Predictive Oncology Inc.

Company Overview

Business Model: Axe Compute Inc. operates primarily in two business areas: Compute Services and Treasury Management, and Drug Discovery Services. The core value proposition of the Compute Services and Treasury Management segment is to provide on-demand access to high-performance Graphics Processing Unit ("GPU") compute capacity for artificial intelligence ("AI") and other high-performance computing workloads through a distributed network model, leveraging the Aethir network. This segment also manages a digital asset treasury strategy focused on the Aethir token ("ATH"), the native utility token of the Aethir network, which functions as a proxy for GPU compute power and a medium of exchange/incentive within the Aethir ecosystem. Revenue from Compute Services is generated primarily through reserved GPU capacity contracts, typically 12- to 36-month prepaid terms, priced on a per-GPU per-hour basis. The Drug Discovery Services segment, referred to as the 'Legacy Business,' supports cancer therapy discovery and development using an AI-driven platform (PEDAL™) with a proprietary biobank of over 150,000 tumor samples, and develops tumor-specific 3D cell culture models. This segment also offers clinical diagnostic testing services (ChemoFx™ and BioSpeciFx).

Market Position: Axe Compute Inc. operates in significant and rapidly growing markets. The global compute market is estimated at over $1 trillion in 2026, with a compound annual growth rate of approximately 9.9%, projected to nearly double by 2032. The AI compute market specifically is anticipated to exceed $1 trillion by 2034, with growth rates exceeding 30% annually. Demand for data center capacity, particularly for AI workloads, significantly outpaces supply, with North American data center vacancy rates at a record low of 1.6% in early 2026 and GPU lead times of 36 to 52 weeks. The Company's competitive advantages in Compute Services include a globally distributed network of over 435,000 GPUs, 48-hour provisioning capability, flexible contract structures, an asset-light operating model, and integration of ATH token settlement. In Drug Discovery Services, the Company leverages a unique, privately held biobank of tumor samples with extensive historical data, combined with AI, to provide high-confidence drug-response predictions, creating a competitive barrier to entry.

Recent Strategic Developments:

• Business Expansion and Name Change: In late 2025, the Company expanded its business strategy to include a compute business under the Axe Compute brand and renamed the Company Axe Compute Inc., effective December 11, 2025.
• Digital Asset Treasury Strategy Launch: On September 29, 2025, the Company launched its Treasury Strategy focused on ATH, intending to acquire additional ATH in the open market and earn yield through staking and other activities.
• PIPE Transactions: On October 8, 2025, the Company closed two private investment in public equity ("PIPEs") transactions totaling approximately $343.5 million. This included a Cash PIPE of approximately $50.8 million and a Crypto PIPE of approximately $292.7 million in notional value (approximately $173.3 million discounted value) of in-kind contributions of locked and unlocked ATH, to fund the digital asset treasury strategy and for general corporate purposes.
• Reverse Stock Split: On September 19, 2025, stockholders approved a one-for-fifteen reverse stock split, effective September 30, 2025, to regain compliance with Nasdaq listing requirements.
• Nasdaq Compliance: As of December 1, 2025, the Company regained compliance with Nasdaq's stockholders' equity requirement and minimum bid price requirement, though it is subject to a one-year mandatory panel monitor.
• CEO Transition: On February 6, 2026, Raymond F. Vennare was terminated as Chief Executive Officer, and Christopher Miglino was appointed Chief Executive Officer and a member of the Board, effective February 9, 2026.
• Strategic Review of Legacy Business: In February 2026, the Company announced it is exploring strategic alternatives for its oncology drug discovery solutions business (Legacy Business), including a potential sale, partnership, or licensing arrangement, to focus on its AI compute infrastructure strategy.
• New Board Appointments: On March 3, 2026, Dr. Theodore Zhu and Thorsten Dirks were appointed as members of the Board.
• Compute Contracts: In March 2026, the Company executed contracts with several enterprise customers to provide remote GPU compute capacity on an hourly basis, with service periods ranging from one month to approximately two years.

Geographic Footprint: The Company's principal executive offices and primary operational regions are located in Pittsburgh, Pennsylvania, United States. Substantially all revenues and long-lived assets are located or derived from operations in the United States.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 42.0%
• Operating Margin: -144400.0%
• Net Margin: -186000.0%

Investment in Growth:

• R&D Expenditure: $2.15 million (1713.9% of revenue)
• Capital Expenditures: $32.62 million (primarily digital asset purchases)
• Strategic Investments: The Company purchased $32.61 million in digital assets (ATH) in 2025 as part of its Treasury Strategy.

Business Segment Analysis

Compute Services and Treasury Management

Financial Performance:

• Revenue: $0.00 billion (0.0% YoY)
• Operating Loss: $(168.73) million
• Key Growth Drivers: Global demand for GPU compute infrastructure, rapid growth in AI-related computing services, supply-demand imbalance in data center capacity and GPU procurement.
• Sub-segment Breakdown (Treasury Management):
  • ATH Holdings (as of December 31, 2025):
    • Unlocked ATH: 2.837 billion tokens (Fair Market Value: $24.44 million)
    • Locked ATH (right to receive): 3.511 billion tokens (Fair Market Value: $15.50 million, after discount for restrictions)
    • Total ATH (including future rights): 6.348 billion tokens (Market Value: $54.60 million, on an as if vested and claimed basis)
  • Digital Asset Purchases (2025): $32.61 million
  • Gains (losses) on digital assets (2025): $(152.49) million (primarily change in fair value of ATH holdings)

Product Portfolio:

• On-demand access to high-performance GPU compute infrastructure for AI, machine learning, and high-performance computing workloads.
• Managed infrastructure model with 48-hour provisioning.
• Ancillary storage and CPU services.
• ATH Treasury Strategy: Acquisition of ATH, staking, and other yield-generating activities.

Market Dynamics:

• Operates within the rapidly expanding global compute and AI computing markets.
• Leverages the Aethir network, a decentralized GPU network, to connect producers and consumers of GPU compute power.
• Addresses the significant supply-demand imbalance in the GPU compute market.

Drug Discovery Services

Financial Performance:

• Revenue: $0.13 million (+56.9% YoY)
• Operating Loss: $(3.81) million
• Key Growth Drivers: Growing demand for AI-empowered solutions in drug discovery, increased efficiency and reduced cycle time in drug development, shift towards non-animal testing methods (FDA Modernization Act 2.0).

Product Portfolio:

• PEDAL™ Platform: AI-driven platform for high-confidence drug-response predictions, combining a proprietary biobank of 150,000+ tumor samples with AI active machine learning and multi-omic historical tumor data.
• 3D Modeling: Development of tumor-specific in vitro models for oncology drug discovery and research, mimicking human tissue physiology.
• Clinical Testing (through Helomics Corporation): Clinically relevant, cancer-related tumor profiling and biomarker tests for gynecological cancers (ChemoFx™ and BioSpeciFx).

Market Dynamics:

• Addresses the high failure rate (90-95% from first human dose to launch) and high costs in oncology drug development.
• Aims to provide early insights for drug prioritization and patient-centric indications.
• Competitive advantage derived from its unique, privately held biobank and AI integration.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Not disclosed for the period.
• Dividend Payments: The Company does not anticipate paying cash dividends in the foreseeable future.
• Dividend Yield: Not applicable.
• Future Capital Return Commitments: No specific programs authorized beyond the current operational strategy.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $10.79 million
• Total Debt: $0.11 million (Note payable)
• Net Cash Position: $10.68 million
• Credit Rating: Not disclosed.
• Debt Maturity Profile: The note payable for D&O insurance requires ten monthly installment payments through April 2026.

Cash Flow Generation (Year Ended December 31, 2025):

• Operating Cash Flow: $(9.88) million (used in continuing operations)
• Free Cash Flow: $(42.49) million (Operating Cash Flow - Capital Expenditures)
• Cash Conversion Metrics: Not explicitly disclosed.

Operational Excellence

Production & Service Model: Axe Compute Inc. operates an asset-light model for its Compute Services, not owning or operating physical data centers. It provides on-demand access to GPU compute capacity through a distributed network model, primarily via the Aethir network. Compute capacity is typically provisioned within 48 hours of customer engagement, without requiring customers to make capital investments in hardware or data centers. The Drug Discovery Services segment operates a CLIA-certified lab in Pittsburgh, Pennsylvania, for its biobank and testing services.

Supply Chain Architecture: Key Suppliers & Partners:

• GPU Hardware: NVIDIA Corporation (dominant supplier for AI training and inference workloads).
• Aethir Network Developer: DCI Foundation, a Panama foundation company.
• Drug Discovery Materials: Multiple suppliers for raw materials, with sole suppliers for certain molecular diagnostic test materials and reagents.
• Strategic Advisor: DNA Holdings Venture Inc. (for digital asset strategies and business development).
• Asset Manager: DNA Holdings Venture Inc. (for digital assets).

Facility Network:

• Corporate Offices: Pittsburgh, Pennsylvania (leased space through February 29, 2028).
• Manufacturing: Not applicable, as the Company does not manufacture hardware.
• Research & Development: Pittsburgh laboratory (CLIA certified) for oncology drug discovery and biomedical research.
• Distribution: Not explicitly detailed for Compute Services, but relies on the distributed nature of the Aethir network.

Operational Metrics:

• Compute Services: Network encompasses over 435,000 GPUs globally.
• Drug Discovery Services: Proprietary biobank of 150,000+ tumor samples.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Managed infrastructure model for enterprises, AI developers, and large-scale workload operators.
• Digital Platforms: Integration with the Aethir network for distributed GPU compute capacity.

Customer Portfolio: Enterprise Customers:

• Compute Services: Enterprises, AI developers, and large-scale workload operators.
• Drug Discovery Services: Pharmaceutical, diagnostic, and biotech industries.
• Customer Concentration: Demand for GPU compute is highly concentrated among a small number of large technology companies (e.g., Google, Amazon, Microsoft, Meta, Apple) and government-sponsored AI programs.

Geographic Revenue Distribution:

• United States: Substantially all of the Company's revenues were located or derived from operations in the United States for the years ended December 31, 2025, and 2024.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics:

• Global Compute Market: Estimated at over $1 trillion in 2026, with a compound annual growth rate of approximately 9.9%, expected to nearly double by 2032.
• AI Compute Market: Anticipated to reach over $1 trillion by 2034, with growth rates exceeding 30% annually.
• Data Center Capacity: Over 50% of all data center capacity dedicated to AI workloads in 2025, expected to grow 3.5 times by 2030. Approximately $6.7 trillion to be spent on data centers globally between 2025 and 2030, with 65.7% GPU-related.
• Supply-Demand Imbalance: Record low North American data center vacancy rates (1.6% in early 2026), 24% increase in data center demand in 2025, and average lead times for data center GPUs of 36 to 52 weeks.
• Drug Discovery Market: Driven by demand for AI-empowered solutions to increase efficiency, reduce cycle time, and improve accuracy in drug development. Expected growth due to a shift towards more efficient, accurate, and predictive models, supported by legislation like the FDA Modernization Act 2.0.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Compute Services: Specialized GPU cloud platforms, operators of dedicated AI data center infrastructure, distributed GPU infrastructure providers, and major public hyperscale cloud providers (e.g., Google, Amazon, Microsoft).
• Drug Discovery Services: Other AI companies addressing drug discovery needs.

Emerging Competitive Threats:

• Advances in AI model efficiency could reduce demand for GPU compute.
• New entrants and disruptive technologies in both compute and drug discovery markets.

Competitive Response Strategy:

• Compute Services: Leveraging geographic diversity, rapid provisioning (48-hour capability), flexible contract structures, asset-light operating model, and the unique economic incentive structure of ATH token settlement.
• Drug Discovery Services: Utilizing its unique, historical database of tumor drug responses and biobank, combined with AI, to provide early, patient-centric insights and prioritize drug development.

Risk Assessment Framework

Strategic & Market Risks

• Digital Asset Strategy Implementation: Uncertainty in successfully implementing the ATH-focused strategy, requiring specialized skillsets and infrastructure.
• ATH Price Volatility: High volatility and unpredictability of ATH price directly affects financial results and balance sheet due to fair value accounting.
• ATH Liquidity: Limited liquidity of ATH may impair ability to sell holdings at favorable prices, especially for locked ATH subject to vesting/transfer restrictions.
• Correlation with Crypto Market: ATH price is correlated with broader cryptocurrency market conditions and macroeconomic factors, leading to disproportionate impact during market declines.
• Aethir Network Disruption: Unanticipated difficulties, failures, or security breaches in the Aethir network could negatively impact ATH value and transaction processing.
• AI Model Efficiency: Advances in AI model efficiency could reduce demand for GPU compute, adversely affecting the Aethir network and the Company's compute business.
• Geopolitical Tensions & Trade Restrictions: Particularly between the United States and China, could disrupt GPU supply chains (e.g., NVIDIA Corporation) and limit addressable markets.
• Energy & Environmental Demands: High energy consumption of data centers may lead to increased regulatory costs, operational limitations, and ESG concerns.
• Demand Concentration: High reliance on a small number of large technology companies and governments for GPU compute demand; reduction in their expenditures could disproportionately affect the market.
• Acquisition and Integration Risks: Risks associated with future acquisitions, including integration difficulties, unforeseen liabilities, and diversion of management resources.
• Capital Needs: Continued negative operating cash flows and significant capital needs to accomplish goals, with no assurance of obtaining equity or debt financing on favorable terms.

Operational & Execution Risks

• ATH Treasury Operational Risks: Rapid evolution of the Aethir network, frequent upgrades, protocol changes, and reliance on third-party service providers introduce operational and cybersecurity risks. Staking activities may lead to lock-up or illiquidity periods.
• Cybersecurity: Risk of security breaches, data loss, and other disruptions to business or third-party service providers, compromising sensitive information and exposing the Company to liability.
• IT & Communications Systems Failure: Dependence on information technology and communications systems, vulnerable to damage or interruption from natural disasters, cyberattacks, or power loss.
• Legacy Business Sale Disruption: Uncertainty and potential adverse terms in the sale of the Drug Discovery Services business, leading to employee, customer, or supplier uncertainty, and potential liabilities or transition costs.

Financial & Regulatory Risks

• Regulatory Uncertainty for Digital Assets: Evolving and unclear application of state and federal securities laws and other regulations to digital assets (ATH) and blockchain-based applications.
• Increased Compliance Costs: Potential requirement to register as a money services business or money transmitter, leading to significant compliance costs or operational shutdowns.
• Nasdaq Delisting Risk: Risk of delisting from the Nasdaq Capital Market if compliance requirements are not met, which could impair stock liquidity.
• Dilution: Potential for substantial dilution from future equity offerings and exercise of outstanding warrants and equity awards.
• NOL Limitations: Ability to use net operating loss and tax credit carryforwards is limited by Internal Revenue Code Sections 382 and 383 due to prior and future ownership changes.

Geopolitical & External Risks

• Geopolitical Exposure: Business disruptions from political/civil unrest, acts of war, epidemics/pandemics, natural disasters, and other catastrophic events.
• Trade Relations: Impact of trade tensions and policy changes, particularly affecting GPU supply chains.
• Sanctions & Export Controls: Compliance requirements and business limitations due to trade restrictions and sanctions.

Innovation & Technology Leadership

Research & Development Focus:

• Core Technology Areas:
  • Compute Services: Development of high-performance enterprise artificial intelligence infrastructure.
  • Drug Discovery Services: AI-driven tumor drug-response prediction platforms (PEDAL™), proprietary tumor biobank, and 3D cell culture models for oncology drug discovery.
• Innovation Pipeline: The Company intends to evaluate opportunities for the Legacy Business, including the potential use of its data assets and predictive models in connection with its expanded artificial intelligence infrastructure strategy.

Intellectual Property Portfolio:

• Patent Strategy: The Legacy Business relies on a combination of patent, trade secret intellectual property rights, and other measures.
• Licensing Programs: Not explicitly detailed for revenue generation, but the Legacy Business explores licensing arrangements.
• IP Litigation: Not explicitly detailed as material litigation.

Technology Partnerships:

• Strategic Alliances: DCI Foundation (developer of the Aethir network) for the Compute Services and Treasury Management segment.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Raymond F. Vennare was terminated as CEO effective February 9, 2026, and Christopher Miglino was appointed as his successor. Chuck Nuzum was appointed Chairman of the Board effective February 9, 2026.

Board Composition: The Board consists of seven directors, divided into three classes with terms expiring in different years. All current members of the Audit Committee (Chuck Nuzum, Gregory S. St. Clair, Sr., Thorsten Dirks) meet Nasdaq's heightened independence requirements. Chuck Nuzum is designated as an "audit committee financial expert." The Compensation Committee (Chuck Nuzum, Gregory S. St. Clair, Sr., Matthew J. Hawryluk) and Nominating and Governance Committee (Daniel E. Handley, Ph.D., Chuck Nuzum) also consist of independent directors.

Human Capital Strategy

Workforce Composition (as of December 31, 2025):

• Total Employees: 13 full-time employees and 1 part-time employee.
• Geographic Distribution: Not explicitly detailed, but corporate offices and primary lab are in Pittsburgh, Pennsylvania.
• Skill Mix: Not explicitly detailed, but includes technical, sales, marketing, and management personnel.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Objectives include identifying, recruiting, retaining, incentivizing, and integrating existing and new employees, with recruitment regardless of gender, ethnicity, or other protected traits.
• Retention Metrics: Not explicitly disclosed.
• Employee Value Proposition: Provides a full complement of employee benefits, including health/dental insurance, disability/life insurance, 401(k) plan, FSA flex plan, and Section 125 plan.

Diversity & Development:

• Diversity Metrics: Not explicitly disclosed.
• Development Programs: Not explicitly detailed.
• Culture & Engagement: Not explicitly detailed.

Business Cyclicality & Seasonality

Not explicitly detailed in the provided filing.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Digital Assets: Subject to extensive and frequently changing laws and regulations in the United States (federal and state) and other jurisdictions. This includes scrutiny from FinCEN, CFTC, SEC, FINRA, CFPB, DOJ, DHS, FBI, IRS, and state financial regulators. The regulatory landscape is evolving, with potential new laws (e.g., GENIUS Act for stablecoins) and enforcement actions.
• Biopharmaceutical Industry: Subject to regulations from the Food and Drug Administration ("FDA") and Clinical Laboratory Improvement Amendments ("CLIA"), among other governmental agencies.
• International Compliance: Digital asset regulation is a focus of foreign regulatory bodies, notably in the European Union (Markets in Crypto Assets Regulation) and the United Kingdom (Financial Services and Markets Act 2023).

Trade & Export Controls:

• Export Restrictions: Geopolitical tensions, particularly between the United States and China, have resulted in restrictions on the export of advanced semiconductors, including certain NVIDIA Corporation GPU products, to China.
• Sanctions Compliance: Digital assets are susceptible to misuse for criminal activities, leading to potential regulatory oversight and enforcement actions by agencies like the U.S. Treasury Department’s Office of Foreign Assets Control.

Legal Proceedings:

• Renovaro Lawsuit: On May 8, 2025, Lunai Bioworks (formerly Renovaro, Inc.) filed a lawsuit in Delaware Chancery Court claiming breaches of a binding letter of intent and extension agreement, seeking to compel a merger. The Company is contesting the lawsuit.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: Zero income tax expense from continuing operations in 2025 and 2024 due to losses.
• Geographic Tax Planning: Pretax income is entirely related to domestic activities; the Company did not have any foreign operations.
• Tax Reform Impact: The Company had $110.76 million in federal Net Operating Losses ("NOLs") and $57.16 million in state NOLs as of December 31, 2025.
• Section 382 Limitations: The Company underwent several ownership changes from 2008 to 2022, and another in 2025 related to its Cash PIPE equity issuance, resulting in limitations and expiration of a substantial portion of its loss carryforwards. A preliminary Section 382 base limitation of approximately $435,000 with an aggregate limitation of approximately $4.6 million over a five-year recognition period was calculated for the 2025 ownership change.
• Valuation Allowance: A full valuation allowance is maintained against the net deferred tax asset ($68.56 million as of December 31, 2025) due to the Company's history of losses, indicating that it is not more likely than not that the deferred tax asset will be realized.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: The Company purchased director and officer insurance policies in June 2025 with a policy period ending June 2026.
• Cybersecurity Risk Management: The Board oversees a cybersecurity risk management program integrated into its overall Enterprise Risk Management ("ERM") approach, based on NIST frameworks. This includes governance, technical safeguards, risk management processes, education, incident reporting, and a cybersecurity incident response plan. Third parties are engaged for assessments and audits of cybersecurity measures.
• Risk Transfer Mechanisms: Not explicitly detailed beyond D&O insurance and cybersecurity measures.