Predictive Oncology (POAI) - 2018 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for 2018 was $1,412,000, a 116% increase from $655,000 in 2017, driven by the sale of 41 STREAMWAY systems and increased disposable supplies [15] - Cost of sales increased to $416,000 in 2018 from $148,000 in 2017, with expectations that costs will decline as a percentage of revenue due to volume discount purchasing agreements [16] - Gross profit margin decreased slightly to 71% in 2018 from 77% in 2017, attributed to assistance with installation costs for customers [16] - Operating expenses rose to $8,900,000 in 2018 from $6,600,000 in 2017, including extraordinary expenses related to acquisitions and startup costs [17] Business Line Data and Key Metrics Changes - Skyline Medical had record sales in 2018, expanding its sales efforts both nationally and internationally, with machines now present in five of the world's seven continents [6][7] - TumorGenesis was formed to develop rapid testing methods for ovarian tumors, with contracts signed for biomarker screening kits [9][10] - The acquisition of Helomics Corporation is expected to enhance the company's capabilities in artificial intelligence for women's cancer [11] Market Data and Key Metrics Changes - The company has established a European office and signed independent distributors in various regions, including Canada, Europe, the Middle East, and Asia [6][7] - The database of tumors at Helomics is significant, with over 150,000 tumors, which the company aims to monetize through collaborations and data sharing agreements [11][22] Company Strategy and Development Direction - The company aims to become a leading artificial intelligence entity focused on women's cancer, leveraging its extensive tumor database and deep learning software [11] - Future collaborations and partnerships are anticipated to enhance the database and accelerate revenue growth [20][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting income levels from Helomics to rise dramatically due to collaborations [20] - The company is preparing to raise additional funds, with a current cash position of about $1 million and a burn rate of approximately $440,000 per month for Skyline Medical [25] Other Important Information - The company is in the process of finalizing the acquisition of Helomics, which is expected to be completed shortly [8] - The new Generation 3 machine is set for testing in May 2019, with plans for a commercial release thereafter [8] Q&A Session Summary Question: How is the company addressing the shortfall in Helomics' earnings? - Management acknowledged the initial disappointment but expressed confidence in the collaborations that are expected to boost income levels significantly [20] Question: What is the current state of the tumor database and its monetization potential? - The database is in good shape, but sequencing is still in progress, which is necessary for monetization [22][23] Question: What is the current cash position and burn rate? - The company has about $1 million in cash, with a burn rate of $440,000 per month for Skyline Medical and $300,000 for Helomics [25] Question: When can shareholders expect to see value from the Advisory Board? - Management expects to see progress from the Advisory Board within the next three to six months following the merger completion [34]