Axe Compute (AGPU) Q2 2024 earnings summary

Executive summary

• Completed a multi-year ovarian cancer study with UPMC Magee-Womens Hospital, expanding AI/ML capabilities for biomarker discovery and drug response prediction in oncology.

• Launched novel organ-specific 3D cell culture technology and announced a collaboration with the University of Michigan for compound exploration, expanding into large molecule models.

• Implemented a strategic cost reduction initiative, consolidating Birmingham operations into Pittsburgh to focus on core AI-driven drug discovery and streamline operations.

• Operates through three business segments: Pittsburgh (AI and 3D models), Birmingham (protein formulation services), and Eagan (medical fluid waste systems), with Eagan as the primary revenue contributor.

• Published findings at major oncology conferences and released a white paper on biomarker discovery opportunities, validating the AI/ML platform and biobank value.

Financial highlights

• Q2 2024 revenue was $278,722, down from $490,110 in Q2 2023, with gross profit margin declining to 45% from 67% year-over-year.

• Net loss for Q2 2024 was $3.2 million, compared to $3.9 million in Q2 2023; net loss per share improved to $(0.68) from $(0.98) year-over-year.

• Cash and cash equivalents were $5.3 million as of June 30, 2024, down from $8.7 million at year-end 2023.

• Net cash used in operating activities was $6.6 million for the first half of 2024, down from $7.0 million in the prior year period.

• Accumulated deficit reached $175.2 million as of June 30, 2024.

Outlook and guidance

• Cost reduction initiative expected to lower annual cash burn by $2.5 million, or 20% of 2023 operating cash use, starting Q4 2024.

• Continued focus on AI-driven biomarker and drug discovery, with plans for further collaborations and technology validation.

• The company does not expect to generate sufficient operating revenue to sustain operations in the near term and must raise significant additional capital.

• Substantial doubt exists about the ability to continue as a going concern within one year without additional funding.