,454	)
Other income		63,047			58,830			146,524			144,122
Other expense		(2,001	)		(7,413	)		(5,207	)		(244,214	)
Gain on derivative instruments		10,219			4,122			107,381			68,884
Net loss	$	(4,059,484	)	$	(5,438,017	)	$	(17,821,524	)	$	(11,900,662	)
Net loss attributable to common shareholders per common shares-basic and diluted	$	(4,059,484	)	$	(5,438,017	)	$	(17,821,524	)	$	(11,900,662	)

Loss per common share basic and diluted	$	(0.05	)	$	(0.08	)	$	(0.25	)	$	(0.23	)

Weighted average shared used in computation – basic and diluted		78,383,878			65,406,312			71,084,454			51,272,960

See Notes to Condensed Consolidated Financial Statements

PREDICTIVE ONCOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2022

(Unaudited)

	Series B Preferred				Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance at 12/31/2021		79,246	$	792		65,614,597	$	656,146	$	167,649,028	$	(128,040,282	)	$	40,265,684
Shares issued pursuant to equity line						120,000		1,200		85,685					86,885
Shares issued to consultant & other						171,868		1,719		160,403					162,122
Vesting expense										36,518					36,518
Net loss												(3,370,715	)		(3,370,715	)
Balance at 03/31/2022		79,246	$	792		65,906,465	$	659,065	$	167,931,634	$	(131,410,997	)	$	37,180,494
Issuance of shares and warrants pursuant to May 2022 Private Offering						12,000,000		120,000		6,387,050					6,507,050
Shares issued pursuant to equity line						195,000		1,950		147,174					149,124
Shares issued to consultant & other						53,662		536		50,134					50,670
Vesting expense										39,383					39,383
Net loss												(10,391,324	)		(10,391,324	)
Balance at 06/30/2022		79,246	$	792		78,155,127	$	781,551	$	174,555,375	$	(141,802,321	)	$	33,535,397
Shares issued to consultant & other						229,212		2,292		91,708					94,000
Vesting expense						23,134		231		22,734					22,965
Net loss												(4,059,484	)		(4,059,484	)
Balance at 09/30/2022		79,246	$	792		78,407,473	$	784,074	$	174,669,817	$	(145,861,805	)	$	29,592,878

See Notes to Condensed Consolidated Financial Statements

PREDICTIVE ONCOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2021

(Unaudited)

	Series B Preferred				Common Stock				Additional Paid-In			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance at 12/31/2020		79,246	$	792		19,804,787	$	198,048	$	110,826,949		$	(108,383,108	)	$	2,642,681
Shares issued pursuant to agreement with former CEO related to accrued interest						100,401		1,004		142,569						143,573
Issuance of shares and warrants pursuant to Shelf offerings, net						13,488,098		134,881		14,877,611						15,012,492
Issuance of shares and warrants pursuant to February 2021 private placement, net						9,043,766		90,438		15,974,301						16,064,739
Exercise of warrants						5,247,059		52,471		4,442,799						4,495,270
Shares issued pursuant to convertible debt						1,107,544		11,075		502,936						514,011
Shares issued to consultant & other						2,665		27		(4,075	)					(4,048	)
Vesting expense										565,082						565,082
Net loss													(3,888,713	)		(3,888,713	)
Balance at 03/31/2021		79,246	$	792		48,794,320	$	487,944	$	147,328,172		$	(112,271,821	)	$	35,545,087
Issuance of shares and warrants pursuant to June 2021 direct placement, net						15,520,911		155,209		19,291,087						19,446,296
Shares issued pursuant to transition agreement with former CEO						400,000		4,000		(4,000	)					-
Shares issued pursuant to Equity Line						572,504		5,725		582,865						588,590
Shares issued to consultant & other						47,424		474		48,238						48,802
Vesting expense										33,243						33,243
Net loss													(2,573,932	)		(2,573,932	)
Balance at 06/30/2021		79,246	$	792		65,335,159	$	653,352	$	167,279,695		$	(114,845,753	)	$	53,088,086
Exercise of warrants						22,000		220		18,370						18,590
Shares issued to consultant & other						77,191		772		97,997

SEC Form 10-Q filed by Predictive Oncology Inc.