Axe Compute Inc. Q4 FY2022 earnings call

• Rebranding and repositioning: The company has been rebranding and repositioning, emphasizing its science-driven approach using AI and machine learning for drug discovery. - PEDAL platform: The PEDAL platform includes a biorepository of over 150,000 tumor samples and 200,000 pathology slides. - Partnerships: Signed a partnership with Cancer Research Horizons to incorporate PEDAL into their drug discovery process and with Cvergenx, Inc. for genomics-based precision radiation therapy. - ACE program: Launched the Accelerating Compound Exploration (ACE) program to partner with academic and research institutions. - Board expansion: Expanded the board with biopharma life science and intellectual property experts. - Scientific Advisory Board: Rebuilding the Scientific Advisory Board around emerging market opportunities in AI, oncology drug discovery, and drug repurposing.

In 2022, Predictive Oncology recorded revenue of $1.5 million, compared to $1.4 million in 2021. Gross profit margin was stable at 66%. Cash and cash equivalents were $22.1 million in 2022, down from $28.2 million in 2021. Stockholders' equity was $21.8 million in 2022, versus $40.3 million in 2021. Expenses increased in 2022 due to higher payroll, lab, and sales/marketing costs. There was an impairment of goodwill of $7.2 million for zPREDICTA, intangible assets of $3.3 million, and other intangible fixed assets of $185,000.

Management aims to continue commercializing the PEDAL platform, avoid a reverse split by maintaining share price above $1 for 10 consecutive trading days, and focus on growing revenue through partnerships and contract milestones. There is no specific upward/downward revision but an emphasis on ongoing efforts to increase share value and secure compliance.

• Reverse split risk: Potential need to perform a reverse split if share price remains below $1, which the company is actively working to avoid. - Contract disclosure uncertainty: Constraints on disclosing contract terms due to non-disclosure agreements. - Funding risk: Potential need for additional funding, though management states no immediate intention for a cash raise. - Market and regulatory risks: Uncertainties related to market conditions and regulatory approvals affecting drug discovery and development processes.

Q: Michael Broadbent asked about zPREDICTA acquisition, asset impairment, revenue growth, and potential additional offerings.

A: Bob Myers explained revenue from zPREDICTA is in contract liabilities due to unmet revenue recognition criteria, and the company is working to avoid a reverse split, having no intention of a cash raise in the near term.

Q: Unidentified analyst asked about zPREDICTA departure and revenue adoption.

A: Raymond Vennare and Bob Myers stated the departure did not harm the company, as assets and expertise were retained, and there are future revenue opportunities through cross-selling and ongoing work.

Q: Michael Broadbent asked about revenue milestones and Q1 2023 revenue.

A: Raymond Vennare explained revenue comes from fee-for-service work on contracts, with potential for milestones and long-term passive income, expecting some revenue bump in the short term as contracts progress.

Q: Robert Antioni asked about executive ownership and stock compensation.

A: Raymond Vennare and Bob Myers stated senior management and board members desire to purchase stock but are constrained by blackout periods, with a commitment to the company's success and ongoing efforts to develop a new compensation plan.

Q: Danny Garcia asked about reverse split goals and compensation.

A: Bob Myers discussed the reverse split range and the company's desire to avoid it, while Raymond Vennare emphasized the commitment of employees who have worked without salaries to support the company.

Q: Brenda Thompson asked about reverse split benefit.

A: Bob Myers explained the reverse split does not change essential shareholder value but a higher share price can help attract investors and support the company's growth.