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CST: 23/10/2019 21:08:43   

Predictive Technology Group Reports Second Quarter Fiscal 2019 Financial

250 Days ago

Revenue jumps 216% for the quarter to $10.7 million versus the prior year; and up 246% for the six month period to $18.8 million with $2.0 million in positive cash flow from operations

SALT LAKE CITY, Feb. 15, 2019 (GLOBE NEWSWIRE) -- Predictive Technology Group, Inc. (OTC PINK: PRED), a leader in the use of data analytics for disease identification and subsequent therapeutic intervention through precision therapeutic treatments, reports financial results for the three and six months ended December 31, 2018 and provides a business update.

Management Commentary

“I’m pleased with our financial performance with revenue for our most recent quarter of nearly $11 million, up more than three-fold from the year-ago period, marking our ninth consecutive quarter of growth,” said Bradley C. Robinson, CEO of Predictive Technology Group.  “Our strong revenue performance for the quarter puts Predictive on a run rate exceeding $40 million for fiscal 2019.  Additionally, we generated $2 million in positive cash flow from operations for the past six months that supported the further development and commercialization of proprietary genetic-based diagnostics and therapeutics.  We completed the quarter with $2.6 million in cash and no long-term debt.  

“We filed a Form 10 registration statement in December 2018 and have been fortunate to have numerous industry-leading advisors assist in guiding this process.  Predictive is now a fully reporting company, providing investors with heightened transparency of our financials and operations,” he added.  “Importantly, this filing is a major step in the process to list our common stock on NASDAQ, which we expect will provide greater visibility and credibility, and expand our reach to a substantially larger market.”

Recent Highlights

Corporate Developments

  • Filed a Form 10 registration statement with the SEC.  Predictive is now subject to the reporting requirements of the Exchange Act, including the filing of annual reports on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K, among other requirements. 
  • Announced John E. Sorrentino as Chairman of the Board in addition to his role as Chair of the company’s Scientific Advisory Board.  Mr. Sorrentino has more than 35 years of senior management experience in the life sciences industry, including 15 years in leadership positions at Wyeth/Pfizer. 
  • Appointed Charles Andres, J.D., Ph.D., to its Scientific Advisory Board.  Dr. Andres leads the life sciences group at Wilson Sonsini Goodrich & Rosati’s Washington, DC office and has significant expertise in intellectual property, FDA/regulatory, transactions, business and government matters. 
  • Completed the initial phase of its new laboratory facility featuring an ISO clean room, which meets Good Tissue Practices (GTP) and Good Manufacturing Practices (GMP) requirements for human cell and tissue products.  Predictive expects phase two of the laboratory facility to be completed during second calendar quarter of 2019.

Second Quarter Fiscal 2019 Results

Revenues from operations (net) for the three months ended December 31, 2018 totaled $10.7 million, compared with $3.4 million for the three months ended December 31, 2017.  The increase of $7.3 million was the result of an expansion of our sales force and distribution networks leading to increased sales of our HCT/Ps and regenerative medicine products.

Cost of goods sold (“COGS”) includes expenses associated with acquisition and processing, manufacture (including material and direct labor), property and equipment depreciation, shipping, and other direct expenses relating to our HCT/Ps and regenerative medicine products. Our gross profit for the three months ended December 31, 2018 was $7.6 million compared with $2.5 million for the three months ended December 31, 2017.  The increased gross profit resulted from increased sales and efficiencies introduced into our manufacturing processes.

Sales and marketing expenses for the three months ended December 31, 2018 were $3.4 million, compared with $953,000 for the three months ended December 31, 2017.  The increased sales and marketing expenses resulted from corresponding increases in sales and an increase in the number of distributors.

Research and development (R&D) expenses for the three months ended December 31, 2018 were $1.8 million, compared with $37,000 for the three months ended December 31, 2017.  The increased research and development expenses resulted from increased focus on product development, streamlining manufacturing methods and additional proprietary research and development work relating to our HCT/Ps and regenerative medicine products.  Additionally, we have invested significant amounts in laboratory support in anticipation of the sale of diagnostic products.

General and Administrative (G&A) expenses for the three months ended December 31, 2018 were $2.5 million compared with $1.1 million for the three months ended December 31, 2017.  The changes in general and administrative expenses resulted from increased management headcount in fiscal 2018, and stock options and warrants issued for consulting services relating to all business entities in fiscal 2017.

Amortization and depreciation expenses for the three months ended December 31, 2018 were $2.0 million, compared with $850,000 for the three months ended December 31, 2017.  The reason for the increase in amortization and depreciation expenses relate primarily to the expense of costs relating to our acquisitions.

The net loss attributable to controlling interest for the three months ended December 31, 2018 was $2.6 million, or $0.01 per share, versus a net loss attributable to controlling interest for the three months ended December 31, 2018 of $376,000, or $0.00 per share.

Year-to-date Financial Results

Revenue for the first six months of fiscal 2019 was $18.8 million, a 246% increase from $5.4 million reported for the first six months of fiscal 2018.  Gross profit margin for first six months of 2019 was 68.4%, an improvement from 67.5% from the prior year period.

Operating expenses for the first six months of fiscal 2019 were $17.0 million versus $9.4 million for the prior year period.  The increase in the fiscal 2019 period was due to increases in sales and marketing expenses, R&D expenses, and amortization and depreciation expenses, offset in part by lower G&A expenses.  For the six months ended December 31, 2018, sales and marketing expenses were $5.8 million, G&A expenses were $5.1 million, R&D expenses were $2.4 million, and amortization and depreciation expenses was $3.7 million.

The company reported an investment loss of $915,000 for the first six months of 2019.  The company did not report an investment loss or gain in the prior year period.

The net loss attributable to controlling interest for the first six months of fiscal 2019 was $5.0 million, or $0.02 per share, versus a net loss attributable to controlling interest for the first six months of fiscal 2018 of $5.5 million, or $0.03 per share.

The company reported cash and cash equivalents of $2.6 million as of December 31, 2018 compared with $1.2 million as of June 30, 2018.

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, Predictive Diagnostics 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 and Predictivebiotech.com.

Forward-Looking Statements

To the extent any statements made in this release contain information that is not historical, these statements are essentially forward-looking and are subject to risks and uncertainties, including the difficulty of predicting FDA approvals, acceptance and demand for human cell and tissue products and other pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, availability of raw materials, availability of additional intellectual property rights, availability of future financing sources, the regulatory environment, and other risks the Company may identify from time to time in the future.

Contact: 

Investors
LHA Investor Relations
Jody Cain jcain@lhai.com
Kevin Mc Cabe kmccabe@lhai.com
310-691-7100

Financial tables to follow


PREDICTIVE TECHNOLOGY GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

    December 31,
2018
    June 30,
2018
 
    Unaudited     Audited  
             
ASSETS            
Current assets:            
  Cash   $   2,559,929       $   1,206,139    
  Accounts receivable     740,455         719,068    
  Inventory     3,912,445         3,791,374    
  Other current assets     47,124         17,551    
Total current assets     7,259,953         5,734,132    
   Fixed assets, net of depreciation     2,470,604         773,870    
   License agreements, net of amortization     16,500,222         20,962,620    
   Patents, net of amortization     7,519,514         7,761,187    
   Trade secrets, net of amortization     42,689,862         8,096,311    
   Equity method investments     43,239,947         45,564,845    
   Other long-term assets     18,569         12,000    
Total assets   $   119,698,671       $   88,904,964    
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
Accounts payable   $   2,668,145       $   1,322,149    
Accrued liabilities     1,049,220         1,034,905    
Subscription payable     3,600,000         4,409,390    
Total current liabilities     7,317,365         6,766,444    
Long-term subscription payable     8,740,610         10,965,610    
Total liabilities     16,057,975         17,732,054    
             
Shareholders' equity:            
Common stock, par value $0.001, 248,846,403, and 224,496,093 shares issued            
and outstanding at December 31, 2018 and June 30, 2018;            
900,000,000 shares authorized     248,846         224,496    
Additional paid-in capital     144,543,434         108,072,429    
Common stock subscriptions receivable     -         (1,025,000 )  
Accumulated deficit     (40,970,309         (35,978,862 )  
Total controlling interest     103,821,971         71,293,064    
Non-controlling interest     (181,275 )       (120,152 )  
Total shareholders' equity     103,640,696         71,172,911    
Total liabilities and shareholders' equity   $   119,698,671       $   88,904,964    



PREDICTIVE TECHNOLOGY GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS

    Three months ended December 31,     Six months ended December 31,  
    2018       2017       2018       2017    
Revenue   $ 10,687,036       $ 3,378,526       $ 18,750,838       $ 5,413,934    
Cost of goods sold     3,059,136         904,384         5,925,871         1,759,549    
 Gross profit     7,627,900         2,474,142         12,824,967         3,654,385    
                                 
Operating expenses:                                
   Sales and marketing     3,431,157         953,232         5,853,876         1,584,819    
   General administrative     2,520,281         1,116,273         5,079,761         5,788,466    
   Research and product development     1,759,560         37,380         2,364,950         49,880    
   Amortization and depreciation expense     1,992,534         850,116         3,664,964         1,948,681    
Total operating expenses     9,703,532         2,957,001         16,963,551         9,371,846    
                                 
   Operating profit (loss)     (2,075,632 )       (482,859 )       (4,138,584 )       (5,717,461 )  
                                 
   Other income, net     (599,627 )       106,568         (913,986 )       212,286    
                                 
Loss before income taxes     (2,675,259 )       (376,921 )       (5,052,570 )       (5,513,927 )  
                                 
   Provision for (benefit from) income taxes     -         -         -         -    
                                 
Net loss   $ (2,675,259 )     $ (376,921 )     $ (5,052,570 )     $ (5,513,927 )  
                                 
   Net loss non-controlling interest     (33,454 )       (628 )       (61,123 )       (8,752 )  
                                 
Net loss controlling interest   $ (2,641,805 )     $ (375,663 )     $ (4,991,447 )     $ (5,505,175 )  
                                 
Basic weighted average shares outstanding     230,111,417         203,135,262         230,111,417         203,135,262    
                                 
Basic loss per share     (0.012 )       (0.002 )       (0.022 )       (0.027 )  
                                 
                                 
Comprehensive loss:                                
 Net loss     (2,641,805 )       (375,663 )       (4,991,447 )       (5,505,175 )  
 Unrealized gain (loss) on available-for-sale securities, net of tax     -         -         -         -    
 Change in foreign currency translation adjustment     -         -         -         -    
 Comprehensive loss   $ (2,641,805 )     $ (375,663 )     $ (4,991,447 )     $ (5,505,175 )  


 

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