Q4 2022 Predictive Oncology Inc Earnings Call

March 22, 2023

Speaker 1: I.

Speaker 1: You.

Speaker 2: Good day and thank you for standing by welcome to the predictive oncology queue for 2022 earnings conference call at this time. All participants on the listen only mode after the speaker's presentation.

Speaker 2: To ask a question during that session, you'll need to press star 11 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Speaker 2: Please be advised that today's conference is being recorded and I would now like to hand the conference over to your speaker today Miss Theresa Ferguson senior director of marketing for predictive oncology Miss Ferguson, please go ahead

Speaker 3: Okay, thank you welcome and thank you everyone for dialing in. They will share about our latest updates. 1st, you're going to hear from our chief executive officer and chairman of the board. Ray and then our chief financial officer. Bob Myers will give you an overview about our financials. Finally, Dr Pamela Bush, our chief business officer.

Speaker 3: We'll join Raymond and Bob during the Q&A portion.

Speaker 3: Certain matters discussed in this call 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.

Speaker 3: included in the call 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.

Speaker 3: The words anticipate, believe, estimate, expect, intend, may, plan, would, target, and similar expressions are intended to identify forward-looking statements.

Speaker 3: Although not all forward-looking statements contain these identifying words. Our actual future performance may material differ.

Speaker 3: From that contemplated by the forward-looking statement, there was a variety of factors, including among other things, factors discussed under the heading risk factors in our filings with the FCC. Except as expressly required by law, the company disclaims any intent or obligation to update these forward-looking statements.

Speaker 1: The.

Speaker 2: Raymond Reneery is now able to present.

Speaker 2: Damon binary is now is now able to present.

Speaker 4: Thank you very much. So good morning, everyone. I apologize for this slight little glitch here and for the delay. Thank you all for taking the time to participate in the call.

Speaker 4: I look forward to we all look forward to answering any questions that you have at the end of our presentation. So I think it's important for me to reiterate a bit what I shared with everyone on March 7th in the letter to investors. That and that is basically that.

Speaker 4: Since I joined the company in November , if not several months before that, there has been a concerted effort to completely rebrand and reposition the company, if not to consolidate the assets. As predictive oncology at the science

Speaker 4: driven company, a science driven company applying our proprietary artificial intelligence.

Speaker 4: and machine learning capabilities to accelerate drug discovery, enable drug development. So that phrase is extremely important because that's who we are, what we do. It's the market in which we play and it is the customer base to which we appeal.

Speaker 4: drug discovery, the entire continuum of drug discovery and drug development.

Speaker 4: So that platform, our platform, the pedal platform includes, of course, as you all know, access to our own bio repository of more than 150,000 tumor samples and more than 250,000 I'm sorry, 200,000 pathology slides.

Speaker 4: both of which are not only core assets of the company, but they are key differentiators for us in the marketplace.

Speaker 4: As I also mentioned in that letter, although briefly, we are also completely reevaluating and expanding our intellectual property portfolio, and you will be hearing more about that in the coming weeks or possibly the next quarter.

Speaker 4: I should also point out, I think I've had an opportunity to speak with literally, literally hundreds of our shareholders, literally, either by phone through email, conference calls, town halls, any venue that we could.

Speaker 4: And one thing is clear to me is that it's unclear to some of the investors how distinctive we are and how innovative this platform is. So not to be obvious.

Speaker 4: But not all artificial intelligence platforms are the same. They're simply not created equal. Our platform.

Speaker 4: is quite unique, not only because of the platform itself and machine learning, but access to the biobank, but our ability to actually do scientific experiments to validate those in silico analyses in our own clear laboratory, in our own wet lab. EM zebaum.136

Speaker 4: So, the point is that the I in AI.

Speaker 4: The intelligence and artificial intelligence is that which makes us unique. It's not the algorithms themselves, it's the comprehensive approach to incorporating artificial intelligence and machine learning into the access to heterogeneous tumor samples. This is the Los heart. This is why I'm doing it. And today we're talking about,

Speaker 4: utilizing the wet lab that we have at our disposal. That is completely unique in the marketplace. That's what sets us apart. The value proposition for predictive oncology, again, this is for context, is that it's the intelligence that is derived by what we do.

Speaker 4: and the actionable information that we provide that distinguishes us in the marketplace. It's important for me to emphasize that because I think artificial intelligence by many people are seen as a widget really and ubiquitous, and it's the application of our...

Speaker 4: launch of predictive oncology's petal drug discovery platform. By commercialization and launch, what I mean is that we just signed, the company just announced that we have partnered with the Cancer Research Horizons referred to it as Cancer Research UK, which is the largest.

Speaker 4: private funder of cancer research in the world.

Speaker 4: the largest private funder of cancer research in the world.

Speaker 4: The purpose of this collaboration is to drive the development of oncology drugs.

Speaker 4: by incorporating our platform, our PEDAL platform, Predictive Oncology's PEDAL platform,

into the CRH.

to CRH drug discovery process.

by which we not only gain visibility and credibility,

We also gain access to many of the drug discovery and drug development companies in the world.

So, with the significance of this contract is that we have entree through CRH to every major or most.

major and even mid-cap biopharmaceutical companies.

in the world. They become a funnel for us through which we can access these companies.

The fact that they are incorporating our platform into drug discovery is a significant.

accomplishment for the company that cannot be underestimated. We also announced that the company had entered into agreement with Cvergenics Inc.

to develop the first ever genomics-based approach to precision radiation therapy and drug discovery, also using our PEDAL platform.

C-virginics is a spin-out of the Moffitt Cancer Center.

where the C4Genics Precision Genomics platform is being used right now.

in a phase two prospective clinical trial for triple negative breast cancer. So there are three things in that statement that are significant.

One is that

The C-vagenics platform is being used in a clinical trial, which as everyone knows is necessary for drug development and FDA approval for anything in development of a drug.

The second is that

it's the first ever genomics approach to precision radiation therapy. The work that we will be doing with Cvergenics is going to leverage that novel platform to focus on radiation oncology, which has been grossly.

underutilized and underserved for the last 30 years. At least in terms of drug discovery, drug development, but also in terms of the ability to screen and monitor patients receiving radiation therapy. And anyone who wants to ask questions after this can certainly feel free to do that.

And the third thing, again, is that it's our platform is going to drive that. And there are other utilities other than clinical application for this collaboration, which I'm also happy to discuss later.

As importantly, at least we think internally and we believe, as importantly, at least in terms of identifying future drug discovery and drug development opportunities, predictive oncology has launched the, it's called the Accelerating Compound Exploration Program, ACE, ACE. Let's take another one.

by which we partner with academic and research institutions to do exactly what the name suggests, to proactively accelerate and participate in their own drug discovery initiatives.

So, as you all know, because Pamela has been introduced to you in the past, either directly or indirectly, Pamela is now our Chief Business Officer.

And in that role, she will lead the company's business development, partnering and growth strategy.

and all of those efforts. So at the end of the call, please feel free to ask her any specific questions about any of these initiatives, contracts, objectives that you'd like to ask.

In support of all of this commercialization and launch strategy, and to further inform, if not accelerate our growth strategy, the company has begun to expand or at least supplement.

the board with two leading experts in biopharma. Again, they should be known to you because we've made it public. These are biopharma life science intellectual property experts. They are David Smith. and we're adding those are majorer looking experts. science alossus and Buddha and K Pretaters. You guys are all at our level.

Life Sciences and Intellectual Property Attorney, and a leading authority, nationally recognized authority on legal issues surrounding therapeutic use of human tissues and cells, which should be the significance of that should be obvious to everyone that's interested in.

what predictive oncology does and the biobank that we have. The other is Matthew Arialock, PhD, MBA, who is currently the Executive Vice President and Chief Business Officer of Gristone Bio, which also has an artificial intelligence component to it. But he is also the former Vice President of Corporate and Business Development.

of foundation medicine, which is, I'm sure most of you know, was subsequently acquired by Roche. The significance of Matthew being on the board should be equally obvious, that foundation medicine, what foundation medicine does, why Roche acquired them, the fact that there's an artificial intelligence component to this.

should make everyone comfortable. In fact, we have someone on the board who really understands not just the artificial intelligence, but the application of that in genomics and specifically for drug development, and even more specifically for positioning the company in terms of valuation in the marketplace.

So, in...

In parallel with that, we're also rebuilding our scientific advisory board around the submerging market opportunities with respect, of course, to artificial intelligence, oncology, drug discovery, and drug repurposing. So in addition to current members, Dr. Mark Melandro, Vice President of O

added just recently actually I think Bob can address this in a bit just yesterday signed the agreement with Kristoff.

Christoph Reinhardt, I'm sorry, PhD, MBA, who is the Senior Director of Translational Research on Oncology Pharmaceuticals and Therapeutics at Eli Lilly & Co.

He also established the next generation sequencing program there, preclinical and clinical, and preclinical and clinical space for them. So he too should be an obvious asset to the company. He's coming from industry, like Pamela. Pamela also came from Eli Lilly. And like Pamela, quite a few.

He's a PhD at MBA, so he understands the business of science, not just the science itself.

And most recently, we have engaged the largest integrated investor relations firm in healthcare and life sciences in the world.

They have global operations across North America, Europe , and Israel. The company is Life Science Advisors. Again, this was made available, this information was made available to our shareholders. They were engaged to raise awareness about predictive oncology among their Wall Street constituents, including...

life science analysts and institutional investors. To supplement that, we have a

Also, and lastly, engaged DLA Piper, a global law firm with very deep experience in life sciences, artificial intelligence, and intellectual property.

So collectively, this overview should.

to make it clear that we have moved, we've moved from R&D, we've moved from validation into the marketplace through Cancer Research UK and in collaboration with Cvergenics Inc., a relationship by which we have significant control over and what has definitely impacted our development.

through which we can control our own destiny with respect to differentiating ourselves in the radiation oncology market or radio sensitizers and radio protectors. And then building the team around us with the board, expanding the board, scientific advisory board of directors, that is scientific advisory board, our law firm and our investor relations firm.

So since this is an earning call, I'm sure the person you really want to be talking to and hearing from is Bob. So I will pass this off to Bob now and welcome any questions at the end of the presentation. Thank you.

Thank you, Raymond. I will give you all a financial summary and then we'll be able to go to our question and answer period. The 2022 financial summary, we concluded the full year of 2022 with $22.1 million in cash and cash equivalents. We're open now for questions, Illinois active taxpayers, having given us a look at the financial

And that was compared to the prior year of 28.2 million. The stockholders' equity completed at $21.8 million in 2022 against 40.3 million in 2021.

Predictive oncology recorded revenue of $1.5 million in 2022 compared to $1.4 million in 2021 and our gross profit margin was stable at 66%.

Expenses increased in 2022 compared to 2021. The increase in 2022 is primarily due to a higher payroll cost, higher costs related to laboratory expenses, as well as increased costs in sales and marketing, expenses that are driven by business development initiatives.

as we transition from research and development into commercialization.

Net cash used in operating activities was $12.3 million in 2022, which is a slight increase from $12.2 million in 2021. We're very consistent in monitoring our cash flow. Cash used in investing activities was $475,000.

Investing activities were primarily related to the acquisition of the predicted one of the initial subsidiaries.

Our net cash provided by financing activities was $6.7 million in 2022.

compared to 50 million point three provided in 2021. Cash flows provided by financing activities in 2022 were primarily due from proceeds from the issuance of common stock and warrants of $6.5 million during the first half of 2022. Cash flows provided by financing activities in 2021 were.

During the year ended December 31, 2022, we recorded an impairment of goodwill of $7.2 million for the full impairment of goodwill of Z predictive.

which was acquired in 2021, predominantly for GAAP and accounting related issues.

We recorded a full impairment of the ZPredictor intangible assets of $3.3 million during the year of 2022. And according to GAP, we impaired some intangible fixed assets totaling $185,000.

We incurred latent losses for the year in December 2021, I'm sorry, December 31, 2022, and December 31, 2021. Predominantly the losses were comprised of impairments. That would be our financial summation, which you could see in our earnings report that was

done with the press release in 8K yesterday, or in course in our 10K on file with the FCC and reachable in our website. So with that, I'm going to turn the call over to Raymond and I believe Raymond, we can start question and answers.

Anyone, whomever would like to ask a question of whomever it is you want to speak with, please do.ACH

Thank you as a reminder to ask a question, please press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. Stand by as we compile the Q and A roster.

One moment please for our first question.

Our first question will come from Michael Broadbent, the analyst. Your line is open. Your line is open.

Hi, Ray, Bob, can you all hear me okay?

Hi, Ray, Bob, can you all hear me okay? Yes, I can. Thank you.

Okay, great. Appreciate the time. My question revolves around, it's kind of a two parter. The Z-predict, the acquisition, the asset impairment and revenue growth seems inflationary at most.

outside of the cost increases under the current economic climate. In the 8K filed, there was mention of additional investment and potential offerings required down the road for further investment in the Helomics and I hope I said that right and the predict business lines. I'm wondering...

With that purchase, the payout to Julia as she left and everything else that goes in those entities, why haven't we seen any revenue growth, especially in Zpredicto over the last year, other than inflationary, you know, a couple of percent at most? And then...

As far as investment goes with the impeding or looming reverse split, is POAI willing to make

as investment goes with the impeding or looming reverse split, is POAI willing to make any

Any, how would you say it, concessions to investors to promise not to do an offering within the six months after the reverse split with $22 million in cash?

It really doesn't seem like there's necessary for an offering or additional debt or convertible notes unless you're planning to do any acquisitions.

It would go a long way to help investors who are about to get diluted that don't want to be diluted further. I'm not dodging the question, but since the entire GPDIC acquisition and everything you mentioned up to the last part of your question,

occurred before I came into the company. I'll ask Bob to address that because he has the historical perspective on it. So Bob, if you don't mind. Of course. Thank you, Raymond. And thank you, Michael.

So first and foremost as explained earlier and the impairment of goodwill and tangibles in Z-Predicta is predominantly from two things. One as explained earlier in the year when we did this in Q2, it was because of the fact that the market dropped.

We are.

beginning to bring in revenue from ZPredictor, but our forecast is it's not substantiated. We only own the company a year. And as a result, again, under GAAP rules, that means you have to – and I'm really simplifying this, Michael.

bring in revenue from ZPredictor, but our forecast is it's not substantiated. We only accompany a year. And as a result, again, under GAAP rules, that means you have to – and I'm really simplifying this, Michael.

right off the intangibles for purposes of GAAP. In terms of the revenue, we are sitting with revenue from ZPredict from 2022, it's not recognized. It's in our what's called contract liabilities line in the balance sheet and I believe that comes out about why we

The reason it's that way is because the way the contracts were developed is that there are various stages in revenue recognition under the accounting rules for the work we're doing as you predicted. There are various levels of it and various acceptance levels from that.

customers and we have not reached that level so therefore the revenue is not yet recognized.

In terms of future revenues, we are now consolidated under our Pittsburgh CLIA lab, and we are now kind of gone through everything with Predictive as one company, and we'll look to the future and see how we can develop a larger molecule revenue.

The second part of your question was regarding the.

So.

possible reverse split and cash raise.

So let me address it this way for you Michael and for everybody else. First off.

I want to repeat something that we have said continually. We at Predictive Oncology do not want to do a reverse lay.

We have done everything possible and anything possible within our control to avoid getting to the point of having to do a reverse split.

We've met with investors, we've been at investment conferences, Raymond has just personally contacted companies left and right. We've now made a deal with Crux, we have, as Raymond said, a deal with Zebra Genix. Companies that have fortunately bought the stock.

to an increase over the course of time during this past year that was then brought down again in the market.

This was not something we can help, but it was something we certainly tried to fight against, and we are still doing.

So the fact that we have put in, according to Wilson regulations, to begin the procedure for a reverse split, that is something we have to do. It's based on the timing. We waited as long as we could. And we are doing everything to protect the company and shareholders and to keep the value of the stock.

In terms of what happens between now and the time of the shareholder meeting, we have the ability to stop.

the reverse split procedure

If in fact the shares of the price per share gets above a dollar and stays that way for 10 consecutive trading days, we would then become compliant and we could drop the reverse split procedure. But if we don't do this reverse split procedure, then we leave ourselves in a position of not becoming compliant by May 8th and doing the share.

And this has given us a strength that when we go through the reverse split, we have absolutely no intention. And that is, in my view, the strength is the best for everybody, and that can require a

a fact that we are not going to be doing any cash raised.

I can't, I'm 100% promised, nobody can do that, six months following.

We have no intention of doing it. I don't find any reason for us to do it. We are a, we have been validated by our accounting firm as a continuing and ongoing organization. We have a support of a large warrant hold as the share prices increase and they don't have to increase very much to bring an input of cash.

and we will bring revenue in. So the intention, the desire, and the promise to do everything to avoid bringing in cash and doing your ways of that nature, that I can do.

Thank you, Raymond. If I can ask you one more question. If I can ask one more question for Bob. Bob in the past, I think even on shareholder calls.

You had mentioned that POAI has the know-how to get back to compliance. Do you have any more tricks up your sleeve to get us there?

Michael, I wish I did have tricks up my sleeve. Everything we've done is with being sleeveless here, if you will. And we've done good things. I'm not sure what more we can do than make a deal for Pedal.

make an incredibly promising deal with Seabroganics and bring in the people that we have in. You know, it's up to the shareholders to see that we are doing everything possible and altruistically to build our company and build our price per share.

and follow through. There's no tricks, there's just us fighting to make this company be what it can and is. I appreciate it. Hopefully we can get out behind those NDAs and get some of those contract terms public soon. I appreciate the hard work. Thank you so much guys.

May I? This is Raymond, if I may. Can I, am I heard? Yeah, you're good. Okay. So I just want on that last point, Michael, thank you for

Keeping the faith honestly, I know we've had some conversations and you you know how transparent I am with all of this

I can honestly say that we have done and will continue to do everything humanly possible. You know, we're not blind to the fact that...

What's going to make investors happy is closed contracts that can be disclosed with financial terms.

But I also want to be equally honest in saying we are constrained by those very contracts about what we can and cannot say We can we can say who we're talking to we can't say what we're doing with them It's a horrible situation to be in where an investor says who you working with and we say I can't tell you What's it about? I can't tell you how much is it worth? I can't tell you. I mean, those are honest answers

That's my definition of a nanosecond. But to Bob's point,

What we've tried to demonstrate to investors, I mean, I can only speak, you know, my history with the company is very short, but I can tell you in the history with this company since November , it's a different company. It's a completely different company. The traction that we have, the respect that we have, the progress that we've made, the value that we've made,

has truly been significant. It just isn't the evidence the investors need to see to convince them not to be squeamish about this. But also to your direct question, my direct answer is we can promise you to continue doing everything we possibly can to keep from doing a reverse split and it is the last thing that we want to do.

for us or for the investors. Period. That's the truth. Are there other questions?

Yes, thank you again to ask the question. Please press star 11 on your phone and wait for your name to be announced to withdraw your question. Please press star 11 again. 1 moment. Please for our next question. Our next question will come from the analyst, Robert Anthony.

Your line is open. Great, thank you very much and thank you Raymond and Bob. Two questions. One is really a follow-on on the Z-Predicta, if I can kind of do that one first. You know, Z-Predicta was acquired in December 2021 and at the time it was

announced it was, you know, complimentary to

predictive oncology's AI platform by leveraging its tumor specific cell culture, etc. And then, you know, the other statement in that sort of release was it was an immediate add to new revenue streams. You know, 12 months later, I bought the.

described kind of the impairment charges, the revenue charges, et cetera. And then the the departure of, I would say, a key individual at that predictor. I guess the question is, did that sort of departure of that key individual, did that slow down?

the revenue adoption or the revenue realization, because we're, as I said, 12 months in or 15 months in now, and that $10 million acquisition, it's pretty much written off and very little revenue to show for. Thank you.

Has the departure of a key individual like vPredicta caused us harm? The answer is no. We were prepared for that departure. We used that departure as a way to advance predictive towards its becoming one predictive and consolidated the

the San Jose office into our Pittsburgh office, where we've just signed new leases for the next five years and expanded our lab. Dr. Arlette Uline, who is the site leader and medical doctor that handles the lab and the Creo lab at Pittsburgh.

is very, very proficient at everything that she does. So our work is ongoing with the things that we took over from the predictor, which is simply now our Pittsburgh location. We don't refer to our subsidiaries anymore because we're one predictor.

As I said earlier, there's revenue to be recognized, it is sitting there. There is future revenue and that is now in a very capable hand as Dr. Pamela Bush, who was the person responsible primarily for the closing of the truck deal that we just had. I was fortunate had

And when we said back in November , December of 21 that this is new revenue, and one of the areas that we were referring to was not just revenue that we could gain through 3D filtering, and the customers that were there already paid for it.

already utilizing. So I think that a lot of that is yet to be seen as to where we're going to be and to the value of what we got from those customers. And Raymond, if you want to expand into that, or perhaps Pamela would like to.

Well, I can certainly, Robert, it's a pleasure to talk to you in person.

Did the departure of Dr. Julie Kirchner hurt us? No, it did not. As you know, in the acquisition and consolidation of any company asset personnel, decisions have to be made about

what we need, what's essential and what's not essential. So the assumption has always been that Julia was essential. And Julia was essential to the transition. She was not essential to moving the company forward, or I'm sorry, the technology forward. And as Bob said, we have some very smart people in our company, scientists, MDs.

computational biologists. They do this for a living. And secondly, Julia's number one person who did the 3D modeling is in the company now. He and his family moved to Pittsburgh. They're here. So nothing was lost in that transition. The assets are here. The domain expertise is here.

But more importantly and frankly, we actually know more about it now than we did a year ago, or whenever it was, I think a year, at least a year ago. And we see ways to move this forward or integrate it that was not immediately recognized. This is my perspective now, looking at it in retrospect.

that there's more to this than we thought. We're actually speaking with another company that does 3D modeling in a very different way with a different matrix and a different media, that is the culture in which these experiments are done, that may actually change the trajectory of 3D modeling and how we use it, or it may not, but we're at least.

overhead. It was that it was a personal decision on Julius Bart and it wasn't working professionally wasn't working and personally wasn't working.

We knew that we learned after the fact that was a possibility. So we did everything in our power to protect that investment.

that we learned after the fact that was a possibility. So we did everything in our power to protect that investment. So hopefully that sets.

supplements with the explanation that Bob gave. Yes, thank you. And one other thing for me, and I don't know if this, how you're going to answer this one, but so, you know, Bob, you talked about kind of cross-sell, up-sell, etc. based on relationships and clients.

And Raymond, you started the conversation around, you know, not all AI is created equal, right?

It's unique machine learning, access to biobank, wet labs, et cetera. And it's a unique value proposition that that. That is quite solid and that you've had the sort of validation that it's 92% effective, et cetera, et cetera. I guess the question is.

If it's that obvious, right, to POAI, predictive oncology, and as we're communicating to shareholders, do pharmas and biotechs see it as that obvious? And if they do, why aren't they flocking? I guess is really, again, maybe an answer to our question, but that's kind of the...

obvious, right, to POAI, predictive oncology, and as we're communicating to shareholders, do pharmas and biotechs see it as that obvious? And if they do, why aren't they flocking? I guess this is really, again, that's maybe an unfair question, but that's kind of the genesis of what I'm trying to get at.

Well, first of all, Robert, it's not an unfair question. So I'm going to, I will in a moment, in a moment, I promise Pamela, I'll hand this off to you because I know you're sweating over there right now. So Robert, here's the thing. There are three ways to look at this.

One is that by definition, when you're ahead of the curve, when you're an innovator, when you have something no one else has, you have to make it apparent. We see the need in biopharma and we see that we are a solution for biopharma, but biopharma has to understand where we fit.

in their workflow. So just A, from a sales cycle point of view, as Pamela mentioned, I believe, again, I wasn't there for the conversation, but I believe she mentioned that it was probably a 12 month sales cycle to get in, talk to the scientists. You have to understand what the sales cycle is. You talk to scientists, you talk to PIs.

You talk to business people and it's a mix of those people that decide to move that conversation up or down the ladder. So that cycle can be long. So for perspective.

mix of those people that decide to move that conversation up or down the ladder. So that cycle can be long. So for perspective,

From the time that Pamela started speaking with Cancer Research UK, to the day, literally the day that that contract was signed, was 12 months. It was a one-year cycle. So our projection on what the sales cycle was absolutely correct, spot on. Secondly, you have to understand that yes, AI is being used in biopharma and there are other people using artificial intelligence in biopharma and for drug discovery.

But it has to fit within the workflow of these organizations. It's not a widget. You just don't plug it in. This is science. It has to fit into their drug discovery, drug development protocol.

So, one of the reasons it takes a year is you have to show them how it fits. You have to show them. They're not going to make a $2 billion mistake because we couldn't demonstrate on the front end how the information that we deliver is going to make a meaningful difference. And the third, from my perspective, is that don't forget at the end of the line, end of the day, the FDA has to approve these things.

So it's all about tracing data, right? Tracing how do you know that this fact is correct? And that will ultimately lead back to our platform that says we believe the probability of this molecule could move you through drug development. Then it's on them. Once they make that decision, it's on them. So there are a lot of external pressures on the sales cycle.

to get this done, but it does not mean at all that BioPharma is not unwilling to do it. They are anxious to do it. In the letter that I sent to investors on the 7th, there was a market analysis, not analysis it really the market conditions around

why AI is being adopted by biopharma, why it's so important, and where we actually fit in that risk mitigation, in that process of risk mitigation on the preclinical side on the front end.

as being adopted by biopharma, why it's so important, and where we actually fit in that risk mitigation, in that process of risk mitigation on the preclinical side on the front end. So from my perspective, it's all of those things.

But Pamela, if you would like to provide more insight, please do. Hi, my name is Bush.

She is unmuted. Whatever technical difficulty we're having, Raymond, I think we should continue on and if Pamela is able to correct it and get in, that would be great.

So, Robert, if you want a more specific answer, I am happy. You can call me directly or we will get Pamela on the phone with you to answer that question. Thank you very much.

Thank you. And I'm seeing no further questions in the queue. I would now like to turn the conference back to Raymond Vannieri for closing remarks. I'm going to interject here for a moment, Raymond, forgive me, and correct me if I'm

So, if you could re-explain to everybody how to go ahead and make a – get on to make a question and present a question, that would be helpful.

Yes, sir, if anyone would like to ask a question or make a comment, please press star 11 on your phone. And wait for your name to be announced.

If you wish to withdraw your question, please press star 1-1 again. I'm only pleased to see if there will be any more questions.

After your question, please press star 1 1 again. One moment please to see if there'll be any more questions. Thank you, Chris. You're welcome, sir.

Again, please press star 1-1 to ask your question. And we have a follow-up from... We do have two questions. One moment. Yeah.

We now have a follow-up from the analyst Michael Broadbent. Again, your line is open.

Thank you. This question is for Bob.

Bob, is there any way, I think one of the major milestones that I'm looking for in predictive trajectory is achieving a break-even status and a zero cash burn?

Is there any way for y'all to be able to predict based on current workflow?

the horizon when that milestone will happen? Is it six months? Is it three months? Is it a year? Is it two years? And then the next question is, is the horizon going to be the same as the horizon? Is it three months? Is it a year?

Michael, that silence is me thinking.

There is not a way that I can currently predict that. And let me explain why. Raymond just indicated to everybody, actually not indicated, very succinctly.

stated that it takes a year or currently a year for our sales cycle with predictive with pedal. And I can tell you that pedal revenue is got various components to it that will show

both when agreements occur and as agreements progress and as milestones are reached and and you know we

progress along the years. So maybe I could rephrase the question a little bit smaller.

along the years. So maybe I could rephrase the question a little bit smaller. What is the time frame?

from signing the contract to the first contract milestone, where Predictive receives payment on pedal contracts.

Is that a three month time frame? Is it a six month time frame or is it a year? I think that should be able to be divulged without violating any type of contract because you're not getting what type of work is being done.

Yes, absolutely. I can give you a generalized view.

All right, perfect. I'm sorry Raymond, are you cutting in there? No, that wasn't me. Okay, sorry. All right, I can give you a generalized view. So first and foremost, we come to agreement on a contract and then there is an initial price that has to be-

be paid that we have is revenue for us to begin the work. You know, this is where we get the, that's gonna vary based on the number of drugs that we're gonna receive that wanna be go through the process in the amount of...

tumors that we're going to use in the process to evaluate the drugs. Now, that process goes through iterations and each iteration, and again, I'm being very general here, but based on the number of drugs, based on the number of tissues, it could be a week, it could be a little longer.

It's a continual process and we're continually learning as we go along from that process both through our machine learning and of course through going back to the lab. So what happens is 10 to 12 weeks later we hope to have the initial answers from whatever project we're doing. Again this is dependent on the size of the project.

based on that answer and what we have in the contract is the next stage for what the drug pharma company is going to do and there could be a milestone now for successes on what they proceed with depending on a contract they could be evaluating what they don't proceed with.

So there's just a number of ways for that revenue to come in. The next thing is, is that the drugs have to go through clinicals. Now, I'm not sure if you're aware of it, but the FDA in this past December , passed the FDA Modernization Act 2.

Which essentially and again, I'm being liberal with my answer here and you know in terms of paraphrasing but it's essentially Saying that the FDA Is very accepting of artificial intelligence And wants to proceed in that direction and it's hopeful that this is something that's going to

So I'm not really capable of fine-tuning that. Then you go through U.N. vehicles and once you get through that and the drug does go to market, then there's opportunity for passive income for a deal that we might make for revenue off of any drug that succeeds, goes through discovery and actually goes to market to the U.N. vehicle.

to ultimately the patients. Yeah, I think you're looking at longer term. You know, really you're looking for clarity on that.

Take a look at these molecules or this molecule. Take a look at this compound. I need to know what the probability of success will be for this compound to move through the preclinical phase into drug development, or at least into preclinical, meaning animal testing and possibly humans in phase one.

So that's the first part of it. They come, they say, look at this stuff, right? Is it yes or no? Is it good? Is it bad? Is it high probability, low probability? That's the fee for service. They come in, the front end of it is, look at our stuff, tell us what you think. We tell them, and we send them a bill. So that's fairly immediate. And as Bob said, that could be. 50

from the time that they contact us. We actually, as I said initially, in the sales cycle of the contracts, we actually have to do work on our side to show them and to figure out. We have to develop our own protocols to answer the questions that they're asking us. It's not, as I said, it's not a widget. You just don't drop it in the toaster and it pops back up. So there's work on our part on the front end. Then we do the work for them. We give them the answer. And whether the answer is high probability or low probability, no user tells you the answer unless they never talk to us. So there's work on our side to explain why this might happen and how our riffle cat fragmentation but all of the details that we're looking at is that we have more deadlines to tell people after the question becomes obvious. That's how we do it. But we'veTH he time it is that a Sending

That's the contract and they pay us for the work that we do. That's, you know, let's say it's three months to do that. I think that's a fair estimate.

I'm assuming everything moves so quickly. The second part of it is- If I can jump in. Yeah, go ahead. If I can jump in, okay. Cause I think this is what shareholders should be latching onto because this is a positive takeaway from this question is that whatever fortune cutter Former

Ultimately, we want to know when are we going to see an increase in revenue? And the quick takeaway from that is, is predictive will get some fees upfront after signing each contract for pedal services. And with that in mind, from Q1 revenue, we should see a small bump in revenue, assumingplay tax huge increases, because the

All these announcements were signed contracts with the UK Research Partnership and other companies. We should see a bump in gross revenue for Q1 2023, correct?

Not from the partnership because the...

Go ahead. Go ahead. It may be small, but we should see something. Yeah. So I'll answer it directly as the contracts go. So the Seavergenic, no, we're not going to see an immediate bump in revenue because the whole point of this is for us to figure out how to use their stuff to our benefit.

How do we utilize that PGRT platform to develop something for ourselves, which we own, where we control our own destiny? The analogy there is rather than waiting for a pharmaceutical company to come to us at some point with a molecule, we go to them with a molecule and say, hey, we think that this molecule works as a radio sensitizer or a radio protector. That's different.

is issued, then it's whatever, you know, 30 days, 60 days, 90 days, whatever their pay cycle is. So the answer is yes. The front end work is fee for service. The back end work are milestones and the milestones are tied to the value created by the work that we do. And value can be saying no, right? Kill it quick.

Because if we identify a molecule that has low probability, that's a molecule they otherwise would have taken through development, and in five years figured out, five years and $50 million later, figured out it didn't work when they could have come to us, and we could have told them that in a year or less than that. So that's the value proposition.

I'm happy to hear, though, by Q2, end of Q2 this year, we should see some bumps in revenue on the predictive, even if it is listed as contract liabilities. It's nice to hear that there's progress in the short term. Thank you, Michael. Thank you. One moment, please, for our next question.

And our next question will also be a follow up for the analyst, Robert Antonioni. Your line is open. Hi, thanks. And sorry, I don't want to monopolize the time, but just a question on really, as a shareholder, I've been here a long time and believe in the kind of

promise and all those kind of good things. I guess the question I have is, as the key executives in predictive oncology, one of the things that you know...

some of the shareholders are talking about is the amount of ownership that key executives have outside of incentive based compensation. Can you make a comment on, you know,

on that. Is there any plans for the individuals to, you know,

you know, put their confidence in by acquiring market-based

to put their confidence in by acquiring market-based stock.

Sure, I think Robert, I think I addressed that slightly in the investor letter. There is interest, yes. Of senior management, yes. And board members, yes. And the company itself, yes. To either buy stock in the open market or stock purchase. We are precluded from doing that.

We have been since December and we will be through May. Bob, if you have the exact dates, that's great. But it's that we can't. We're in a blackout period. We're not permitted to do it. We actually tried. I asked Bob to figure out some way to contact the FCC, and there is this sort of safe harbor process, but it's so convoluted, the process takes longer than waiting out the May deadline for the end of the blackout.

So, uh, there's nothing nefarious in senior management, not purchasing stock. There's a desire to do it. We're just not permitted to do it at the moment. Because if there was any time we knew was a good time to buy stock, just like any other investor, it's when it's, you know, when we can buy it up at a reasonable price, but the reality is we can't do it. That's fair. So, so if outside of the blackout period, that's, that's totally fair. You got to do what you don't want to kind of violate anything, but outside of the blackout period.

there's my guess is really the question and the intent. Again, it'll show confidence to the shareholders that you guys are in it with us. Yeah, no, Robert, listen, you are so right. There's nothing about that question that it's either improper or not obvious.

But we're also constrained by the reality of being a public company and under the thumb of the FCC, or at least under the guidance, I should say, of the FCC. Thank you.

Thank you. And again, to ask a question, please press star 11 on your phone and wait for your name to be announced. If you all support tples, you can click on the link at the end of this video.

Stand by as we compile the Q&A roster. Again to ask a question, please press star 1-1 on your phone.

I am not seeing any questions in the queue.

I will turn the conference back to Raymond Vannari for closing remarks. One moment. It looks like we do have another question. One moment.

We do have a question from Danny Garcia of KSU. Your line is open. Hello Ray and Bob. I'm showing up a little late so I don't know if anybody has asked the question yet. Are you guys able to hear me right?

We have a question from Danny Garcia of KSU. Your line is open. Hello, Ray and Bob. I'm showing up a little late, so I don't know if anybody has asked the question yet. Are you guys able to hear me right? Yes. Danny, good to talk to you. Okay.

Good to talk to you as well. It's good to hear from you again. I was going to ask, some of you guys have structured everything that's currently going on with the reverse split. Some investors are the way that you're most likely going to reverse split, depending on what you guys do. What are you guys shooting for post split? You want the share price to be in a range of...

you know, three, you know, three to five or, you know, what, what's facing your guys's decision off of, you know, what dilution number you guys would use.

So, Danny, I'll answer that for you. This is Bob. As you know, in the preliminary proxy that we put out, the Board approved this to do a 1 to 2 to 125. And the reason that we make such a broad range is because we have a lot of people who are

is because a lot of it is going to be dependent on where the price per share is at the time of the shareholder meeting and before we look to go effective.

So the vote from the shareholders is based on the fact that we can do anything between 1 to 2 to 1 to 25. Then once that is approved, we as a management team who has already been discussing this...

not only amongst ourselves, but with some very wise consultants, will make a determination as to where we want to be.

It involves a lot of things. Number one, generally when you do a reverse split, there's usually a down ride from the initial split where a reaction is to sell off.

you know, you come down a little bit. So, you know, that reverse split doesn't automatically gain you compliance. It's carrying that price for 10 consecutive business days. So that by May 8th, we are compliant. So coming in at $1.10 or $1.15.

wouldn't be a prudent move because it could go below a dollar and they just Sacrificed everything we've done by coming in to low on the other hand You know, we don't want to do a ratio that that's going to be disruptive to anybody You know ideally in the market. It's anywhere from 350 to 450 and that's not what I'm saying that we're doing I'm using an indicator

of the value of the stock, the beestorm to the shareholders, and the assurance that we could go through 10 complete days consecutively and gain compliance with.

Yeah, okay. So this question is more directed towards you, Bob. So basically there was a question saying that something about how many shares the board of directors have. Would you guys be willing to, with the guys' compensation pay increase, would you guys be willing to I guess that kind of commission pay increase or

switch over from getting instead of no pay cash would you guys be willing to accept more stock you know just because like

depending on the decisions you make and how the company grows, if you're getting paid more stock than anything else, you guys wouldn't want the share price to go down, right? And so going based off of what you said, Bob, of being the real deal, Hellomics back in the day was supposed to be receiving all these contracts. So the Click

In the end, they did it. And so we hopped over to different subsidiaries, including Deep Predicta, which got a write-off, which was massive. Would you guys be willing to…

shift your guys's pay for more stock than you know cash

So Danny, that's a good question. Let me first...

I'm going to, since it is kind of a personal question, I'm going to answer this personally. You know, we're all workers here, we're all people that are supporting families and trying to make a living.

I believe very much in what we're doing with Pedal and now the opportunity with Seaborgenics. So my desire to succeed and to bring the shareholders value is very, very altruistic and very, very much for me.

on what we do and in the hope that we can make a difference in cancer. And I would just love to see that. Now, in terms of getting a stock, yeah, and I've done that in the past. Even when I first joined the company, I was paid very, very little because it was not very, very much cash.

And I received options as my pay. And like many shareholders, through historical problems with the stock, I lost that. And that's okay because I took that chance and I'm willing to take that chance again.

But there are certain restrictions, there's certain rules and regulations regarding stock as a salary. So we try to do the best we can to get the combination of both, and we are developing a new plan. I haven't presented it yet to anybody, but I'm looking at a new plan that might help in terms of options for people.

this company, and again, it predates me, but I see it, retrospectively, there are people in this company who work without salaries to keep it going.

As the commitment of these people that have been around for quite a while have recognized the importance of what they do, but also the potential of this company, they have worked and continue to work, you know, seven days a week, 365 days a year if necessary, and have gone without salaries completely absent any stock.

to make sure that the company moves forward, to help this company move forward. So if the concern by investors is, we're not committed to the company, or that in some way we're taking advantage of the opportunity to make money rather than taking stock, that's simply not true. The commitment is there, and the desire to make it successful is there. So I want you to feel comfortable, I want everyone to feel comfortable.

As a reminder, to ask a question, please press star 11 on your phone, and please wait for your name to be announced. To withdraw your question, please press star 11 again. One moment please as we compile the Q&A roster.

In one moment.

One moment!

And we do have another question. Our question will come from Brenda Thompson.

Your line is open. I have a rhetorical question and that is the higher the

the price, even if it doesn't get to one, you have to do a reverse split. Okay, doesn't that benefit all of the shareholders because then they're deleted left? That's my question. Thank you.

So I'm sorry, the question I get, Brenda, is the higher the price. I'm taking that as a question regarding the reverse or split. Honestly, this is honestly my Newsp homage to standards overall. Usually that was, I don't know, huge Bugaye orb,

basically say this in terms of actual value. The value to the shareholder doesn't change. It's proportional split to the price of the price per share to the amount of shares you own. So your essential value does not switch. In terms of the price and the higher the price being.

better for the shareholders, you make a very, very good point. It's not the way we want to get there. We want to get there because people are buying the stock and because they believe in what we're doing and we're bringing a good return to them. But you're absolutely right that by getting the price into a...

true value of the stock where the type of investors that are high net worth and are looking to really support a company are gonna invest and cause that price to now naturally go up as we wish to, that is a big help. But when we're doing something like this reverse split, we have to be very cognizant of all areas of how that price is affected. And again, since I'm talking about reverse split, I'm gonna be really...

One moment as we compile the Q&A roster.

And it's because I'm seeing no further questions in the queue.

If you like, I will hand the call back to Mr Raymond for neary for closing remarks.

Thank you, Chris. And thank you, everyone. Hopefully, this has been helpful and you have a deeper understanding and perspective of where we are and what our intentions are moving forward and the efforts that are being made. But as usual, and as I promised from day one, if anyone has any question about anything, please contact us directly and we'll do our best to.

There are no questions in the queue at this time, so this will conclude today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.

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Good day and thank you for standing by. Welcome to the Predictive Oncology Q4 2022 earnings conference call. At this time, all participants are on the listen-only mode. After the speaker's presentation, we'll be open for any questions from the audience.

To ask a question during that session, you'll need to press star 1 1 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your questions, please press star 1 1 again. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your speaker today, Ms. Theresa Ferguson, Senior Director of Marketing for Predictive Oncology. Ms. Ferguson, please go ahead.

Thank you. Welcome and thank you everyone for dialing in. Today we'll share about our latest updates. First you're going to hear from our Chief Executive Officer and Chairman of the Board, Raymond Vannari. Then our Chief Financial Officer, Bob Myers, will give you an overview about our financials. Finally, Dr. Pamela Bush, our Chief Business Officer, will join Raymond and Bob during the Q&A portion. Certain matters discussed in this call contain forward-looking statements. These forward-looking statements reflect our current expectations and projections about future events.

are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Our actual future performance may material differ from that contemplated by the forward-looking statement with a variety of factors, including, among other things, factors discussed under the heading risk factors.

in our filings with the FCC. Except as expressly required by law, the company disclaims any intent or obligation to update these forward-looking statements.

Thank you for bearing with us with that. And now we are going to welcome Raymond Benary and get him on the line.

Thank you for bearing with us with that. And now we are going to welcome Raymond Vineri, and we'll get him on the line. One moment please.

In every is now is not able to present.

Thank you very much. So good morning everyone. Apologize for this slight little glitch here. And for the delay, thank you all for taking the time to participate in the call. I look forward to answering any questions that you have at the end of our presentation. So I think it's important for me to reiterate a bit what I shared with everyone on March 7th in the letter to investors.

And that is basically that since I joined the company in November , if not several months before that, there has been a concerted effort to completely rebrand and reposition the company, if not to consolidate the assets. As predictive oncology as a science driven company, a very science driven company applying our proprietary artificial intelligence.

and machine learning capabilities to accelerate drug discovery, enable drug development. That phrase is extremely important because that's who we are, what we do. It's the market in which we play and it is the customer base to which we appeal.

drug discovery, the entire continuum of drug discovery and drug development. So that platform, our platform, the PEDAL platform, includes, of course, as you all know, access to our own biorepository of more than 150,000 tumor samples and more than 250,000 or I'm sorry, 200,000 pathology slides.

both of which are not only core assets of the company, but they are key differentiators for us in the marketplace. As I also mentioned in that letter, although briefly, we are also completely reevaluating and expanding our intellectual property portfolio.

And you will be hearing more about that in the coming weeks or possibly the next quarter. I should also point out, I think I have had an opportunity to speak with literally hundreds of our shareholders. Literally. Either by phone, through email, conference calls, town halls, any venue that we could.

And one thing is clear to me is that it's unclear to some of the investors, how distinctive we are and how innovative this platform is. So not to be obvious, but not all artificial intelligence platforms are the same. They're simply not created equal. Our platform is quite unique, not only because of the platform itself and machine learning, but also because of the platform itself.

and access to the biobank, but our ability to actually do scientific experiments to validate those in silico analyses in our own clear laboratory, in our own wet lab. The point is that the AI, in AI, the intelligence and artificial intelligence is that which makes us unique. It's not the algorithms themselves, it's the comprehensive approach to incorporating artificial intelligence and machine learning into the access to heterogeneous tumor samples.

utilizing the wet lab that we have at our disposal. That is completely unique in the marketplace. That's what sets us apart. The value proposition for predictive oncology, again, this is for context, is that it's the intelligence that is derived by what we do, and the actionable information that we provide that distinguishes us in the marketplace. It's important for me to emphasize that because I think artificial intelligence by many people.

are seen as a widget really and ubiquitous. And it's not, it's the application of our science base that allows our artificial intelligence engine to differentiate us. So in the last few months, as I said, we have moved from R&D and product development to the validation, commercialization and launch, launch of predictive oncology's petal drug discovery platform. And by commercialization and launch, what I mean is that we just signed, the company just announced that we have partnered with the cancer research, with cancer research horizons, we refer to it as,

Cancer Research UK, which is the largest private funder of cancer research in the world.

the largest private fund of cancer research in the world. The purpose of this collaboration is to drive the development of oncology drugs.

by incorporating our platform, our PEDAL platform, Predictive Oncology's PEDAL platform, into the CRH drug discovery process.

by which we not only gain visibility and credibility, we also gain access to many of the drug discovery and drug development companies in the world. So with the significance of this contract is that we have entree through CRH.

to every major or most major and even mid-cap biopharmaceutical companies in the world. They become a funnel for us through which we can access these companies.

The fact that they are incorporating our platform into drug discovery is a significant accomplishment for the company that cannot be underestimated.

We also announced that the company had entered into agreement with Cvergenics Inc to develop the first ever genomics-based approach to precision radiation therapy and drug discovery, also using our PETAL platform. Cvergenics is a spin-out of the Moffitt Cancer Center.

where the C-vagenics precision genomics platform is being used right now in a phase two prospective clinical trial for triple negative breast cancer. So there are three things in that statement that are significant.

the C-vagenics precision genomics platform is being used right now in a phase two prospective clinical trial for triple negative breast cancer. So there are three things in that statement that are significant. One is that

The Subrogenics platform is being used in a clinical trial, which as everyone knows is necessary for drug development and FDA approval for anything in the development of the drug. The second is that

It's the first ever genomics approach to precision radiation therapy. So the work that we will be doing with Cvergenics is going to leverage that novel platform to focus on radiation oncology, which has been grossly underutilized and underserved for the last 30 years, at least in terms of drug discovery, drug development, but also in terms of the ability to screen and monitor patients.

receiving radiation therapy. And anyone who wants to ask questions after this can certainly feel free to do that. And the third thing, again, is that it's our platform is going to drive that. And there are other utilities other than clinical application for this collaboration, which I'm also happy to discuss later. So as importantly, at least we think internally, we take what may be presented by NASA hasharmon IP but from that standpoint, we rely on our partnersley, who are archiving on data onro to cowardice

rate and participate in their own drug discovery initiatives. So as you all know, because Pamela has been introduced to you in the past, either directly or indirectly, Pamela is now our chief business officer.

And in that role, she will lead the company's business development, partnering and growth strategy. And all of those efforts, so at the end of the call, please feel free to ask her any specific questions about any of these initiatives, contracts objectives that you'd like to ask. In support of all of this commercialization and launch strategy.

And to further inform, if not accelerate our growth strategy, the company has begun to expand or at least supplement. The board with 2 leading experts in bio pharma again, they should be known to you because we've made it. But we've made it public.

These are biopharma life science intellectual property experts. They are David Smith, a life sciences intellectual property attorney and a leading authority, nationally recognized authority on legal issues surrounding therapeutic use of human tissues and cells, which should be the significance of that should be obvious to everyone that's interested in

what predictive oncology does and the biobank that we have. The other is Matthew Hariulock, PhD, MBA, who is currently the Executive Vice President and Chief Business Officer of Gristome Bio, which also has an artificial intelligence component to it. But he is also the former Vice President of Corporate and Business Development of Foundation Medicine, which I'm sure most of you know was a subsequent.

artificial intelligence, but the application of that in genomics and specifically for drug development, and even more specifically for positioning the company in terms of valuation in the marketplace. So in parallel with that, we're also rebuilding our scientific advisory board around the emerging market opportunities with respect, of course, to artificial intelligence, oncology, drug discovery.

and drug repurposing. So in addition to current members, Dr. Mark Melandro, Vice President of Operations and Sciences, the Chan Zuckerberg Foundation, and with machine learning and Italy's pioneer, Robert Murphy, actually the inventor of the core platform, the ACORE platform that drives PETL.

We've added just recently, actually, I think Bob can address this in a bit, just yesterday signed the agreement with Christoph Reinhardt, I'm sorry, PhD, MBA, who is the Senior Director of Translational Research oncology, Pharmaceuticals and Therapeutics at Eli Lilly and Company.

the largest integrated investor relations firm in healthcare and life sciences in the world. They have global operations across North America, Europe and Israel. The company's life science advisors, again, this was made available, this information was made available to our shareholders. They were engaged to raise awareness about predictive oncology among their Wall Street constituents, including life science analysts and institutional investors. To supplement that.

We have also and lastly engaged DLA Piper, a global law firm with very deep experience in life sciences, artificial intelligence, and intellectual property. So collectively, this overview should...

to make it clear that we have moved, we've moved from R&D, we've moved from validation into the marketplace through Cancer Research UK and in collaboration with Cibrogenics Inc., a relationship by which we have significant control over and...

Through which we can control our own destiny at least with respect to differentiating ourselves in the radiation oncology market or radio sensitizers and radio protectors And then building the team around us with the board expanding the board scientific advisory board of directors that is scientific advisory board our law firm and our investor relations firm So since this is an earning call sure the person you really want to be talking to and hearing from is

year of 2022 with $22.1 million in cash and cash equivalents. And that was compared to the prior year of $28.2 million.

The stockholder's equity completed at $21.8 million in 2022 against $40.3 million in 2021. Predictive oncology recorded revenue of $1.5 million in 2022 compared to $1.4 million in 2021 and our gross profit margin was stable at 66 percent. Expenses increased in 2022 compared to 2021.

The increase in 2022 is primarily due to higher payroll costs, higher costs related to laboratory expenses as well as increased costs in sales and marketing, expenses that are driven by business development initiatives.

as we transition from research and development into commercialization. Net cash used in operating activities was $12.3 million in 2022, which was a slight increase from 12.2 in 2021. We are very consistent in monitoring our cash flow. Net cash used in investing activities was $4.5 million in 2022, which was a slight increase from $12.3 million in 2022. Net cash used in investing activities was $4.5 million in 2022, which was a slight increase from $12.3 million in 2022.

We predicted that well one of the initial subsidiaries

Our net cash provided by financing activities was $6.7 million in 2022 compared to $50 million.3 provided in 2021. Cash flows provided by financing activities in 2022 will primarily do

from proceeds from the issuance of common stock and warrants of $6.5 million during the first half of 2022. Cash flows provided by financing activities in 2021 were primarily due from proceeds from the issuance of common stock and warrants of $50.5 million and from the proceeds and exercise of warrants of $4.5 million.

all of which was offset by a debt repayment of $5.2 million. The company is currently debt-free. During the year-ended December 31, 2022, we recorded an impairment of goodwill of $7.2 million.

for the full impairment of goodwill of Z-Predictor, which was acquired in 2021, predominantly for GAAP and accounting related issues. We recorded a full impairment of the Z-Predictor intangible assets of $3.3 million during the year of 2022, and according to GAAP, we impaired some intangible fixed assets.

total is $185,000. We incurred litany losses for the year in December 2021 – I'm sorry, December 31, 2022 and December 31, 2021. Predominantly the losses were comprised of impairments. That would be our financial summation which you could see in our earnings report that was ge beats based on the short timeline on whereRuPaul or Coke or Coke 1, which I'm talking about. And then of course there was something else which was convened in July .

done with the press release in 8K yesterday or in course in our 10K on file with the FCC and reachable in our website.

So with that, I'm going to turn the call over to Raymond and I believe Raymond, we can start question and answers. Anyone, whomever would like to ask a question of whomever it is you want to speak with, please do. Thank you. As a reminder, I'm going to start the call over to Raymond and I believe Raymond.

To ask a question, please press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. Stand by as we compile the Q&A roster. One moment, please, for our first question. Our first question will come from Michael Broadbent.

The analyst, your line is open. Hi, Ray, Bob, can you all hear me okay? Yes, I can, thank you. Okay, great, appreciate the time. My question revolves around, it's kind of a two parter.

Z-Predict, the acquisition, the asset impairment, and revenue growth seems inflationary at most.

that purchase, the payout to Julia as she left, and everything else that goes in those entities, why haven't we seen any revenue growth, especially in ZPredict over the last year, other than inflationary, a couple of percent at most? And then as far as investment goes with the impeding or looming reverse split, is POAI willing to make my own decision please?

any, how would you say it, concessions to investors to promise not to do an offering within the six months after the reverse split with $22 million in cash, it really doesn't seem like there's necessary for an offering or additional debt or convertible notes unless you're planning to do any acquisitions.

It would go a long way to help investors who are about to get diluted that don't want to be diluted further. Right. So, I will, I'm not dodging the question, but since the entire ZPredict acquisition and all of those other, everything that you mentioned, essentially up to the very last part of your question occurred before I came into the company, I'll ask Bob to address that because he has the historical perspective on it.

So, Bob, if you don't mind. Of course. Thank you, Raymond. And thank you, Michael. So, first and foremost, as explained earlier, and the impairment of goodwill and the tangibles as you predict is predominantly from two things. One, as explained earlier in the year when we did this in Q2, it was because of the fact that the market dropped and where our cash value is against our...

price per share at that time. Under accounting rules, essentially, we had to impair the $7.2 million.

The $3.3 million is relevant to the fact that we are beginning to bring in revenue from ZPredictor, but our forecast is it's not substantiated. We only company a year. And as a result, again, under GAAP rules, that means you have to – and I'm really simplifying this, Michael.

right off the intangibles for the purposes of GAAP. In terms of the revenue, we are sitting with revenue from ZPredict from 2022, it's not recognized. It's in our what's called contract liabilities line in the balance sheet and I believe that comes out to about $600,000. The reason it's that way is because the way the contracts were.

developed is that there are various stages in revenue recognition under the accounting rules for the work we're doing, and as you predicted, there's various levels of it and various acceptance levels from the customers, and we have not reached that level, so therefore the revenue is not yet recognized. In terms of future revenues, we are now consolidated under our Pittsburgh

CLIA lab and we are now kind of gone through everything with Predictive as one company and we'll look to the future and see how we can develop a large molecule revenue. The second part of your question was regarding the

lab and we are now kind of gone through everything with Predictive as one company and we'll look to the future and see how we can develop a large molecule revenue. The second part of your question was regarding the

possible reverse split and cash raise. So let me address it this way for you Michael and for everybody else. First off, I wanna repeat something that we have said continually. We at Predictive Oncology do not want to do a reverse split. We have done everything possible and anything possible within our control to avoid getting to the point of having to do a reverse split.

We've met with investors, we've been at investment conferences, Raymond has just personally contacted companies left and right. We've now made a deal with Crück, we have, as Raymond said, a deal with Zebra Genix.

things that have fortunately brought the stock to an increase over the course of time during this past year that was then brought down again in the market.

This was not something we can help, but it was something we certainly tried to fight against, and we are still doing. So the fact that we have put in, according to rules and regulations, to begin the procedure for a reverse split, that is something we have to do. Based on the timing, we waited as long as we could. And we are doing everything to protect the company and its shareholders and to keep the value of the stock.

In terms of what happens between now and the time of the shareholder meeting, we have the ability to stop the reverse split procedure if in fact the shares of the price per share gets above a dollar and stays that way for 10 consecutive trading days. We then become compliant and we could drop the reverse split procedure. But if we don't do this reverse split procedure, then we leave ourselves in the position of

not becoming compliant by May 8th, and doing the shareholders and the company a very large disservice. As regards cash, Michael, and everybody else, you're quite right. We feel very comfortable where we are in our cash position. This is an unusual situation if you look at the companies that are deficient in the market of which there are hundreds. And this has given us a strength that when we go through the reverse split, we have absolutely no intention, and that is a fact that we are not going to be doing any cash raised.

I can't 100% promise, nobody can do that, six months following. We have no intention of doing it. I don't find any reason for us to do it. We are a, we have been validated by our accounting firm as a continuing and ongoing organization. We have support of a large warrant hold as the share prices increase and they don't have to increase very much to bring an input of cash.

and we will break revenue in. So the intention, the desire, and the promise to do everything to avoid bringing in cash and doing arrays of that nature, that I can do. Thank you, Randy. If I can ask you one more question. If I can ask one more question for Bob. Bob, in the past, I think even on shareholder calls, you had mentioned that POAI has the know-how to get back to compliance. Do you have any more tricks up your sleeve to get us there? Well, Michael, I wish I did have tricks up my sleeve.

Everything we've done is with being sleepless here, if you will. And we've done good things. I'm not sure what more we can do than make a deal for Pedal, make an incredibly promising deal with Seaborgenics and bring in the people that we have in. It's up to the shareholders to see that we are doing everything possible and altruistically to build our company and build our price per share.

and follow through. There's no tricks, there's just us fighting to make this company be what it can and is. I appreciate it. Hopefully we can get out behind those NDAs and get some of those contract terms public soon. And I appreciate the hard work. Thank you so much, guys. May I, this is Raymond, if I may, can I, am I heard?

Yeah, you're good. Okay, so I just want on that last point, Michael, thank you for keeping the faith. Honestly, I know we've had some conversations and you know how transparent I am with all of this. I can honestly say that we have done and will continue to do everything humanly possible. You know, we're not blind to the fact that what's going to make investors happy is

But I also want to be equally honest in saying we are constrained by those very contracts about what we can and cannot say. We can say who we're talking to. We can't say what we're doing with them. It's a horrible situation to be in where an investor says, who are you working with? And we say, I can't tell you. What's it about? I can't tell you. How much is it worth? I can't tell you. I mean, those are honest questions. They sound swift and arrogant, but they're really not.

All I can say is no one is more anxious to let the investors know about these contracts than we are. And there will be the definition of a nanosecond is the time from which the ink is dry and the terms are disclosed and the investors being notified. That's my definition of a nanosecond. But to to to Bob's point, what we've tried to demonstrate to investors, I mean, I can only speak, you know, my history with the company is very short, but I can tell you in the history with this company since November . It's a different company. It's a completely different company. The traction that we have.

the respect that we have, the progress that we've made, has truly been significant. It just isn't the evidence the investors need to see to convince them not to be squeamish about this, but also to your direct question, my direct answer is we can promise you to continue doing everything we possibly can to keep from doing a reverse split, and it is the last thing that we want to do for us or for the investors, period. That's the truth.

that we have, the progress that we've made has truly been significant. It just isn't the evidence the investors need to see to convince them not to be squeamish about this. But also to your direct question, my direct answer is we can promise you to continue doing everything we possibly can to keep from doing a reverse split. And it is the last thing that we wanna do for us or for the investors, period. That's the truth. Are there other questions?

Yes, thank you. Again, to ask the question, please press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment please for our next question. Our next question will come from the analyst, Robert Antioni. Your line is open. Great. Thank you, Raymond and Bob. Two questions. One is really a follow-on on the Z-Predicta, if I can do that one first. Z-Predicta was acquired in December 2021. At the time, it was announced it was complementary to Predictive Oncology's AI platform by leveraging its tumor-specific cell.

Ramy, do you want to respond or do you want me to? No, you can start. I'm happy to join in. But again, you have the perspective on it. I can give my current assessment, but you can give the historical perspective. Sure. Thank you, Robert, for your question. So has the departure of a key individual predicted?

The answer is no. We were prepared for that departure. We used that departure as a way to advance predictive towards its becoming one predictive. And consolidated the San Jose office into our Pittsburgh office where we just signed new leases for the next five years and expanded our lab.

Dr. Arlette Uline, who is a site leader and a medical doctor that handles the lab, the CLIA lab at Pittsburgh, is very, very proficient at everything that she does. So our work is ongoing with the things that we took over from ZPredictive, which is simply now our Pittsburgh location. We don't refer to our subsidiaries anymore because we're one predictive.

As I said earlier, there's revenue to be recognized. It is sitting there. There is future revenue and that is now in a very capable hand as Dr. Pamela Bush, who was the person responsible primarily for the closing of the truck deal that we just had. When we said back in November , December of 21 that this is new revenue.

And one of the areas that we were referring to was not just revenue that we could gain through 3D culturing and the customers that were there already preexisting from the deal, but the fact that we can now cross-sell to those customers. It's perhaps different avenues within those customers.

very large companies, but that's something that Dr. Bush is very familiar with and already utilizing. So, I think that a lot of that is yet to be seen as to where we're going to be and to the value of what we got from those customers. And Raymond, if you want to expand on that or perhaps Pamela would like to. Well, I can certainly, Robert, it's a pleasure to talk to you in person. Yeah.

but that's something that Dr. Bush is very familiar with and already utilizing. So I think that a lot of that is yet to be seen as to where we're gonna be and to the value of what we got from those customers. And Raymond, if you wanna expand on that or perhaps Pamela would like to. Well, I can certainly, Robert, it's a pleasure to talk to you in person. Yeah.

Did the departure of Dr. Julie Kirchner hurt us? No, it did not. As you know, in the acquisition and consolidation of any company asset personnel, decisions have to be made about what we need, what's essential and what's not essential. So the assumption has always been that Julia was essential. And Julia was essential to the transition. She was not essential to moving the company forward, or I'm sorry, the technology forward. And as Bob said, we have some very smart people in our company, scientists, MDs, computational biologists. They do this for a living. And secondly, Julia's number one person who did the 3D modeling is in the company now.

He and his family moved to Pittsburgh. They are here. Nothing was lost in that transition. The assets are here. The domain expertise is here. But more importantly and frankly, we actually know more about it now than we did a year ago or whenever it was, I think at least a year ago. We see ways to move this forward or integrate it that was not immediately recognized. This is my perspective now, looking at it in retrospect, that there is more to this than we thought.

We are actually speaking with another company that does 3D modeling in a very different way with a different matrix and a different media, that is the culture in which these experiments are done, that may actually change the trajectory of 3D modeling and how we use it. Or it may not, but at least that is what science is. You look at it and you evaluate it. So we have not lost anything by Julia's departure, but I should also say Julia chose to leave. It wasn't entirely that because we did an acquisition that we shed expense and overhead.

It was a personal decision on Julius Bart and it wasn't working. Professionally it wasn't working and personally it wasn't working. We knew that we learned after the fact that that was a possibility, so we did everything in our power to protect that investment. So hopefully that supplements the explanation that Bob gave.

Yes, thank you. And one sort of other thing for me, and I don't know if this, how you're going to answer this one, but so, you know, Bob, you talked about kind of, you know, cross sell upsell, et cetera, based on relationships and clients. And Raymond, you started the conversation around, you know, not all AI is created equal, right?

It's unique machine learning, access to biobank, wet labs, et cetera. And it's a unique value proposition that is quite solid. And that you've had the sort of validation that it's 92% effective, et cetera, et cetera. I guess the question is.

machine learning, access to biobank, wet labs, et cetera. And it's a unique value proposition that is quite solid and that you've had the sort of validation that it's 92% effective, et cetera, et cetera. I guess the question is, if it's that obvious.

right to POAI predictive oncology and as we're communicating to shareholders, do pharmas and biotechs see it as that obvious? And if they do, why aren't they flocking? I guess this is really, again, maybe an unfair question, but that's kind of the genesis of what I'm trying to get at. Yeah, sure. Well, first of all, Robert, it's not an unfair question.

I will in a moment. I promise, Pamela, I will hand this off to you because I know you are sweating over there right now. Robert, here is the thing. There are three ways to look at this. One is that by definition, when you are ahead of the curve, when you are an innovator, when you have something no one else has, you have to make it apparent. We see the need in biopharma and we see that we are a solution for biopharma, but biopharma has to understand where we fit in their workflow.

A, from a sales cycle point of view, as Pamela mentioned, I believe, again, I wasn't there for the conversation, but I believe she mentioned that it was probably a 12-month sales cycle to get in, talk to the scientists. You have to understand what the sales cycle is. You talk to scientists, you talk to PIs, you talk to business people, and it's a mix of those people that decide to move that conversation up or down the ladder.

So that cycle can be long. So for perspective, from the time that Pamela started speaking with Cancer Research UK, the day, literally the day that that contract was signed was 12 months. It was a one year cycle. So our projection on what is the sales cycle was absolutely correct spot on. Secondly, you have to understand that yes, AI is being used in biopharma and there are other people using artificial intelligence and biopharma and for drug discovery.

but it has to fit within the workflow of these organizations. It's not a widget, you just don't plug it in. This is science, it has to fit into their drug discovery, drug development protocol. So understand that one of the reasons it takes a year is you have to show them how it fits. You have to show them.

They're not going to make a $2 billion mistake because we couldn't demonstrate on the front end how the information that we deliver is going to make a meaningful difference. And the third, from my perspective, is that don't forget at the end of the line, end of the day, the FDA has to approve these things. So it's all about tracing data, right? Tracing how do you know that this fact is correct? And that will ultimately lead back to our platform that says we believe the probability of this molecule could move you through drug development. Then it's on them. Once they make that decision, it's on them. So there are a lot of external pressures on the sales cycle.

to get this done, but it does not mean at all that biopharma is not unwilling to do it. They are anxious to do it. In the letter that I sent to investors on the 7th, there was a market analysis, not analysis, really the market conditions around why AI is being adopted by biopharma, why it's so important, and where we actually fit in that process of risk mitigation on the preclinical side on the front end.

So, from my perspective, it's all of those things. But Pamela, if you would like to provide more insight, please do. Pardon me, Ms. Bush. Line is open.

on the phone with you to answer that question. Thank you very much.

that question. Thank you very much.

Thank you. And I'm seeing no further questions in the queue. I would now like to turn the conference back to Raymond. I'm going to interject here for a moment, Raymond, forgive me, and Chris.

Can we be sure of that because I know that I have had shareholders contact me in the past saying that we've cut off after a few questions and yet they were there looking to ask questions. So if you could re-explain to everybody how to go ahead and get on to make a question.

and present the question, that would be helpful. Yes, sir. If anyone would like to ask a question or make a comment, please press star one one on your phone and wait for your name to be announced. If you wish to withdraw your question, please press star one one again. One moment please to see if there'll be any more questions.

Thank you Chris. You're welcome sir. Again, please press star 1 1 to ask your question. And we have a follow up from. We do have 2 questions 1 moment. We now have a follow up from the analyst, Michael broadband. Again, your line is open. Thank you. This question is for Bob.

Bob, is there any way, I think one of the major milestones that I'm looking for in predictive trajectory is achieving a break even status and a zero cash burn. Is there any way for y'all to be able to predict based on current workflow? No.

the horizon when that when that milestone will happen? Is it six months? Is it three months? Is it a year? Is it two years? Michael, that silence is me thinking.

There is not a way that I can currently predict that and let me explain why. Raymond just indicated to everybody actually, not indicated, very succinctly stated that it takes a year or currently a year for our sales cycle with predictive.

with pedal. And I can tell you that pedal revenue is, got various, various components to it that will show both when agreements occur and then as agreements progress and as milestones are reached and, you know, we.

progress along the years. So maybe I could rephrase the question a little bit smaller. Yeah. What is the time frame from signing the contract to the first contract milestone where

predictive receives payment on pedal contracts. Is that a three month time frame? Is it a six month time frame or is it a year? I think that should be able to be divulged without without violating any type of contract because you're not yeah what type of work's being done. Yes absolutely. I can give you a generalized view all right. Perfect. I'm sorry Raymond are you cutting in there?

No, that wasn't me. Okay, sorry. All right, I can give you a generalized view. So first and foremost, we come to agreement on a contract and then there is an initial price that has to be paid that we have as revenue for us to begin the work. This is where we get the – that's going to vary based on the number of drugs that we're going to receive that want to go through the process and the amount of tumors that we're going to use in the process to evaluate the drugs.

Now, that process goes through iterations, and each iteration, and again, I'm being very general here, but based on the number of drugs, based on the number of tissues, it could be a week, it could be a little longer. It's a continual process, and we're continually learning as we go along from that process, both through our machine learning and of course, through going back to the lab. So what happens is 10 to 12 weeks later, we hope to have the initial answers.

from whatever project we're doing. Again, this is dependent on the size of the project. Based on that answer and what we have in the contract is the next stage for what the drug pharma company is gonna do. And there could be a milestone now for successes on what they proceed with. Depending on the contract, they could be valuing what they don't proceed with.

So there's just a number of ways for that revenue to come in. The next thing is, is that the drugs have to go through clinicals. Now I'm not sure if you're aware of it, but the FDA in this past December passed the FDA Modernization Act II, which essentially, and again, I'm being liberal with my answer here in terms of paraphrasing, but it's essentially saying that the FDA is very accepting of artificial intelligence and wants to proceed in that direction and is hopeful that this is something that's going to happen.

reduce if not even potentially eliminate animal clinicals. So if by saving this time and money, that's a revenue opportunity for us. That could take three years, two years. Again, it depends on the process. So I'm not really capable of fine-tuning that.

Then you go through U.S. equals, and once you get through that, and the drug does go to market, then there's opportunity for passive income for a deal that we might make for revenue off of any drug that succeeds, goes through discovery and actually goes to market to ultimately the patients. Well, I hope you think- I think you're looking at longer term. You know, really- You're looking at longer term. I'm looking forward to that.

and once you get through that and the drug does go to market, then there's opportunity for passive income for a deal that we might make for revenue off of any drug that succeeds, goes through discovery and actually goes to market to ultimately the patients. I think you're looking at longer term. You know, really, you're looking for clarity on that.

I'm sorry, did someone ask me a question? Yeah, I did. Based on my answer, do you have any additional clarity on that? Yeah. So, Michael, let me address it from a contract. Just from the structure of the contract, I think this will answer your question pretty straightforward. So our contracts are tiered contracts. Basically, when a pharmaceutical company comes to us and says, I'm just making it up, but this is the way it works, take a look at these molecules or this molecule, take a look at this compound. I need to know what the probability of success will be for this compound to move through the preclinical phase into drug development, or at least into preclinical, meaning animal testing and possible use of the compound.

So there's work on our part on the front end. Then we do the work for them. We give them the answer and whether the answer is high probability or low probability.

That's the contract. And they pay us for the work that we do. That's, you know, let's say it's three months to do that. I think that's a fair estimate.

I'm assuming everything moves so quickly. The second part of it is- If I can jump in. Yeah, go ahead. If I can jump in, because I think this is what shareholders should be latching onto because this is a positive takeaway from this question is that ultimately we wanna know when are we gonna see an increase in revenue? And the quick takeaway from that is, is predictive we'll get some fees upfront after signing each contract for federal services.

With that in mind, from Q1 revenue, we should see a small bump in revenue, assuming all these announcements were signed contracts with the UK research partnership and other companies. We should see a bump in gross revenue for Q1 2023, correct?

Not from the partnership because the— It may be small, but we should see something. Yeah. So I'll answer it directly as the contracts go. So the CVRGenics, no, we're not going to see an immediate bump in revenue because the whole point of this is for us to figure out how to use their stuff to our benefit. How do we utilize that PGRT platform to develop something for ourselves, which we own, where we control our own destiny?

they want us to do, figure out what that protocol is, and the delivery of that work, when the invoice is issued, then it's whatever, you know, 30 days, 60 days, 90 days, whatever their pay cycle is. So the answer is yes, the front end work is fee for service. The back end work are milestones, and the milestones are tied to the value created.

by the work that we do. And value can be saying no, right? Kill it quick. Because if we identify a molecule that has low probability, that's a molecule they otherwise would have taken through development and in five years figured out, five years and 50 million dollars later, figured out it didn't work when they could have come to us and we could have told them that in a year for less than that, right? So that's the value proposition.

I'm happy to hear though by Q2, end of Q2 this year, we should see some bumps in revenue on the predictive, even if it is listed as contract liabilities. It's nice to hear that there's progress in the short term.

Thank you. Thank you. One moment, please, for our next question. And our next question will also be a follow-up for the analysts, Robert and Tonjone. Your line is open. Hi. Thanks. Sorry, I don't want to kind of monopolize the time, but just a question on really…

As a shareholder, I've been here a long time and believe in the promise and all those good things. I guess the question I have is, as the key executives in predictive oncology, one of the things that you know,

some of the shareholders are talking about is the amount of ownership that key executives have outside of incentive based compensation. Can you make a comment on that? Is there any plans for key individuals to put their confidence in by acquiring market based stock? Sure. I think, Robert, I think I addressed that slightly in the investor letter. There is interest, yes. Senior management, yes. And board members, yes.

And the company itself, yes, to either buy stock in the open market or stock purchase. We are precluded from doing that. We have been since December and we will be through May. Bob, if you have the exact dates, that's great. But it's that we can't. We're in a blackout period. We're not permitted to do it. We actually tried. I asked Bob to figure out some way to contact the FCC and there is this sort of safe harbor process but it's so convoluted. The process takes longer than waiting out the May deadline for the end of the blackout. So there's nothing nefarious in the process.

senior management not purchasing stock, there's a desire to do it. We're just not permitted to do it at the moment, because if there was any time we knew it was a good time to buy stock, just like any other investor, it's when it's, you know, when we can buy it up at a reasonable price. But the reality is we can't do it. That's fair. So it's outside of the blackout period. That's that's totally fair. You got to do it. But you don't want to kind of violate anything. But outside of the blackout period, there's my guess is really the question and the intent. Again, it'll show confidence to the shareholders that you guys are in it with us.

Yeah, no, Robert, listen, you are so right. There's nothing about that question that's either improper or not obvious. But we're also constrained by the reality of being a public company and under the thumb of the FCC, or at least under the guidance, I should say, of the FCC. Thank you. Thank you. And again, to ask a question, please press star 11 on your phone and wait for your name to be.

One moment, it looks like we do have another question. One moment. We do have a question from Danny Garcia of KSU. One line is open.

Hello Ray and Bob, I'm showing up a little late so I don't know if anybody has asked the question yet. Are you guys able to hear me right? Yes, Danny good to talk to you. Good to talk to you as well. Good to hear from you again. I was going to ask.

Ray and Bob, I'm showing up a little late, so I don't know if anybody has asked the question yet. Are you guys able to hear me right? Yes, Danny, good to talk to you. Hey, good to talk to you as well. It's good to hear from you again. I was going to ask, so you guys are structured.

Everything that's currently going on with the reverse split, some investors, the way that you're most likely going to do the reverse split, depending on what you guys do, what are you guys shooting for post split? You want the share price to be in a range of three to five? What's facing your guys' decision off of what dilution number you guys would use? Danny, I'll answer that for you. This is Bob. As you know, in the preliminary proxy that we put out, the board approved us to do a one to two to 125. The reason that we make such a broad range is because a lot of it is going to be dependent on where the price per share is at the time of the shareholder meeting and before we look to go effective.

So the vote from the shareholders is based on the fact that we can do anything between 1 to 2 to 1 to 25. Then once that is approved, we as a management team who has already been discussing this, not only amongst ourselves but with some very wise consultants, will make a determination as to where we want to be. Thank you.

It involves a lot of things. Number one, generally when you do a reverse split, there's usually a down ride from the initial split where a reaction is to sell off and you come down a little bit. So that reverse split doesn't automatically gain you compliance. It's carrying that price for 10 consecutive business days so that by May 8th, we are compliant. So coming in at $1.10 or $1.15 wouldn't be a prudent move because it could go below $1 and we've just sacrificed everything we've done by coming in at too low.

On the other hand, we don't want to do a ratio that's going to be disruptive to anybody. Ideally, in the market, it's anywhere from 350 to 450. That's not what I'm saying that we're doing. I'm using an indication of what various high net worth investors look at, what institutions look at, and the value of the stock that has been cited by analysts in the past, which is $5. So I'm not avoiding the question. I don't have the answer. But what goes into it is the determination of the value of the stock, the return to the shareholders and the assurance that we could.

go through 10 complete days consecutively and gain compliance with NASDAQ. Yeah, okay. So this question is more directed towards you, Bob. So basically there was a question saying that something about how many shares the board of directors have. Would you guys be willing to, with the guys' compensation pay increase, would you guys be willing to,

switch over from getting instead of no pay cash, would you guys be willing to accept more stock? You know, just because it's like, depending on the decisions you make and you know how the company grows, if you're getting paid more stock than anything else, you guys wouldn't want the share price to go down, right? And so, you know, going based off of, you know, what you said, Bob, of being the real deal, Hellomics back in the day was supposed to be receiving all these contracts and in the end they did it. And so we hopped over to, you know, different subsidiaries, including Deep Predicta, which got a write off, which was massive. You know, would you guys be willing to, you know,

shift your guys's pay for more stock than you know cash? So Danny that's a good question. Let me first I'm going to since it is kind of a personal question I'm going to answer this personally. You know we're all workers here we're all people that are supporting families and trying to make a living.

With that being said, I'm still in this company and have been with it for 11 years because I really believe in it. I still believe in our Streamway machine and what it can do protectively for patients and people in the OR that are the practitioners. I believe very much in what we're doing with Pedal and now the opportunity with Cevergenics. So my desire to succeed and to bring the shareholders value is very, very altruistic and very, very much belief in what we do and in the hope that we can make a difference in cancer. And I would just love to see that now.

We try to do the best we can to get the combination of both, and we are developing a new plan. I haven't presented it yet to anybody, but I'm looking at a new plan that might help in terms of options for people in the company that would give further inspiration to the people that are doing it that are actually doing the work. So the answer is a general yes, and I hope that that from a personal side helps.

So if the concern by investors is we're not committed to the company or that in some way we're taking advantage of the opportunity to make money rather than taking stock, that's simply not true. The commitment is there and the desire to make it successful is there. So I want you to feel comfortable and I want everyone to feel comfortable. So we all take it very seriously. But to Bob's point, we are constrained by certain things and there are people in the company who can't do that and so they won't do that.

Thank you. As a reminder to ask a question, please press star 11 on your phone and please wait for your name to be announced. To withdraw your question, please press star 11 again.

One moment, please, as we compile the Q&A roster. And we do have another question. Our question will come from Brenda Thompson.

as we compile the Q&A roster. And we do have another question. Our question will come from Brenda Thompson. Your line is open.

I have a rhetorical question and that is the higher the price, even if it doesn't get to one, you have to do a reverse split. Doesn't that benefit all of the shareholders because then they're deleted less? That's my question. Thank you.

So, I'm sorry, the question I get, Brenda, is the higher the price. I'm taking that as a question regarding the reverse or split. I mean…

basically say this, in terms of actual value, the value to the shareholder doesn't change. It's proportional split to the price of the price per share to the amount of shares you own. So your essential value does not switch. In terms of the price and the higher the price being better for the shareholders, you make a very, very good point. It's not the way we wanna get there.

We want to get there because people are buying the stock and because they believe in what we're doing and we're bringing a good return to them. But you're absolutely right that by getting the price into a true value of the stock where the type of investors that are high net worth and are looking to really support a company are going to invest and cause that price to now naturally go up as we wish to, that is a big help. But when we're doing something like this reverse split, we have to be very cognizant of all areas of how that price is affected.

Again, since I'm talking about reverse split, I'm going to be really annoying here to everybody, but we do not want to do this. You hope you do not have to do this. Let's bring that stock up just by natural means. Thank you. Again, to ask a question, please press star 11 on your phone.

One moment as we compile the Q&A roster. And it's because I'm seeing no further questions in the queue.

If you like, I will hand the call back to Mr. Raymond for closing remarks. Thank you, Chris and thank you everyone. Hopefully this has been. Helpful and you have a deeper understanding and perspective of where we are and what our intentions are moving forward and the efforts that are being made. But as usual usual, and as I promised from day 1, if anyone has any question.

about anything, please contact us directly and we'll do our best to answer that question as honestly as possible. So unless there are any other questions today, I just want to thank you all for your time. We've run a little long, but I'm grateful for the fact that you've stayed on this long and been so interactive with us. Thank you. So this will conclude today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.

Q4 2022 Predictive Oncology Inc Earnings Call

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