What changed in Axe Compute Inc.'s 10-K — 2022 vs 2023

CONSOLIDATED BALANCE SHEETS December 31, 2022 December 31, 2021 ASSETS Current Assets: Cash and cash equivalents $ 22,071,523 $ 28,202,615 Accounts Receivable 331,196 354,196 Inventories 430,493 387,684 Prepaid Expense and Other Assets 526,801 513,778 Total Current Assets 23,360,013 29,458,273 Fixed Assets, net 1,833,255 2,511,571 Intangibles, net 253,865 3,962,118 Operating Lease Right-of-Use Assets 211,893 814,454 Other Long-Term Assets 75,618 167,065 Goodwill - 6,857,790 Total Assets $ 25,734,644 $ 43,771,271 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 943,452 $ 1,021,774 Accrued Expenses and other liabilities 2,229,075 1,262,641 Derivative Liability 13,833 129,480 Contract Liabilities 602,073 186,951 Operating Lease Liability – Net of Long-Term Portion 94,237 639,662 Total Current Liabilities 3,882,670 3,240,508 Other Long-Term Liabilities - 25,415 Operating Lease Liability, long-term portion 86,082 239,664 Total Liabilities 3,968,752 3,505,587 Stockholders’ Equity: Preferred Stock, 20,000,000 authorized inclusive of designated below - - Series B Convertible Preferred Stock, $ .01 par value, 2,300,000 authorized, 79,246 shares outstanding 792 792 Common Stock, $ .01 par value, 200,000,000 authorized, 78,762,701 and 65,614,597 outstanding 787,627 656,146 Additional Paid-in Capital 174,755,389 167,649,028 Accumulated Deficit (153,777,916 ) (128,040,282 ) Total Stockholders' Equity 21,765,892 40,265,684 Total Liabilities and Stockholders' Equity $ 25,734,644 $ 43,771,271 See Notes to Consolidated Financial Statements F-4 PREDICTIVE ONCOLOGY INC.

CONSOLIDATED STATEMENTS OF NET LOSS Year Ended December 31, 2022 2021 Revenue $ 1,505,459 $ 1,420,680 Cost of sales 505,107 487,024 Gross profit 1,000,352 933,656 General and administrative expense 11,110,735 10,932,125 Operations expense 3,798,425 2,698,565 Sales and marketing expense 1,358,907 774,530 Loss on goodwill impairment 7,231,093 2,813,792 Loss on impairment of intangibles 3,349,375 2,893,548 Loss on impairment of tangible fixed assets 185,469 1,249,727 Total operating loss (26,033,652 ) (20,428,631 ) Other income 185,646 184,528 Other expense (5,275 ) (239,631 ) Gain on derivative instruments 115,647 164,902 Loss before income tax benefit $ (25,737,634 ) (20,318,832 ) Income tax benefit - (661,658 ) Net loss (25,737,634 ) $ (19,657,174 ) Loss per common share - basic and diluted $ (0.35 ) $ (0.36 ) Weighted average shares used in computation - basic and diluted 72,997,987 54,876,044 See Notes to Consolidated Financial Statements F-5 PREDICTIVE ONCOLOGY INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY Series B Preferred Common Stock Additional Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance at 12/31/2021 79,246 $ 792 65,614,597 $ 656,146 $ 167,649,028 $ (128,040,282 ) $ 40,265,684 Issuance of shares and warrants pursuant to May 2022 private placement, net 12,000,000 120,000 6,387,050 6,507,050 Shares issued pursuant to Equity Line 315,000 3,150 232,859 236,009 Share issuance to consultant and other 596,670 5,967 350,158 356,125 Vesting expense and option repricing 236,434 2,364 136,294 138,658 Net loss - - - (25,737,634 ) (25,737,634 ) Balance at 12/31/2022 79,246 $ 792 78,762,701 $ 787,627 $ 174,755,389 $ (153,777,916 ) $ 21,765,892 F-6 PREDICTIVE ONCOLOGY INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY Series B Preferred Common Stock Additional Paid-In Accumulated Shares Amount Shares Amount Capital Deficit Total Balance at 12/31/2020 79,246 $ 792 19,804,787 $ 198,048 $ 110,826,949 $ (108,383,108 ) $ 2,642,681 Shares issued pursuant to agreement with former CEO related to accrued interest 100,401 1,004 142,569 143,573 Issuance of shares and warrants pursuant to Shelf offerings, net 13,488,098 134,881 14,877,611 15,012,492 Issuance of shares and warrants pursuant to February 2021 private placement, net 9,043,766 90,438 15,974,301 16,064,739 Exercise of warrants 5,269,059 52,702 4,461,169 4,513,871 Shares issued pursuant to convertible debt 1,107,544 11,075 502,936 514,011 Issuance of shares and warrants pursuant to June 2021 direct placement, net 15,520,911 155,209 19,291,087 19,446,296 Shares issued pursuant to transition agreement with former CEO 400,000 4,000 (4,000 ) - Shares issued pursuant to Equity Line 647,504 6,475 669,115 675,590 Share issuance to consultant and other 174,954 1,750 203,443 205,193 Vesting expense and option repricing 57,573 564 703,848 704,412 Net loss - - - (19,657,174 ) (19,657,174 ) Balance at 12/31/2021 79,246 $ 792 65,614,597 $ 656,146 $ 167,649,028 $ (128,040,282 ) $ 40,265,684 See Notes to Consolidated Financial Statements F-7 PREDICTIVE ONCOLOGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2022 2021 Cash flow from operating activities: Net loss $ (25,737,634 ) $ (19,657,174 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,313,075 1,340,301 Vesting expense 166,312 715,938 Equity instruments issued for management, consulting, and other 356,125 205,193 Amortization of debt discount - 244,830 Gain on valuation of equity-linked instruments (115,647 ) (164,902 ) Benefit from release of valuation allowance - (661,658 ) Loss on goodwill impairment 7,231,093 2,813,792 Loss on intangible impairment 3,349,375 2,893,548 Loss on long-lived tangible asset impairment 185,469 1,249,727 Loss on fixed asset disposal 14,346 5,858 Changes in assets and liabilities: Accounts receivable 23,000 (20,769 ) Inventories (42,808 ) (98,149 ) Prepaid expense and other assets 78,425 (194,363 ) Accounts payable (78,322 ) (350,296 ) Accrued expenses 869,987 (499,563 ) Contract liabilities 41,819 54,548 Other liabilities (25,415 ) (85,790 ) Net cash used in operating activities: (12,370,800 ) (12,208,929 ) Cash flow from investing activities: Acquisition of zPREDICTA, net of cash acquired - (9,590,214 ) Purchase of fixed assets (419,869 ) (910,429 ) Acquisition of intangibles (55,828 ) (51,893 ) Loan activities - (55,000 ) Net cash used in investing activities (475,697 ) (10,607,536 ) Cash flow from financing activities: Proceeds from issuance of common stock, net 6,507,050 50,523,527 Proceeds from exercise of warrants into common stock - 4,513,871 Repayment of debt - (4,162,744 ) Payment penalties - (1,073,470 ) Proceeds from issuance of stock pursuant to equity line 236,009 675,590 Repurchase of common stock upon vesting of restricted stock units (27,654 ) (11,526 ) Other liabilities - (124,500 ) Net cash provided by financing activities 6,715,405 50,340,748 Net increase (decrease) in cash and cash equivalents (6,131,092 ) 27,524,283 Cash and cash equivalents at beginning of year 28,202,615 678,332 Cash and cash equivalents end of year $ 22,071,523 $ 28,202,615 See Notes to Consolidated Financial Statements F-8 PREDICTIVE ONCOLOGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS continued Year Ended December 31, 2022 2021 Non-cash transactions Shares issued pursuant to former CEO per agreement related to accrued interest $ - $ 143,573 Increase to operating lease right of use asset and lease liability due to new and modified leases - 77,128 Inducement shares issued pursuant to convertible debt - 514,011 Adjustment to goodwill for acquisition of zPREDICTA contract liabilities 373,303 - Cash paid during the period for: Interest paid on debt $ 3,821 $ 690,508 See Notes to Consolidated Financial Statements F-9 PREDICTIVE ONCOLOGY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Continuance of Operations Predictive Oncology Inc., (the “Company” or “Predictive” or “we”) filed with the Secretary of State of Delaware a Certificate of Amendment to its Certificate of Incorporation to change the corporate name to Predictive Oncology Inc. on June 10, 2019, trading under the new ticker symbol “POAI,” effective June 13, 2019.

The Company operate in four primary business areas: first, the application of artificial intelligence (“AI”) for optimized, high-confidence drug-response predictions within a large experimental space that enables a more informed selection of drug/tumor combinations to increase the probability of success during development.; second, creation and development of tumor-specific 3D cell culture models driving accurate prediction of clinical outcomes; third, contract services and research focused on solubility improvements, stability studies, and protein production, and; fourth, production of the United States Food and Drug Administration (“FDA”)-cleared STREAMWAY® System for automated, direct-to-drain medical fluid disposal and associated products.

The Company has four reportable segments: Helomics®, zPREDICTA®, SolubleTM and Skyline®. The Helomics segment includes contract services that include the application of AI, partnering projects and clinical testing. The zPREDICTA, Inc. (“zPREDICTA”) segment specializes in organ-specific disease models that provide 3D reconstruction of human tissues accurately representing each disease state and mimicking drug response enabling accurate testing of anticancer agents.

Going forward, the Company has determined that it will focus its resources on applying AI to develop optimal cancer therapies, partnering with biopharma clients to prioritize drugs for development and identify biomarker-informed indications enabling a more informed selection of drug/tumor combinations to increase the probability of success during drug development.

As a result of this focused approach, the Company has consolidated its brand under Predictive Oncology name. Going forward, the Company will operate under the Predictive Oncology tradename with laboratory operations in Pittsburgh, Pennsylvania and Birmingham, Alabama.

Impact of the Coronavirus Disease 2019 In response Coronavirus Disease 2019 (“COVID- 19” ), the Company continues to closely manage manufacturing and supply chain resources. The Company monitors its sites to protect the safety of its staff and employees. The Company continues to experience some disruption due to the global supply chain caused by COVID- 19.

As a result of COVID- 19, the Company is also experiencing disruption due staffing shortages within the service and healthcare industries and negative impacts on the demand for our products and services. For example, some customers are managing inventory and capital more conservatively and our suppliers continue to ask for pre-delivery deposits.

The Company is monitoring and taking actions to mitigate potential risks of these shortages and delays which may impact the Company’s ability to obtain new contracts, the fulfillment of product demand and to meet its contract obligations.

The extent to which COVID- 19 may impact the Company’s financial condition and results of operations remains uncertain and is dependent on numerous evolving factors, including the measures being taken by authorities to mitigate against the spread of COVID- 19, the emergence of new variants and the effectiveness of vaccines and therapeutics.

The continuation or re-implementation of these measures remains uncertain. These factors may remain prevalent for a significant period of time even after the pandemic subsides, including due to a continued or prolonged recession in the U.S. or other major economies.

The impacts of the COVID- 19 pandemic, as with any adverse public health developments, could have a material adverse effect on our business, results of operations, liquidity or financial condition and heighten or exacerbate risks described in this Annual Report on Form 10 -K.

F- 10 Recently Adopted Accounting Standards The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the “FASB”). Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the condensed consolidated financial statements of the Company.

In June 2016, the FASB issued ASU 2016 - 13, “Financial Instruments – Credit Losses.” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses.

The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss.

As a smaller reporting company pursuant to Rule 12b - 2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. Management is currently evaluating the potential impact of these changes on the consolidated financial statements of the Company.

Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and during the reporting period. Actual results could materially differ from those estimates.

Cash and cash equivalents The Company considers all highly liquid instruments with maturities when purchased of three months or less to be cash equivalents. The Company places its cash with high quality financial institutions and believes its risk of loss is limited to amounts in excess of that which is insured by the Federal Deposit Insurance Corporation.

Receivables Receivables are reported at the amount the Company expects to collect on balances outstanding. The Company provides for probable uncollectible amounts through charges to earnings and credits to the valuation allowance based on management’s assessment of the current status of individual accounts.

Amounts recorded in accounts receivable on the consolidated balance sheets include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. An allowance for doubtful accounts is maintained to provide for the estimated amount of receivables that will not be collected.

The Company reviews customers’ credit history before extending unsecured credit and establishes an allowance for uncollectible accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Invoices are generally due 30 days after presentation. Accounts receivable over 30 days is generally considered past due.

The Company does not accrue interest on past due accounts receivables. Receivables are written off once all collection attempts have failed and are based on individual credit evaluation and specific circumstances of the customer. The allowance for doubtful accounts balance was $0 as of both December 31, 2022 and 2021.

F- 11 Fair Value Measurements As outlined in Accounting Standards Codification (“ASC”) 820, Fair Value Measurement , fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The accounting standards ASC 820 establishes a three -level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows: Level 1 – Observable inputs such as quoted prices in active markets; Level 2 – Inputs other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3 – Unobservable inputs where there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company uses observable market data, when available, in making fair value measurements. Fair value measurements are classified according to the lowest level input that is significant to the valuation. The fair value of the Company’s investment securities, which consist of cash and cash equivalents, was determined based on Level 1 inputs.

The fair value of the Company’s derivative liabilities and debt were determined based on Level 3 inputs. The Company generally uses Black Scholes method for determining the fair value of warrants classified as liabilities on a recurring basis.

In addition, the Company uses the Monte Carlo method and other acceptable valuation methodologies when valuing the conversion feature and other embedded features classified as derivatives on a recurring basis. See Note 7 – Derivatives . When performing quantitative testing related to goodwill impairment analysis, the Company estimates the fair values of its reporting units using discounted cash flows.

To determine fair values, the Company is required to make assumptions about a wide variety of internal and external factors.

Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations including the rate of future revenue growth, capital requirements, and income taxes), long-term growth rates for determining terminal value and discount rates.

The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. See Note 8 – Goodwill and Intangibles . The acquisition of zPREDICTA was accounted for as a business combination using the acquisition method of accounting.

This method requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. The fair value for the assets acquired and the liabilities assumed are based on information knowable and determined by management as of the acquisition date.

The majority of the inputs used in the discounted cash flow model, the relief-from-royalty method under the income approach, the distributor method under the income approach and the multi-period excess earnings method under the income approach, each are unobservable and thus are considered to be Level 3 inputs. See Note 2 – zPREDICTA Acquisition .

Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first -in, first -out basis. Fixed Assets Fixed assets are stated at cost less accumulated depreciation. Depreciation of fixed assets is computed using the straight-line method over the estimated useful lives of the respective assets.