Core Insights - Predictive Oncology Inc. has developed 3D organoid models for Labcorp to enhance drug discovery and preclinical analysis of cancer therapies [1][2][3] - The new models include human and rat liver toxicity models that simulate the liver microenvironment for evaluating drug metabolism and toxicity [2][3] - These organoid models aim to predict in vivo drug clearance, transport, and hepatotoxicity, providing species-specific data that captures hepatic cellular heterogeneity [3][4] Company Developments - The 3D organoid models complement Predictive Oncology's existing AI-driven 2D platform and 3D spheroids, which utilize a biobank of over 150,000 frozen tumor samples [3][6] - The company’s AI platform, PEDAL, predicts with 92% accuracy whether a tumor sample will respond to specific drug compounds, aiding in informed drug selection [6] Industry Trends - The use of organoid-based platforms is seen as a key driver in transforming healthcare, accelerating drug development, and reducing reliance on animal models [4] - There is a growing investment in personalized medicine and biotechnology, with organoids offering cost-effective and high-fidelity alternatives to traditional research methods [4]

Core Viewpoint - Predictive Oncology Inc. is engaged in a legal dispute with Renovaro, Inc., with the Delaware Court of Chancery rejecting RENB's request for an expedited trial, citing delays in RENB's actions [1][2]. Company Overview - Predictive Oncology is a leader in AI-driven drug discovery, utilizing its AI platform, PEDAL, which predicts with 92% accuracy whether a tumor sample will respond to specific drug compounds [3]. - The company has a biobank of over 150,000 assay-capable heterogeneous human tumor samples, providing extensive AI-based drug discovery solutions [3]. - Predictive Oncology is headquartered in Pittsburgh, PA, and operates a wholly owned CLIA laboratory facility [3]. Legal Proceedings - The court has scheduled the trial for November 12-13, 2025, and Predictive Oncology intends to defend against RENB's claims, which are deemed inaccurate and without merit [2].

Core Viewpoint - Renovaro Inc. has initiated legal action against Predictive Oncology Inc. to enforce a merger agreement, alleging breaches of contract and seeking specific performance and damages [1][4]. Group 1: Legal Proceedings - Renovaro filed a lawsuit on May 9, 2025, in the Delaware Court of Chancery against Predictive Oncology to enforce a merger agreement executed on January 1, 2025 [1]. - The court has ruled to expedite the trial for this lawsuit, which is pending under Case No. 2025-0509 [4]. - Renovaro claims that Predictive Oncology breached the agreement by conducting a public offering of $545,000 in securities on February 19, 2025, and later attempted to unilaterally terminate the agreement on April 3, 2025 [3]. Group 2: Financial Impact - Following the public disclosure of the merger agreement on January 6, 2025, Predictive Oncology's stock price increased by over 50% [2]. - The litigation seeks specific performance, injunctive relief, and damages for the alleged breaches, indicating potential financial implications for both companies [4]. Group 3: Company Background - Renovaro Inc. focuses on next-generation diagnostics, drug discovery, and genetically enhanced cancer therapies, aiming to accelerate precision and personalized medicine [5]. - The company includes subsidiaries such as RenovaroBio, which specializes in advanced cell-gene immunotherapy, and RenovaroCube, leveraging AI for diagnostics and drug development [5].

Core Viewpoint - Renovaro Inc. has initiated legal action against Predictive Oncology Inc. to enforce a merger agreement, alleging breaches of contract and seeking specific performance and damages [1][4]. Group 1: Legal Proceedings - Renovaro filed a lawsuit on May 9, 2025, in the Delaware Court of Chancery against Predictive Oncology to enforce a merger agreement executed on January 1, 2025 [1]. - The court has ruled to expedite the trial for this lawsuit, which is pending under Case No. 2025-0509 [4]. - Renovaro claims that Predictive Oncology breached the agreement by conducting a public offering of $545,000 in securities on February 19, 2025, and later attempted to unilaterally terminate the agreement [3]. Group 2: Financial Impact - Following the public disclosure of the merger agreement on January 6, 2025, Predictive Oncology's stock price increased by over 50% [2]. - The litigation seeks specific performance, injunctive relief, and damages for the alleged breaches, indicating potential financial implications for both companies [4]. Group 3: Company Background - Renovaro Inc. focuses on next-generation diagnostics, drug discovery, and genetically enhanced cancer therapies, aiming to accelerate precision and personalized medicine [5]. - The company includes subsidiaries such as RenovaroBio, which specializes in advanced cell-gene immunotherapy, and RenovaroCube, leveraging AI for diagnostics and drug development [5].

Core Insights - Predictive Oncology Inc. is leveraging over 150,000 live cell tumor samples and drug response data to enhance drug discovery and biomarker identification using AI and machine learning [1][12] - Regeneron Pharmaceuticals' acquisition of 23andMe for $256 million signifies a strategic shift towards data-driven drug discovery, emphasizing the value of genomic databases in therapeutic development [2][5] - 23andMe's extensive genomic dataset provides insights into disease progression and treatment efficacy, making it a valuable asset for precision drug development [3][4] Company Developments - Predictive Oncology has achieved a milestone in AI-enabled cancer drug discovery by developing predictive tumor response models for 21 previously untested molecules targeting common cancer types [7][8] - The company's AI platform, PEDAL, predicts with 92% accuracy whether a tumor sample will respond to a specific drug compound, facilitating informed drug selection for testing [11][12] - The integration of AI and machine learning with real-world drug response data allows Predictive Oncology to expedite early-stage drug discovery and reduce risks in drug development [9][10] Industry Trends - The acquisition of 23andMe by Regeneron reflects a broader trend in the biopharma industry towards the convergence of AI, real-world data, and predictive analytics to enhance therapeutic outcomes [5][10] - The life sciences sector is undergoing a transformation where the integration of genomics and machine learning is becoming a foundational element in precision medicine [10]

Core Insights - Predictive Oncology is expanding its AI-driven drug discovery platform to include biomarker discovery and drug repurposing, positioning itself as a leader in precision oncology innovation [1][7] - The global biomarker discovery market is valued at $14.5 billion in 2024, with a projected growth rate of 19.4% CAGR through 2030, indicating significant market potential for the company [1][7] Company Developments - The company has developed AI-powered multi-omic machine learning models in collaboration with UPMC Magee-Womens Hospital, which predict survival outcomes in ovarian cancer patients, outperforming traditional clinical data models [3][4] - Predictive Oncology has identified novel ovarian cancer biomarkers linked to patient survival and drug response using advanced deep learning methods, enhancing its capabilities in biomarker discovery [6][7] - The company is actively refining its survival prediction models for integration into clinical practice at leading cancer centers worldwide, particularly for high-grade serous ovarian cancer [5][6] Drug Discovery and Repurposing - The company addresses high clinical trial failure rates in oncology by integrating real-world diversity from its biobank of 150,000 tumor samples, which enhances the Probability of Technical Success (PTS) in drug discovery [9][10] - Predictive Oncology has identified three candidates for re-evaluation in ovarian and colon cancer from previously abandoned oncology drugs, showcasing its drug repurposing capabilities [11][12] Product Expansion - The company plans to expand its flagship assay, ChemoFx®, into Europe and broaden its availability in the United States, which provides personalized treatment selection based on live-cell tumor profiling [13][14] - ChemoFx® works alongside the BioSpeciFx® molecular biomarker portfolio to help oncologists determine effective chemotherapy options for patients, initially focusing on gynecologic cancers [14] Future Outlook - The progress made in 2024 lays a strong foundation for future growth, with the company positioned to lead advancements in precision oncology through its AI innovation and proprietary data [15]

Financial Performance - The company reported a loss from continuing operations of approximately $2.3 million on total revenue of $110,310 for Q1 2025, compared to a loss of $3.6 million in Q1 2024[1][11] - Revenue increased significantly from $4,858 in Q1 2024 to $110,310 in Q1 2025, primarily due to the completion of a tumor-specific 3D model[8][11] - Loss per common share from continuing operations improved to $0.32 in Q1 2025 from $0.88 in Q1 2024[8][11] Cash and Expenses - The company concluded Q1 2025 with $3.1 million in cash and cash equivalents, up from $611,822 as of December 31, 2024[8] - General and administrative expenses decreased by $497,464 to $1,828,200 in Q1 2025, compared to $2,325,664 in Q1 2024[8][11] - Net cash used in operating activities decreased to $985,840 in Q1 2025 from $2.7 million in Q1 2024, reflecting lower cash operating losses[8] Product Development and Partnerships - The company identified three promising compounds for repurposing in new cancer indications, including Afuresertib for breast cancer and Alisertib for colon cancer[4] - The company launched its ChemoFx drug response assay in Europe and expanded its availability in the United States, initially focusing on ovarian and gynecological cancers[3][4] - The company partnered with Tecan Group Ltd. to expand high-throughput drug screening capabilities using human tumor spheroids[4] Strategic Focus - The company completed the sale of Skyline Medical assets to DeRoyal Industries, which sharpened its focus on core AI-driven drug discovery capabilities[4]

Core Viewpoint - Predictive Oncology reported a loss from continuing operations of approximately $2.3 million on total revenue of $110,310 for Q1 2025, highlighting the company's ongoing focus on leveraging AI and machine learning for drug discovery and development [1][9]. Q1 2025 and Recent Highlights - The company expanded its AI and machine learning platform to identify abandoned drugs with potential for new cancer indications, aiming to repurpose existing clinical candidates [3][5]. - The launch of the ChemoFx drug response assay in Europe and expanded availability in the U.S. is a significant step towards personalized cancer care, initially focusing on ovarian and gynecological cancers [3][5]. - The sale of Skyline Medical assets to DeRoyal Industries has allowed the company to concentrate on its core AI-driven capabilities while reducing cash usage [3][5]. - A partnership with Tecan Group Ltd. aims to enhance high-throughput drug screening using human tumor spheroids [5]. Q1 2025 Financial Summary - The company recorded revenue of $110,310 for Q1 2025, a significant increase from $4,858 in the same period in 2024, primarily due to the completion of a tumor-specific 3D model [9][11]. - General and administrative expenses decreased by $497,464 to $1,828,200, while research and development expenses decreased by $109,679 to $520,406 [9][12]. - The net cash used in operating activities decreased to $985,840 in Q1 2025 from $2,709,688 in Q1 2024, reflecting lower cash operating losses [9]. Financial Results - The company concluded Q1 2025 with $3.1 million in cash and cash equivalents, up from $611,822 as of December 31, 2024 [9][10]. - Basic and diluted loss per common share from continuing operations was $0.32, compared to $0.88 for the same quarter in 2024 [9][11]. - The total net loss for Q1 2025 was $2,442,873, a reduction from $4,218,843 in Q1 2024 [11].

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=ITEM%201.%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The company's Q1 2025 financial position improved due to financing activities, increasing cash and reducing stockholders' deficit, despite ongoing net losses, increased revenue, and reduced operating expenses, with divested segments now discontinued operations and a 'going concern' risk persisting [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, cash and cash equivalents significantly increased to $3.1 million due to financing, total assets grew to $5.9 million, liabilities to $6.0 million, and stockholders' deficit improved to ($145,796) Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,087,588 | $611,822 | | Total current assets | $3,486,024 | $2,225,918 | | Total assets | $5,868,251 | $4,972,517 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $4,609,043 | $3,593,401 | | Total liabilities | $6,014,047 | $5,175,127 | | Total stockholders' deficit | ($145,796) | ($202,610) | [Condensed Consolidated Statements of Net Loss](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20NET%20LOSS) Q1 2025 saw revenue increase to $110,310 and operating expenses sharply reduced by over $1.2 million, resulting in a smaller net loss of $2.4 million, or ($0.34) per share, compared to $4.2 million, or ($1.04) per share, in Q1 2024 Statement of Net Loss Comparison (Unaudited, Three Months Ended March 31) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $110,310 | $4,858 | | Gross profit (loss) | $65,192 | ($17,575) | | Total operating expenses | $2,352,239 | $3,564,459 | | Loss from continuing operations | ($2,285,416) | ($3,564,105) | | Net (loss) | ($2,442,873) | ($4,218,843) | | Net (loss) per share | ($0.34) | ($1.04) | [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY%20(DEFICIT)) Q1 2025 stockholders' deficit decreased to ($145,796) from ($202,610), driven by common share issuances from warrant exercises, a direct offering, and a Renovaro agreement, which boosted paid-in capital, partially offset by the $2.4 million net loss - Issuance of shares from warrant exercises, a Registered Direct Offering, and the Renovaro Extension Agreement added approximately **$2.5 million** to equity before being offset by the quarterly net loss[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 net cash used in continuing operations decreased to $0.99 million, while financing activities generated $2.5 million and discontinued operations provided $0.85 million, leading to a net cash increase of $2.37 million Cash Flow Comparison (Unaudited, Three Months Ended March 31) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) continuing operating activities | ($985,840) | ($2,709,688) | | Net cash provided by (used in) continuing financing activities | $2,499,687 | ($112,372) | | Net cash provided by (used in) discontinued operations | $854,494 | ($706,332) | | Net increase (decrease) in cash | $2,368,341 | ($3,531,424) | | Cash and cash equivalents at end of period (continuing ops) | $3,087,588 | $4,734,628 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Notes detail the company's AI oncology focus, the terminated Renovaro merger, discontinued Eagan and Birmingham segments, substantial 'going concern' doubt due to recurring losses and capital needs, and Nasdaq non-compliance for stockholders' equity - The company's business is focused on applying AI to oncology drug discovery using a proprietary biobank of over **150,000 tumor samples**[18](index=18&type=chunk) - A proposed merger with Renovaro, Inc. was terminated on March 31, 2025, after a letter of intent expired without a definitive agreement[20](index=20&type=chunk) - The company has incurred significant recurring losses, resulting in an accumulated deficit of **$182.9 million** as of March 31, 2025, conditions that raise substantial doubt about the company's ability to continue as a going concern[24](index=24&type=chunk) - The former Eagan operating segment (STREAMWAY System) was sold on March 14, 2025, and is now reported as a discontinued operation, along with the previously discontinued Birmingham segment[21](index=21&type=chunk)[42](index=42&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's strategic shift to AI oncology post-divestiture, noting Q1 2025 revenue growth and expense reduction, but emphasizes critical financial condition, recurring losses, and 'going concern' doubt requiring additional financing [Recent Developments](index=20&type=section&id=MD%26A_Recent_Developments) Recent developments include the termination of the Renovaro merger and subsequent lawsuit, alongside the sale of the STREAMWAY® product line to DeRoyal Industries for $625,000 plus assumed liabilities - The binding letter of intent with Renovaro for a merger terminated on March 31, 2025, and on April 3, 2025, the Board decided to discontinue merger discussions[78](index=78&type=chunk) - On May 8, 2025, Renovaro filed a lawsuit against the company in Delaware Chancery Court, which the company believes is without merit and plans to contest vigorously[78](index=78&type=chunk) - The company sold its STREAMWAY® product line to DeRoyal Industries, Inc. for **$625,000** plus the assumption of certain liabilities on March 14, 2025[80](index=80&type=chunk) [Results of Operations](index=21&type=section&id=MD%26A_Results_of_Operations) Q1 2025 continuing operations revenue increased to $110,310 due to a 3D model project, while operating expenses significantly decreased across G&A, R&D, and Sales & Marketing, driven by reduced headcount and professional fees Operating Results Comparison (Continuing Operations, Three Months Ended March 31) | Line Item | 2025 | 2024 | Difference | | :--- | :--- | :--- | :--- | | Revenue | $110,310 | $4,858 | $105,452 | | General and administrative expenses | $1,828,200 | $2,325,664 | ($497,464) | | Operations, research and development expenses | $520,406 | $630,085 | ($109,679) | | Sales and marketing expenses | $3,633 | $608,710 | ($605,077) | - The increase in revenue was primarily due to the completion of a tumor-specific 3D model in Q1 2025, with no comparable completion in Q1 2024[89](index=89&type=chunk) - The decrease in sales and marketing expenses was mainly due to lower employee compensation, including severance for a former executive recorded in 2024, and a reduction in headcount[93](index=93&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=MD%26A_Liquidity_and_Capital_Resources) The company's liquidity is critical, with substantial 'going concern' doubt due to recurring losses and negative operating cash flow, despite $3.1 million cash and $2.5 million raised in Q1 2025, necessitating significant additional capital to meet $4.6 million short-term obligations - The company has incurred significant recurring losses, has an accumulated deficit of **$182.9 million**, and does not expect to generate sufficient operating revenue to sustain operations in the near term[99](index=99&type=chunk) - These conditions raise substantial doubt about the company's ability to continue as a going concern within one year[99](index=99&type=chunk) - In Q1 2025, the company raised capital through a Registered Direct Offering (gross proceeds of **$545,004**) and a share subscription agreement with Renovaro (**$500,000**)[102](index=102&type=chunk)[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is not required for the reporting period - Disclosure for this item is not required[107](index=107&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and Interim CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Interim Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[109](index=109&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, internal controls[110](index=110&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=25&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Management reports no pending legal proceedings likely to materially adversely affect financial position, results, or cash flows, though this should be considered with risk factors disclosing a recent Renovaro lawsuit - The company states that there are no pending legal proceedings that management believes are likely to result in a material adverse effect[112](index=112&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=ITEM%201A.%20RISK%20FACTORS) New risks include a costly lawsuit from Renovaro following merger termination and non-compliance with Nasdaq's minimum stockholders' equity requirement, posing a material delisting risk - On May 8, 2025, Renovaro filed a lawsuit alleging breach of contract after merger discussions were discontinued, and while the company intends to contest the lawsuit, litigation can be costly and divert management's attention[114](index=114&type=chunk) - The company received a notice from Nasdaq on November 20, 2024, for non-compliance with the minimum stockholders' equity requirement of **$2.5 million**[116](index=116&type=chunk) - There is a risk the company may not regain compliance with Nasdaq's listing requirements, which could lead to delisting and severely impair the stock's liquidity[117](index=117&type=chunk)[118](index=118&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) On March 13, 2025, the company privately sold 467,290 unregistered common shares to Renovaro, Inc. for $500,000 at $1.07 per share, exempt from Securities Act registration - Pursuant to a share subscription agreement, the company sold **467,290 unregistered common shares** to Renovaro for **$500,000**[121](index=121&type=chunk) - The transaction closed on March 17, 2025, and was exempt from registration under Section 4(a)(2) of the Securities Act[121](index=121&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) None reported - None[122](index=122&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Not applicable - Not applicable[123](index=123&type=chunk) [Item 5. Other Information](index=27&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Not applicable - Not applicable[124](index=124&type=chunk) [Item 6. Exhibits](index=27&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including agreements related to the Renovaro letter of intent, the DeRoyal asset purchase, and the registered direct offering, as well as required officer certifications - The report includes a list of exhibits filed, such as the Letter of Intent with Renovaro, the Asset Purchase Agreement with DeRoyal, and various officer certifications[125](index=125&type=chunk)

Core Insights - Predictive Oncology Inc. has made significant advancements in biomarker discovery and drug repurposing through the integration of active machine learning and a biobank of live-cell tumor specimens [1][2] - The company’s innovative approach has successfully identified three compounds for further exploration in tumor indications that have not been previously examined [3][4] Drug Discovery and Development - The efficient screening process identified Afuresertib, Alisertib, and Entinostat as promising candidates for ovarian and colon tumors, with Alisertib and Entinostat outperforming standard care drugs [4][6] - Afuresertib is an Akt inhibitor previously studied in various cancers, while Alisertib is a selective Aurora A inhibitor showing strong responses in ovarian and colon tumors [5][6] - Entinostat, an HDAC1/3 inhibitor, demonstrated strong responses in colon tumor models and is currently in clinical trials for combination therapy [7] Methodology and Future Directions - The company’s AI platform, PEDAL, predicts with 92% accuracy whether a tumor sample will respond to specific drug compounds, enhancing drug/tumor type selection for testing [10] - The next logical step involves applying this methodology to other publicly available abandoned drugs, potentially creating partnership opportunities with pharmaceutical companies [9]