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SALT LAKE CITY, Sept. 30, 2019 (GLOBE NEWSWIRE) -- Predictive Technology Group, Inc. (OTC PINK: PRED) (the Company), a leader in the use of data analytics for disease identification and subsequent therapeutic intervention through precision therapeutic treatments, reports financial results for fiscal year 2019 ended June 30, 2019 and provides a business update.
“Fiscal 2019 fourth quarter revenue up 88%, to $13.4 million, compared to fiscal 2018 fourth quarter, was an all-time quarterly high and capped a highly productive year, with revenue up 162% to $43.5 million and cash flow from operations of $3.5 million,” said Bradley Robinson, CEO of Predictive Technology Group. “Notably, fiscal Q4 marked our 11th consecutive quarter of sequential-quarter revenue growth.
“Over the past year we significantly strengthened our ability to support the successful development and commercialization of proprietary genetic-based diagnostic tests and services, while growing sales of human cell and tissue products,” he added. “We expanded our leadership and Board with highly qualified professionals, opened state-of-the-art laboratories and production facilities, and presented compelling data at leading industry conferences that further validate our genetic approach to develop cutting-edge diagnostics and related therapeutics at early points or intervention. Among highlights was our global infertility research collaboration with Thermo Fisher Scientific to use their market-leading next-generation sequencing technology and technical resources and expertise to commercialize current diagnostics and develop future comprehensive infertility diagnostic solutions. This partnership with a global diagnostics leader is a significant stride forward in securing a leadership role for Predictive in infertility diagnostics.
“In reviewing our diagnostics portfolio, we recently commercialized the PGxPLUS+™ test, which assists physicians in selecting the right medication for patients suffering from chronic pain. Additionally, preparations are underway to launch our genetic testing service for those experiencing infertility, FertilityDX, to select collaborators during the American Society for Reproductive Medicine conference in October,” Robinson said. “In addition to these launches, our near-term focus is on commercializing our endometriosis diagnostic test ARTguide™ and our human cell and tissue products, and on further improving products currently on the market.”
Fiscal Year 2019 and Recent Highlights
Fiscal Year 2019 Financial Results
Revenue for fiscal 2019 was $43.5 million, up 162% from $16.6 million for fiscal 2018, with the increase primarily due to higher demand for human cell and tissue products. In fiscal 2019 the Company elevated its presence at trade shows, expanded sales headcount and added several new distributors resulting in sales to more U.S. clinics.
Cost of goods sold for fiscal 2019 were $16.3 million, compared with $4.0 million for fiscal 2018 with the increase mainly due to an increase in the volume of products shipped, as well as increases in quality and regulatory costs, share-based compensation cost and facility costs.
Selling and marketing expenses for fiscal 2019 were $13.9 million, compared with $12.7 million for fiscal 2018. The increase was primarily due to higher commissions and personnel costs related to headcount as the Company continued to expand, partially offset by lower share-based compensation expense related to warrants issued in fiscal 2018 with no similar issuance in fiscal 2019.
General and administration expenses for fiscal 2019 were $18.2 million, compared with $5.8 million for fiscal 2018. The increase was primarily due to higher share-based compensation expense, as well as higher personnel costs and increased outside services costs mainly in connection with public company compliance.
R&D expenses for fiscal 2019 were $5.8 million, compared with $1.9 million for the prior fiscal year, with the increase primarily due to costs related to the development of diagnostic products, and continued development of human cell and tissue product manufacturing methods.
Depreciation and amortization expenses for fiscal 2019 were $9.2 million, compared with $4.6 million for fiscal 2018. The increase was primarily due to an increase in the intangible asset portfolio arising from business combinations, asset acquisitions and costs related to laboratory expansion.
Other loss for fiscal 2019 was $0.8 million, compared with other loss of $0.7 million for fiscal 2018. The change was primarily driven by higher losses from the equity method investment associated with the increasing ownership in Juneau Biosciences, LLC and a decrease in interest income, partially offset by the bargain purchase gain arising from the acquisition of Taueret Laboratories, LLC.
Net loss attributable to controlling interest for fiscal 2019 was $15.3 million, or $0.06 per share, compared with a net loss attributable to controlling interest for fiscal 2018 of $6.1 million, or $0.03 per share.
Cash and cash equivalents as of June 30, 2019 were $1.6 million, compared with $1.2 million as of June 30, 2018. Cash provided by operating activities for fiscal year 2019 was $3.5 million, a significant improvement from cash used in operating activities of $0.3 million for the prior fiscal year. The increase in cash provided by operating activities for the year ended June 30, 2019 compared to the prior year was primarily due to a $2.1 million decrease in the year over year change in inventories, and a $2.5 million increase in the year over year change in accounts payable. These increases were partly offset by an increase in the year over year change in accounts receivable.
About Predictive Biotech, Inc.
Predictive Biotech, Inc., a Salt Lake City-based life sciences company formed in 2015, is a leader in human cell and tissue products for use in cellular therapies and regenerative medicine. A growing national network of clinics, health systems, researchers and physicians leverage Predictive’s four main placental-derived and Wharton’s Jelly umbilical cord-derived products. Predictive Biotech’s current products are regulated by the FDA under 21 CFR part 1271 section 361 as minimally manipulated allografts intended for homologous use.
About Predictive Laboratories, Inc.
Predictive Laboratories owns significant next-generation sequencing and genotyping assets along with extensive protocols, quality and laboratory management systems and other resources required by a high complexity molecular diagnostic laboratory operating under CLIA. The group recently launched its novel test for women experiencing infertility, ARTguide, to selected collaborators. ARTguide is a proprietary gene test panel for women experiencing infertility as a result of endometriosis and other genetic conditions. The test is expected to change the way that Assisted Reproductive Technologies (ART), such as in vitro fertilization (IVF), are used to assist couples having difficulty conceiving a pregnancy.
About Predictive Technology Group, Inc.
Predictive Technology Group aims to revolutionize patient care through predictive data analytics, novel gene-based diagnostics and companion therapeutics through its subsidiaries Predictive Therapeutics, Predictive Biotech, and Predictive Laboratories. These subsidiaries are focused on endometriosis, scoliosis, degenerative disc disease, and human cell and tissue products. The subsidiaries use genetic and other information as cornerstones in the development of new diagnostics that assess a person’s risk of illness and therapeutic products designed to identify, prevent and treat diseases more effectively. Additional information is available at Predtechgroup.com, Predrx.com, Predictivebiotech.com, and Predictivelabs.com.
This release contains “forward-looking” statements that are based on present circumstances and on Predictive Technology Group’s predictions with respect to events that have not occurred, that may not occur, or that may occur with different consequences and timing than those now assumed or anticipated. Such forward-looking statements and any statements of the plans and objectives of management for future operations and forecasts of future growth and value, are not guarantees of future performance or results and involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements. Such forward-looking statements are made only as of the date of this release and Predictive Technology Group assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances. Readers should not place undue reliance on these forward-looking statements. The information in this press release should be read in conjunction with, and is modified in its entirety by, the Annual Report on Form 10-K (the “Form 10-K”) filed by the Predictive Technology Group with the Securities and Exchange Commission (the “SEC”) and all of the Company’s other public filings with the SEC (the “Public Filings”). In particular, the financial information contained herein is subject to and qualified by reference to the financial statements contained in the Form 10-K and Public Filings, the footnotes thereto and the limitations set forth therein. Investors may not rely on the press release without reference to the Form 10-K and the Public Filings.
Financial tables to follow
|PREDICTIVE TECHNOLOGY GROUP, INC.|
|CONSOLIDATED BALANCE SHEETS|
|Years ended June 30,|
|Accounts receivable, net of allowance for doubtful accounts of $687,064 and $ -||1,250,476||534,625|
|Due from equity method investee||184,443||184,443|
|Other current assets||103,080||17,551|
|Total current assets||8,931,428||5,734,132|
|Fixed assets, net of depreciation||6,974,441||773,870|
|License agreements, net of amortization||18,062,315||20,962,620|
|Patents, net of amortization||6,850,490||7,761,187|
|Trade secrets, net of amortization||45,336,335||8,096,311|
|Other intangible assets, net of amortization||383,931||-|
|Equity method investments||51,717,719||55,392,622|
|Other long-term assets||67,075||12,000|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Capital lease obligation, current portion||504,488||-|
|Subscription payable, current portion||6,300,000||4,409,390|
|Total current liabilities||14,074,813||6,766,444|
|Capital lease obligation||1,511,554||-|
|Deferred tax liabilities||11,014,745||4,917,323|
|Common stock, par value $0.001, 273,761,955 and 247,624,403 shares issued and outstanding at June 30, 2019 and June 30, 2018; 900,000,000 shares authorized||273,762||247,624|
|Additional paid-in capital||153,604,830||108,049,300|
|Common stock subscriptions receivable||-||(1,025,000||)|
|Total controlling interest||112,775,743||81,457,967|
|Total stockholders' equity||112,536,463||81,337,815|
|Total liabilities and stockholders' equity||$||143,578,185||$||103,987,193|
|PREDICTIVE TECHNOLOGY GROUP, INC.|
|CONSOLIDATED STATEMENTS OF OPERATIONS AND|
|Years ended June 30,|
|Cost of goods sold, exclusive of depreciation & amortization shown below||16,293,553||3,971,255|
|Selling and marketing||13,937,512||12,680,741|
|General and administrative||18,229,874||5,827,891|
|Research and development||5,822,862||1,896,092|
|Depreciation and amortization||9,150,184||4,573,534|
|Total operating expenses||47,140,432||24,978,258|
|Interest income (expense)||(17,504||)||199,953|
|Bargain purchase gain||363,676||-|
|Loss on equity method investment||(1,164,903||)||(899,950||)|
|Total other loss||(841,315||)||(699,997||)|
|Loss before income taxes||(20,781,711||)||(13,025,174||)|
|Benefit from income taxes||5,357,413||6,894,407|
|Net loss non-controlling interest||119,128||63,411|
|Net loss controlling interest & comprehensive loss||$||(15,305,170||)||$||(6,067,356||)|
|Weighted average common shares outstanding||265,526,265||240,781,490|
|Basic & diluted loss per share||$||(0.06||)||$||(0.03||)|
|PREDICTIVE TECHNOLOGY GROUP, INC.|
|CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Years ended June 30,|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash provided (used) in operating activities:|
|Depreciation and amortization||9,296,417||4,510,123|
|Provision for bad debts||687,064||-|
|Share based compensation||11,654,942||10,527,427|
|Deferred income taxes||(5,415,912||)||(6,894,407||)|
|Losses on equity method investment||1,164,903||899,950|
|Interest income paid in equity shares||-||(199,187||)|
|Gain on bargain purchase||(363,676||)||-|
|Changes in operating assets and liabilities:|
|Net cash provided by (used in) operating activities||3,494,771||(288,999||)|
|Cash flows from investing activities:|
|Purchases of property and equipment||(2,708,446||)||(405,580||)|
|Purchases of intellectual property||-||(1,357,272||)|
|Issuance of note receivable to equity method investee||-||(300,000||)|
|Cash acquired from acquisitions, net||885,674||-|
|Cash payments on equity method investee stock subscription||(2,084,391||)||(1,875,000||)|
|Capitalization of patent acquisition costs||-||(111,305||)|
|Net cash used in investing activities||(3,907,163||)||(4,049,157||)|
|Cash flows from financing activities:|
|Cash proceeds from stock subscriptions||1,025,000||1,367,500|
|Proceeds from issuance of common stock||-||1,440,743|
|Proceeds from issuance of common stock warrants||-||1,767,850|
|Proceeds from issuance of promissory note||400,000||-|
|Principal payments on capital leases||(655,203||)||-|
|Exercises of warrants for cash||50,000|
|Exercises of stock options for cash||4,700||-|
|Net cash provided by financing activities||824,497||4,576,093|
|Net increase (decrease) in cash and cash equivalents||412,105||237,937|
|Cash and cash equivalents at the beginning of the period||$||1,206,139||$||968,202|
|Cash and cash equivalents at the end of the period||$||1,618,244||$||1,206,139|