Good day, and thank you for standing by. Welcome to the Predictive Oncology Q2 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be an opportunity to ask your questions. Please be advised that today's conference is being recorded. And I now, would like to turn the conference over to your speaker, Mr. Glenn Garmont, Investor Relations. Mr. Garmont, please go ahead.

Welcome, and thank you, everyone, for dialing into the Predictive Oncology second quarter 2023 earnings call. First, you'll hear from our Chief Executive Officer and Chairman of the Board, Raymond Vennare; then our Chief Financial Officer, Bob Myers, will review our financials. Finally, Dr. Pamela Bush, our Chief Business Officer, will join Raymond and Bob to answer any questions that you may have. Certain matters discussed on this call contain forward-looking statements. These forward-looking statements reflect our current expectations and projections about future events and are subject to substantial risks, uncertainties and assumptions about our operations and the investments we make. All statements other than statements of historical facts included in this call regarding our strategy, future operations, future financial position, future revenue and financial performance, projected costs, prospects, plans and objectives of management are forward-looking statements. The words anticipate, believe, estimate, expect, intend, may, plan, would, target and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Our actual performance -- future performance may materially differ from that contemplated by the forward-looking statements as a result of a variety of factors, including, among other things, factors discussed under the heading Risk Factors in our filings with the SEC. Except as expressly required by law, the company disclaims any intent or obligation to update these forward-looking statements. And now I'd like to turn the call over to Raymond Vennare, Chief Executive Officer. Raymond?

Thank you, Glenn, and good afternoon, everyone. During the second quarter of this year, we continued to make significant progress in growing our pipeline with biotech and biopharma companies as well as research institutions looking to incorporate artificial intelligence and machine learning into their early drug discovery process. The importance of our differentiating pedal platform, which includes our vast proprietary biobank of more than 150,000 heterogeneous tumor samples and more than 200,000 pathology slides combined with our CLIA-certified AtLab is beginning to resonate in the market. We are the only AI-powered company capable of predicting clinical success in the very early stages of drug discovery and supporting those predictions with actual in silico modeling and bench level experimentation. This is only possible because we are able to introduce the human element of petrogeneity far earlier in the drug discovery process, essentially looking 5 years into the future of drug development in advance of clinical trials. As I have mentioned before and for those unfamiliar with our company, the word heterogeneous is a key descriptor for predictive oncology. Even though many patients are diagnosed with the same type of cancer, each of those tumors respond differently to a particular cancer therapy. Each tumor and every response is unique. Understanding drug response in a heterogeneous population is invaluable along the entire continuum of drug discovery through drug development. Our unique combination of assets and capabilities offers drug developers, a multifaceted value proposition that includes, first, the mitigation of clinical risk at the most critical stage of drug discovery. Second, by identifying and validating drug targets sooner and thereby avoiding unnecessary trials that are likely to fail later in development. The potential exists not only to significantly reduce the cost of drug discovery, but potentially to expand the drug development pipeline; and third,…

Thank you, Randy [ph]. We ended the second quarter 2023 with cash and cash equivalents of $14.8 million as compared to $22.1 million as of December 31, 2022. In addition, we have 1.8 million outstanding warrants that represent an additional source of capital. We have no debt, so our balance sheet is very strong. As of June 30, 2023, stockholders' equity stood at $14.7 million as compared to $21.8 million as of December 31, 2022. We recorded second quarter 2023 revenue of $490,110 and as compared to $371,591 for the second quarter of 2022. Our gross margin in the second quarter 2023 was 67% as compared to 64% for the second quarter of 2022. Operating expenses were just under $1 million in the second quarter of 2023 as compared to $900,000 for the second quarter of 2022. Net cash used in operation activities were $7 million in the first half of 2023 as compared to $6.4 million for the comparable period in 2022. Net cash used in investing activities was $0.3 million for the first half of 2023, which was consistent with the comparable period in 2022. That concludes our financial summary. You can find additional details on our 8-K containing our earnings press release as well as our 10-Q, which is on file with the SEC and also available on our website. So with that, I'm going to turn the call over to the operator for Q&A. And as a reminder, Dr. Pamela Bush, our Chief Business Officer, is also available for this segment of the call.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from Michael Broadbent [ph], a private investor.

I appreciate the call. I wanted to ask the same question I've asked at a couple of the others. Given the trajectory of the company and the increase in expenses, obviously, there's a lot of things still in place. So what is -- is there a new time line that the company will achieve at least a breakeven on operations because the cash burn still has me worried about a potential offering, even though the warrants are still there. A second part of that question is, do the warrants -- at what price would they be exercisable given if there is a raise necessary in the next year?

Bob, do you want to take that? Or do you want me to?

Sure, I'd be glad to. Michael; so to answer your question, our expenses in terms of burn are still rolling along at about [indiscernible]. We had $18.5 million in the bank at the end of March 31, and we're sitting with about 148 in at the end of June. So that rate is pretty consistent. We're solid certainly for moving ahead over the next year and the anticipation and forecasted revenue that we believe will be coming in. And let's take it that way, revenue, let's say, cash from deals that we have, revenues being recognized is different from the cash that we may earn from some of these deals. We'll certainly assist in maintaining our run. In terms of the warrants, right now, the lowest price warrants is $14. And as you know, we were at $4.7 to date in terms of our price. So -- but there's a lot we can do with the warrants, and there's also, as you said, always a potential to raise. But Raymond and I have always been very honest and said to the shareholders that we're going to try to do everything we can to not do another way and to try to bring our cash levels up through revenue and the business we do continually and that is our aim.

And Michael, I would add to that, that we are obviously scrubbing the budget. There are a couple of ways that we're going to address this. One is in order for us to extend the runway we have to reduce the cash burn. So we're certainly looking at that. The balance, of course, is to take advantage of these opportunities that are in front of us, we have to spend money to do that. So we win some of these contracts and need to hire people and get some equipment, then we're going to have to do that as well. But we are acutely aware of that balance, and we're keeping an eye on it literally on a weekly basis.

Okay. And then on the company's current trajectory, is there a potential time line for breakeven on the EPS or we have still a year or 2 years out, 6 months? Any kind of indication you can give based on current forecasts.

Right. Mike, it's a great question, and it's a difficult one to answer based on forecast without a historical knowledge because, as you know, Petalas new. We've had our first deal with CRH, and I think we have a lot of prospective deals upcoming. But without seeing these come in and without knowing exact dates, it's difficult for me to give you an exact date with a breakeven. Our goal is to do so by the end of 2024 or sooner. But a lot depends on how quickly we can turn those sales into revenue and close other contracts.

I will say, Michael, that we've mentioned CRH several times, right? And I think everyone is very well attuned to the significance of that relationship. And we are actively -- I'm here at the laboratory right now. I'm doing a call from the laboratory, and we are working on that project as we speak. So no one is more anxious than we are to move that forward as quickly as possible. But as Bob said, we are doing on our end, certainly everything we can do. We have to work through on the other end, how long it takes our partners, our customers, our collaborators actually get us what we need and give the approvals and just keep the projects moving.

Thank you. There are no further questions. I would like to turn the floor back over to Raymond for closing comments.

Okay. Well, thank you, everyone. That concludes today’s call. We hope that you can take away from this call the fact that all of us at predictive oncology are very excited about the growth trajectory of the company. What’s been happening in the last few months, much of that what we’ve been talking about for the last few months is finally coming to fruition. So in the coming quarters, I would anticipate more collaborations and partnerships with some of the leading drug developers and research and academic institutions. They are critical to the process. We're also very excited to play an important role in the discovery of new oncology drugs. That’s certainly part of the relationship with CRH which we believe and everyone on this call, I truly believe understands the benefits of the patients, but will also create enduring value for our shareholders. So I want to thank you all for your support, and I look forward to the third quarter update, and I wish you all a good day and a good evening. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.